Case study: ICT as the key ingredient of your city development strategy

Nirvesh Sooful
Board Member, it4ALL
Chief Technology Officer, Satinlink Technologies
Director: Strategy, Hetu Consulting
Managing Director: Southern Ambition

Innovative Development Solutions

it4ALL S outhern 1
2/21/2009
Ambitions Reg No. 2004/067721/23

Been involved in the IT industry for

approximately 20 years
Joined Local Government in 1997 as Director:

IT for Cape Metropolitan Council (CMC)
2000 – seconded to Unicity Commission

(Unicom) to develop strategy roadmap for the
new “megacity”
2001 – Interim Manager: ICT for the

amalgamated City
2002 – July 2008: CIO of the City of Cape Town


Nirvesh is the architect and driver of the City’s Smart City strategy, which Communications Minister
Ivy Matsepe-Cassaburri in January 2005, called a “visionary transformation strategy,” which
positioned Cape Town “to become one of our most technologically advanced cities” and “a
frontrunner in South Africa’s National IT Strategy”. The strategy also focuses on how to harness the
power of ICT to meet the development needs of the city and all its citizens.
While at the City of Cape Town, Nirvesh has implemented some of the largest ICT enabled business
transformation projects in South Africa, creating billions of Rands of value for the City. These have
resulted in the city winning numerous national and international awards including the Bill and
Melinda Gates Foundation Access to Learning Award and the 21st-Century Achievement Award
from the Computerworld Honors Programme. In September 2007, Nirvesh received a Provincial
Honour Award from the Premier of the Western Cape as a person “rendering exceptional
achievements and exceptional meritorious service in the interest of the Western Cape.
ITWEB July 2008

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Challenges facing cities

◦ Globally
◦ Nationally
◦ Locally
The emerging agenda for local government

and the role of ICT within that
Case study – Practical examples of using ICT

for:
◦ Efficient and Effective Administration
◦ Improved Governance and Customer Service
◦ Social and Economic Development


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Cities and towns are growing (size and influence)

(The world is becoming more urban)
Devolution of functions to lower levels of

government (Governments are decentralizing)
Globalisation (Cities are becoming more global)

Major programmes modernise/ re-invent

government (Government is being reformed)
Additionally, technological developments and e-

commerce are having a profound effect on
society and speeding up change…..


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“Sub-saharan Africa runs the risk of being virtually deleted from a
world economy that increasingly is being driven and shaped by
informational and globally networked capitalism…..
…. Countries can operate effectively in the new global economy only
if they meet two conditions: they must command adequate
information and communication technology infrastructure and they
must generate the human resources to operate it”
Manuel Castells
Spanish sociologist and author of “The Information Age: Economy, Society and Culture”
Quoted in the Sunday Independent 16/07/2000

“The ability to maximise the use of knowledge is now
considered to be the single most important factor in deciding
the competitiveness of countries as well as their ability to
empower their citizens through enhanced access to
information”
Department of Arts, Culture, Science and Technology
White paper on Science and Technology, 1996


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Increasing pressure to consider alternate service delivery -

i.e. find creative methods through which municipalities can
mobilise energy, capacity and resources outside the
municipality for the development of the area
Increasing pressure to become service and customer oriented

e.g. Batho Pele ('People First') White Paper
Increasing pressure to involve the community in the work of

the municipality
Increasing pressure to provide all relevant information to

other levels of government, communities & other stakeholder
More and more functions being devolved to local government

(partly due to fiscal and budgetary constraints at a national
and provincial level, which leads to 'unfunded mandates')


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Employee disillusionment/ uncertainty

Organisational decay

Lack of common service delivery standards

across areas under our control
Lack of integration between Departments and

Directorates
Increasing bureaucracy - huge reliance on

manual processes and people based
processes
IT Systems focused mainly on cost reporting

not business enablement

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Is about the social and The role of ICT within this

economic development needs agenda:
of the city ICT enabled Social and

Is about creating a competitive Economic Development

city ICT enabled

Good governance and good Administration/ Service

Government Delivery
Customer/ user/ citizen driven

ICT enabled Governance

Partnership oriented


Leadership + Policy and Regulations


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Citizens and businesses

Target: Target: Target:
Citizens Society & the economy
Council employees &
Improved
Councillors

