Highly Confidential

Presentation to the Select Committee on Social Services

4 JUNE 2008

An Update on the Transformation Programme

Building a New Home Affairs

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The 2004-05 audit clearly indicated the need for change

Following a disclaimer in the audit for 2004-5, the Minister of Home Affairs – with the Ministers of Finance and Public Service and Administration – mobilised a Support Intervention Team (SIT). The SIT began its work in June 2006.

The main work of the SIT was to analyse the root causes of the problems at the DHA and make recommendations.

Their report was made available in the first quarter of 2007 and accepted by the Committee of Ministers.

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The Support Intervention Team confirmed deeply rooted problems

The SIT reported that there were deeply rooted problems with:

• Leadership and Management;

• Human Resources and the organisational design;

• Information and Communication Technology;

• Service Delivery; and

• Financial Management and internal control.

The response of Minister, supported by the Cabinet, was to launch a comprehensive and well-resourced turnaround over three years

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There are fundamental issues which must be addressed at Home Affairs

Service Delivery

Low motivation, poor supervision Infringement of standard business rules & breach of security Aversion to technology Scant attention to risk management Weak management & control processes

Steeply hierarchical management structure Over-centralised decision making Limited business understanding: who is the customer? Inappropriate training Limited management skills

Concept of citizen or customer as “king” alien Cumbersome business management processes Loss of key people on a regular basis

Unstable IT and communication Infrastructure, Inadequate Infrastructure rollout to local and international offices) Systems not linked to one another (e.g. Border Post immigration systems) Duplication of systems and information (silo-based approach), which is costly and effects

security Inappropriate offices layout and limited footprint Rudimentary asset management practices

Scoping study for TAP: Selected Observations

Key Themes

Source: DHA Interviews, Inter Ministerial Report

Case for Action

Corruption, Security &

Risk

Organisational Structure &

People

Financial Management and Controls

Context

IT & Facilities

Qualified audit reports Poor asset management Fruitless and wasteful expenditure

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Our objective for the Turnaround is clear

To transform the department into a modern,

efficient, cost-effective service organisation

responsive to the needs of South African

citizens, residents and visitors to our

country

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We have completed Phase 1 of the Turnaround which focused on quick wins and design…Our focus is now on implementation

Criticality/ Urgency

Stabilisation & Quick Wins

Strategy & Future End State Definition

including Roadmap

Transformation Implementation

TimeHigh

Low

Objectives (Why)

Stabilise key management processes

Implement early value initiatives" Quick Wins” to galvanise support for the initiative

Define the future service delivery model

Determine roadmap to reach end state

Implement the transformation roadmap

Apply change management to ensure successful implementation

Test rollout plans in a controlled setting before full implementation

Early Value Realisation

DefineDesign & Develop

Embed Change

StagesImplement

Embed changes by providing long term enabling incentives, structures and tools

Phase I Phase 2

Fundamentally Improve The Customer Experience

Building a new Home Affairs

Piloting

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Phase I realised a number of key achievements (1/2)

Focus Areas AchievementsTrack & Trace and Contact Centre

Completed printer rollout across 254 offices Trained 1,249 front line staff on Track & Trace (improved customer visibility into the status of

their IDs) Implemented a new Contact Centre for the department (Contact Centre with 30+ staff to be

ramped up in 2008)

Permits & Refugees

Cleaned up Marabastad Piloted 4 large account management projects with Lafarge, Gautrain, Anglo-American and

Arcelor Mittal Operationalised a special skills help desk Relocation of Rosettenville refugee centre to Crown Mines completed Reduced backlog

ID Process Baselined ID process and agreed quick wins Added 4 finger print scanning machines to increase throughput in key bottleneck area Trained 400 front office staff on QA check list to improve quality Implemented a new Postal Receipts process to streamline flow and monitor quality of ID

applications Eliminated coding and second scan fingerprint process to improve turnaround times Commenced implementation of a single courier service for IDs (pick-up and drop-off of all IDs

between front offices and BVR) Rolled out 4 pilots with redesigned front-end ID process using Online Verification Defined new end to end ID processes (15 processes)

Operations Management (Pilot)

More than doubled productivity in key ID process bottle-neck area (Turnaround time reduced from 27 to 4 days in Fingerprint Verification)

