1. READY WHEN YOU ARE
Kgabo H Badimo
23 February 2008
National and provincial government departments have not bought an
HR, financial or procurement application for two years, while the
prioritised IFMS takes shape. As a consequence, SAP and others have
focused on parastatals and metros. But once the IFMS is in place, open
vendors like SAP will be ready to plug in and take them to the next level.
Ten years ago, when SAP started out in South Africa, it was with its R/3 client server
offering.
Towering awe-inspiringly over the enterprise business application landscape for the
next decade, the German vendor gave South African organisations a leg up on the
SAP bandwagon, while early global movers were going through R/3 migrations.
At the time, enterprise back-office software in government was the „province‟ of
financial systems like BAS, and HR/ payroll systems such as Persal. The legacy
persists to this day.
THE SMALL MATTER OF IFMS
Now that things are about to change with the planned implementation of the
Integrated Financial Management System (IFMS), which will replace these systems,
it still won‟t necessarily benefit SAP or other such vendors. All national and
provincial government departments have been directed to stop any IT purchases that

2. might clash with the IFMS. (The IFMS will be n integration and migration of
government finance, HR, asset management, logistics and other line-of-business
solutions, into a single distributed transversal system, to be used across government
structures.)
Given the certainty that such a complex array of systems won‟t all be from one
vendor, this leaves SAP to hedge its bets with state-owned enterprises (SOEs) and
municipalities.
SOE INROADS
SAP South Africa‟s GM for Public Services, Kgabo Badimo, says SAP SA has made
serious inroads into SOEs, putting it down to having spun off its Public Services
division as a privately owned company, in which shares were sold to Blitec (the
Black IT Forum‟s investment arm).
What were these entities‟ needs of an ERP system, and how did SAP satisfy those?
Badimo highlights one part of each selected client‟s end-to-end SAP deployment:
Telkom
In 2003, Telkom invested in an ELA system with a suite of SAP products, covering all
three components (HR or HCM, financial and SCM). Cost cutting was HCM‟s major
advantage, in headcount, paperwork and time spent approving single-click functions
like leave. Change management (executive buy-in and communication with IT) was a
critical success factor, and helped HR get the most out of the system. Telkom

3. reviewed its processes with line management, decided which processes were HR‟s,
which belonged to the LOB (recruitment, for example, became a line function), and
which ones ought to be electronic. Having 10 SAP-certified people on board also
helped.
Functionality increased dramatically over the years and now supports analytics.
Following payroll Telkom installed the SAP portal, Manager‟s Desktop and Employee
Self-Service. Along with ESS, Telkom moved to shared services (call centre and back
office support functions) and centralised administration.
Transnet
Transnet, a complex, federated and
sprawling transport organisation,
implemented SAP end-to-end
across divisions and functions, in
one of SAP‟s largest sites. Badimo
explains the interplay between the
heart of any ERP implementation,
financials, and other modules, like
HR. “Salaries must be budgeted.
HR requirements are defined
within this module, with the ability
to plan six months ahead. This has
an impact on expenditure.”
Transnet‟s HR module gave it leave management through self-service, with a huge
impact on man days recovered. Handling much of HR‟s functionality in automated
fashion also put paid to much repetitive work, such as job code definition when
advertising positions. The system is mapped to divisional processes but reports at
group level.
Gauteng Shared Services Centre The Gauteng Shared Services Centre (GSSC)
invested substantially since 2002 in SAP, growing this investment as it added users
(new departments) and functions. Offering centralised shared use of the system,
GSSC is today heavily invested in SAP.
Badimo highlights the procurement solution, SAP SRM. “This module eliminated
paperwork for tender submissions. All suppliers are in the procurement database.
IFMS LOWDOWN
ITWeb reported in May that SITA’s tender for the HR module
was being brought forward, having already issued tenders for
the IFMS’s integrated development environment (IDE) and
procurement module.
Following HR, SITA will develop payroll, inventory
management and financial accounting systems, and buy and
develop integration and security infrastructure. The payroll
system will be developed in-house and integrated into the HR
module. The rest of the system, comprising financial
management and supply chain management will also be
developed in-house, using the IDE toolkit to future-proof
IFMS. The IFMS will be used as a shared service by 34
national and 109 provincial government departments.

4. Procurement procedures are followed unvaryingly, according to the rules defined for
every type. Tenders are even issued automatically.”
The upshot is little human interaction, other than to initiate a tender. The system
even comes up with a recommendation. But the big win is savings and integration
into core backend systems for reports at any given point. Badimo notes that the
GSSC‟s SAP implementation transcends organisation boundaries (i.e. individual
departments). The GSSC centralised infrastructure is shared by 12 provincial
departments.
UP AND UP
Further north, SAP has had notable successes in Africa. Yeni Keri, Director,
Customer Solutions and Operations: Nigeria, and Regional Manager: West Africa,
highlights SAP‟s automation of the Delta State Government of Nigeria‟s
administration with its financial accounting, management accounting, materials
management and public sector accounting modules. “The move away from manual
processes realised great time savings,” says Keri. She also cites better control over
cash project and capital expenditure (avoiding duplication of payments, and fraud
and leakage prevention).
SAP was later challenged by Oracle when partner implementation challenges arose.
But the issue was resolved and SAP retained for its proven expertise in the same
sector in African (the Zimbabwean Ministry of Finance couldn‟t be a more valuable
reference site).
Keri says change management was rigorous, as SAP encountered resistance to the
system. Delta State is currently implementing SAP‟s HCM solution, and considering
tax and revenue management systems.
As for SAP Nigeria‟s seriousness with the country, it is the only limited-liability
operation in all of Africa. The entity is staffing up, focusing mainly on local skills and
partners, expanding beyond Abuja into Lagos, and seeking reference sites across
industries. It is a founding sponsor of Nigeria‟s Convention on Business Integrity.
KEEPING GOVERNMENT CLOSE
And as for SAP‟s future in government, it is betting the farm on its flexible, agile
Business Process Platforms (BPPs), a series of industry-specific integration platforms
that make it possible for government entities to effect back-office automation

5. through integration, as well as mutually beneficial outcomes, by working together
seamlessly with other government entities.
That would have been money in the water, had the SA government‟s IFMS initiative
not also had a similar openness in mind. The call for tenders on the IFMS made
provision for an integrated development environment (IDE), so that BAS and
Persal‟s successor will tie into the wares of industry-standard vendors like SAP.
“SAP has perfected its enterprise services architecture with NetWeaver. We‟re on the
leader board,” says Badimo. “This will stand us in good stead as government goes
beyond ERP. It is time to think beyond automation, and start looking at
collaboration, without reinvesting in a new technology platform. Any new technology
should just plug into the IDE.” In short, as government is moving ahead, SAP is one
of those in industry that are ready to guide the way.
Contact details:
Kgabo Badimo
GM for Public Services: SAP South Africa
Tel: 011 235 6000
Fax: 011 235 6301
Email: kgabo.badimo@sap.com
URL: www.sap.com