The South African Public Service currently owns and operates a large number of transversal systems (Supply Chain Management, Human Resource Management, Financial Management, Payroll and Business Intelligence). Many of these systems are based on aging technologies. Furthermore, these systems are not fully integrated and there are duplicated functionalities across systems. After an intensive study, the feasibility of continuing with these systems was considered to be restricted. Therefore, Government took a decision in 2005 to replace these transversal systems with an integrated financial management system.
The Integrated Financial Management System (IFMS) programme was approved by Cabinet on 14 September 2005 as a joint programme between:
The aim is to provide an IFMS to the Public Service that integrates human resource, payroll, financial and supply chain management and business intelligence functions.
The key objectives of the IFMS include:
The programme was approved with a hybrid solution architecture consisting of Commercial-off-the-Shelf (COTS) and bespoke modules. In this regard,
In preparation for the transition to the IFMS, Cabinet approved that all legacy systems continue to be managed as per the status quo at the time, until migration to the IFMS was considered feasible. In addition, a moratorium was placed on the acquisition of new (duplicating) Financial Management, Supply Chain Management, Payroll, and Human Resource Management systems by departments (see Treasury Practice Note 7 of 2006 in this regard). The moratorium is applied through Treasury Regulation 17.3.
As at 2013 the HR Management, Asset Management, Item and Service Master, Catalogue Management and Procurement Management components had been delivered and installed at a few national and provincial government sites. Development of the Inventory Management and Financial Management components commenced but had not been completed. The applications were not yet integrated, apart from partial integration with legacy systems at lead implementation sites.
During the execution of the programme challenges were frequently encountered – and whilst quite concerning in certain instances – they were not considered anomalous in comparison to the experiences of other similar public sector initiatives, both nationally and internationally. The greatest concern had arisen in terms of the extended timeframes taken to implement the IFMS. As a result, external project reviews were commissioned during 2013 on the overall enterprise architecture, solution architecture and project governance. The outcomes of the reviews in respect of the solution architecture were largely aligned in proposing a solution architecture exclusively comprised of COTS modules. It was implied that the benefit of a hybrid (COTS and bespoke) system, as originally conceived, would largely have diminished with time.
After consultations with key stakeholders the IFMS Steering Committee recommended the adoption of a COTS solution. Subsequently, Cabinet approved the revised solution architecture on 20 November 2013. The intention is to implement a so-called “vanilla” COTS solution where customization changes to the system are kept to an absolute minimum.
Enterprise Resource Planning (ERP) COTS Software Acquisition
In March 2014 the State Information Technology Agency (SITA) on behalf of NT invited service providers to bid for the provision of an ERP COTS system including the provision of services for lead site implementation, maintenance and support. A number of questions and observations from industry were received about this bid relating to response times and the identified lead sites. This necessitated that the IFMS Programme Team reconsider the procurement approach.
In November 2014 a revised request for proposals (RFP 1282/2014) was published for the provision of an ERP COTS system, including on-going upgrades and support for this software. This RFP was directed only to Original Software Manufacturers (OSMs) who were capable of supplying software licenses for Tier 1 ERP COTS software. The RFP excluded implementation services, hardware and maintenance and support of the system. Separate RFPs will be issued for these products and services.
By June 2015, with the bid evaluation process having been completed, a letter of conditional award was submitted to Oracle Corporation (South Africa) (Pty) Ltd (“Oracle”). A systematic value assurance process was then conducted. The purpose of the exercise was to ensure that Oracle made fair and accurate representations in their response to RFP1282/2014, of their ability to supply software licenses as well as the capability of the software on offer to satisfy the requirements of a modern and efficient Public Service.
After extensive engagement and negotiations a contract was signed with Oracle.
Implementation of the IFMS will be overseen by the IFMS Programme Committee which will ensure that the procurement of software, licenses and services are in compliance with the Government procurement prescripts and is conducted in the most efficient and transparent manner.
The National Treasury has recognised that Departments require urgent access to financial and related systems. Since the comprehensive IFMS is not yet available, all Departments that have not yet implemented LOGIS (the legacy logistical information system used for procurement and asset / inventory management purposes) may do so.
The legacy systems and IFMS modules already in operation will be maintained and enhanced where it is considered critical for purposes of business continuity, until the new IFMS has been implemented.
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