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23 October 2017 04:35 (South Africa)
Opinionista Yonela Diko

Sassa and JSE’s Project Orion: When a big institution misjudges the difficulty of a task

  • Yonela Diko
    Yonela-Diko-new-photo.jpg
    Yonela Diko

    Yonela Diko is currently the Spokesperson of the African National Congress (ANC) in the Western Cape. Prior to assuming his role in the ANC, he worked in various companies in the private sector. Between 2007-2009 he worked for one of the Leading Retirement Fund Companies, NBC Holdings as an Employee Benefits Consultant. After that he joined the Corporate Strategy and Industrial Development (CSID), an Economic Research Unit housed under the School of Economics at Wits University.

    He did his BCom degree at the University of Cape Town majoring in Economics.

As with the JSE’s Project Orion, Sassa’s IT system had to be moved in-house, but this proved extremely difficult. Moving away from this arrangement would be a tall order in the league of Project Orion and it’s possible that after we have moved, we will miss CPS and its effectiveness in distributing to Sassa beneficiaries.

In 2004 the JSE signed a R200-million deal with the global consulting and technology firm Accenture to embark on a drive to update its IT system to next-generation technology. The project was codenamed “Project Orion”. The JSE’s state-of-the-art system Project Orion was to replace the majority of the JSE’s legacy information technology systems and infrastructure. The system implementation met so many setbacks that by 2007, three years later, it was still not completed.
In 2007, the JSE had to take a painful and difficult decision to move back its IT function from Accenture in-house. This was after many disasters including losing an hour of trading due to an unspecified network problem. The IT system was a huge failure and the JSE lost R300-million paid to the company for the software. Project Orion was supposed to be a success because Accenture, which prides itself on its high performance delivery, was managing it.
It turned out Accenture misjudged the difficulty of the task of upgrading the JSE’s technology infrastructure. And things were worsened by the fact that Accenture wasn’t allowed to talk to the media to clarify its position regarding Project Orion. Which left a lot to speculation and hysteria. Accenture had to take the pain and cough up a hefty R75-million. Although it should have followed that heads at the JSE needed to roll, they did not. There was no mention of heads rolling even though the question had been asked.
Asked whether Project Orion was a failure, JSE then deputy CE Nicky Newton-King said, “No – but it is late and that’s disappointing.”
Misjudging the difficulty of a project, denying its difficulty, with no one taking accountability, loss of hundreds of millions, it’s the story of Project Orion, it’s also the story of Sassa.
The story of Sassa, however, is not necessarily a three-year story like that of Project Orion, and does not begin in 2014 when the ConCourt declared the contract with CPS invalid or in 2012 when the deal with CPS was actually signed. The story of Sassa begins with a social security grants programme that has gone through an evolution, always looking for the next generation of technology to perfect it.
Bathabile Dlamini found a social development department that had been bleeding money for years, with lots of holes and gaps, dead people being paid welfare, department staff looting pensioners’ money, hijackings of money vans and rural shops robbing trusting elders. Even then, those who came before Bathabile had found a different set of problems and had done their best to clean up the system. Like the JSE, big decisions about improving the system needed to be made and big companies needed to be employed to do it.
JSE customers can possibly recover from losing billions in trade over a system malfunction, but 17-million of our most vulnerable citizens cannot. In fact, by 2005, only a year later, it was already clear that Accenture had underestimated the magnitude of the task,, but it would only be in 2007 that the JSE took that a painful decision to bring things back in-house.
Given the leap forward that Bathabile Dlamini has given her department since taking over, at least insofar as cleaning up the grants beneficiary payout is concerned, it’s a pity that she did not come out looking very prepared in her first press briefing. She presented a crystalised administration without a proper narrative about the difficulties of migrating systems in a project of this magnitude. Social security systems across the world weigh heavily on government as the biggest administrative tasks, and almost all of them have troubles.
In the Unites States, President Franklin Roosevelt signed the Social Security Act on August 14, 1935, establishing a Social Security Board to administer a programme of old-age retirement benefits based on a person’s earnings history. The board had less than 17 months to set up a record-keeping system unparalleled in history. This would be a daunting task even if everything went smoothly, which of course it did not. The board then had to figure out how to get an anticipated 22-million workers and 3.5-million employers registered by January 1, 1937, when the payroll tax would take effect. The plan was to set up a nationwide system of field offices to deal directly with the public, issuing numbers and taking claims; but as of September 30, 1936, the Bureau of Old-Age Benefits had only 164 employees and not even a third of that 22-million had been registered.
Given the historical difficulties in both Sassa and other major technological transitional projects, it’s not clear how Chief Justice Mogoeng Mogoeng would have the final wisdom on at least the time it would take to perfect this system with a different supplier. It would be great to know what is he basing his decision on. From where I am standing it seems the ConCourt was only concerned with ensuring CPS does not renew its contract by March 31, 2017, given that it was declared legally invalid, not really concerned about the complexities of migrating IT systems of this magnitude, something that would require the ConCourt to do some in-depth study. The current contract has not really lapsed, so it’s not clear what the ConCourt is really doing, except having a sense of vulnerability to public hysteria.
As with the JSE’s Project Orion, Sassa’s IT system had to be moved in-house, but this proved extremely difficult. One of the reasons why Sassa wants to use CPS as a service provider after March 31, according to their statements, is because CPS is the only company that meets its requirements for biometric identification. This may not be true, but what is true is that moving away from this arrangement would be a tall order in the league of Project Orion and it’s possible that after we have moved, we will miss CPS and its effectiveness in distributing to Sassa beneficiaries. It’s a decision that can only be taken after deep and exhaustive options, simulations, pilot projects and an ultimate conviction that such a move will not result in any dropping of the ball. We cannot afford it.
Although Sassa has changed in many ways over the years, the root causes of its administrative challenges have remained much the same throughout its existence. Sassa has overcome many difficult challenges in its 23-year history, and will no doubt weather the current storm. Sassa has a history of rising to its challenges and evolving to meet society’s changing needs. Some may doubt that social security will be there for them in the future, but such an absence is highly unlikely.
Sassa is a survivor. DM

  • Yonela Diko
    Yonela-Diko-new-photo.jpg
    Yonela Diko

    Yonela Diko is currently the Spokesperson of the African National Congress (ANC) in the Western Cape. Prior to assuming his role in the ANC, he worked in various companies in the private sector. Between 2007-2009 he worked for one of the Leading Retirement Fund Companies, NBC Holdings as an Employee Benefits Consultant. After that he joined the Corporate Strategy and Industrial Development (CSID), an Economic Research Unit housed under the School of Economics at Wits University.

    He did his BCom degree at the University of Cape Town majoring in Economics.

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