Creating value through ict in local government the cape town experience
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Creating Value through ICT in Local Government – the Cape Town experience. Name surname Company . Function & Duties Municipalities. Electricity Water and Sanitation Solid Waste Roads, Stormwater and transport Public Housing Local Economic Development

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Creating value through ict in local government the cape town experience

Creating Value through ICT in Local Government – the Cape Town experience

Name surname

Company


Creating value through ict in local government the cape town experience

Function & Duties Municipalities

  • Electricity

  • Water and Sanitation

  • Solid Waste

  • Roads, Stormwater and transport

  • Public Housing

  • Local Economic Development

  • Social - and primary health services

  • Emergency Services

  • Municipal Policing

  • Urban Planning and Environment

  • Sport and Recreation

  • City Administration

Local Government –

the delivery arm of Government


Creating value through ict in local government the cape town experience

Demographics of Cape Town

Population:3.4 million

Share of National GDP: 15.9 %Share of Provincial GDP: 82 %

Area:2461 km2

Rateable Properties:700 000

Employees: 23 579

City of Cape Town annual budget 2009/10:

Revenue: R18,8 billion ZAR Capital: R 6,2 billion ZAR

City of Cape Town annual Income 2009/10:

From Utility Services: 53 % of total Revenue

From Property Tax: 23 % of total Revenue


Transforming local government

Transforming Local Government

Merging autonomous Organisations is complex:

  • “Lack of standardised financial policies and procedures”

  • “IT systems entrench the ‘old order’”

  • “Back-office systems were deemed to be outdated, functionally inadequate and not properly integrated”

  • “Difficulty in merging these systems was in fact hindering the merger of the administrations and undermining the objectives which motivated the creation of the Unicity”


Creating value in the public sector

Enable

Social / PoliticalConsciouspolicies

Creating Value in the Public Sector –

“City Leadership only get involved when they realise that –

if IT fails they will fail ”

High

Address

historical backlog

and service

Inequality –

Social Upliftment

Improve Service Del.

Createfinancialvalue

Financial & Organisational Transformation

Enabled trough ICT

Advance socialupliftment

Improveservice delivery

Advance Social Upliftment

Informationtransparency

Long-term

financial

Sustainability and

Improved

Efficiencies

Result:

Continue doing more of the same.

EnhanceOrganisational

Performance

Med.

High

Improved Efficiency


Creating value

Creating Value

  • “How can you justify spending money on computers when the business of Local Government should be all about:”

    • Social Upliftment

    • Service Delivery

    • Sustainability


Creating value through ict in local government the cape town experience

Public Sector

Value Creating Measures

Quantifying only the tip of the Iceberg

Financial VALUE


What makes organisations successful

Strategy

Process

What makes Organisations Successful?

TECHNOLOGY

STRATEGY:

What must we do ?

Organisation

PROCESS:

How are we going to do it?

People

People:

Who is going to do it ?


Creating value through ict in local government the cape town experience

Our ERP Strategy – Fundamental to Organisational performance

MAINTENANCE Processes

REVENUE Processes

An ERP system offers organizations a comprehensive and integrated solution for managing services such as financial, revenue, human resources, maintenance, procurement, leasing, customer care on a single integrated IT system.

It is notso much about the technology as it is about the integration of business processes contained within the system.

An ERP system vs. so called ‘best of breed’ systems.

PROCUREMENT Processes

ASSET MANAGEMENT Processes

PROJECT Processes

CUSTOMER Processes

HR processes

PLANNING processes

ACCOUNTING processes


Business process integration

- Billing to sundry debtors

- Financial Accounting

SD

Sales &

Distribution

FI

Financial

Accounting

MM

Materials

Mgmt.

CO

Controlling

-Management Accounting

- Procurement & Inventory Management

SCADA*

R/3 and

IS-U/CCS

AM

Fixed Assets

Mgmt

PP

Production

Planning

EDI

QM

Quality

Management

PS

Project

System

  • Plant Maintenance

- Asset Management

PM

Plant Maintenance

WF

Workflow

Field

Service

Support

IS

Industry

Solutions

- Project Accounting

HR

Human

Resources

IS-RE

Work

Clearance*

IS-U /

FERC

SM

Service

Mgmt

GIS

AM/FM

- Real Estate Management

CAD

  • Human Resources & Payroll

IS-U/

CCS

  • Industry Solution for Utilities

  • Customer Care & Revenue Management

Business Process Integration

ERPFact Sheet

  • 420 end-to-end Business Processes

  • Cost: R354mil (in 2002)

  • Single Instance

  • 8 250 Users

  • > 500 SAP Sites City Wide

  • 3,2 mil ISU contracts

  • 1,2 mil consolidated invoices per month


Cape town s erp strategy

City ofCape Town

Cape Town’s ERP Strategy

“To implement a functionally rich ERP system, in a manner that will ensure integration, facilitate the merger and bring about organisational transformation.”

