Labour minister blasts Siemens

Labour minister Membathisi Mdladlana has taken Siemens' IT Services and Solutions unit to task over its alleged failure to address the IT needs of the department's Compensation Fund (CF).

However, a source within Siemens claims the minister could be misinformed.

Addressing the media and other stakeholders at his official residence, in Pretoria, this week, Mdladlana said: "I am so angry with them I don't even want to talk to them. They asked to meet with me and I said no - they can talk to some other official."

Siemens IT Services and Solutions, formerly Siemens Business Services, is the ICT provider for the labour department, in a R30 million-per-quarter deal, signed in 2002. Over 10 years, the total contract value is R1.2 billion.

The minister and his officials said the fund today is still characterised by piles of laborious paperwork that are being "pushed around" and that Siemens is too slow in updating its systems.

ITWeb attempted to contact Siemens Southern Africa CEO Sigi Proebstl for comment, but was told he is unavailable as he is in Germany on business. No one else in the organisation was willing to comment officially on the minister's complaints, or on the details of the deal.

The Siemens contract expires in 2012, which has prompted the minister to decide to renegotiate the entire deal with Siemens.

"I am not satisfied," he said. "We must renegotiate the contract and I don't want to see them either until they start to deliver.

"I don't know if we can get any IT company to come on board" with the CF, Mdladlana stated. He noted that IT companies tender for the business, saying it would be simple work, but then "run away" after realising the scope of the project.

Newly-appointed CF commissioner Shadrack Makhonto provided examples of where the unit needs IT interventions. These include the duplication of efforts where doctors are paid more than once for the same service.

Makhonto said this also links with the department's governance environment, as managers cannot pick up duplications and over-payments. "To generate information at this stage is a mission. With the right information, we can pick up who is holding up the documents."

According to Makhonto, the "minister's dream" of the fund operating in a paperless environment is far from being achieved, despite plans to have all documents digitised.

Vanguard Mkosana, DG of the Department of Labour (DOL), confirms he is "not happy" with how Siemens has been assisting the fund to address these problems.

"We have called Siemens and put across that it [the situation] is problematic. The whole frame of the [R1.2 billion] contract needs to be restructured. The systems we need now can only be addressed appropriately by 2008, so [the CF's needs] become irrelevant."

Reacting to the minister's complaints, a highly-placed source within Siemens said: "Perhaps the minister is not being fully informed by his officials about the situation on the ground."

He explains that the existing public private partnership (PPP) is guided by the DOL, in that it determines the IT priorities Siemens has to address.

He adds: "The department put on hold all technological transformation initiatives" towards the end of 2005 until the beginning of 2007 "to make way for the development of a department-wide business strategy".

"You can't put new technology in place to support legacy processes," he says. "At the CF we are starting to work on this. There are definitely challenges at the CF."

At the time of announcing the partnership with Siemens in 2002,the then DG of the DoL, advocate Rams Ramashia said the deal's main goals were to ensure an integrated approach to service delivery, enhance the utilisation of information as a strategic resource, integrate its IT systems more effectively, and ensure its information is digitalised for more accessibility.

Benefits to the public were to include being able to access services via call centres and information kiosks on a 24/7 basis, and online access being able to facilitate digital transactions.

Siemens was expected to digitally link information systems with operational systems, self-service digital transactions between the department and its clients, and provide access to real-time information with "a few simple commands".

Ramashia says Siemens was selected as a partner due to its international IT and PPP expertise. He also notes that Siemens incorporated a 37.6% black empowerment component into the unit that landed the contract.

In 2004, DOL CIO Deon Haasbroek noted the PPP would require "a total paradigm shift in utilising information systems as a business enabler". He added: "The DOL's experience is that the implementation and management of its PPP project does not go without challenges."

ITWeb attempted for two days to get comment from Haasbroek on whether Siemens was delivering on its targets. Queries were, however, referred to departmental spokesmen who, in turn, referred the matter back to Ramashia. At the time of publication, none of the spokesmen, nor Ramashia or Haasbroek, had come back to ITWeb.

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