1. PRESENTATION TO THE SELECT COMMITTEE ON LABOUR AND PUBLIC ENTERPRISES
INFORMATION AND COMMUNICATIONS TECHNOLOGY UPDATE
12 February 2014

2. BACKGROUND : PUBLIC PRIVATE PARTNERSHIP
The Department of Labour (DoL) entered into an Information Technology (IT) Public Private Partnership (PPP) with Siemens Business Services in 2002 for a period of ten years
This was the first IT PPP and was facilitated with the assistance of National Treasury
The purpose of the PPP was to provide a full range of IT services to the DoL
70% of the PPP was for IT operations and infrastructure, and 30% for systems development
Prior to the end of the PPP, EOH bought Siemens and continued to deliver the PPP services to the DoL

3. BACKGROUND : TERMINATION SUPPORT
When the PPP ended in November 2012, a Termination Support period was initiated, in terms of the PPP contract, for a handover back to the DoL
The termination support ran for a period of 12 months ending 30 November 2013
During the termination support, EOH were to finalise all outstanding deliverables from the PPP and handover the environment back to DoL including information, licenses, contracts etc.

4. ICT Future Strategy
Parallel to the EOH/Siemens Contract, a 5-year ICT strategic plan was drafted and approved by the DG
Implementation of components of the strategy have commenced, these include :
Staff augmentation
Implementation of a governance framework
User education and awareness sessions
ICT Policies update
Infrastructure update (Datacentre) – through the refresh programme

5. Challenges identified towards end of the Termination Support Contract.
Legal opinion confirmed that in terms of the Labour Relations Act, the Department was COMPELLED through Section 197 TO TAKEOVER the service provider employees.
SITA was not ready to take over ICT support services
The new ICT 5 year strategy was in its initial implementation stages and appointment of staff in line with the newly approved structure was discontinued.
EOH had not completed some of the enhancements in line with the Exit and Transfer Strategy due to a suspension that occurred earlier during the year.
DOL was not going to have ICT support beyond 30 November 2013.
The CIO resigned and a new Acting CIO had to be appointed

6. Transfer of staff under Section 197 of the LRA
The process of transferring staff to the DOL became protracted due to various disagreements on several matters, including, which staff to transfer
This was further hampered by the lack of information provided by the service provider
The negotiations broke down to an extent where the DoL approached the Pretoria High Court for a declaratory order
The matter was settled out of court with the agreement that only the IT operational services staff would be transferred.

7. IT Future Strategic Direction
During Mid November 2013, DOL had a consultative meeting with SITA, National Treasury and The State Law Advisors to:
Map a way forward given the pending end date of the contract and other identified challenges.
Determine readiness of SITA to take on some current EOH ICT support services and their future role in the DOL ICT.
To map a way forward given the Court Process that was underway and to:
Clarify procurement process and any form of assistance that Treasury can provide

8. Key Agreements from the Consultative Meeting
DOL will have to make its own judgement on other internal matters
SITA was not ready to take over however advised on need enter into a short term and very tight contract with EOH.
That the DOL has a legal obligation to take over staff that were working on the DOL contract under the LRA Section 197 of the contract and this process needed to be completed.
That Treasury will support the DG’s procurement for a very focussed New Contract with EOH.
That the Department of Labour will provide SITA with a list of external additional services to be procured once it has completed the staff transfer process and Services Gap Analysis

9. ICT EMERGENCY INTERVENTION
A Six Month agreement ending 31st May 2014 was negotiated and concluded with EOH with CCMA’s assistance on the 29th November 2013 covering:
Completion of outstanding IT application by EOH without additional payment
Transfer of identified staff from EOH commencing from 1st December
Submission of receipts and other documentation and Payment of outstanding debts
Additional services to be rendered by EOH post transfer of staff

