State Information Technology Agency Turnaround Strategy: briefing

Meeting report

The Chairperson queried the failure of the Department of Public Service and Administration (DPSA) to attend the meeting.  The Committee had not received apologies from the Department.  The briefing on the progress made by the State Information Technology Agency in the implementation of the turnaround strategy had been postponed before but could no longer be delayed.  The Committee had been critical of the performance of the Agency in the past.  The Agency played a critical role in government and its lack of performance reflected badly on the Committee’s ability to carry out its oversight responsibilities.  Relations between the Committee and the Agency had been strained in the past and other government entities could not be encouraged to make use of the Agency’s services until the issues had been resolved.  She looked forward to an improved relationship between the Committee and the Agency.  She asked for a written explanation of the irregular expenditure incurred during the 2010/11 financial year, which was required for the Committee’s Budgetary Review and Recommendation Report (BRRR).

Mr G Hill-Lewis (DA) suggested that the Committee sent a letter of congratulation to the recently-appointed Minister of Public Service and Administration.  The suggestion was accepted.

Briefing by the State Information Technology Agency (SITA)
Mr Ronnie Mabena, Member of the SITA Board and chairperson of the subcommittee on stakeholders extended the apologies of the Chairperson of the Board and the Chief Executive Officer.  The current Board was appointed one year ago.  There had been many challenges and it had been necessary to re-engineer SITA to ensure that the Agency was in a position to meet its mandate.  The turnaround strategy was developed, consultations were held with the sector and with stakeholders and progress had been made.

Ms Khumbuotso Ntshavheni, Chief Operations Officer, SITA presented the briefing to the Committee (see attached document).

Seven desired outcomes of the turnaround strategy were determined for the period 2010 to 2014, i.e. quality information and communication technology (ICT) service delivery to the public sector; being the proficient lead agency in public sector ICT; providing integrated public sector ICT supply-chain management (SCM); offering competitive pricing and being financially sustainable; being an effective ICT regulator; achieving effective governance and monitoring and becoming an employer of choice in the ICT sector.

Details of the objectives and the progress made to date in achieving each of the seven desired outcomes were provided.  Achievements in the improvement in the quality of service included compliance with SCM processes, improving SCM turnaround times and responses to requests for proposals, improving guaranteed hosting and network service levels, finalising the SITA service strategy and improving contract management processes.  The establishment of a dedicated function for government solutions, dedicating 1% of operational expenditure to innovation and partnering with the private sector to develop innovative solutions would aid the development into the lead agency for government IT.  E-Government initiatives included the development of an Integrated Financial Management System (IFMS), identifying ten key government services that could be made available to citizens online and verifying the identities of bank clients through the National Population Register.  The IFMS system integrated the financial, SCM and human resource management systems used by the national and provincial departments.  A summary of the product scope and status was included.

ICT supply-chain management included transforming from a procurement function and implementing the SITA/industry partnership model.  The cost and pricing model was in the process of being finalised, with the objective to lower the cost of ICT services to government.  Stakeholder relationships were improved through active engagement with clients and other stakeholders and visits to provincial authorities.  A mechanism for performance assessment of SITA was developed and a distribution model for decentralising service delivery to provinces had been approved.

The institutional reform of SITA included the appointment of executives in eight of the nine vacant executive management positions; redesigning the organisational structure with the strategy; reviewing human resource policies; establishing a performance management system and standardising processes for efficiency and consistency of service.  Issues of governance identified by the Auditor-General were addressed by implementing the SCM policy and procedures and ensuring future legislative and regulatory compliance.  The items of irregular expenditure concerned the clean-up of existing contracts and were expected to increase in subsequent years.  SITA received an unqualified audit from the Auditor-General for 2010/11.

Mr Mabena concluded that much had been achieved by the Board during the previous year and stable leadership was currently in place.  SITA had fourteen CEO’s in ten years and had been subjected to much criticism in the past.  The lack of service provision had resulted in many government departments developing their own ICT systems.  SITA was re-engineered to improve the service delivered and continued to improve its skills capacity.  The range of products developed narrowed the gap with the private sector.  The partnerships formed with the industry would reduce the cost of ICT services to government.  Relationships with the provincial and local government authorities had improved.  Government had developed a three-year strategy for IT.  GOVTECH was an important think-tank for the industry.

