Portfolio Committee Presentation DEPARTMENT OF PUBLIC WORKS 28 February 2012 Portfolio Committee...
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Transcript of Portfolio Committee Presentation DEPARTMENT OF PUBLIC WORKS 28 February 2012 Portfolio Committee...
Portfolio Committee PresentationPortfolio Committee Presentation
DEPARTMENT OF PUBLIC WORKSDEPARTMENT OF PUBLIC WORKS
Turnaround Strategy
28 February 201228 February 2012
1
Purpose of the PresentationPurpose of the Presentation
Present the TURNAROUND STRATEGY of the Department in light of the prevalent crisis.
When written in Chinese, the word "crisis" is composed of two characters-one represents danger, and
the other represents opportunity.” JFK
Where we come from?Where we are now?Where we are going?
Portfolio Committee Presentation 28 February 2012 2
Danger/Crisis
Opportunity/Turnaround
Size of DPW: Property Portfolio Compared to Size of DPW: Property Portfolio Compared to others others
DPW portfolio is relatively 7 times larger than the most significant private companies
DPW portfolio operates below the ‘profitably’’ curve(About 1.6% compared to 16% others)
Management personnel to portfolio ratio relatively much higher for DPW than other commercial companies(approximately 4300 compared to less than less than 400 for other)
Portfolio Committee Presentation 28 February 2012
3
Where do we come from?
Portfolio Committee Presentation 28 February 2012 4
Part 1
Year Hon. Minister Director General History – Major Initiatives
1994
J Radebe
T van Robbroeck
1995
S Shezi
1996
1997
1998
1999
2000
S.N. Sigcau
T M Sokutu2001
2002
2003
T Maseko2004
2005
2006 Acting: Z NtsalubaActing: S Philips
2007T Didiza M Moroka
2008
2009G Doidge
Acting: S Malebye, S Vukela
2010 S Dongwana
2011 G Mahlangu-Nkabinde Mr Thembelani Thulas Nxesi
Acting: S VukelaActing: M Mabuza
Sakahasonke ECD
Sakahasonke ECD
GIAMA ACT
State Asset management Partnership
State Asset management Partnership
CIDB Act
White Paper PW beyond the 21st
Century.
White Paper on GIAMA
Built environment councils Acts
White Paper on Construction Industry
Development
5
Year Hon. Minister Director General History – Organisational Change
1994
J Radebe
T van Robbroeck
1995
S Shezi
1996
1997
1998
1999
2000
S.N. Sigcau
T M Sokutu2001
2002
2003
T Maseko2004
2005
2006 Acting: Z NtsalubaActing: S Philips
2007T Didiza M Moroka
2008
2009G Doidge
Acting: S Malebye, S Vukela
2010 S Dongwana
2011 G Mahlangu-Nkabinde Mr Thembelani Thulas Nxesi
Acting: S VukelaActing: M MabuzaActing: M. Fatyela
Discontinuation of Workshops
Discontinuation of Workshops
Organisation Review
Organisation Review
State Asset management Partnership
State Asset management Partnership
FailedRestructuring
Zimisele Performance
Improvement
Zimisele Performance
Improvement
Introduction of Accommodation
Charges and PMTE
Introduction of Accommodation
Charges and PMTE
Failed Implementation
Corruption InvestigationsCorruption Investigations
6
ChallengesChallenges
• Increasing rate of change of executive and administrative leadership
• Number of Acting DGs/DDGs and CDs over the years• Limited success in the implementation of policies (e.g.
1997 White Paper, Construction White Paper and Property and Construction Charters)
• Inappropriate recording/systems/processes and M & E and reporting
• Client’s dissatisfaction and allegations of corruption
Portfolio Committee Presentation 28 February 2012 7
Where are we now?
