Oracle IFMS Tender under Gigaba spotlight

The National Treasury has awarded the Integrated Financial Management Systems (IFMS) tender to US-based multinational computer corporation Oracle. Industry sources this week told Business Report (BR) that the tender was awarded to Oracle “sometime last year”. The tender has been a source of speculation, with insiders claiming it needed to be investigated. “The matter is being looked into and further details will be shared once it has been concluded,” Finance Minister Malusi Gigaba said yesterday. IT Web reported in May 2014 that the IFMS project was conceived in 1998 and approved by the cabinet in 2005. “It was a National Treasury-led joint initiative with the Department of Public Service and Administration and the State IT Agency (Sita),” IT Web said at the time. “Its objective was to replace the numerous disparate, inadequate and/or outdated systems employed throughout the public sector.”

It is clear to BR that the IFMS initiative turned out still to be a constant source of controversy, attracting criticism on the system architecture, partner and/or solution selections, top-level project strategy and management, operational planning and oversight, and the feasibility of the stated objectives and deadlines. Nothing has changed since IT Web published its article. BR research on the IFMS tender can be summarised by various headlines spread over many years: "Sita taken to task over IFMS tender"; "Accenture snares government finance system"; "Controversial Sita tender reissued"; "SAP wins R800m IFMS deal"; "Small firm grabs IFMS tender (ICT Works)". But on August 4 last year a short statement was released by the Treasury: “The National Treasury has concluded the contract with Oracle Corporation to purchase software licences.

"The software licences relate to the Integrated Financial Management System (IFMS) programme. It brings government closer to fully implementing a 2005 cabinet decision to replace legacy systems for managing supply chain, human resources and finance functions with a modern integrated system that will improve service delivery. “The successful purchase of the software licences paves the way for the next steps in the process, which will include completing the centralised design of the IFMS solution, planning and procuring the hardware (including hosting infrastructure) as well as software implementation services.” Various sources contacted yesterday said they were aware that “millions have been paid to both SAP and Oracle”. One has to question what has been delivered against these contracts. Is it software to the amount of R450million? It is also interesting that senior managers previously employed by Sita are now being employed by Oracle.

Another source said openly: “It is impossible to get any IT contract in government without paying serious kickbacks, and if the right business groups are not involved.” BR will investigate the IFMS tender further.

Note from the editor

Early in May last year a business contact asked if I could assist him and his partner with “government contacts for SAP, who at the time was nervous that they might lose the IFMS contract”. They were working on specific contracts with SAP. I was then introduced to the SAP SA sales executive, who told me: “SAP was perfectly aligned to win the IFMS tender since Gauteng and the Western Cape run on SAP, but that there are rumours that Oracle approached another IT company with strong connections in government to help them win the tender.”