10. CURRENT STATUS – OPERATING FRAMEWORK
BUSINESS RELATIONSHIP MANAGEMENT
Business Relationship Management (DoL, CF, UIF), ICT Communications, Systems Integrator
PORTFOLIO MANAGEMENT
Project Management, Business analysis, Systems Analysis, IT Architecture
IT OPERATIONS
Datacentre
Telecomms
IT Security
Networks
Desktop support
Provincial IT Operations
SOLUTIONS AND MAINTENANCE
Application support and maintenance
SAP support
Custom software
Off-the shelf
Systems development
STRATEGY, GOVERNANCE & COMPLIANCE
IT Strategy
Governance and compliance
Audits
IT Risk management
IT SERVICE MANAGEMENT
ITIL Service Management
Quality Assurance

11. CURRENT STATUS CONTRACT EXTENSION - GOVERNANCE
a formalised and defined governance has been implemented to manage the contract extension
These structures include business representatives, DoL Exco and service provider representatives
Governance structures for oversight :
IT Programme and Portfolio Committee – weekly
IT Steering Committee – biweekly
IT Exco – monthly
DoL Exco - biweekly

12. CURRENT STATUS – GOVERNANCE FRAMEWORK

13. CURRENT STATUS STAFF TRANSFER
a total of 96 staff were transferred to the DoL
These staff have been integrated into the Department through orientation and briefing sessions
Morale of staff is very high due to finalisation of the process and job stability
Staff transferred are currently providing the majority of IT services to DoL
Management workshop completed to define processes, standards, operating framework, financials etc.

14. CURRENT STATUS Section 197
Employees transferred were all employees who were directly involved in providing IT services to the DoL
Contract employees, shared employees of the service provider and employees not providing IT services were not transferred
Terms and conditions of employment of each employee remained substantially the same
Leave accruals and pension funds transferred to DoL
Employees have employment continuity (ie. years of service carried over to DoL)

15. CURRENT STATUS OPERATIONS
Seamless transition of IT operations during the transfer and transition process
IT service gaps identified and mitigated – direct service contracts signed with service providers, where necessary
No impact to end users or clients of the DoL
IT operating framework agreed, based on the approved ICT strategy

16. CURRENT STATUS OPERATIONS – Service Desk
the State Information Technology Agency was appointed to host and manage the IT service desk
Service desk staff transferred from the service provider to DoL are based at the SITA offices
No disruption of services or impact to end-users was experienced in transitioning the service desk from the service provider to SITA
An SLA with SITA is in place to monitor and manage performance

17. CURRENT STATUS OPERATIONS
Migration of the Sheltered Employment Factories is in progress
This will benefit the Sheltered Employment Factories in the following manner :
allow for economies of scale eg. licensing
benefit from the already stable DoL IT infrastructure
reduce IT costs by using DoL contracts, infrastructure and licenses
improve IT security
assist in addressing SEF IT audit findings

18. FINANCING THE ICT STRATEGY
During the 2012/13 ENE processes, the DoL unbundled the ICT allocation from that of an operational lease to cater for the transfer of staff.
Allocations of R30m were therefore reflected in respect of Compensation of Employees, and Goods and Services to cater for these expenses.
During the 2014/15 allocation process however, the allocations made by the DoL through the unbundling exercise were removed from the budget due to the fact that the positions created to absorb staff in terms of LRA S197 remained vacant.

19. FINANCING THE ICT STRATEGY
An allocation has been provided for the 2016/17 financial year to cater for this.
The DoL has however absorbed the staff as from 1 December 2013.
This matter has been brought to the attention of the National Treasury, but has not yet been finalised.
An amount of R100m becomes available in 2016/17, but does not address the current requirement.

20. NEXT STEPS Finalise Human resource processes : Functional structure
Organisational structure
Develop job profiles
Job evaluation process
Finalise and implement operational plans for IT service delivery
Refine and roll-out of the IT strategy
Address service gaps post end of the contract extension
Continue change management programme for transferred staff
Reach an agreement with SITA on the additional services to be procured before end of February 2014 and embark on the procurement process.

21. THANK YOU