GSSC wants mandate change

By Christelle du Toit, ITWeb senior journalist

Johannesburg, 20 Mar 2008

The Gauteng Shared Services Centre (GSSC) wants premier Mbhazima Shilowa to change its mandate from being one of a government department to a government agency.

However, commentators have questioned the move, asking whether the administrative body would be able to stand on its own feet in such a situation, and whether it would clash with existing state agencies.

The GSSC's head of communications, Khusela Sangoni, says the provincial back-office hub is waiting for the premier to approve its plans.

"We need an Act of [the provincial] Parliament to change our operating model," she explains. "We were hoping it would happen as of 1 April, but for now we are still waiting."

The GSSC was promulgated in November 2001 as an internal support body for Gauteng's 11 provincial departments. It offers back-office support in the areas of finance, human resources, procurement and technology support services.

It falls under the jurisdiction of finance and economic affairs MEC, Paul Mashatile. One of its key services is the running of a call centre that manages all driver and learner licence bookings in the province.

Facing huge obstacles

Craig Terblanche, business and technology advisor for Marketworks, and Steve Edwards, business advisor for Marketworks, have questioned the GSSC's intended move.

"It is a very different thing to run a shared service centre versus running a business," warns Terblanche. "Essentially, the change would amount to establishing a business entity with a more complete business model. Such an entity will live and die by the value it delivers to clients.

"The biggest challenge to establishing a viable business model in this space is the clarity of the mandate, one that is not confused by political agendas. A clear mandate may allow them to charge clients, but there needs to be a clear value proposition and sustainable service delivery model."

Edwards adds: "If the operational shift is not complete or coherent, we'll end up with nothing more than a much more expensive government department posing as an agency."

Sangoni says the reasons for the move include that the GSSC wants to save government money - it has been allocated about R1 billion for the current medium-term financial period - and finance itself. This would mean expanding its mandate from a provincial role to one that interacts with local and national government as well, and charging for its services.

Another motivator is that it wants to be able to pay more for scarce skills and procure services for which it currently has to go through the State IT Agency (SITA).

Encroaching on SITA's territory?

Sangoni anticipates that changes to the SITA Act, expected later this year, will allow for the GSSC to perform similar functions to that of the incumbent state agency.

However, initial indications are that the Act's amendments will most likely give SITA more power, compelling local government to also procure though it.

Terblanche says the GSSC's move to become a state agency will in fact lead to a conflict of interest. "SITA has the mandate to offer 'must do' services to government. Some 'competition' in this arena is healthy for improved service delivery, but I do think the GSSC is treading on thin ice."

Edwards also questions the move: "Is there a tangible driver for the move, or do we have egos and ambitions at work here? Why has the GSSC not actually looked to a partnership with SITA, if delivering on its mandate is the real motive?"

He adds: "I'd add concerns about the economic impact of another cost layer to the single largest sub-economy in the country. Their own sustainability is one thing, but their talk of being able to fund themselves and pay their professionals more - while noble enough - implies a hike in administration costs, however you plead budgetary substitution and enhanced efficiencies.

"Given the socio-economic environment and culture, it is simply going to cost more, whichever way you rationalise it."