Trained over 100 managers on Operations Management practices at BVR Eliminated critical path backlog at Fingerprint Verification (over 236,000 records) Reduced the1st application fingerprint capturing backlog at HANIS (from 495,000 to 97,000

by Dec 08)

Selected Achievements

Phase I Overview and Key Achievements

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Phase I realised a number of key achievements (1/2)

Focus Areas AchievementsEmployee Relations

Held meetings with union leadership and proposed joint statement of shared intent Agreed a joint statement of shared intent and turnaround accord with unions

Contracts Baseline spend analysis by supplier and category conducted Negotiated new/improved SLAs with key suppliers SLAs—Sita, Telkom, Lindela, XPS,

Skynet and GPW Agreed a single courier pick up and delivery service for IDs and applications between

BVR and front offices Negotiated a cost savings of R68m on the remainder of the Lindela contract. Identified potential cost savings of up to R40m with key suppliers Sent out information request to top 50 suppliers to determine payment schedules and

contractuals

Finance & Risk Reviewed all 6 previous audit reports, categorised and prioritised key risks and issues Identified Rosslyn as the biggest risk, developed long-term strategy to fix it,

implementing near-term measures to mitigate it Implemented process to gather revenue information Pilot of cash machines in offices and potential to improve revenue collection in offices of

10% (19M Rand) New lease with Rosslyn landlord Clean up of key HR and Asset Management audit issues

Selected Achievements

Phase I Overview and Key Achievements

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Phase I realised a number of key achievements (2/2)

Focus Areas AchievementsIT Developed business cases for top 15 IT projects

Agreed IT projects and architecture to support new operating model requirements Baselined DHA IT organisation

Governance & Operations Management

Recommended a new Committee structure (Ministerial Executive Committee, Executive Committee, Ethics & Standards, Audit Committee, Operations Committee, Policy Committee)

Established the Operations Management Committee to monitor operational performance of the department

Initiated the development of a Delegations of Authority document

Strategic Initiative Governance

Developed business cases for 13 key business projects Agreed prioritisation of business projects Developed a new project prioritisation and approval process Agreed the need to set up an Enterprise Programme Management Office (EPMO)

Vision & Design & Legislative Framework

Performed survey of 700+ customers nation-wide Developed a comprehensive organisational baseline for DHA Staged 2 visioning workshops with 30+ top management participation Agreed 9 key principles and targets of vision Developed a new operating model design including footprint recommendations Developed a new organisational structure including staff numbers Developed and agreed a new budget structure Developed a high level road map to transform the department to the new operating

model Recommended a new leadership structure Developed a draft policy and legislative conceptual framework

Selected Achievements

Phase I Overview and Key Achievements

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In particular, the Vision & Design team completed the design of the New Home Affairs operating model

July August September October November

Current state analysis Visioning Design

Current state

analysis

Current state

analysis

High-level operating

model

High-level operating

model

DHA Executive leadership structure

DHA Executive leadership structure

New Home Affairs

operating model

New Home Affairs

operating model

Overview of process followed and consultation

In-depth analysis of current situation and issues by the different design teams

Interviews with stakeholders

Customer survey

1st Visioning workshop Sept 10 to discuss and validate the current state analysis

2nd Visioning workshop Sept 13 on Legislative framework

3rd and 4th Visioning workshops Sept 27 and Oct 4 to determine targets and principles for the new model and extent of separation between CS and NIB

1st EXCO workshop 14 Nov – discussion and validation of part 1 of the operating model

2nd EXO workshop 27 Nov – discussion and validation of part 2 of the operating model

EXCO presentation 4 Dec on integral New Home Affairs model

All workshops conducted with DHA wide management representation present

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A unique feature in the model is that Customer needs drove the design of the New Home Affairs Service Delivery Model

PeopleIT

Facilities

CustomersS

erv

ice

s

Channels

Processes

What processes will link our business

architecture to our customers in the

delivery of our services?

What processes will link our business

architecture to our customers in the

delivery of our services?

What IT and facilities do we need to deliver services to our

customers?

What IT and facilities do we need to deliver services to our

customers?

How?What?

The organizational structure will result from — not drive — the design of the service delivery model

Service Delivery Model

Customer Cube

Operating model

Which services will be offered to which customers through which channels?