Discussion
Mr A Williams (ANC) had observed an improvement in the performance of SITA.  One of the objectives of the partnerships formed with the industry was to improve the quality of service through government-friendly product support and maintenance (see page 14 in the presentation document).  He warned of the risks involved and asked how support and maintenance services to government installations would be regulated.

Dr H Van Schalkwyk (DA) said that the briefing indicated that promising progress was being made.  The Committee had engaged with SITA during the workshop on the compilation of the BRRR report and she wished the Agency well.  Complaints were lodged during the 2010 local government elections that certain voters had two identity documents and could have cast their votes more than once.  She asked for clarity on the validity of more than one identity document issued to the same person.  The Committee was invited to the GOVTECH conference held in 2010 in Durban but invitations to attend the 2011 conference had not been received by Members of the Committee.

Ms M Mohale (ANC) acknowledged the improved performance but would like to see ongoing improvement.  Reference was made in the briefing of a system that was being developed by SITA to manage the declarations of interest of government employees.  She asked if government departments had expressed interest in acquiring the system.  She asked if SITA was aware of the research and innovation initiatives in ICT that were undertaken by the Centre for Public Service Innovation (CPSI).  She asked how SITA could assist with providing people in the rural areas of the country with IT skills.

Mr M Manana (ANC) commended SITA for the progress that had been made.  He anticipated that the turnaround strategy would be successfully completed by 2014.  He assured SITA of the support of the Committee and trusted that the Agency would continue to display a positive attitude to addressing the challenges.

Ms J Maluleke (ANC) asked for more information on SCM and the Agency’s anti-corruption strategy.

The Chairperson agreed that progress had been made and that the performance of SITA was much improved, although the targets that had been set were not always clearly measurable.  Research was an important aspect and it was essential that SITA was at the forefront of technological developments in the IT industry.  Research was however costly and she wanted to know what the base was for the research and what areas of research had been prioritised.  SITA’s strategic outcomes were linked to Government’s outcomes, in particular the creation of jobs and making opportunities available for new graduates.  She asked what the link was to the national developmental and job creation objectives and the human resource strategy of the DPSA.  She welcomed the engagement with the private sector and the forming of public/private partnerships as it was necessary for the private sector to be involved in government objectives.  The Committee encouraged a relationship between SITA and CPSI in the areas of research and innovation.  The DPSA’s PALEMA programme could assist with the training of government employees.  ICT had a role to play in meeting government’s public participation obligations.  Cooperation with the ICT sector was welcomed but a major risk factor was the security of government data and information.  Clear criteria needed to be in place and Government must have the assurance that its systems and data were secure.

Mr Mabena replied that the SITA Act mandated the Agency to issue regulations and to certify products and services.  There were sufficient legislative safeguards in place to prevent South Africa from becoming a dumping ground for the products of international companies.  However, the Board had identified that there could be a conflict of interest if the Agency was both a player and the referee of the ICT sector.  Currently, there was no other regulatory body in South Africa.  The framework, policy and processes for the regulatory function needed to be developed and the intention was that the function would be independent from the operations of SITA.

Ms Ntshavheni advised that the minimum operating standards and minimum security standards were under review.  SITA was considering the standards and criteria applicable to integration and testing.  The standards applicable to maintenance functions ensured that the work was carried out by suitably qualified persons.  SITA provided assistance to the small, medium and micro enterprises (SMME’s) and facilitated a mentorship programme with larger companies in the ICT sector.  A range of services at different levels was available.  If a person had two identity documents, only one document would be valid.  The second document would be fraudulent.  The NPR system hosted by SITA detected the fraudulent document.  The hand-held scanners used by the Independent Electoral Commission (IEC) during elections detected the fraudulent identity document, which was confiscated and reported to the South African police Service (SAPS).  It would be beneficial if the Department of Home Affairs publicised the fact that an identity document that was lost and replaced by another would be fraudulent if the original document was subsequently found.  The system for declarations of interest of government employees was developed for the DPSA.  The Department would issue regulations that the system had to be used by all other government entities.

