SITA on its 2016 Strategic and Annual Performance Plans

Meeting report

Briefing by SITA

Dr Setumo Mohapi, Chief Executive Officer, said there would be more emphasis on System on Chip (SOC) rationalisation and the Minister had requested SITA’s input on SOC rationalisation. The Board would give SITA’s input by the end of the second term. SITA would be seeking the removal of duplication and the streamlining of services. The Minister had urged a clean up in e-government, ICT, security and as the operational model was reviewed there was a need to look at extracting value for money through operational efficiencies. Not all SITA services were delivered by SITA itself. SITA would concentrate on the change to an e-government programme with a focus on integration. He was not expecting the next audit to be a clean audit.

Ms Rudzani Rasikhinya, Chief Financial Officer, said the finances were not looking good but would be improving. SITA had started negotiating on its big contracts and started to see savings. The fees for its hosting services had not been revised for the past seven years. The Agency would apply an inflation related increase in the budget and was working with the Department for an increase in this financial year. The budget was R6.3 billion, which was an 18% increase. There had not been a programme to put money aside for depreciation and this would be done going forward. The majority of equipment was imported and was negatively affected by currency fluctuations. Its operating cost was R1.1 billion and SITA wanted to reduce its debt by 25%. SITA was targeting getting more money from debt collection.

Discussion

Ms N Ndongeni (ANC) asked for more clarity on programme 2 on infrastructure. What interim plans were in place to mitigate the electricity supply risk and what was the cost of the plans? What plans did SITA have to attract Small, Medium and Micro Enterprises (SMMEs), especially the historically disadvantaged and those with disabilities, to conduct business with SITA? What plans were there to increase revenue? What was SITA’s cyber security threat plan?

Ms M Shinn (DA) said that the presentation did not mention an increased spend or programme to address relevant skills to secure ICT security in government. Could this be explained? How many disaster recovery sites existed? Was SITA too ambitious with its targets to attract skills given SITA’s lack of money?

Mr C Mackenzie (DA) asked if the compliance with the Protection Of Personal Information Act had been considered in light of the fact that government was the single biggest host of personal data on individuals and SITA had acknowledged it would seek to exploit the data for social and economic purposes. Was SITA actively developing Government’s planned central tendering procurement hub? When would it go live? Given that 25% of government procurement came through SITA, what percentage were goods and what percentage were services?? Did SITA have a role to play and what role would it play with regard to the rationalisation of SOCs like SA Connect and Broadband Infraco?

Ms T Tsotetsi (ANC) asked how SITA would characterise and measure the quality of the IT service mentioned in its goals as providing ‘high quality IT services’. What would SITA do to ensure there was transformation in SMMEs and fairness regarding procurement and the awarding of tenders? How often did SITA do a customer survey and how long would it take to implement findings and improve customer service?

Ms L Maseko (ANC) asked whether the 25 annual targets were achievable. Where were the disaster recovery hubs hosted? Were all the officials working in procurement process vetted? Did SITA have a plan for a skills transfer regarding the aging workforce? Was consequence management for non-compliance in place?

The Chairperson said the top structure of SITA was bloated. She felt the performance targets were very ambitious. It was noted in an oversight visit that there was a lack of motivation and other staff morale issues. Most of the audit findings were around procurement and it would be interesting to see how things would be tightened up. SITA’s spending on smmes was not aligned with the government announcement that 30% of the budget had to be spent on SMMEs. She asked how many vacancies there were in SITA. She always made an issue on the signing of performance agreements. All strategic plans and APP’s had to be linked to performance contracts. How much was SITA spending on legal fees and consultants? How reliable were the electrical systems and what was the cost of doing so?

Dr Mohapi said the main data centre was at Centurion. Eskom’s electricity supply had been very bad and the backup generator had not started as it was supposed to and government, especially the Department Of Home Affairs, had come to a standstill. There were two other data centres in Gauteng that had also not worked to pick up the load. These problems had now been resolved and the electrical systems were now stable. All that remained was mechanical issues such as air conditioning for the server rooms and SITA would do a full stabilisation plan for the mechanical issues. There were also data centres and backup sites in the Western Cape, Free State, Limpopo and Pietermaritzburg.