Efficient and Governance Social and
Effective and Customer Economic
Administration Service Development
Foundation

Leadership
Enabling policy and regulatory environment
Core/ strategic infrastructure
Appropriate Institutional Model (for delivery)


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Pursuing a buy Vs build philosophy with regards to

application software.
Focus on customer and network-based solutions, making

data and applications available from anywhere in the city.
Data should be captured once and as close to the source as

possible.
Focus on integrated enterprise-wide solutions to facilitate

communications and data sharing across the new city.
Focus on centralised administration with decentralised service

delivery.
Streamline the administration and delivery (operations) of IT

services to increase efficiency and effectiveness while
reducing costs.
Leverage economies of scale.



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Efficient and Effective Administration:

Billing to sundry debtors
Financial Accounting
SAP Fact Sheet
SD FI
Sales & Financial

 420 end-to-end Business Processes
Distribution Accounting
MM CO Management Accounting
Materials Controlling
Procurement & SCADA*
Mgmt.

R/3 and Cost: R354milAM
PP (2000-2002)
Inventory
Fixed Assets
Production
Management
IS-U/CCS Mgmt
Planning
 Single Instance – 8 terabyte db
EDI
PS
 7 500 Users
QM
Plant Maintenance Project Asset
Quality Management System
Management
WF
 580 SAP Sites City Wide
PM
Field Workflow
Plant Maintenance
Service
IS
 3,2 mil ISU contracts
Support IS-RE Project Accounting
HR Industry
Work
Solutions
Clearance* IS-U /
Human Resources

 1,2 mil consolidated invoices per
FERC
SM GIS
CAD Real Estate
month
Service
Human Resources & AM/FM
IS-U/ Management
Mgmt
Payroll
CCS
 2 mil equipment items.
Industry Solution for
Utilities
Customer Care &
it4ALL S outhern Revenue Management
AmbitionsReg No. 2004/067721/23


How was the benefit realised?
• Improved visibility and transparency of information on the new
invoice, the ability for citizens to pay their accounts at any municipal
pay point and the implementation of a call center to address billing
queries.
• Revenue Services performed significant data alignment duties in
converting data to SAP.
• Revenue enhancement interventions have received priority attention.

Calculation:
12 Month Moving Average -
• 1% increase in the payment ration =
Payment Ratio
R6 mil per month.
100.00%

• ROI option: 90 % payment ratio was
98.00%
96.00%
used as the baseline for this ROI study
94.00%
and only 11% of financial value of the
92.00%
increase above baseline has been
90.00%
used. = R224.6 mil.
88.00%
• 100% option: Instead of allocating
86.00%
Payment Ratio
only 11% - if 100% allocation over 90%
84.00% ROI Baseline
82.00%
base is to be used the financial value
Jun-04
Jul-03

Nov-03

Jul-04

Nov-04
May-04
Aug-03

Jan-04

Aug-04

Jan-05
Oct-03

Mar-04
Apr-04

Oct-04

Mar-05
Apr-05
Sep-03

Dec-03

Feb-04

Sep-04

Dec-04

Feb-05

would be = R794 mil.

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Cash Position - City of Cape Town
June 2002 to July 2006

2,500

2,000
R '000 000

Go-live
1,500

1,000 Planned loan of
R300 mil not
taken up
500

0
Jun-02

Jun-03

Jun-04

Jun-05

Jun-06
Dec-02

Dec-03

Dec-04

Dec-05
Budget Actual Cash Position Innovative Development Solutions

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No Txns per Day
8 000
7 000
Average Daily Value R744,201 6 000
Average Daily No. of Txns 1140 5 000
4 000
Andre Stelzner, ESC Manager, City of CT 3 000
“Another interesting area has been the 2 000
automation of fuel payments through e- 1 000
fuel system and interface into SAP. 0

Through this we pay approximately R750
000 per day for fuel to the respective
suppliers without any human
intervention...... Sum of No Txns

......What makes things even
Inv Value per Day
3 500 000
better is that the price is
3 000 000
checked against contract
2 500 000
pricing and payment is
2 000 000
optimised to ensure that we
1 500 000
only pay on due date. In the
1 000 000
past we had the fuel supply
cut to the city due to late
500 000

payment, now nobody worries
0

about it.”