Ms Mtshavheni explained that an internal audit was undertaken on each tender process and the tender was not proceeded with unless the adjudication committee was satisfied with the internal audit report.  SITA worked closely with the CPSI, which investigated which products were available on the market.  SITA had signed memoranda of understanding (MOU’s) with the CPSI and with the Council for Scientific and Industrial Research (CSIR).  Areas requiring a high degree of security had been identified and the work done on these systems were always conducted in-house.  High-security systems included the systems for the State security sector, the identity data of South African citizens and the encryption of ministerial cell phones.  The responsibility for providing IT skills in the rural areas rested with the Departments of Higher Education, Basic Education and Communication but SITA collaborated closely with these entities.  The PALEMA programme provided IT training to government officials.  The Department of Communication (DOC) was responsible for providing connectivity in rural areas, which was an ongoing challenge as universal access was not yet available.  Services were provided by the South African Post Office (SAPO) and the Thusong Service Centres.  Not all service centres had skilled assistants available to provide assistance to the public.  SITA was currently investigating the provision of government services via cell phone technology.  As far as she was aware, invitations to the Committee to the GOVTECH conference had been issued.

The Chairperson said that the Committee had found during oversight visits that many Thusong Service Centres had not been connected.  The Committee had received a report on the matter.  She requested that SITA and the DOC resolved the matter as soon as possible.

Ms Ntshavheni conceded that not all the Thusong centres were connected.  She undertook to ascertain which centres remained unconnected and would take up the matter with the DPSA.  Connectivity was lost if the Telkom service was interrupted.  SITA included the requirement that new graduates must be appointed for joint projects with private enterprises.  SITA attempted to influence the private sector to appoint more candidates for vacant positions from previously disadvantaged communities.

Mr Peter Kgame, Chairperson of the subcommittee on procurement, SITA advised that SITA had identified that direct involvement with the industry was critical to reduce the cost of IT services to government.  Discussions were held with the major hardware companies to explain the new business models developed by SITA.  The large number of government installations allowed for economies of scale and SITA insisted on reducing the cost of IT products and services.  He agreed that research and development was costly and the ICT industry should invest in this as well.  Private companies were invited to participate in research programmes (unless the programme was confidential) and the industry was encouraged to establish testing centres in South Africa.  He considered engagement with the ICT sector and public/private partnerships to be critical for the success of SITA.  Clients were important as well and were engaged with in the first instance.  Major clients included SAPS, DOD, the Departments of Basic and Higher Education and the Department of Justice and Constitutional Development.  SITA undertook road shows and held ongoing discussions to establish the IT needs of clients.

Mr Kgame said that staff relations had improved.  Management engaged with staff on a formal basis, gave feedback on the progress made in implementing the turnaround strategy, ensured that staff skills were developed and reviewed the performance of subordinates.  The Deputy Ministers of Communication and Public Service and Administration had initiated a joint project to utilise the connectivity provided to schools to extend access in the rural areas.

Mr Mabena said that the SITA Board had found that the internal governance structures of the Agency were inadequate.  Subsequently a governance committee, ICT committee, audit and risk committee and a stakeholder committee were established.  The Board had approved approximately 30 policy, strategy and framework documents in a period of six months.  The Board was committed to assist SITA to deliver on its mandate, which would lead to the creation of more jobs in the ICT sector.  SITA’s policy was to provide opportunities to SMME’s, particularly in the rural areas.  Generally, automation and computerisation had a negative impact on job-creation as people were replaced by machines.  Conversely, innovation created more jobs.  The SITA programmes and procurement could potentially create 1 million new jobs in 10-15 years.  More government departments were utilising SITA and there was an improvement in the confidence in the Agency.  He thanked the Committee for its support to SITA.

The Chairperson expressed appreciation for the significant progress that had been made and the time and effort that had been devoted to ensuring that the turnaround strategy was successfully implemented.  The interaction between the Agency and the Committee had improved.  She assured SITA of the Committee’s continued support and wished the Agency well in its endeavours.

Other Committee Business
The Chairperson advised that the absence of the DPSA meant that the scheduled briefing on the draft legislation that would be tabled in Parliament during 2011 was postponed.  The briefing was not urgent but should be finalised before the end of March 2012.  She had attempted to contact the DPSA by telephone but her calls were unanswered.  The failure of the DPSA to attend the meeting would be reported to the Minister.

The meeting was adjourned.