R1bn IFMS project scrapped

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Government has abandoned its decade-long attempt to create its own Integrated Financial Management System (IFMS) and is now looking for a commercial-off-the-shelf (COTS) solution to take its place.

According to conservative estimates, the IFMS project has already spent at least R1 billion on system development alone. This does not take into account cross-government spend on indirect cost drivers, including addressing infrastructure shortfalls; acquisition of skills; training; and increased pressure on support environments (hardware/software/support).

Conceived in 1998 and approved by Cabinet in 2005, the IFMS project was a National Treasury-led joint initiative with the Department of Public Service and Administration and the State IT Agency (SITA). Its objective was to replace the numerous disparate, inadequate and/or outdated systems employed throughout the public sector.

To do so, the final IFMS system needed to be a single, integrated solution encompassing supply chain management, financial management, HR management, and business intelligence. The ICT industry welcomed the project, eagerly eyeing its multibillion-rand budget and the many opportunities to be found in a project of that scale.

However, the IFMS initiative turned out to be a constant source of controversy, attracting criticism on the system architecture; partner and/or solution selections; top-level project strategy and management; operational planning and oversight; and the feasibility of the stated objectives and deadlines.

Admitting defeat

Despite the ever-present criticism, SITA stuck to its guns, barely acknowledging rising levels of concern across industry, government and Parliament. Conceding the solution was behind schedule, the organisation repeatedly assured significant progress was being made and the final solution imminent.

However, finance minister Pravin Gordhan stated in his budget speech that change was on the way. "Spending reviews are under way to examine programme performance and value-for-money, conducted by the National Treasury and the Department of Performance Monitoring and Evaluation, and by provincial treasuries."

Over the last six months, treasury has devoted a lot of attention to the IFMS project. Earlier this year, treasury established an independent Programme Management Office (PMO) to improve governance and overall performance of the IFMS project. The PMO took on responsibility for ensuring delivery of distinct projects on time, of the standard required, within budget. SITA had held most of these responsibilities.

Following a number of independent reviews on the IFMS project, as well as an intensive study, the initiative says: "The feasibility of continuing with these systems based on hybrid solution architecture was considered to be restricted. Therefore, government opted to replace these systems with a seamless fully integrated and secure ERP COTS solution."

Government is now looking for a service provider, or consortium, to provide an IFMS based on a "tier one enterprise resource planning COTS solution". The contract requires the system to be ready to go live at lead sites on 1 April 2016, with final handover taking place by 31 March 2017.

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