Questions/Answers

The modernisation of government systems is based on principles of simplification, standardisation and automation of as many business processes as possible. The National Treasury, through the Office of the Chief Procurement Officer (OCPO) embarked on a project of modernising public sector supply chain management. There was significant compliance burden on government departments, municipalities, public entities, state owned enterprises and constitutional bodies when procuring goods, services and works to execute government’s mandate. Public procurement represents approximately R500 billion per year with approximately 700 000 suppliers at the different spheres of government. All state institutions used to be required to keep and maintain a database of prospective suppliers to be used for procuring for goods and services. All prospective suppliers are required to meet certain compliance requirements, amongst others, these entail tax compliance, BBB-EE (Broad Based Black Economic Empowerment) compliance, supplier registration, verification of bank details, certifying that the suppliers are not in the employment of the state, etc. The compliance requirements are equally burdensome for businesses\suppliers as the same documents and certificates are submitted (in original form) to all procuring entities at all spheres of government (264 Municipalities, 170 National and Provincial Departments and approximately 1300 public entities). The cost of duplication and the administrative burden made it exceptionally difficult for suppliers to do business with government in South Africa. There was an urgent need to eliminate unnecessary manual paper based processes and duplication of effort by optimising the technology at our disposal. The Office of the Chief Procurement Officer had the ambition to consolidate the supplier databases of government estimated at between 2500 and 3000 different supplier masters with endless number of duplications. Thus leading to duplication and inc

The central supplier database project aims to: • Reduce cost of doing business with the state; • Simplify the supplier management processes; • Automate supplier registration processes; • Standardise processes of doing business with the state; • Make it easier for SCM practitioners to find suppliers; • Monitor compliance and policy effectiveness; • Centralise the audit function for supplier’s basic compliance information; • Simplify reporting on state spend.

The central supplier database project aims to: • Reduce cost of doing business with the state; • Simplify the supplier management processes; • Automate supplier registration processes; • Standardise processes of doing business with the state; • Make it easier for SCM practitioners to find suppliers; • Monitor compliance and policy effectiveness; • Centralise the audit function for supplier’s basic compliance information; • Simplify reporting on state spend.

In order to achieve the above, the Office of the Chief Procurement Officer has initiated the Central Supplier Database (CSD) Project. Suppliers that want to do business with the state are required to only register ONCE, to be able to do business with any organ of state without the need to re-register multiple times on multiple databases of different government institutions. This resulting in removing duplication and reduction in the cost of doing business with the state. The central supplier database (CSD) enables prospective service providers to register once-off through a web-based application linked to a central supplier database. It will require capturing of B-BBEE information, tax compliance information, company registration information, Identity verification and any other compliance related information required by government institutions. The supplier will capture information directly and certify correctness and validity thereof. The CSD serves as a secure central master of all vetted supplier information. Through systems integration, the automatic verification of the correctness of the supplied information is done electronically with South Africa Revenue Service, Companies and Intellectual Property Commission, Department of Home Affairs, Government payroll, Tender defaulters and other central databases before an entity is registered on CSD. The CSD carries the tax c

Government institution have been maintaining their own supplier’s databases for a number of years. The supplier database concept is not new within the supply chain environment. What makes this project innovative if the fact it pushed boundaries in what was traditionally paper based environment and transformed the environment into a world class paperless environment which is secure and real time updates takes place No more paper copies of compliance certificates as required by the Public Finance Management Act. All mandatory compliance checks and verifications are done real time through systems integration with multiple state entities to ensure seamless registration process, thus making this the first of its kind in the country and the magnitude of the implementation. This is a platform that is used by whole of government. Over 17000 SCM practitioners use the CSD and over 360 000 suppliers registered on a single platform. 710 organs of state utilise the CSD regularly.

The concept of supplier database has always existed in different form. The CSD automated and enhanced the verification process and simplified the process.

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1. What service delivery improvements have been achieved? South Africa was ranked 42 on the Doing Business 2015 report published by the world bank when compared to other 189 countries. It really takes time and effort for suppliers when they want do business with the state. The Central Supplier Database makes it much easier. The whole project applied batho pele (people first) principles by ensuring that thorough consultation is done with multiple stakeholders, more suppliers (citizens) will now have access to more business opportunities and exposure to magnitude of government institutions which they can do business with. The central supplier database makes it easier for citizens/suppliers to have access to information related to supply chain from one central point, irrespective where the citizen stays – as long as they have access to a mobile telephone device of majority of citizens have more than one device. Access is also provided though public facilities such as Libraries, government offices and local government offices. The National Treasury now has good picture of the suppliers that do business with the state. The data available from the database will allow policy makers to measure impact of government policies and also make it easier to implement new government policies. Recently, the President Jacob Zuma announced that government procurement will be used as a strategic

The project is managed through the SCM ICT chief directorate which is responsible for using technology efficiently to address service delivery challenges within the supply chain management space in the public service. This project forms a base for the bigger project of enabling eProcurement for goverment. All organs of state (National departments, provincial departments, constitutional bodies, local government and public entities) are required to put in place mechanism to support the central supplier database and ensure that suppliers are assisted to register on ongoing basis. Provincial Treasuries, departments and entities have also been engaged to setup support centres for the central supplier database

The concept of the central database can be adopted and implemented in many spheres of government. Other government institutions can adopt the model for implementing national databases for different purposes. The BBB-EE commission based at the Department of Trade and Industry has also looked at the model to see how a central BBB-EE database can be implemented. The model will definitely assist other organs of state to improve efficiency in their processes, thus improving service delivery.

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South Africa was ranked 42 on the Doing Business 2015 report published by the world bank when compared to other 189 countries. It really takes time and effort for suppliers when they want do business with the state. The Central Supplier Database makes it much easier. The whole project applied batho pele (people first) principles by ensuring that thorough consultation is done with multiple stakeholders, more suppliers (citizens) will now have access to more business opportunities and exposure to magnitude of government institutions which they can do business with. The central supplier database makes it easier for citizens/suppliers to have access to information related to supply chain from one central point, irrespective where the citizen stays – as long as they have access to a mobile telephone device of majority of citizens have more than one device. Access is also provided though public facilities such as Libraries, government offices and local government offices. The National Treasury now has good picture of the suppliers that do business with the state. The data available from the database will allow policy makers to measure impact of government policies and also make it easier to implement new government policies. Recently, the President Jacob Zuma announced that government procurement will be used as a strategic tool for uplifting communities and small businesses.

The project was a second runner up on State Information Technology Agency awards for Innovative Use of Technology in 2015 and won the Centre for Public Service Innovation award for innovative use of technology for improved service delivery. H. REFERENCES : Betty Rakubu Limpopo Provincial Treasury RakubuMB@treasury.limpopo.gov.za Molefi Moetapele North West Provincial Treasury mmoetapele@nwpg.gov.za Pumezo Gulwa National Treasury Pumezo.gulwa@treasury.gov.za

• The biggest challenged experienced is change management. Introducing changes in processes that have been rigid for many years brings a lot of resistance and sceptism in adopting the new way of doing things. • Communication and more communication with affected practitioner and officials to ensure that they understand and adopt the new changes. • Training of officials with different skill levels. • The most important lesson learned is that change management is critical in delivering a project of this magnitude. It’s important that all stakeholders are consulted in all phases of the project. • Having change champions in all affected departments, officials that will sell project throughout their departments is also an important lesson learned in implementing the central supplier database. • Ensuring optimum support structures are in place before full scale implementation. • Robust ICT network infrastructure is in place and thorough testing. • Communication campaigns and engagements with citizens/suppliers.