IFMS Scope: Modules SCM. Financial. Management (GL) Inventory. Management. Asset. Payroll. Management HRM. Procurement Management Catalogue Management

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1 Status of IFMS

2 IFMS Background The IFMS project is aimed at replacing aging and fragmented financial (including Payroll), supply chain and human resource (HR) management systems, and associated ageing technologies, across national and provincial departments. The project was approved by Cabinet on 4 September 2005 as a joint project between: National Treasury (NT) as the project sponsor and policy owner for financial and supply chain management (SCM) in the Public Service; DPSA as the policy owner for HR management and information and communication technology and SITA as the solution provider and prime systems integrator (PSI). Phase I culminated in a submission to Cabinet in 2005 (Cabinet Memorandum 6 of 2005) to obtain approval for the continuation of the IFMS. Based on the Memorandum, Cabinet took a number of decisions at its meeting on 4 September 2005 of which the following should be highlighted for purposes of this report: All financial management (including payroll), supply chain management and human resource systems should be provided centrally. All related independent systems renewal initiatives at national and provincial departments must be suspended. The independent applications used by the North West, Gauteng and Limpopo provinces, the Department of Defence (DoD) and the South African Police Service (SAPS) should be migrated to a new central solution or solutions (IFMS). The new financial management, integrated SCM (with the exception of the procurement management module) and payroll systems should be developed and managed by SITA. The new HR and procurement management systems should be acquired and managed by SITA as commercial-offthe-shelf (COTS) systems.

3 IFMS Scope: Modules HR Inventory Management SCM Payroll Asset Management HRM Financial Management (GL) Procurement Management Catalogue Management BI

4 IFMS Benefits Automate of business processes to ensure greater efficiencies in process execution and improve quality and access of data. Support the implementation of the Public Finance Management Act, Public Service Act, and other relevant legislation by providing centrally hosted secure financial, supply chain and HR management solutions. Will greatly improve the general control environment, assist in reducing the incidents of fraud or the early detection thereof, and help to minimise the level of corruption in supply chain management processes. Result in development of Information and Communication Technology (ICT) skills within the country. Reduce duplication of financial type systems use by government. Provide visibility into the departments financial, human resource management, payroll and supply chain management position by providing easy and secure access to data via a multitude of reports.

5 IFMS Product Development Status Development Completed Development Completed, Test Completed and Ready for Lead Site Implementation Development Completed and Being Tested Development Underway Supply Chain Management Core Asset Management (200) Procurement Management (20) Catalogue management (20) Human Resource Management (200) IFMS Human Resource Management and PERSAL Interface Leave Component (planned implementation 203) BI Vulindlela Replacement (planned lead site implementation 203) Supply Chain Management: Inventory Business Functionality (planned lead site implementation 203) Financial Management Core (Some components have been developed and unit tested - planned development completion 203) Payroll (planned completion TBD dependent on service provider to be sourced) IFMS Human Resource Management and PERSAL Interface Organisational Management and Personnel Admin (planned development completion 203) Development Planned Supply Chain Management: Services Procurement (commencement dependent on approval of proposal by National Treasury and DPSA)

6 IFMS Lead Site Implementation Status Completed Procurement Management National Treasury SCM Operations and National Treasury Contract Management Asset Management National Treasury Limpopo Department of Treasury Limpopo Department of Roads and Transport Limpopo Department Local Government and Housing Limpopo Department of Agriculture Human Resource Management Public Service and Administration In Progress Asset Management Limpopo Department of Health Department of Defence Human Resource Management Free State Department of Education Procurement Management Department of Defence Planned Payroll Department of Public Service and Administration Finance Core National Treasury Inventory National Treasury Services Procurement National Treasury IFMS HRM and Persal Interfaces Department of Public Service and Administration Free State Department of Education

7 IFMS Brief Status Per Module Payroll: Attempts to source a service provider to develop, maintain and support the module were unsuccessful. During the last attempt the RFB was withdrawn to allow additional time for engagement between National Treasury, SITA and DPSA on the approach (i.e to acquire a Commercial-Off-the-Shelf solution or to do bespoke development as stipulated in the Cabinet Memo of 2005). Financial Management: Accenture was contracted via a formalised RFB process to develop, maintain and support the module. To-date, the project has progressed approximately 52% of which specifications were completed and some functionality developed and unit tested. Business Intelligence: There are two development initiatives ie Business Intelligence Vulindlela Replacement and Business Intelligence for IFMS. Praxis was contracted to develop the Business Intelligence Vulindlela Replacement module, an interim solution intended to replace the current legacy Vulindlela legacy business intelligence solution. The development of the modules was completed and data migration has commenced. The development of Business Intelligence for IFMS is in the initial stage. HRM: A SAP module was acquired from SAP for IFMS HRM, implemented at DPSA and is being used. The module is being implemented at Free State Department of Education. SCM: The SCM system will enable departments to generate demand forecasts, plan and execute procurement processes, effectively manage assets, and balance inventory across the supply chain. It consists of: Catalogue Management; Item and Service Master; Asset Management; Procurement Management and Inventory Management.

