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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 - PowerPoint PPT Presentation
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Creating Value through ICT in Local Government – the Cape Town experience
Name surnameCompany
2
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
Function & Duties Municipalities
3
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
Demographics of Cape Town
4
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“Back-office systems were deemed to be outdated, functionally inadequate and not properly integrated”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”
5
Creating Value in the Public Sector –
“City Leadership only get involved when they realise that – if IT fails they will fail ”
Improved EfficiencyMed. High
Result:Continue doing more of the same.
Adv
ance
Soc
ial U
plift
men
t
Financial & Organisational TransformationEnabled trough ICT
Hig
h
Advance socialupliftment
Informationtransparency
Enable Social / PoliticalConsciouspolicies
EnhanceOrganisational Performance
Improveservice delivery
Address historical backlog and service Inequality – Social UpliftmentImprove Service Del.
Long-term financial Sustainability and Improved Efficiencies
Createfinancialvalue
6
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
Improved EfficiencyMed. High
Result:Continue doing more of the same.
Adv
ance
Soc
ial U
plift
men
t
Financial & Organisational TransformationEnabled by ERPProgramme.
Hig
h
Address historical backlogand service Inequality –Social UpliftmentImprove Service Del.
Long-term financial Sustainability and Improved Efficiencies
Advance socialupliftment
Informationtransparency
Enable Social / PoliticalConsciouspolicies
EnhanceOrganisationalPerformance
Improveservice delivery
Createfinancialvalue
7
Financial VALUE
Public SectorValue Creating Measures
Quantifying only the tip of the Iceberg
8
People
OrganisationStrategySTRATEGY: What must we do ?
PROCESS: How are we going to do it?
People: Who is going to do it ?
TEC
HN
OLO
GY
Process
What makes Organisations Successful?
9
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 not so 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.
Our ERP Strategy – Fundamental to Organisational performance
MA
INTE
NA
NC
E P
rocesses
RE
VE
NU
E P
rocesses
PR
OC
UR
EM
EN
T Processes
AS
SE
T MA
NA
GE
ME
NT P
rocesses
PR
OJE
CT P
rocesses
CU
STO
ME
R P
rocesses
HR processes
PLANNING processes
ACCOUNTING processes
10
Business Process Integration
R/3 and IS-U/CCS
FIFinancialAccounting
COControlling
AMFixed AssetsMgmt
WFWorkflow
ISIndustrySolutions
MMMaterialsMgmt.
HRHumanResources
SDSales &Distribution
PMPlant Maintenance
GISAM/FM
WorkClearance*
CAD
FieldServiceSupport
PSProjectSystem
PPProductionPlanning
QMQualityManagement
EDI
SCADA*
SMServiceMgmt
IS-U /FERC
IS-RE
IS-U/CCS
- Financial Accounting
- Management Accounting
- Asset Management
- Procurement & Inventory Management
- Project Accounting
- Billing to sundry debtors
- Real Estate Management
- Industry Solution for Utilities
- Customer Care & Revenue Management
- Human Resources & Payroll
- Plant Maintenance
ERP Fact 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
11
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”
Blaauwberg
Tygerberg
Oostenberg
HelderbergSouth Peninsula
CapeTown
CAPEMETROPOLITAN
AREA
City ofCape Town
12
-R 200,000,000
-R 180,000,000
-R 160,000,000
-R 140,000,000
-R 120,000,000
-R 100,000,000
-R 80,000,000
-R 60,000,000
-R 40,000,000
-R 20,000,000
R 02001/2 2002/3 2003/4 2004/5
Support CostsProject Costs
Creating FINANCIAL VALUEThe City’s ERP-ROI Study:
Total Project Cost Over 3 years:
R355 mil (2001-2003)Support Cost: p/a
R 62 mil (2003)
R 0
R 50,000,000
R 100,000,000
R 150,000,000
R 200,000,000
R 250,000,000
R 300,000,000
R 350,000,000
2001/2
2002/3
2003/4
2004/5
Staff CostsRevenueInventory Benefits IT Value Opportunity
Value Creating Opportunities (VCO’s) tracked:
Support Staff Costs IT TCO Revenue Inventory
13
R -300,000,000
R -200,000,000
R -100,000,000
R 0
R 100,000,000
R 200,000,000
R 300,000,000
R 400,000,000
R 500,000,000
2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9
Costs Benefits Realised Actual Case Expected Case Feb2002
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.
