Transforming SITA to enable service delivery in Government

1. Transforming SITA to enable service delivery in Government Executive Summary December 2000

2. Act as advisors to the board on the SITA business model Review the current business model submitted to the board and recommend an appropriate model that will assist SITA in achieving the IT value imperatives Provide a high level migration plan Best of breed advisory services Strategic advisory services IT strategy IT research and benchmarking Change management Operations management META Group The board of SITA appointed a team of leading consulting companies to review and define a business model that will position SITA as an excellent provider of IT services Project Team Mandate

3. Outline of the Contents This report describes the background and context of the business model development process, the recommended business model and the migration plan for the recommended model Introduction Background and Context Business Model Options Migration Strategy Key Next Steps

4. Key stakeholders in Government DPSA GITO Members Department of Communication Department of Justice Department of Correctional Services Department of Home Affairs Department of Finance SARS Department of Defence SAPS Gauteng Provincial Government The approach we took, the stakeholders involved and the results achieved Processes Stakeholders involved in the process Outputs Diagnosis SITA Board Background and context SITA Executives Business Model Options Recommended Business Model Model Development Migration Strategy Migration Plan Migration Key Next Steps

5. DPSA service delivery imperatives that guide the utilisation of IT as an enabler of service delivery Batho Pele Service Delivery Principles DPSA Transformation Priorities Rationalisation and restructuring the public service Consulting the users of the services Institution building and management Setting of service standards Getting the best value for money Representativeness and Affirmative action Transforming service delivery Increasing access to services Remedying mistakes and failures Democratising the state Human resource development and training Information Technology Ensuring courtesy to the public Increasing openness and transparency Employment conditions and Labour relations Providing more and better information The promotion of a professional service ethos Source: White paper on the transformation of public service Nov 24 1995 and Oct 1 1997 (The Batho Pele White paper)

6. The “cradle to grave” service delivery imperatives from the Citizen and Business The key areas in a citizen’s life that will require IT enabled interaction with the Government Organisation. Birth Health Job Properties Environ Conditions Research Social Benefits Politics Death Education Transport Marriage National Defense Tax Investment Travel Communication The key areas in a Business’s life that will require IT enabled interaction with the Government Organisation. Incorporation Subsidy/ Funding Vehicle Human Resources Purchases Accreditation Politics Research Liquidation Finance Exports/ Imports Business Development Sales Administration Corporate Citizenship Communication Statutory Requirements

7. Key service delivery expectations from the citizen point of view Sample of Life Events Expectations • Prompt generation of identification documents drivers licenses and passports • Citizen identification for registration • Educational records and facilitation of planning • Remote health diagnosis • Ability to report road damage to enable quick repair • Consolidated Citizen identification systems (e.g. population register) • Electronic submission of tax returns and query handling • Prompt registration of properties • Ease of pension payments • Speedy closure of cases • Easier track down of criminals • Identification Documents , drivers licenses and passport applications • Education • Health • Transport • Employment, Investments and Taxation • Property procurement • Social Security • Crime and Justice Key service delivery expectation is the reduction of waiting time

8. Prompt generation of identification documents, drivers licenses and passports Citizen identification for registration Educational records Remote health diagnosis Ability to report road damage to enable quick repair Consolidated Citizen identification systems (e.g. population register) Electronic submission of tax returns and query handling Prompt registration of properties Prompt feedback on eligibility and ease of pension payments Speedy closure of cases Easier track down of criminals Key service delivery expectations from the citizen point of view Expectations Challenges Expectations • Integrated, accurate and up-to-date population register • Bio-metrics integrated with population register • Educational records linked to population register • Network access, bandwidth, link to health records • Call center to route call to correct Authority (Local, National, Provincial) • Automated scheduling of maintenance team • Bio-metrics integrated with population register • Access to SARS tax systems • Linking the conveyancer, bondholder, land register and the surveyor general to the Deeds register and the GIS • Bio-metrics integrated with population register, deeds register, unemployment records, health records and vehicle register; accessibility to pay-points • Court automation and links to police and correctional services • Bio-metrics integrated with population register and links to justice, police and correctional services Key challenge is to maintain security and privacy of information

