City of Cape Town: Enterprise Resource Planning Solution

City of Cape Town merged seven autonomous local authorities to form one megacity. The city chose Accenture to create a large-scale Enterprise Resource Planning solution to support the new administration in its provision of world-class services to its 1.2 million customers.

Cape Town wanted to operate as a world-class city, efficiently supplying top-notch services to its 1.2 million customers. To achieve this it had to merge the disparate and dispersed administration systems of seven municipalities. This daunting task involved 62 legacy systems processing hundreds of different processes for 4,000 users.

In March 2001 the city embarked on a rigorous selection process to select partners and products that would support its vision of a being world-class operation. Accenture was chosen because of its successful track record in delivering large-scale Enterprise Resource Planning (ERP) projects at organisations such as the Eskom electricity utility and the Rand Water Board water utility, and its "can-do" approach to the mammoth project.

The project was put under extreme time pressures because the city, which was undergoing a major structural reorganisation to become a megacity, needed to have administration support in place as soon as possible. It also wanted to quickly benefit from anticipated cost savings. Cutting out the maintenance bill on the legacy systems alone is expected to save R60 million annually.

In January 2002 a full-time, 200-member project team, comprising an equal number of Accenture and client personnel, was formed and moved into a project centre in an exhibition hall at Cape Town's Civic Centre. Part of Accenture's team was drawn from Maseko Bytes, an Affirmative Business Enterprise specialising in technical support and implementation.

Through a series of workshops with the client a three-phased rollout of SAP's Public Sector V4.6C application was adopted. The first phase—to be completed within a year—involved the implementation of human resources, payroll, financial accounting, management accounting, asset management and materials management.

Working around the clock, the team completed this phase by December 2002 when more than 2,000 users went live on these applications which enforce rigour in the core of the city's administration by bringing a uniform approach to key business processes.

The second phase, which went live in a pilot site in February 2003, focused on revenue management services embracing the customer-facing applications such as customer care, device management, payment and debt management, billing, real estate, treasury and rates. Phase three, when the proven phase two applications were rolled out to other areas of the city, went live in October of 2003.

The City of Cape Town's administration is already feeling the benefits of productivity improvements through working to standardised processes and procedures and better communication between divisions.

Apart from the R60 million saved by dispensing with the legacy systems the city expects further savings, such as:

• R40 million saved annually by standardising and co-ordinating procurement practises and reducing the number of suppliers. Better stock visibility at depots around the megacity reduces the tendency to overstock. The online availability of improved approved product catalogues ensures cost-efficient buying procedures.
• R20 million will be saved on staff costs when, through natural attrition, posts will not be refilled because the system has taken over many of the functions that were duplicated after the seven municipalities merged.

The City of Cape Town expects a return on its investment in the new SAP system to be realised within 27 to 42 months.