Thereby, enabling the City to deliver on its Strategic Objectives”


Creating financial value the city s erp roi study

Creating FINANCIAL VALUEThe City’s ERP-ROIStudy:

Total Project Cost Over 3 years:

R355 mil (2001-2003)

Support Cost: p/a

R 62 mil (2003)

Value Creating Opportunities (VCO’s) tracked:

  • Support Staff Costs

  • IT TCO

  • Revenue

  • Inventory


City s erp program roi payback in 36 months

Break-even in June 2005 – with only 11% of the financial value of Improved City Revenue attributed to the ERP Program.

City’s ERP program ROI:Payback in 36 months


Creating value through ict in local government the cape town experience

FINANCIAL VALUEImproved Cash Position

Go-live

Planned loan of R300 mil not taken up


Creating value through ict in local government the cape town experience

ICT spend in the City of Cape Town

The value of our IT investment can not be doubted.

A relatively diminishing investment is enabling an growing organisational capacity.


Creating value through ict in local government the cape town experience

Public Sector

Value Creating Measures

Quantifying only the tip of the Iceberg

Political VALUE

Citizen VALUE

Social VALUE

Financial VALUE


Creating social value

Large disparity in the socio-economic status of citizens

  • Identifying citizens which can – but don’t pay; versus

    Citizens which do not have the means to pay.

  • Support the vulnerable members of society.

    Examples of social responsible Policies and Tariff- structures enable via the ICT investment:

  • Free Basic Utility Services.

  • Grants for the Indigent

  • Debt relief through arrangements and incentives

  • Free Internet access from all 100 Municipal Libraries

Creating: SOCIAL VALUE


Creating citizen value

Convenience:

  • Itemized Billing and Consolidated Invoicing.

  • Pay Municipal Account at any Cash Hall across the City, via Internet, Debit / Stop Order, 3rd party vendors etc.

  • Centralised Call Centre for account queries and defect reporting.

    Execution of Service Request

  • Works Management via Generic Enterprise-wide Process

    Flexibility of Service

  • Account available in 3 official Languages

Creating: CITIZEN VALUE


Creating political value

Go-live

Creating: POLITICAL VALUE

“Good News”

  • “Trend Setter”

  • Compliance: Unqualified Financial Audits

  • Both National and International Recognition.

  • But, its actually all about what the newspapers are saying – as demonstrated via the following sequence of newspaper articles:

Jan 2003

Sept 2003

Oct 2003


Erp story 2001 2010 it s a journey

Value Creation demands Ongoing Investment

ERP Story: 2001-2010 – it’s a journey

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1

6

Flexible

RE

PSRM

Corporate

Performance

Management

Business

Warehouse

HCM

Benefit

Realisation

4.7 Upgrade

ERP6 Upgrade


City of cape town system capability

City of Cape Town System Capability

Corporate

Performance

Management

Financial Perspective

Internal Business Process Perspective

Vision and Strategy

Customer Perspective

Innovation & Learning Perspective

Business Warehouse

R/3 and IS-U

Logistics

Human Resources

Real Estate and Land

Revenue Management

Finance


Creating value through ict in local government the cape town experience

Service Delivery:

The core business of Local Government

Receive

Report

Execute

Assign

Close

Assign

Close

All Services / Works Request in the City could follow the same process to overcome the challenge of initiating and tracking the diversity of services we are responsible for:

The Notification Process

Managing Service Delivery through the Corporate Works Management Process.


Creating value through ict in local government the cape town experience

Spatial Reporting: Service Delivery


Creating value through ict in local government the cape town experience

The City’s Dashboard and Reporting Tools

The Value of up-to-date Management Information – presented via dashboards


City of cape town a systems view

City of Cape Town a Systems View

Corporate

Performance

Management

Financial Perspective

Internal Business Process Perspective

Vision and Strategy

Customer Perspective

Innovation & Learning Perspective

Business Warehouse

R/3 and IS-U

Logistics

Human Resources

Transactional Systems enabling

Local Government Business Process

Real Estate

Revenue Management

Finance


Creating value through ict in local government the cape town experience

“Analytical and Reporting Tools”Only once you have well defined automated Business Processes you can extract Valuable Management Information.


Reporting and dash boarding

Reporting and Dash boarding –

Operational

Reports

Tactical

Reports

Strategic

Reports


2010 event tracking dashboard

2010 Event Tracking Dashboard


Sdbip s city s delivery management

SDBIP’s – City’s delivery Management


Creating value through ict in local government the cape town experience

Organisational Performance Management


The role of it systems in value creation

Strategy

Process

The Role of IT Systems in Value Creation

IT Systems allow organisations to align and enforce:

TECHNOLOGY

STRATEGY:

What must we do ?

Organisation

PROCESS:

How are we going to do it?

People

People:

Who is going to do it ?


The systems approach has created value through being

The Systems Approach has created Value through being:

  • TRANSFORMATIONAL : Helped to align the operational activities of the organisation to its strategic imperatives

  • A CREATOR OF CAPACITY: Provided a robust technical platform to integrate and standardise business processes across the organisation

    Significantly impacted the city’s operating model, organisational structure and human performance considerations - Services closer to the People.

  • COMPLIANCE: Provides effective management reporting capabilities, encouraging fairness, accountability, responsibility and transparency

  • CREATOR OF BENEFITS: Both Financial and non-financial benefits

  • Provides a Powerful Platform which we believe will continue to create additional value.


Thank you

Thank You


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