Integrated Financial Management System IFMS Status and Plans

Integrated Financial Management System (IFMS) Status and Plans Ahead: for CFO Forum Presenter: Lindy Bodewig | Chief Director: National Treasury | 12 August 2016

Overview • Present State of Progress – Critical Path – Procurement of Software Licenses, Fit-For-Purpose • Considerations for Way Forward – Implementation Principles – Rollout Considerations – Intensity of Focus – Centralised Design – Engagement with PT’s 2

IFMS I vs. IFMS II IFMS I November 2013 IFMS II

Software procurement progress Procurement: Evaluation and Administration - Mo. F briefs Cabinet on imminent software procurement - Oracle Corporation (OSM) receives conditional award, post conclusion of functional and price evaluation of bids June / July 2015 November 2015 Value Assurance - Business processes concluded and submitted to OSM for process-toproduct mapping - Governance strategies for PMO are drafted in anticipation of rapid team expansion January 2016 Value Assurance Processes kicked off; Aug / Sept process (P 2 P) 2015 compliance - OSM assessed; Engagement product Strategy demonstrations Completed held; technical workshops - OSM Kick-Off conducted; legal Session held and commercial with OSM work stream activity intensifies Contracting March 2016 - Value assurance completed - Legal negotiations advanced - Commercial negotiations advanced - Steering Committee meeting to seek approval of key principles for conclusion of software purchase April 2016 - Software procurement concluded - Internal planning intensifies 4

IFMS solution stack (Oracle) Customers Mobile / Web Disconnected Agents Kiosk. Phone, IVR Web Phone, Email. IVR Fax, Employees Email Text Chat Local Office User Access Devices DATABASE ENTERPRISE MANAGEMENT MIDDLEWARE AND ITEGRATION ENTERPRISE SECURITY ENTERPRISE DEVELOPMENT PLATFORM BUSINESS MODULES ENTERPRISE SHARED INFRASTRUCTURE 5

Applications procured The licenses are “perpetual” – meaning that RSA pays a one time license fee that allows continued use of the software for as long as RSA complies with all terms of the license agreement Core Business Modules

Process to Product Mapping Exercise The Business Process Documents (BPDs) 232 93% 79 91% 91 83% 26 94% 36 • Total number of processes: • SCM reform resulted in increase in complexity and breadth of requirements to be supported by the IFMS project; • All the new / extended business processes had to be verified against the solution proposed by Oracle to: (a) ensure that the solution proposed still [materially] meets our business requirements; (b) identify any gaps in the solution and requirements and the impact thereof on the IFMS ERP; • All activities were undertaken with the respective policy owners

IFMS Programme Critical Path (Short-term) 04/16 05/16 06/16 07/16 08/16 09/16 10/16 11/16 12/16 01/17 02/17 03/17 04/17 05/17 Software Licences Negotiations Inform Cabinet, HODs & others Procure Envision Phase Services & Mobilisation IFMS Programme Finalise Lead Site Selection Conduct Envision Phase: • Target Operating Model • Business Architecture • Solution Architecture • Implementation Roadmap Elaborate Phase: Solution Design Procure and Install Hosting Infrastructure Procure Implementation Services Procure Lead Sites Technical Infrastructure Procurement of Communications Infrastructure Construction Phase: Solution Build

Overview • Present State of Progress – Critical Path – Procurement of Software Licenses, Fit-For-Purpose • Considerations for Way Forward – Implementation Principles – Rollout Considerations – Intensity of Focus – Centralised Design – Engagement with PT’s 9

Implementation Principles • The IFMS solution is a ‘COTS ERP Vanilla Wall-to-Wall’ Implementation; – The customisation of the solution must be managed according to OSM ‘Best Practices’; – The implementation of the solution will be executed by means of the OSM’s implementation methodology and ‘Best Practice’ as prescribed by the OSM; • The IFMS solution will be centrally hosted and managed; • Departments are responsible for the accuracy and completeness of data to be migrated to IFMS, according to the required standard as prescribed by the OSM; • Departments must ensure that all required infrastructure is in place for implementation, including, but not limited to, ‘last mile’ infrastructure. Guidance will be provided by the IFMS PMO; and • Departments must ensure that suitable human resource capacity is in place to support the implementation.

Rollout Considerations • Provincial and National Lead Sites – WC (All depts. except health, education), EC (Treasury, Social Development, Office of the Premier) – (Under discussion) – NT, DPSA, Environmental Affairs and possibly others • National Rollout – Generic Administrative Departments: Administrative and primarily governed by the Public Service Act (PSA) and the Public Finance Management Act (PFMA), and utilize a single version of the IFMS solution. – Differentiated Departments: Governed by special legislation and associated regulations that augment the above legislation: § Defence, SA Police Services, Health, Basic Education, Correctional Services, Justice. Consideration is being given to a centralised (cloud-styled) deployment, offering opportunities for accelerated national rollout 11

Intensity of Focus (OUM) 12

Engagement with PT’s and National CFO’s Change Management • Resource management considerations – FM, HR, SCM policy alignment – Capacity-building programme • Operational Change – Working with new technology interfaces – Revised operational processes and controls A centralised (cloud-styled) deployment will have implications for the envisaged pace for change-management 13

Case Study: LG Electronics Improves HR Management by Consolidating on a Single Global HRMS “The key to business success lies in the effective management of human resources. We now use a single HR system developed on Oracle to manage 82, 000 employees in 39 countries. The result has been a significant improvement in efficiency, a better understanding of our HR processes, and dramatic cost savings. ” – Mi Jung Kang, Chief Human Resource Officer, HR Management Team, LG Electronics Key benefits: ü Established enterprise-wide view of operations across 114 subsidiaries in 39 countries by moving to a centralized HR management platform; ü Improved efficiency by standardizing HR processes ü Enhanced HR management by giving senior managers real-time access to information ü Boosted employee satisfaction and eased workload on HR staff by introducing self-service options ü Boosted staff learning by providing online training