What service and productivity levels are required?

Which services will be offered to which customers through which channels?

What service and productivity levels are required?

What staff with what

skills do we require?

What staff with what

skills do we require?

Source: A.T. Kearney

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Going forward, 55 projects - clustered in 7 workstreams - have been identified to achieve the total transformation, to be completed over a 2-3 year period

Note: (1) Transformation is a holistic implementation programme of a specific function beyond just the reorganisation; It includes sub-projects involving process, system, facilities and capability changes; It will work closely with the organisational implementation team on the staff implications

Proposed High-Level Programme Structure – 2008 and Beyond

5 Functional Workstreams –• Civics• NIB• Support Services• Finance• IT

2 Cross-Functional Workstreams –• Organisational

Implementation• Organisational

Governance & Operational Control

Programme Management Office (PMO)

Sub-projectProject

Civics NIB Support Services ITFinance

Work-stream PMO

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Leadership Appointments Change Management Employee Relations Reporting Line Split

Job Profiling & Skills Gap Analysis

Matching & Staff Redeployment Recruiting

Committee Structure Roll-Out

Government Relations Strategy & Plan

Organisational Projects Evaluation & Monitoring Project Communications Scaffolding

Online Verification Roll Out

Memory ID Card Pilot

Birth Network Expansion

Late Registration Roll-Out

Passport Machine & Process Implementation

Contact Centre Ramp-Up

Centre of Excellence

Mobile Unit Optimisation

Operations Management Roll-Out

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7 Delegation of Authorities

Implementation

TrainingEmployee Database Baseline

Policy Framework & Legislative Programme

Audit & Risk Implementation Monitoring & Evaluation

Finance Transformation(1)

Budgeting Split

Performance Mgmt Implementation

Revenue Mgmt Roll-Out

Procurement Transformation(1)

2nd Wave SLAs

Supplier Sourcing

Performance Agreement Realignment

NPR & Data Clean Up

IT Application Realignment to New Architecture

Policy & Process Optimisation

EDMS

Network Infrastructure Upgrade

GPW Corporatisation Oversight

Payment & Level Adjustments

HR Transformation(1)

Security & Investigations Transformation(1)

HR Policy and Strategy

Security Upgrade

MOUs and SLAs with 3rd parties

Fleet Optimisation

Real Estate Optimisation

Information Mgmt Trans-formation (incl. Archiving)

Refugee Transformation and Footprint Roll-Out

FIFA 2010 Design and Planning

Marpless System Implementation

Permits Transformation1

Inspectorate Transformation(1)

Lindela Contract Optimisation

12 7 5 5 6

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5

4

Communications Transformation(1)

4 5

B/M/D redesign (incl certificate decentralisation

Foreign Office and Ports of Entry Review Business continuity

Payroll verification

Establishment of PMO

Office Refurbishments

Footprint Optimisation (incl. MPCCs)

ID Process Transformation11

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The 5 functional workstreams will focus on transforming Home Affairs to dramatically improve the customer experience

Work Stream Objective Illustrative Benefits by Dec 20081

Civics To dramatically reduce throughput times for core processes and to improve the customer experience through an enhanced delivery model

New ID card selected and piloted Reduced ID card throughput from Ave 100+ days to Ave 60 days Reduced Passport throughput time from 40 days to 10 days Increased accessibility for birth registrations within hospitals Clamp down on fraudulent activity through the late registration process Functional call centre that answers calls in under 1 minute Better office environment with cleaner facilities, clearer signage, shorter queues and 7 AM opening

hours 1-4 centres of excellence in key urban areas Functional mobile units that reliably deliver service to remote locations

NIB To effectively enable and to increase the movement of skilled workers into the country, to build an operating model that can handle 100% of refugee demand and to build sufficient capacity to efficiently and securely manage the entry and exit of visitors, including FIFA 2010

Key systems, resource and process elements in place and/ or being implemented to enable an efficient and secure entry and exit of SA for the FIFA 2010

Dramatic increase in the take-up rate of temporary business permits 5 clean, efficient refugee centres that process all applicants within one month and no backlog

Support Services

To transform the support functions—especially HR, Communications and Security—so that they effectively service Home Affairs and to stage a major crack-down on criminal activity