14
FINANCIAL VALUEImproved Cash Position
Cash Position - City of Cape TownJune 2002 to July 2006
0
500
1,000
1,500
2,000
2,500
Jun-
02
Dec
-02
Jun-
03
Dec
-03
Jun-
04
Dec
-04
Jun-
05
Dec
-05
Jun-
06
R '0
00 0
00
Budget Actual Cash Position
Go-live
Planned loan of R300 mil not taken up
15
ICT spend in the City of Cape Town
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2007 2008 2009 2010 2011
IS&T as % of total City Expenditure
IT investment as Percentage of City total expenditure
1.03% =R200 252 579
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2007 2008 2009 2010 2011
IS&T as % of total City Expenditure
IT investment as Percentage of City total expenditure
The value of our IT investment can not be doubted. A relatively diminishing investment is enabling an
growing organisational capacity.
16
Financial VALUE
Social VALUE
Citizen VALUE
Political VALUE
Public SectorValue Creating Measures
Quantifying only the tip of the Iceberg
17
Creating: SOCIAL VALUELarge 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
18
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
ProcessFlexibility of Service Account available in 3 official Languages
19
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
Go-live
20
ERP Story: 2001-2010 – it’s a journey
16
4.7 UpgradeBenefit Realisation
ERP6 Upgrade
HCM
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CorporatePerformanceManagementBusiness
Warehouse
FlexibleRE
PSRM
Value Creation demands Ongoing Investment
21
Logistics
Human Resources
Real Estate and Land
Revenue Management
Finance
R/3 and IS-U
R/3 and IS-U/CCS
FIFinancial
Accounting
COControlling
AMFixed Assets
Mgmt
MMMaterials
Mgmt.
HRHuman
Resources
SDSales &
Distribution
PMPlant
Maintenance
GISAM/FMCAD
PSProjectSystem
PPProductionPlanning
QMQuality
Management
EDI
SMServiceMgmt
IS-U /FERC
IS-RE
IS-U/CCS
R/3 and IS-U/CCS
FIFinancial
Accounting
COControlling
AMFixed Assets
Mgmt
MMMaterials
Mgmt.
HRHuman
Resources
SDSales &
Distribution
PMPlant
Maintenance
GISAM/FMCAD
PSProjectSystem
PPProductionPlanning
QMQuality
Management
EDI
SMServiceMgmt
IS-U /FERC
IS-RE
IS-U/CCS
City of Cape Town System Capability
Business Warehouse
Corporate Performance
Management
Customer Perspective
Internal Business Process
Perspective
Financial Perspective
Innovation & Learning
Perspective
Vision and Strategy
22
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:
Receive Execute Report
Assign
AssignClos
e
Close
Service Delivery: The core business of Local Government
The Notification Process
Managing Service Delivery through the Corporate Works Management Process.
23
Spatial Reporting: Service Delivery
The City’s Dashboard and Reporting Tools
The Value of up-to-date Management Information – presented via dashboards
25
Logistics
Human Resources
Real Estate
Revenue Management
Finance
R/3 and IS-U
R/3 and IS-U/CCS
FIFinancial
Accounting
COControlling
AMFixed Assets
Mgmt
MMMaterials
Mgmt.
HRHuman
Resources
SDSales &
Distribution
PMPlant
Maintenance
GISAM/FMCAD
PSProjectSystem
PPProductionPlanning
QMQuality
Management
EDI
SMServiceMgmt
IS-U /FERC
IS-RE
IS-U/CCS
R/3 and IS-U/CCS
FIFinancial
Accounting
COControlling
AMFixed Assets
Mgmt
MMMaterials
Mgmt.
HRHuman
Resources
SDSales &
Distribution
PMPlant
Maintenance
GISAM/FMCAD
PSProjectSystem
PPProductionPlanning
QMQuality
Management
EDI
SMServiceMgmt
IS-U /FERC
IS-RE
IS-U/CCS
City of Cape Town a Systems View
Business Warehouse
Corporate Performance
ManagementCustomer
Perspective
Internal Business Process
Perspective
Financial Perspective
Innovation & Learning
Perspective
Vision and Strategy
Transactional Systems enabling
Local Government Business Process
26
“Analytical and Reporting Tools”
Only once you have well defined automated Business Processes you can extract
Valuable Management Information.
27
Reporting and Dash boarding –
OperationalReports
TacticalReports
StrategicReports
28
2010 Event Tracking Dashboard
29
SDBIP’s – City’s delivery Management
30
Organisational Performance Management
31
People
OrganisationStrategySTRATEGY: What must we do ?
PROCESS: How are we going to do it?
People: Who is going to do it ?
TEC
HN
OLO
GY
Process
The Role of IT Systems in Value Creation
IT Systems allow organisations to align and enforce:
32
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
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