9. Key expectations and current service delivery challenges from the business point of view Sample of Business Events Expectations • Starting-up a business • Raising funds • Training • Health, Safety & Environment • Labour relation issues • Minimal red-tape • Quick understanding and approval of Government incentives and support • Clear understanding of Government policy and available support, particularly to smaller businesses • Understanding of Government regulation and requirements; obtaining advice from officials • Understand rules of the game and speedy resolution of labour related cases Key service delivery expectation is the reduction of waiting time and improvement in productivity

10. Minimal red-tape Quick understanding and approval of Government incentives and support Clear understanding of Government policy and available support, particularly to smaller businesses Understanding of Government regulation and requirements; obtaining advice from officials Understand rules of the game and speedy resolution of labour related cases Key expectations and current service delivery challenges from the business point of view Expectations Challenges Expectations • One-stop registration for Registrar of companies, UIF, SARS, SETA, RSC, Local Authorities, etc • Advise and prompt direction of businesses to IDC, SBDC, Land Bank, NSF, DTI, etc • Links to Labour, Education and Educational Institutions, SAQA • Access to Health,Safety and Environmental Officers • Quick access to advice and scheduling appointments for mediation and conciliation cases Key challenge is to maintain security and service levels

11. The imperatives for IT service delivery have been captured in the house of IT value • Cost of access • Cost of delivery • In service delivery Primary elements of IT Value Cost Production Service Delivery (User Welfare) Enabled by …. • Convenience, Choice, Control and Universal access Key Strategic focus areas Elimination of Duplication IT Security Economies of Scale Interoperability These imperatives will form the foundation for the rest of this document

12. Provide information technology and information systems training; Provide application software development and maintenance services; Promote the effective utilization of information technology to enhance the efficiency at all levels of the Public Service; Provide technical, functional and business advice and support regarding information technology; Provide information technology and information systems management services; Act as procurement agency in respect of information technology requirements, in accordance with State procurement policy Provide data processing services; SITA has not alleviated IT skills shortages in government. Provision of effective IT resource management has not been done by SITA Economies of scale on IT service procurement has not been felt at any level of the public sector Value for money has not been provided by SITA in delivering IT services to departments or convenience to the citizens. SITA’s intervention has not reduced departments’ dependence on contractors SITA’s intervention has not eliminated duplication and non compatibility of IT infrastructure Information sharing and interoperability in government IT services has not yet occurred SITA’s current performance does not live up to its legislative mandate Mandate Current Performance

13. Has SITA provided value for money? Has SITA provided effective IT resource management? Has SITA reduced high IT cost? Has SITA reduced the dependence on contractors? Has SITA eliminated duplication and non compatibility of IT infrastructure? Has SITA promoted information sharing in government? Has SITA alleviated IT skills shortages in government? Discussions with stakeholders reveal that there is a strong perception that SITA has not yet fulfilled its mandate Stakeholder Perceptions Yes No X X X X X X X

14. Key Business model development challenges that SITA has to resolve Elements of the Challenge • What value creating role should SITA be playing ? • What is the value proposition for that role ? • How can we optimally migrate SITA to achieve this role ? • What is the optimal time-frame to achieve this role ?

15. The next session of this brief discusses the Business Model options and the recommended Business Model Diagnosis Background and context Business Model options Recommended Business Model Model Development Migration Strategy Migration Plan Migration Key Next steps

16. Potential business model roles for SITA were defined in terms of planning, delivery, maintenance and managing The IT Value Chain Description of the Elements The planning and formulation of Government-wide IS strategy to achieve the IT value imperatives Planning Delivery Mainte - nance To ensure that there is delivery capacity and to meet the specfic IT needs of the organs of state To have inhouse capabilities to maintain the IT solutions at a low cost and the highest levels of quality Managing Continuous guidance to support the delivery of business capabilities through procurement and contract management as well as project and programme management

