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SITA spends R1bn on 'learning curve'

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 26 Mar 2015
SITA CEO Freeman Nomvalo asserts the R1.3 billion the agency has spent on IFMS is not fruitless.
SITA CEO Freeman Nomvalo asserts the R1.3 billion the agency has spent on IFMS is not fruitless.

The State IT Agency (SITA) has spent over R1 billion on a failed integrated financial management system (IFMS), which has been in the offing for a decade now, with no noticeable outcomes.

SITA is yet again at tender stage for the system, which is meant to provide more transparency into government's accounts and root out corruption. This time, the state's IT procurement arm is looking for a wall-to-wall tier one commercial off-the-shelf system.

However, SITA already spent R1.3 billion rolling out pilot phases to a handful of government entities before Cabinet's 2013 approval of a change in architecture. Outgoing CEO Freeman Nomvalo admitted at a recent Parliamentary Portfolio Committee meeting that the project was a "failure".

Nomvalo added SITA faced challenges with its original concept, noting the organisation was also going through a difficult period, and the potential costs seemed to be growing. Despite this, he asserted the R1.3 billion already spent is not "fruitless".

National Treasury accountant general Michael Sass says the initial budget was R4 billion, and SITA has, so far, only spent R1.3 billion. Ninety percent of the technology already bought with this money will be "reused", he says.

No research

However, Andricus van der Westhuizen, a member of Parliament and of the Portfolio Committee on Public Service and Administration, believes SITA's spending has been wasted.

"Whatever the real amount spent on the initial development, the lack of proper homework in deciding which way to go from the onset is just shocking," he comments.

SITA's previous tender, published in the 2013/14 financial year, attracted only two bids: from India's 3i Infotech South Africa and SAP. The recently-closed bid attracted four offers, which SITA said in February were being evaluated.

A waste

Van der Westhuizen notes R1.3 billion "is a lot of money" and years have been lost during which a more appropriate system could have been in use. IFMS was initially approved by Cabinet in 2005.

SITA's unsuccessful pilot projects can only have led to more confusion and low motivational levels among those public servants that had to deal with inadequate software being piloted over the last few years, says Van der Westhuizen.

"One may be able to claim back some of the money spent on software licences, but even that I doubt. It is not the software company selling the licences at fault if the buyer did not do his/her homework and/or failed to implement successfully."

Van der Westhuizen notes the only way in which this expense can be perceived as not fruitless is if SITA has learned from the failed systems. "Even then, it remains a very expensive form of training."

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