An HR function that can quickly identify and hire high quality recruits, effectively assess, evaluate and train staff and support the transformation programme

A Communications function that proactively and clearly communicates both externally and internally

A Security function that takes a proactive approach to deterring crime and a dramatic decrease in corrupt internal activity

Finance To transform the finance, procurement, audit and risk functions so that they can effectively monitor and control Home Affairs spend and performance to objectives and to ensure that the Department is PFMA compliant

New, operationally aligned budget that empowers Civics and NIB with their own budgets Performance measurement systems that enable effective monitoring and evaluation Increase in revenue collection of more than 10% from offices Measurable and substantial service level improvement and/ or costs savings from key suppliers Effective risk and audit monitoring and evaluation tool A clean audit report

IT To transform the IT department into a business-driven technical service provider that provides a stable, reliable infrastructure environment and key enabling technologies that enhance the customer experience and make processes more efficient

A new culture where business and IT work in partnership to design and implement IT initiatives that are driven by business requirements

Clean NPR database with the most reliable information on identity in South Africa Key documents digitised and stored electronically and backed up to ensure data protection in the

event of fire or system collapse Reliable network environment when email works 99.9% of time and with enhanced national

bandwidth

High Level Functional Workstream Descriptions

Note: (1) Benefits will be driven by the change scenario and projects that DHA selects

Illustrative

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2 cross-functional workstreams and the PMO will centrally drive the reorganisation, organisational governance and the overall programme

Work Stream Objective Illustrative Benefits by Dec 20081

Organisational Implement-ation

To reorganise Home Affairs into a customer-focused, efficient, skilled, appropriately paid and well-led organisation

New, highly qualified senior leadership team Clear reporting split between NIB and Civics Staff that understand the mission of Home Affairs, its strategy and how they personally fit in and

can make a difference Strong working partnership with the unions throughout the transformation exercise and beyond New, better crafted performance agreements that are linked to variable pay for performance and

drive positive behaviour Less layers and more direct interaction between senior leadership and the front line New specialist skills in key areas—e.g. communications, contracts, risks management, etc Organisation-wide training programme customised for specific functions

Governance & Operational Control

To develop an effective external and internal governance structure that clearly specifies where decisions get made by who with a particular emphasis on taking direct control of operational performance – all clearly housed within a sound policy and legislative framework

A comprehensive legislative framework within which Home Affairs operates Clear positioning of Home Affairs within the SA government context with priortised links and SLAs

between DHA and other key departments Integrated delegation of authorities document specifying who has what powers New internal committee structures that effectively govern the organisations performance New, front-line, performance-driven operating environment

Programme Management

To drive and manage the strategic and tactical programme activities and to ensure the overall success of the transformation

An organisation-wide project monitoring and evaluation tool Clear external and internal communications about the programme Fast-track way of bringing short-term help on board

High Level Cross-Functional Workstream Descriptions

Note: (1) Benefits will be driven by the change scenario and projects that DHA selects

Illustrative

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Work on the implementation has already begun

Organisational Implementation

Finance Transformation

Governance & Ops Management

Support Transformation

Civics Transformation

NIB Transformation

IT Transformation

Transformation Road Map and Selected Milestones2008 2009 2010

Illustrative1

15-25% 55-65% 75-85% % Completion of Transformation Programme

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We have designed the programme for Phase 2 based on five principles

1. Bottom-up build – All potential initiatives to be implemented in 2008 and beyond have been gathered from the workstreams and business units and grouped into projects

2. Top-down programme structure – Projects have been grouped into a manageable set of 5-10 workstreams and set up either within the new organisational structure or as centrally-coordinated cross-functional activities

3. Prioritisation and sequencing – Projects have been prioritised and sequenced within each workstream based on the degree of business benefit it will generate, costs and implementation dependencies

4. Governance – Each project has a clear governance and support structure

• Driven by the PMO and sponsor and supported by FeverTree-A.T. Kearney consultants

• Driven by the PMO and sponsor and supported by another consultancy/ specialist

• Monitored by the PMO and supported by another consultancy/ specialist

• Monitored by the PMO and implemented by the business

5. Scenarios – 3 change scenarios have been developed varying in scope and pace

Principles of the Programme Design

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Thank You