17. Three alternative business model roles for SITA was developed Option 1 Option 3 Planning Delivery Maintenance Planning Delivery Mainten- ance Managing Managing Option 2 Option 4 Planning Delivery Maintenance Planning Delivery Mainten- ance Managing Managing The fourth model option was developed as an extension of model option 2

18. Another view of the three distinct business model options for the role of SITA in IT service delivery Planning & Control of the delivery capability Delivery of Technology Solutions to enable service delivery Role Option 1 Program / Project Management Solution Development Solution Maintenance End-User Application Services Information Management IS Planning and Architecture IS Quality & Standards Acquisition Centre - IT Procurement Administration Role Option 2 Data CentreServices Transversal Systems DesktopServices End-UserServices Security & RecoveryServices CommunicationServices Customer Relation- ship Management Management of Infrastructure and Services Role Option 3 Role Option 4 = Role Option 2 + Options 1,2 and 3 are pure and represent the core logic/reason for existence Additional capabilities have been added to option 2 to fully support the achievement of the IT value imperatives The options enable the organisation to focus its capability building and migration

19. Value proposition Impact on the “House of IT value” Roles and Responsibilities Impact on current operations Implications on the degree of change Financial value proposition Each model option was explored further Key Elements of the Analysis

20. Interoperability Elimination of duplication Economies of Scale IT Security The value proposition per alternative business model role Option 1 Option 2 Developments of standards and guidelines to facilitate the acquisition and implementation of IT solutions Adherence to an agreed standard utilised across Government, ensuring interoperability of systems Ensure that all technology solutions that have broad applications are shared by departments Maintenance and updating of standards timeously Assist Departments translate their business needs into IT Specifications with minimal dependence on vendors Management of vendor relationships to ensure delivery to agreed service levels Release of departmental managerial focus from IT towards delivery of service to their constituents Consolidation of bulk buying power through a shared service procurement capability

21. Interoperability Elimination of duplication Economies of Scale IT Security The value proposition per alternative business model role Option 3 Option 4 Provide adequate capacity to implement and maintain IT Solutions timeously, at the lowest possible cost Adherence to an agreed standard utilised across Government, ensuring interoperability of systems Ensure that all technology solutions that have broad applications are shared by departments Consolidation of bulk buying power through a shared service procurement capability Management of vendor relationships to ensure delivery to agreed service levels Assist departments translate their business needs into IT specifications with minimal dependence on vendors Release of departmental managerial focus from IT towards delivery of service to their constituents Ensure that a government-wide focus and management of IT security is maintained

22. Provides advices to DPSA on planning and development of government-wide IT standards Performs advanced technology research Definition of architecture and network design Planning of human resources Roles and responsibilities per alternative business model role Option 1 Option 2 What SITA Does What SITA Does • Capabilities described in option 1 • Provide the mechanism where departments can obtain Technology that complies with Government standards • Monitor the implementation of IT solutions that enable service delivery imperatives • Manages the acquisition of IT solutions through procurement and contract management What SITA Does Not Do What SITA Does Not Do • SITA does not execute project and program management • SITA does not deliver Technology • SITA does not implements skills development and transfer programs within departments • Business process management is not executed by SITA • The improvement of service delivery at departmental level becomes the responsibility of the private sector and other stakeholders and not SITA • Does not develop systems • Does not operate the front office • Does not do physical support • Will not implement and run the network, however it will remain responsible for the management thereof to ensure compliance with standards and IT security • Does not execute IT security The departments have to define the service levels that SITA should be fulfilling SITA would propose solutions that would enable the achievement of these service levels

