SITA Quarter one Corporate Performance Report as at 30 June 2015

SITA Quarter one Corporate Performance Reportas at 30 June 2015

Outline • FY2015/2016 Quarter 1 Performance Report • FY2015/2016 Financial Performance Report • Performance focus areas for Quarter 2

SITA Strategic Programmes Service delivery: The purpose of this programme is to provide high-quality IT services to enable government to deliver efficient and convenient services through the use of ICT. Procurement: The purpose of this programme is to address all issues relating to delayed procurement turnaround times, removing customer pain points, and transforming the procurement function. SITA 22 Transformation Initiatives Financial sustainability: The purpose of this programme is to ensure effective and efficient financial management and to ensure financial growth and sustainability. Infrastructure: To optimise the provisioning of SITA’s IT infrastructure services in order to increase availability, flexibility, scalability, predictability and security. Organisation: The purpose of this programme is to build and maintain organisational capability to enable SITA to achieve its strategic imperatives. Governance and administration: The purpose of this programme is to provide leadership, strategic management, governance, risk and resource management, in line with Government’s accepted norms and standards. 3 3

Financial Sustainability

Financial Sustainability • SITA achieved three of the four performance indicators measured in the organisations APP • The deficit before tax for the quarter under review is currently at R215,3m from a revenue of R1,235bn – translating into a negative effect of 17,4% • The actual revenue of R1,235bn is 31,5% above the budgeted amount of R939,4m and the cost of sales of R1,316bn is 17,7% above the budget of R1,118bn for the quarter ended 30 June 2015

Procurement (1)

Procurement (2)

Procurement (3)

Procurement • SITA achieved five of the seven Procurement performance indicators measured in the organisations APP the two are currently being addressed through key strategic initiatives underway • The development of the integrated procurement strategic plan will provide SITA with a road map to address key Procurement challenges • SITA’s approved transformation development programme will target enterprise development, preferential procurement on targeted entities and black industrialists/manufacturing • Procurement’s revised approved policy enhances controls with respect to root challenges such as cancellations, poor specifications and technical evaluations

Service Delivery (1)

Service Delivery • SITA achieved two of the seven performance indicators measured in the organisations APP • To accelerate the customer centricity initiative, SITA’s has started a process to institutionalise a new way of working that addresses structures, tools, processes and access to the right skills for improved service delivery to customers • 289 out of 307 SLAs (94,14%) have been signed. Outstanding SLAs are mainly due to negotiations still in progress with customers or awaiting sign-off from customers • The relevant Governance structures to ensure success of e-Government are in the process of being instituted • The e-Cabinet solution has been designed and configured • The organisations infrastructure modernisation programme is on track

Organisation

Governance and Administration

Organisation and Governance • All displaced employees have been placed in the organisation • SITA’s approved integrated talent management strategy will guide the integrated management of talent across the business • The organisation has embarked upon an employee value proposition programme to energise and re engage employees • SITA’s litigation procedures are monitored and tracked on a weekly basis • The organisation is in the process of reviewing commercial contracts, with the primary focus on avoiding and eliminating contractual pitfalls and enforcing performance and legal compliance in terms of contractual obligations • All Auditor-General findings have been automated and are regularly monitored by Internal Audit, Exco and the Audit, Risk and Compliance Committee • The external audit for FY2014/15 is in progress

Quarter 1 Performance Summary Figure 1 - Quarter 1 performance results against planned targets

Finance Report for Quarter ended June 2015

Statement of Financial Performance

Statement of Financial Position

Statement of Financial Position (2)

Statement of Cash Flows

Working Capital Management Ratios

Accounts Receivable Age Analysis

Capital Expenditure: Original budget

Capex Budget Revision • Flaws discovered in the originally approved budget: • Operational budget was unrealistic • Calculated cash flow from operations was done incorrectly and could not be substantiated • This resulted in significant uncertainties that affected SITA’s ability to accurately forecast cash flows • To manage the risk relating to the financial sustainability of SITA, the capital expenditure budget had to be revised • The revised capital expenditure budget was approved by the Board on 29 July 2015 • Measures implemented to manage budget related challenges: • Budget review committee instituted • Additional resource to assist with managing the process

Revised Capital Expenditure Budget

Performance Focus Areas for Quarter 2 • Finalise FY2014/2015 Performance Assessments • Finalise FY2015/2016 IBSC contracting • FY2015/2016 Organisational alignment assessment against the approved CBSC • Intensify efforts in the implementation of projects and initiatives as per approved FY2015/2016 APP -(Quarter 1 non-achievements and quarter 2 targets) • Address Challenges / Lessons learned from FY2014/2015 external audit

SITA Quarter one Corporate Performance Report as at 30 June 2015