The Cape Town municipality`s SAP enterprise resource planning (ERP) deployment has so far generated about R65 million in financial benefits, says Andre Stelzner, manager of the ERP support centre.
The ERP system provides the municipality with a solution for managing financial, revenue, human resources and service delivery on a single integrated IT system.
By June 2005, Cape Town had recovered the R350 million it had spent implementing the system three years ago and in the last six months savings have totalled R65 million, it says.
It is expected that by June this year the figure will reach R100 million.
Stelzner says the savings from the programme will be used to enhance service delivery.
He adds that the savings have occurred primarily through reduced inventory holdings, better debt management and other benefits enabled by the ERP program - all of which have contributed to improving the city`s financial position.
Business and technology analyst Craig Terblanche from MarketWorks says that since the project is the only municipal ERP solution of such magnitude, assessing the return on investment is not easy. "Without a benchmark or a stake in the ground, it is difficult to say whether the city of Cape Town is doing well."
However, he says the general perception has been that "service is stable and even improving in previously disadvantaged areas".
The cost of supporting the ERP system is about the same as the support costs of the previous legacy systems - R60 million per year, says the municipality.
"But the SAP ERP system provides a much broader solution which satisfies a greater number of the business needs," says Stelzner.
He says that previously Cape Town operated a host of legacy systems, which made application and infrastructure support complex. Since consolidating to a single system, some employees have had to be re-trained, but he adds that the benefits of the SAP system have far outweighed this.
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