23. SITA is executes project and program management SITA implements skills development and transfer programs within departments Business process management is executed by SITA The improvement of service delivery at departmental level becomes the responsibility of SITA SITA is responsible for managing projects’ life cycle costs Roles and responsibilities per alternative business model role Option 3 Option 4 What SITA Does What SITA Does • Provide the mechanism where departments can obtain Technology that complies with Government standards • Monitor the implementation of IT solutions that enable service delivery imperatives • The security and recovery agent for all Government services in collaboration with the security cluster What SITA Does Not Do What SITA Does Not Do • SITA does not plan and develop Government-wide IT standards • Sourcing alternatives are the departments’ responsibility • SITA is on the delivery end of the ITG service delivery spectrum and not on the policy and standards development end • The design of government IT service delivery process is the domain of the DPSA not SITA • Does not develop systems • Does not operate the front office • Does not do physical support • Will not implement and run the network, however it will remain responsible for the management thereof to ensure compliance with standards and IT security The departments have to define the service levels that SITA should be fulfilling SITA would propose solutions that would enable the achievement of these service levels

24. Production Production Production Production Cost Cost Cost Cost Service Delivery Service Delivery Service Delivery Service Delivery Elimination of Duplication Elimination of Duplication Elimination of Duplication Elimination of Duplication Interoperability Interoperability Interoperability Interoperability Economies of Scale Economies of Scale Economies of Scale Economies of Scale IT Security IT Security IT Security IT Security Impact on the “House of IT Value imperatives” per alternative business model role Option 1 Option 2 Option 3 Option 4 Rationale - Primary involvement in implementation ensures delivery according to promise - Since SITA will not have capacity to perform all implementation, minimal inolvement in monitoring and control will reduce the impact on IT value Rationale - Full involvement in implementation and focused responsibility for delivery further enhances the probability for delivery according to promise by vendors - IT also reduces the burden for develoing internal capacity without increasing the delivery risk Rationale - Planning and control role increases the degree of quality(service) assurance - Lesser involvement in implementation reduces some of the impact of model on IT value Rationale - Development of standards to govern IT services - However minimal involvement in implementation and monitoring reduces iimpact of model on IT value Impact Scale High Low

25. Impact on current operations per alternative business model role for SITA Option 1 Option 3 Planning Delivery Maintenance Planning Delivery Mainten- ance Managing Managing Option 2 Option 4 Planning Delivery Maintenance Planning Delivery Maintenance Managing Managing The un-shaded areas are the capabilities that SITA must plan to remove from the current operations

26. Implications on the degree of change per alternative business model role Option 1 Option 2 Option 3 Option 4 1 Scale of change to current operations in SITA 2 Scale of skills development - reskilling and acquisition 3 Degree of Impact on the current organisation 4 Criticallity of customer relationship management 5 Criticallity of a coherent and focused communication strategy 6 Criticality of executive buy-in to the model option Based on the evaluation, Option 4 was selected as the preferred target business model High … Low Impact Scale

27. Financial Value proposition per business model option Options Funding Working Capital Capital Expenditure Options • Grants from DPSA 1 • Requirements are small • Minor capital expenditure Charge to customers based on: • Contract management fee • Subscription fee for IT advice • Outsourcing arrangements with vendors 2 • Customer accounts managed on a 30 day cycle • Vendor accounts managed on 30 day cycle • Capex burdens placed on vendors through contracts • Minor capex requirements • Large and fluctuating as inventory is included • Risk of inventory obsolescence • Risk of late / non payments for goods and services delivered • Huge and fluctuating capex requirements covering networks, computers, hardware, software and infrastructure 3 • Charge to customers based on goods and services delivered 4 • Capex burdens placed on vendors through contracts • Capex planning for network acquisition, upgrades and replacements • Customer accounts managed on a 30 day cycle • Vendor accounts managed on 30 day cycle Charge to customers based on: • Contract management fee • Project management fee • Subscription fee for IT advice • Outsourcing arrangements with vendors

28. The Service delivery strategies and targets together with the preferred role option will be the primary influence on the SITA business model Need to develop business skills that match the dynamic and varied needs of departments Organisation Structure and Competencies Development of a citizen focused scorecard to measure service delivery Strategy Performance Management Development of partnership strategies around key IT government interventions. (E.g. eGovernment) Processes Technology Development of a voice, data and video network to deliver education to previously disadvantaged areas Facilities Facilitate the development of an integrated government through process enhancements. (E.g using eGovernment ) Development of a regional and centralised service hubs to facilitate service delivery

