Case Studies (Tesota Consulting)
1. ICT Consulting at a Government Department (2013)
Issue: Outsourced ICT costs were out of control and service levels not as desired, i.e. diminished value from ICT
Problem identification:
The ICT services were outsourced to a local ICT company and this company had been the incumbent for about ten years. The service provider and ICT were no longer working as a unit. ICT was largely irrelevant except for providing funding for infrastructure and general services. The service provider was imbedded to a point where services to the users were provided directly and new projects initiated without the full involvement of ICT.
The service reviews were not effective and no corrective action was effected during the period, particularly the preceding two or three years. The cost of services had grown substantially from the time it was initiated but the service levels were not satisfactory. Current prices were in excess of R300-400 m a year.
Interventions:
Analysis of the business requirements, basic services and special solutions for the components of the business units separating the services into categories ranging from commodity services to unique solutions. This analysis was used to develop a services catalogue and estimate pricing was provided based on expected service levels.
The service catalogue was used as the focal point for a request for proposals to provide ICT services to the department. The services were split into four service lines. This would allow sourcing niche providers for each service line. The capacity of the ICT directorate was reviewed and organisational changes were recommended and included a function to manage the service integration function and manage the service providers accordingly.
An ICT governance framework was recommended to improve the decision making in ICT support of the business as well as controlling the introduction of new ICT systems into the environment.
Outcome:
The department successfully appointed new service providers, at a total cost of R200-R250 m a year, with an increased scope of services, better control by ICT and more satisfactory service delivery. The ICT department was reorganised as recommended and now controls the environment and have taken complete ownership of the service delivery.
2. Project Recovery (SAP) at an SOE
Issue: The SAP implementation project was not progressing as per plan, problems with contractor and cost overrun projected
Problem identification:
The primary service provider was struggling to execute the project due to lack of control over subcontractors and could not galvanise the capacity required to execute the project. The project value R145m.
Intervention:
The project review indicated the key problem to be the main contractor was not experienced or certified to carry out such an implementation. In addition the client was reluctant to terminate the contract in case this would lead to a long-drawn out court battle, which in turn would necessarily halt the project.
The other complication was the poor process mapping that had been done prior to the development of the blueprints necessitated significant customisation of the programme leading to a requirement for high end resources and thus cost issues between the two parties, the contractor and sub-contractor.
The agreed approach was to salvage the project at minimal cost variation. The project review of progress and payments made as well as the commercial arrangements provided guidance as to how the engagement could be terminated without prejudice for either party. Analysing the project progress versus expenditure, i.e. the deliverables paid for indicated that the client had made payments not in sync with the progress and as such the vendor owed the client R5m. By forfeiting this amount, the client was able to terminate the contract.
The next step was to redraw the RFP for the rest of the implementation reusing as much as possible the work done by the errant contractor. This would allow the project to be brought back on track.
Outcome:
The original contract was terminated without any fallout at a cost of R5m and 3 months’ time loss.
A new certified service provider was sourced using the new RFP Terms of reference (drawn up by us). It took two months to engage new service provider.
Provided guidance on the blueprint creation phase, limiting the customisation required to implement the solution.