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Sum of Inv Value

Improved Governance and Customer Service

Allow Citizens to contact the City via any channel and at any office,

but record this in a single record:

This will –

Create a uniform level of Service
◦
Allow for central telephone contact centre – irrespective of the service
◦
being requested
◦ Complete record of all Citizen Contacts
◦ Allow for the performance management.

To be addressed by ensuring that all parts of the Organisation

record Citizen Contacts via single integrated ERP system (SAP).

How does the ERP enable this –

◦ Via the Citizen Interaction Centre Module (ISU-CIC).
◦ A single screen exists from which queries can be answered and work can
be initiated.


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Consumption History
Account Balance.

Click for View Service Orders History of Customer
Click for Graphiccurrent and
and details of Meter raised Raised
future amounts Contacts
Monthly Consolidated
Readings details of payments
and and Period
Instruction to
Consumption.
received.
Account. No further action
Operational Units to
required Click for details
perform work.
Click for copy of Invoice
Click for Progress and
Costing Information

One place to see all
accounts.

Click for service
required eg. Electricity


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Spatial, Dashboard eg. Balanced Scorecards, Graphical


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We are learning that Citizen Value leads to Citizen Loyalty.

Citizens demand Private Sector 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.
Citizens demand that their requests be actioned
 Works Management via Generic Enterprise-wide
Process
Citizens are looking for Flexibility of Service
 Account available in 3 official Languages


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Social and Economic Development

Objective: to ensure that all citizens of Cape

Town have access to basic information and
communication technologies (ICT).

www.smartcape.org.za
Public access model that allows computing

facilities to be provided cost effectively,
using open source software and
piggybacking on existing infrastructure and
resources.
◦ Word processing and other applications
◦ Connected to the Internet
 Web sites
 E-mail
Enabler of other social and economic

development initiatives by the City


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Our projects have resulted in tangible benefits to
real people across all communities


100 communities connected

(500+ access points)
+ 90 000 users. Rapid growth

in new users
Facilities 400% oversubscribed.


Tremendous success – finding

of jobs, expanding businesses,
connecting communities, etc.
Access to relevant local content

key to a successful e-
government programme
Mobile Smart Cape was

launched in first Quarter 2006.


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Entrepreneur Support and Business Development:

Digital Business Centres
◦ 4 launched, training, entrepreneur support, voucher scheme, etc.
Youth Development and Job Creation: Kulisa Project

◦ 130 youth, 95% employment
ICT for the masses

◦ ICT skill a basic requirement for entry into the economy, 20
training centres
Techno Nucleus:

Digital Business Centre
◦
.Net Competency Centre
◦
FOSS Competency Centre - real projects that touch real people
◦
Online Content Creation
◦
Refurbishment Centre
◦
Smart Cape Access Technical Support
◦
Cisco Academy
◦
it4All Network
◦
Municipal Broadband



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Digital communications are the basis of the

modern knowledge economy
Digital communications are integral to the

delivery of services, trade and commerce, the
creative industries and even social interaction
Convergence means that all types of traffic

can be carried and exchanged across any
digital network
At the core of these networks are optic fibre

cables
The demand for the bandwidth provided by

these cables is growing exponentially


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The total contribution to GDP is expected to amount to

R225m in 2007/08, R483m in 2008/09 and R736m in
2009/10. Based on these projections, the proposed
broadband rollout would have made a cumulative
contribution to GDP of R5.7 billion by 2011/12 when the
majority of the infrastructure development will be complete.
This cumulative total increases to over R211bn by 2026/27
(over the 20 year lifetime of fibre).
YES, you read right!!! - 211 BILLION RAND
From a jobs creation point of view, the report finds that quot;total

direct and indirect jobs are expected to amount to 2 412 in
2007/08 and 4 837 in 2008/09. It is expected that 14 828
direct and indirect jobs would be created in 2010 and nearly
252 000 by 2027quot;.


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Thank You
Questions/
Discussion

Contacts:
nirvesh@sooful.co.za
Copies of this and other related
presentations, as well as further discussion
can be found at
www.knowledgecommune.com/blog


it4ALL S outhern

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