SITA Annual Report: briefing

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Meeting report

Portfolio Committee on Public Service Administration

19 November 2003

Chairperson: Mr P Gomomo

Documents handed out:
SITA's annual report presentation

SITA briefed the Committee on their annual report. Overall, SITA's financial performance had been satisfactory yielding a significant profit compared to the previous year's loss. Discussion focused on how SITA had managed to save money and whether this was not at the expense of their mandate.

SITA Briefing

Mr Radebe, Group Executive-Corporate Affairs for SITA led the presentation. He covered the mission statement, vision statement, and the highlights. Please refer to attached document.

He stressed the need to reduce dependency on big Multi-National Corporations for the provision of services. Data capturing, centralized information storage and easy access to information had to be improved. A pilot project on the government's core network was already running with the Department of Justice.

Mr Radebe briefed the Committee on key performance areas. The key challenge was the non-transfer of the Transversal System from Treasury to SITA, research and development partnering with private and public institutions, and how to put value added service on the network especially now that they had the license.

Mr Peter Els, Chief Financial Officer for SITA made a presentation on SITA's financial performance for the year. Overall, SITA's financial performance was very sound and they had managed to yield a significant profit compared to the previous year where they were running at a loss. Mr Els pointed out that they had a good audit report from the Auditor General.

Ms Mentor (ANC) pointed out that it was not necessary for SITA to re-frame their mission statement and vision in their report. Instead what was important was to show current performance and meeting of objectives. She was critical of the fact that SITA seems to be concentrating their report on how much profit they had made and how much money they had managed o save the government. The issue should be whether there had been progress in terms of delivery. She wrote off the report as less than mediocre as it did not deal with the important issues. She brought up problems in SITA reported in the media which were findings made by the CEO. She encouraged SITA to deal with these problems.

Mr Van Jaarsveld (NNP) asked whether the thirteen departments mentioned by SITA were all on board regarding information systems improvement?

Mr Radebe said that rolling out the master system was a challenge despite the fact that they had the system. He said it was a huge and involved process that involved issues such as diligence, viability assessment and care. He enquired if debtors were charged interest and if so, how it was done?

Mr Els said that issue of debtors was a thorny issue. He did not elaborate on this point but said that they had not been able to charge for late payments.

Mr Mohlala (ANC) asked how it had come about that SITA has managed to make savings on operating costs despite a staff increase of 500.
Mr Els's replied that the R13m savings was due to negotiated deals with the various software providers.

Mr Mohlala enquired about the number of students that had accepted to do internships with SITA and what was being done to increase this number. Was there discussion with other SETAs to roll out the internship programmes?

Mr Radebe pointed out that getting the students was not the main challenge, but actually insuring that they get the correct training and that skills were transferred to these interns. He said they needed to do an audit on the overall process to see that it was being done correctly.

Ms Roopnarain (IFP) asked if SITA had done an audit for all departments to determine where they were regarding improvements as some were struggling and others still using old and outdated systems.

Mr Radebe said an IT audit for all departments had not yet been done as the process was still at a pilot stage.

Mr Els added that there was an audit document that had been produced two years ago which evaluated the software types and systems being used in the various departments and said that despite the fact that it might be outdated, it might still be useful as not much had changed since then. The target was to increase the roll out by three to four departments a year.

Mr Steele (DA) enquired about SITA's security system and whether there had been any attempts by hackers to infiltrate the system or if they had had problems with viruses and what they have done about such issues.

Mr Els's response was that these were problems affecting all companies in the same business and that at the moment they had a project team that dealt with these issues.

Mr Steele said that SITA 's hardware depreciation was factored at three years and he wanted to find out how this compared to other companies.

Mr Els pointed out that usually the useful life of machines were longer than the actual depreciation period fractured in.

Mr Steele asked what was used with the cash pile acquired.

Mr Els said that the cash on hand enabled them to do in house training, research and development, and other related issues. Training took place throughout the year across the entire organization.

Mr Kgwele requested more detail regarding what outcomes SITA had spent particular amounts in their report. How was the amount of money spent by SITA used to promote government priorities such as job creation, service delivery?

Mr Els said that they were worked to promote BEE and SMMEs especially in their evaluating and awarding of tenders. He pointed out that there were highly technical areas in SITA, which needed high specialization. What steps were being taken to make sure that those skills were transferred?
What was being done to retain skills and avoid brain drain?

Mr Els said that they had tried to address the problem but that the IT industry was very fluid in terms of staff turn over. They had set a target of 12% retention and that this year they had managed 10%. He said that retention tools used included attention to remuneration, performance bonuses.

Mr Mohlala asked how the SITA Amendment Act had improved services.

Mr Els said that the major challenge was Internet protocol. SITA was trying to roll out systems for government to acquire new PCs. They were struggling with setting up structures at the IT acquisition centre.

Ms Mentor noted that the amount recorded for training interns (R34m) was too high and totally unreasonable and requested an explanation.

Mr Els said this amount was the direct cost of having these 300 interns on board. Some of the expenses went to operating expenses, profit, and time.

Meeting was adjourned.


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