29. The next session of the brief discusses the outline of the migration strategy, migration plan and key next steps Diagnosis Background and context Business Model Options Recommended Business Model Model Development Migration Strategy Migration Plan Migration Key Next steps

30.          The business model migration strategy was developed using a comprehensive process with the purpose of defining the major initiatives and approach for SITA to achieve tangible results Agree on set of drivers which will define the scope and extent of further work required Define the key change programs in the change journey Develop the high level migration plan Validate the migration plan with key stakeholders Prioritise the change programs We are here Refine and add further detail to the plan Define and communicate potential require- ments to key stakeholders Validate and confirm the migration plan Align the migration plan with the SITA business plans Complete the first draft of the detailed plan Finalise planning and set up the implementation capability Implement the migration plan To be finalised by SITA  Done Not yet Done

31. The perception that SITA will not be able to dramatically improve its levels of service SITA does not therefore deserve extra time in order to prove that it can add value Perception that SITA is arrogant because it has a captive market Potential for resistance from departments The large scale and complexity of change required to achieve the new business model The need to maintain and improve service levels to the current customer base The need to source the financial investment required to achieve the migration plan Specific guidelines were then developed in order to address the challenges resulting from the migration issues Outline of Issues Migration guidelines • Communication, marketing and public relations should play a fundamental role in order to promote a positive can do image • The creation of visible, tangible and early successes is critical in building service delivery credibility • Collaboration(especially with influencial depts) should drive partnership approach with departments • Utilise both the regulatory power & the collaboration approach • View and manage the migration as a program vs a “large project” • Manage SITA with a dual focus - “Maintain and improve current service levels” while “Building the new capabilities” • Utilise the collaboration approach in order to share the investment required and reduce the burden on SITA

32. Certain assumptions were made in developing the migration plan. The changes to these assumptions may impact the implementation of the migration plan • There will be visible leadership, sponsorship and support for the change programme; • Change initiatives and progress on the migration process will be managed throughout the migration; • The project team will have sufficient access to the key decision makers; • The migration strategy will be adjusted to accommodate changes to the selected model option; • SITA will dedicate the necessary resources required throughout the change journey; • Communication for the overall journey will be planned and delivered in a consistent manner; • Decision making that impacts the migration process will be prompt; • Current initiatives within SITA will be incorporated into the migration plan if they are aligned to the implementation of the preferred business option. • Executive buy-in to the business model and migration plan will be achieved ;and • Detailed planning will be done before the implementation of each phase.

33. Based on our experience, successful migration plans are dependent on four key factors - Navigation, Leadership, Ownership and Enablement • Clearly define the change programme • Minimum interuption of operations during the migration • Realisation of value through service delivery • Delivery of business benefits • Prioritisation of the change initiatives • Executive sponsorship and involvement • Dedicate resources needed for the change journey • Ensure skills tranfer and capacity builiding during the change process • Demonstrate support for the change programmes Navigation Leadership • Ownership of the SITA vision at all levels of the organisation • Communication of consistent messages to ensure buy-in • Management of stakeholders’ expectations • Development of a set of common values • Creation of a desired business culture • Leverage of SITA resources and skills as much as possible • Value -based partnerships • Reward for performance and not attendance Enablement Ownership

34. Programme Management Capability Transition Management Communications and Mobilisation Capability Development Management Culture Programme Building the future Organisational Performance Management Leadership Development Marketing and Public Relations The migration strategy will have 8 major change programs implemented according to two major themes Wrap-up Maintain & Improve service levels while transitioning Preparation Foundation Establish Scale Up Powerhouse

35. Each phase in the migration strategy will result in specific outputs 4. Scale Up 5. Powerhouse • Further enhance the performance of all capabilities • Wrap-up transitioning capabilities • Sign more service level contracts with departments • Create a culture of “Customer is King” • SITA is effectively running according to the preferred business model 3. Establish • Implement the rest of the capabilities • Transition next set of capabilities not in the preferred model • Complete review of all IT contracts • Sign the first set of service level contracts with departments • Complete performance management system 2. Foundation • Achieve the critical mass of capabilities • Transition out critical mass of current capabilities not in the preferred model • Start review of all IT contracts(current and pending) • Determine systems needs based on life events • Review and align all internal performance contracts 1. Preparation for the Migration • Plan for success • Set up program management office • Review Business plans