Regarding SMMEs, he said there were vast opportunities for historically disadvantaged businesses. SITA always had a target to support SMMEs but there was no building block system for enterprise development. SITA would have an open and transparent process to attract SMMEs and put money for enterprise development. A consortium-based concept had been tried previously. It had many structural problems and unintended consequences. The Competition Commission said the consortium-based concept was not compliant with the Preparation of Procurement Policy Framework Act (PPPFA). SITA would be testing a sustainable system with elements of competition and elements of preference where five out of one hundred on their database were chosen, from which SMMEs would have an opportunity. It was a very transformational system. SITA’s entire demand plan would be published. It was not a secret who was doing work for SITA or for how long, it was public information. It was for people to understand what opportunities there were in SITA. SITA would be going full scale on transparency.

The issue was not about revenue; it was about solutions.

Cyber security fell under different types of mandates. SITA’s approach was thus from a practical perspective and the first was to create a zone for government websites. The second aspect was around standards like architecture and developing standards for security. SITA was creating HR capacity at programme level.

SITA was in the market looking for expertise. With its reputation deficit it was a still a challenge to get the best recruits to SITA. SITA was refreshing its headhunters database. The lack of emphasis on HR in the presentation was not intended to mean no emphasis was being placed on it.

On the comments that the targets were too ambitious, he said it was ambitious because general management skills in SITA were not there yet. However the core critical skills had been redefined and SITA now had a definition of critical skills required which would go to the HR committee.

The fundamental problem with data mining of public data was the re-use of information about privacy and also ethics. The information could be used for the public benefit and SITA could get a transactional cost fee. In the short term government would use the data for policy optimisation.

The procurement hub was the IT systems.

On economies of scale, he said he did not have a number regarding the tipping scale but the premium SITA was paying was approximately 30%. The target was a 30% reduction in IT services using the muscle of economies of scale.

On the question of quality, there were standard ways of measuring whether an IT system was working, like availability of the data centre, but it went beyond that to deliver the services expected by the public.

The customer survey was not done for members of the public but deploying managers of SITA at the coalface where public officials were working so that the SITA managers had a better understanding of what public officials needed and develop solutions.

On improving transformation, SITA had plans and sessions with people who knocked on SITA’s door as part of industry day.

On the cleanliness of procurement systems, all decisions were well considered. Tender documents would be cleaned ups

Transformation was not where it should have been.

Procurement process people had submitted vetted documents.

The skills transfer programme had been done, but without heart so it was an area that was being revamped. The best would be to have an internship programme that gave interns practical skills they could put on their Curriculum Vitae.

Board members had undertaken a study tour to South Korea, which had taken three years to develop e-government through working with private sector companies. SITA was sending three or four people to be trained and tested on certificated e-government systems. One needed to work with the private sector and on what capability should reside within the state structure.

Consequence management was being driven at board level. SITA was a public service and the board had made it very clear that it was time to act against people.

He acknowledged the issues around the key performance indicators (KPIs).

SITA was putting a lot of effort into the internal audit process and was not only looking at the findings but also the root causes.

Regarding the recruitment cover ratio, this KPI was a typical target that changed but kept the overall outcome the same. At the beginning of the year there were 1000 vacancies but because of funding challenges this was cut to under 500, then cut further, but SITA questioned whether enough was done around productivity. So SITA was not looking at the number of people it was employing but rather the quality of people employed. The focus moving forward was not about recruiting but about succession planning.

The performance contract was the APP.

Dr Mohapi did not have the details to answer the question on cost of sales question at hand.

Mr Zukile Nomvete, Acting Chairperson of SITA, said the board shared the common sentiment on the top-heavy structure of SITA and would come back to the Committee on this matter.

Mr Mackenzie asked if the R1.07 billion spent on networks included broadband networks.

Dr Mohapi replied that the R1.07 billion was for the current government network including provincial broadband networks.

The meeting was adjourned