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PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR 09 FEBRUARY 2011

PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR 09 FEBRUARY 2011. 2. Briefing on the progress made with regard to the Public Private Partnership (PPP) IT Contract with Siemens. BACKGROUND TO THE PPP 3. MOTIVATION FOR THE PPP.

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PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR 09 FEBRUARY 2011

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  1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON LABOUR 09 FEBRUARY 2011

  2. 2 Briefing on the progress made with regard to the Public Private Partnership (PPP) IT Contract with Siemens

  3. BACKGROUND TO THE PPP 3

  4. MOTIVATION FOR THE PPP 4 • The need to partner with the private sector for improving IT capability, leverage of expertise and specialist knowledge, and exploit international standards and best practice • To address a high turnover of DOL IT staff • The need to integrate labour market services and systems to offer better service • To form part of the move towards automation of services towards e-government initiatives • Achieving maximum IT benefits and objectives against budgetary constraints

  5. COMPONENTS OF THE PPP 5 Risk sharing • Department of Labour articulation of the business requirements • Siemens systems design, build, operation and maintenance upfront capital investment ======================= Deliverables • IT Operations and infrastructure : 70% of contractual deliverables • Systems development : 30% of contractual deliverables

  6. CURRENT CHALLENGES 6 PPP - STRATEGIC • IT partner delays to systems development arising from lack of capability, poor project/quality and resource management. • IT Partner retrenchments, contract terminations and high staff turnover resulting in loss of skills\knowledge to service the DOL. • Cession of PPP contract by Siemens Limited • Carve out of Siemens PPP - OPERATIONAL • System operational challenges • Outdated equipment in the DoL environment • Increased demand for mobile computing (laptops)

  7. STRATEGIC PLAN TOWARDS COMPLETION OF PPP 7 • Diagnostic review of the PPP on areas identified by the DoL • Done • Development of the Exit and Transfer plan • Draft Plan currently in consultation • Establishment of an internal steering committee to manage the transition to a new IT delivery model • Done • Development of a new DoL ICT strategy • Process underway by SITA • Conducting of a feasibility study on a new ICT delivery model • Will commence as soon as strategy is completed • Resourcing of the current Office of the Chief Information Officer (OCIO) office to manage closure and transition • Process underway

  8. SCOPE OF DIAGNOSTIC REVIEW 8 KPMG External assistance was sought to: • Determine the impact of the Siemens carve-out and cession of the contract by DoL • Determine the business rationale for the use of SAP as the solution platform • Determine responsibility and liability to purchase software licenses • Investigate and identify current termination options • Penalties due to the Department • Determine whether "Additional Services” have been appropriately costed • Identify measures to address current delivery challenges

  9. KPMG HIGH LEVEL FINDINGS 9

  10. HIGH LEVEL FINDINGS contd. 10

  11. PROJECTS IN PROGRESS 11

  12. PROJECTS IN PROGRESS 12

  13. PROGRESS TO DATE 14 • Letter of termination / intention not to renew contract was given to Siemens. • Secured involvement and participation of National Treasury, SITA and the State Attorney to assist in resolving current PPP contract problems. • Strengthened governance structures to oversee current IT projects - Management Committee receives regular progress reports and provides guidance to the IT Steering Committee. - Increased participation of business stakeholders at forums • SITA Contract manager appointed to oversee the PPP contractual matters • High level engagement with Siemens Limited is underway - implementation of recommendations of the PPP KPMG diagnostic report • Engagement with SITA on the development of the ICT strategy

  14. 15 Thank you

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