36. At each landmark, SITA will be enable to deliver specific value based on services - Capability creation at each milestone - 2. Foundation 3. Establish • IT procurement administration • Contract Management • Legal services • Security management • Service delivery management • Customer Satisfaction management • Technology research and development • Client Interface management • Governance • Architecture definition • IS Strategic planning • Programme and Project management • IS measurement and monitoring • Performance and Capacity management • Standards Development • Human Capital planning • IT Change management • Configuration management • Problem management

37. Building the future Building the future Two broad approaches could be adopted for the migration strategy Fast track Pros • Rapid improvements in service delivery • Build credibility quickly • Create a sense of urgency Wrap-up Maintain & Improve service levels while transitioning Concerns • Impact of union involvement • Time to build key competencies • Time to obtain approval Preparation Foundation Establish Scale Up Powerhouse 30 Days 3 months 8 months 12 months 15 months 0 Even paced Pros • Managed pace of change • Extra time for transitioning and capability building exercise Wrap-up Maintain & Improve service levels while transitioning Concerns • Allows time for resistance to change • Does not address urgency for service delivery • Duplication of costs due to running old and new Preparation Foundation Establish Scale Up Powerhouse 30 Days 12 months 18 months 24 months 30 months 0

38. How can we manage the transition of capabilities with minimal impact on the current operations and service levels to the customer? What will be the approach to integration of customers into the new SITA? How should we organise SITA in order to manage the creation of new capabilities while fulfilling our current commitments? What approach should we use to manage the financial implications of the capability transition? The capability transition program is focused on planning the migration of capabilities not included in the recommended option Key Issues that have to be addressed

39. Partner with key departments to ensure success Focus on improving performance and review service level agreeement before transitioning The migration of capabilities should be done in parallel with contract negotiations and selection of the preferred vendor. This will minimise potential conflict with the unions through the development of an inclusive approach that is utilised in all integration efforts minimise the need for SITA manage the assets of the integrated operations minimise the impact on service levels through careful management of the transition to the preferred vendor provide an opportunity to minimise the impact on the employees by ensuring that this forms part of the contract negotiations. e.g. retrenchment clauses, representativeness of the staff, Organise SITA to maintain a comprehensive focus on maintaining current service levels, development of new capabilities and the successful integration A number of critical factors will have to be fulfilled in order to achieve successful transition of capabilities

40. Critical factor 1: Partnership A partnership rather than a solo effort approach with key stakeholders will position SITA to overcome key change barriers and achieve the strategic objectives Example of Key Partners Example of Key Area • National Treasury • Department of Trade and Industry • DPSA Procurement • Department of Communications • Department of Trade and Industry • Department of Arts, Culture, Science and Technology • DPSA E-Government The exact details of the partnership will have to be developed jointly with the relevant departments within the context of the specific project(s) • This will • accelerate the process of obtaining buy-in from different stakeholders • leverage the significantly good work that has been done by other stakeholders and avoid duplication of effort • enhance the creation of a spirit of cooperation rather than that of “us” vs “them” • potentially form the foundation for discussions around contribution of both effort and investment towards implementation of key capabilities • promote the concept of “one window” to government services

41. Critical factor 2: Improve performance and Review SLA We recommend a two step process to dealing with the founding departments • Focus on improving the effectiveness across all key entities … •  Personnel effectiveness •  Process effeciencies •  Technology platform uutilised • … whilst reviewing the current service level agreement(s) to ensure that … •  the expected service outputs from SITA are aligned with the new direction implied by the IT value imperatives •  the business plans of the transition capabilities are are aligned with the new direction implied by the IT value imperatives  the time-frame for the transition is aligned with the change journey imperatives • Benefits of the approach •  The capabilities that are transitioned out of SITA will be positioned for success •  Minimises the risk of disruption in service levels and enables SITA to plan the transition •  Ensures that the capabilities adhere to the direction implied by the IT value imperatives in all areas – choice of technology, management of the IT assets, relationships with vendors …