8 IFMS Brief Status Per Module SCM (continued) Catalogue Management: Acquired from PiLog, implemented at National Treasury and is being used. Asset Management, Item and Service Master: Modules were developed, have been / are being implemented at lead sites and operationalised (supporting, stabalising and ensuring functional fit). The modules were implement at National Treasury andlimpopo: Provincial Treasury, Department of Roads and Transport, Department of Local Government and Housing, and Department of Agriculture and is not being used. The modules are being implemented at Department of Defence and Limpopo Department of Health has been delayed. Procurement Management (supply chain management operations, transversal contract management* and services procurement): A module was acquired from Oracle for Supply Chain Management Operations and Transversal Contract Management, it was Implemented at National Treasury. The module is been implemented at Department of Defence and implementation has been delayed. Supply Chain Management Operations is being used at National Treasury and is being operationalised. Transversal Contract Management is not being used. It was used during the initial implementation and subsequently whilst using the module, requirements emanated that were not catered for. The module is currently being amended to accommodate these requirements Services Procurement, Module acquisition is being planned for. Inventory Management: the module has been developed and software integration testing is in progress. Product User Acceptance Testing and Lead Site implementation is being planned for. The detailed status for Supply Chain Management, Human Resource Management and Business Intelligence follows.

9 SCM Status: Procurement Management Supply Chain Management Operations A module was acquired from Oracle for Supply Chain Management Operations and Transversal Contract Management, it was Implemented at National Treasury as a Lead Site. Supply Chain Management Operations is being used and is being operationalised. Transversal Contract Management is not being used. It used during the initial implementation and subsequently whilst using the module, requirements emanated that were not catered for. The module is currently being amended to accommodate these requirements The module and is being used. The module The module is currently being implemented at Department of Defence and implementation has been delayed. Services Procurement Module acquisition is being planned for.

10 Supply Chain Management

11 Supply Chain Management (SCM) Scope The SCM system will enable departments to generate demand forecasts, plan and execute procurement processes, effectively manage assets, and balance inventory across the supply chain. It consists of: Catalogue Management, consistent classification of uniquely identified items and services. Item and Service Master, addition of Item Management data e.g. Commodity Manager, Item Control and Supplier information to improve governance and control. Asset Management, control and visibility of assets through the complete government asset lifecycle. Procurement Management, manage procurement processes (supply chain management operations, transversal contract management* and services procurement) throughout the full procurement life cycle, beginning from the point where a requirement has been identified (approved), through to awarding and managing a contract with a supplier to provide the required service and payment thereof. Inventory Management, controls receipt, issue and distribution of items, monitoring of stock levels, placing of requisitions, and maintenance and control of items. * Note: Only National Treasury will utilise Transversal Contract Management functionality to source suppliers for transversal type goods and services

12 SCM Status: Catalogue Management, Item and Service Master and Asset Management Catalogue Management module Acquired from PiLog, implemented at National Treasury and is being used. Item and Service Master and Asset Management modules Modules were developed, have been / are being implemented at lead sites and operationalised (supporting, stabalising and ensuring functional fit). Lead Sites Implemented National Treasury The module is not being utilised due to organisational change management not being effective. Furthermore, there is a requirement for electronic data capturing functionality for assets Limpopo: Provincial Treasury, Department of Roads and Transport, Department of Local Government and Housing, and Department of Agriculture The module is not being utilised due to organisational readiness (e.g. Insufficient staff capacity) and expectations on the system i.e. The National Transport legislation requires the Vehicle Identification Numbers (VIN) as the primary identifier where the Provincial Policy requires the bar code number as the primary identifier. The IFMS complies to the National Transport Legislation, however it makes provision for secondary identification numbers such as bar code and vehicle registration number. Lead Sites Currently Being Implemented Department of Defence: Implementation delayed due to the Department requiring a hosting architecture that meet their legislative security requirements. A federated hosting approach was recommended to the Department to support a separate instance of IFMS for Department. The Department accepted the approach in principle pending a detailed write up of the solution by SITA and representatives from the Department. The drafting of the document has been initiated and will be detailed during the work sessions to be held between SITA and DOD. Limpopo Department of Health: Implementation delayed due to the Department not being able to asset data in a format as required by the IFMS. National Treasury and SITA to visit Limpopo and address the matter.

13 SCM Status: Procurement Management Supply Chain Management Operations Module acquired from Oracle and is being operationalised. Implemented at National Treasury as a Lead Site and is being used. Currently being implemented at Department of Defence. Implementation delayed due to Department of Defence requiring a hosting architecture that meet their legislative security requirements. A federated hosting approach was recommended to the Department of Defence to support a separate instance of IFMS for Department of Defence. The Department accepted the approach in principle pending a detailed write up of the solution by SITA and representatives from the Department. The drafting of the document has been initiated and will be detailed during the work sessions to be held between SITA and DOD. Transversal Contract Management Module was acquired from Oracle and is being operationalised. Implemented at National Treasury as a Lead Site and is currently not being used. The module was used during the initial implementation and subsequently whilst using the module, requirements emanated that were not catered for. The module is currently being amended to accommodate these requirements Services Procurement Module acquisition is being planned for.

