Agenda driven by ‘single individual’
An influential international consulting firm, requested by the SA Revenue Service (Sars) to conduct a health check on its five IT dimensions last year, revealed that Sars has spent about R3.997 billion on modernisation and that R1 billion has been spent on Barone, Budge & Dominick’s (BB&D) services.
When BB&D acquired the contract, through exemption, it was for about R100 million, comprising of software and maintenance for about R85 million and hardware for about R15 million. By last year, Sars had spent R1 billion on the particular service provider.
Although, modernisation “did deliver value as it created an electronic platform for tax administration”, in terms of “impact and value for money”, a Sars assessment roadmap, prepared on June 2, 2015 by Gartner Consulting, showed a medium rating.
Some of the issues raised in the roadmap were that decisions taken to proceed with “a certain vendor were not good”. And part of Gartner’s recommendations were that they should ensure that “contract renewals do not transgress the PMFA Act or the Com- petition Act and that mandatory compliance requirements are rechecked prior to signature of renewal in a timely manner”.
Other issues were that when modernisation started in 2006, there was no clear idea or strategy of what the end would look like, said Gartner. Again, “business seemed to have little or no say in determining the modernisation agenda and related IT investments, even though they signed off against it”.
Gartner also noted that “the modernisation’s agenda was largely driven by a single individual” and that the “agenda was not fully aligned with the business requirements at all times”.
“The modernisation process worked on a principle of memos describing what was going to be done. Furthermore, these memos included elements of alignment with Sars’ business plan, but was never 100% matched with the business needs,” revealed the assessment roadmap.
It also stated that an open tender process was conducted to which three consortia responded, one of which was disqualified.
“The other two went through the Sars evaluation process and, from the documentation provided, the Accenture consortium achieved the highest score. The evaluation process was audited by Internal Audit, after which the tender was awarded to Accenture. BB&D were not part of the original Accenture consortium and were brought in through a tender exemption in terms of Treasury Regulations 16A6.4,” the report stated.
“A memo to Minister (Manuel) dated 2/11/2006 reflects that the GM strategy modernisation and technology was only prepared to recommend IBM, Accenture and BB&D as a result of his past experience with those vendors,” recorded Gartner.
“Achievements in modernisation were never mapped against actual business benefits delivered and cost incurred were not linked to benefits realised. Gartner therefore found it impossible to quantify the value delivered by modernisation.”
Seeking clarity on the leaked report, Gartner Africa Events & marketing manager Lisa Lawlor said: “We cannot discuss projects conducted for clients or the work produced. Therefore, I recommend you contact Sars directly.”