42. The customer interaction and absoprtion into SITA The negotiations about management of assets (Hardware, Sotware and Peopleware) post - integration The IT service levels to the integrated department post-integration The capacity that SITA will have to develop in order to manage the integrated assets (Hardware, Sotware and Peopleware) The approach to partnering with the preferred vendor(s) The impact of potential union involvement on the success of the integration The content of the contracts with the preferred vendor(s) The financial implications for both SITA and the integrated department Critical factor 3: Integration Integration is the key compentence that will influence both the migration of departments into SITA and the migration of current capabilities into a new entity The integration approach will influence

43. Lock Stock and Barrel integration implies that  SITA takes over the responsibility for the IT assets (Hardware, Sotware and Peopleware)  Departments cede responsibility for contract management and procurement to SITA  SITA manages the assets in the interim before it selects the preferred vendor  SITA negotiates contract with the preferred vendor  SITA transfers responsibility for managing the assets to the preferred vendor  SITA manages the contract and service levels  Vendor delivers the service to the department  Once the current contract expires, SITA negotiates new contract Contract based integration implies that  Departments cede responsibility for contract management and procurement to SITA  SITA negotiates contract with the preferred vendor  SITA transfers responsibility for managing the assets to the preferred vendor  Vendor takes over the responsibility for the IT assets (Hardware, Software and Peopleware)  SITA manages the contract and service levels  Vendor delivers the service to the department  Once the current contract expires, SITA negotiates new contract Critical factor 3: Integration There are 2 broad integration approaches that could be adopted - “Lock stock and barrel integration”, “Contract based integration”

44. SITA does not have to develop the capacity to manage the integrated assets (Hardware, Sotware and Peopleware) - This responsibility will be passed on to the preferred vendor The IT service levels to the integrated department post-integration are not interrupted The risk of potential union push-back will be managed through contract stipulations. (E.g on retrenchment and training) The financial implications for both SITA and the integrated department are minimised through transfer of responsibility to the vendor using contract management Critical factor 3: Integration We recommend the Contract based integration approach Benefit Key Success factors • A set of critical skills have to be rapidly developed within SITA. E.g • Contract development and Management • Service Level agreements and management • Customer and Vendor interface management in order to manage the relationship between SITA and the preferred vendors • Rapid audit of the current environment - Both within SITA and in the government IT environment

45. Critical factor 4: Structure SITA will have to re-organise itself in order ensure that it achieves business results from the change journey Objectives • Ensure that the structure enables SITA to maintain focus on current operations • Ensure that a structure that enables the migration of in-house capabilities that are not part of the preferred model • Ensure that a structure that enables SITA to focus on the creation of the future business model • Ensure that integration process has • the adequate level of executive emphasis • maintains the dual effort - migration of departments into SITA and in-house capabilities that are not part of the preferred model out of SITA

46. Critical factor 4: Structure A preliminary structure was developed in order to achieve the describe objectives Board of Directors MD COO Ring fenced Delivery Capabilities Core Capabilities Support Capabilities

47. Preparation of a detailed migration plan Conduct financial analysis in order to understand the financial implications of the migration approach Conduct a skills audit based on the competences required in the preferred option Determine the integrated solution requirements to drive the IT solution blue-print(IT audit and future systems needs to drive a proactive solution delivery strategy) Review the integration approach to ensure that it does not commit SITA in a direction that is not aligned to the preferred model Review the recruitment approach to ensure that it is aligned to the preferred model Build partnernships with key stkeholders that will enable SITA to achieve rapid and tangible success Ensure that the executive performance contracts are aligned to the achievement of the strategic imperatives in the preferred model We recommend that SITA completes the folloing key next step to ensure success Key Next Steps