14 SCM Status: Procurement Management Key PMM enhancements releases up until October 203 A release to production (for usage) was done on 9 April 203. It included enhancements such as New Standard Chart of Accounts; PMM integrating SARS required information to BAS (Tax Clearance Numbers, Bank Accourt Holder Name, Approval Indicator, Country of Issue, Identification Number and Company Registration Numbers) and an additional 43 outstanding change requests A release to production is planned for 3 May 203. Enhancements such as PPPFA, Government General Matrix Report, Government Suppliers Awarded Report and Government Non Award Report has been made and the module has already been released for user testing. A release to production is planned for 5 June 203. It will include enhancements such as workflow to cater for multiple authorisers, vacation rules on invoicing and visibility of Banking details and cost centre allocations, Integration to Inventory, and SCOA Item Matching field A release to production is planned for 5 October 203. It will include enhancements such as integration to other IFMS modules as well as BAS, outstanding PMM audit findings changes (management of Supplier information, enforce four way matching, decimal values not allowed in quantities, price break functionality, vendor type and Vat number must be mandatory) Documentation in the process of being updated based on findings from NT internal auditors: Update of URS, Finalise Access Management Policy and Procedure and Update development and implementation methodologies.

15 SCM Status: Inventory Management Development (excl integration into other IFMS modules) of agreed upon scope has been completed. Software integration testing is in progress. Product User Acceptance Testing and Lead Site implementation is being planned for. Delays in development experienced primarily due to lack of resources within SITA.

16 SCM Key Challenges Organisational readiness to adopt and operate SCM modules Change management to be strengthened and organisational readiness checklists to be completed to ascertain organisational readiness levels. Constraints and SITA capacity to acquire, develop, enhance, and integrate inclusive of enhancing transversal contracts functionality to meet business requirements SITA Turnaround Strategy underway, Capacity augmented/to be augmented with industry partners, and source capacity from with SITA (external to IFMS). Unsigned key documentation such as User Requirements Specifications, Project Charter and Concept of Operations (the latter two for Inventory Management), Project Closure report for Catalogue Management The matter has been escalated to IFMS SLA Committee and the responsible stakeholder has been requested to ensure the documents are signed. Availability of users to conduct product user acceptance testing test schedule to be circulated in advance, user identified and to be scheduled accordingly. Delay in identifying ownership of master data and establishment a master data governance office the matter was escalated to the IFMS SCM Product Board to address. No agreement by SLA Committee operationalisation costs the matter was discussed at the IFMS SLA Committee and finance agreement options are being looked into.

17 SCM Lessons Learnt SCM programme proved to more complex than originally envisaged Restricted time frames Governance issues Longer than planned procurement and contract negotiation processes Lack of sufficient capacity in key stakeholders Mutual understanding between different stakeholders of respective limitations and requirements Readiness and change management issues in lead sites

18 Human Resource Management 8

19 Human Resource Management (HRM) Scope The human resource management system will enable departments to comprehensively plan and manage its organizational structure, post establishment and workforce throughout the human resource management lifecycle in a formalized and thorough manner. Furthermore, employees will be allowed to transact with the system by using the employee self service functionality. The Human Resource Management system makes provision for the following functionalities Manage Organisation Structure and Post Establishment Manage HR Planning Recruitment Management Termination of Services Employee Movement Career Management Performance Management Education, Training and Development Remuneration Management Manage Labour Relations Manage Health and Safety Human Resource Reporting

20 HRM Status A SAP module was acquired from SAP for IFMS HRM, implemented at DPSA and is being used. Lead Site Implemented Implemented at DPSA and is currently being utilised, however users are required to double capture information IFMS HRM and PERSAL in order to get access to Payroll functionality Lead Site Implementation Free State Department of Education The solution has been configure and testing (software integration and system integration) has been completed. Product User Acceptance Testing, Data Migration and Training still needs to be done. Implementation has been delayed due to: The Department is not willing to double capture information in the same way that DPSA does. The Department does not have sufficient funds to upgrade the hardware and network infrastructure to the level required by IFMS and for operationalisation of the module.

21 HRM Status: Key Development Activities IFMS HRM performance management functionality is being extended to cater for all DPSA s requirements. A Change Request to bring about the required changes has been approved by the IFMS HRM Product Board and development will commence. erecruitment functionality has been developed and tested. The landing for citizens to apply for positions is planned to be developed as well as the piloting of the functionality at DPSA. An electronic interface between IFMS HRM and PERAL is being developed and once implemented it will eliminate double capturing of data. The interface has three components, i.e. Leave Management, Personnel Administration and Organisational Management. Leave Management: Development and testing (system integration testing and product user acceptance testing) has been completed Organisational Management and Personnel Administration: Development have been completed and the functionality is currently being tested (system integration testing) after which product user acceptance testing will be done

22 IFMS Conclusion and Way Forward Execute various audits to establish accurate status quo and identify project risks; Establish a project management office within NT; Review and update all user requirements (including infrastructure); Evaluate and decide on the appropriateness of the solutions acquired; Determine new and realistic timelines for deliverables and implementation (roll out strategy); Review the concept of lead site testing; Quick wins on the legacy system