Portfolio Committee Presentation 28 February 2012 8
Part 2
Budget / Financial ChallengesBudget / Financial Challenges
• Disclaimer• Uneven spread of budget - Bulk sits under programme 2 [Immovable Asset
Investment Management]• Under-spending by the infrastructure and EPWP programmes• Opacity of budget, especially programme 2 on infrastructure• Shifting of funds by the department• March expenditure spike from delayed project implementation • Lack of technically sound budget proposals• Lack of technical capacity to plan, implement and report on projects• Lack of adequate finance skills, and poor financial management• Violations of the PFMA and Treasury Regulations, including supply chain
management rules• Client’s dissatisfaction• Corruption• Escalation of construction costs through poor planning/policy / supply chain
management• Slow delivery of accommodation and job creation• Low worker morale
Portfolio Committee Presentation 28 February 2012 9
Service Area ChallengesService Area Challenges
Service Area ChallengesPolicy / Regulatory
Conflict of interest [Implementer & regulator], Funding, Capacity, Strategic Leadership
Asset Management
Prestige
Asset Register- incomplete, inaccurate, undervalued & no condition status, Missing records, Unusable land, Disposals, Regenerating portfolioPoor planning, management, lack of policy, norms and standards lacking
Property Management & Facilities
Charges too small, Bad debt, Maintenance over Expenditure, Maintenance backlog, Skill shortages, Underutilised / unused properties, Poor leasing, SCM open for corruption, Poor client relations, Aging owned properties, Unreliable asset register
Construction Project Management
Under resourced, Built Environment Skill shortage, Insufficient training, Poor SCM, lack of controls, open for corruption, Cost and time over runs, Poor quality control, Maintenance backlogUnder spending Departmental budgets, Too much decision making power
Portfolio Committee Presentation 28 February 2012
Service Area ChallengesService Area Challenges
Service Area ChallengesSpecial Functions (ICR) Feasibility Study target not achieved due to insufficient HR,
Only preliminary work plans for minor centres completed, Delays in implementing Tshwane precinct master plan, partnership has not translated into a policy of action, Under spending
EPWP High visibility programme, Suitable labour intensive projects, Poor reporting, 50% of grant not disbursed (2010)Non-core business for DPW
Corporate Services
Top heavy senior management, Key skill shortage, Lack of systems & controls, Poor placement, Ineffective trainingIT system projects failed, IT not integrated, GAAP implementation slow, Records & Filing poor, Overstaffing in Regions, Ineffective management reporting systems , Ineffective Internal Auditing, Inappropriate organizational structure, Poor SCM checks & balancesOverpriced tenders, absence of HR Plan
Portfolio Committee Presentation 28 February 2012
Portfolio Committee Presentation 28 February 2012 12
Part 3a
• “turnaround specialists’… mandate is to lead a significant change effort within a limited period of time – to turn things around as quickly as possible, all the while focusing not only upon immediate challenges but also on long-term planning and the bigger picture” (Takacs, Turnarounds, 2001)
• “Turnaround literature stresses the importance of a change in the overall management team, not only the CEO” (Takacs, Turnarounds, 2001)
• “Organizational change of any magnitude is unlikely to take place unless there is also significant change in many of the individuals who work for the organization”
(Eadie 1997)• “What is crucial here is the need to turn people around, along with the
organization. Turning internal and external stakeholders, who may initially be cynical or even hostile, into enthusiastic contributors to the turnaround process is a key challenge for all leaders” (Khandwalla 1992, 162)
Portfolio Committee Presentation 28 February 2012 13
Some Characteristics of Turnarounds
Portfolio Committee Presentation 28 February 2012 14
Part 3b
DPW: Turnaround Strategy Role PlayersDPW: Turnaround Strategy Role Players
DDG:Corporate Services
DDG:Projects
DDG:Innercity
Regeneration Programme
DDG:Expanded
Public Works Programme
DDG:Construction & Property
Policy Regulation
DDG:Asset
Investment Management
DG
COO
CFO
Inter-Ministerial Committee MINISTER
Support Team(Stabilisation & Transformation)
Technical Advisory Committee
Simplified Version
Portfolio Committee Presentation 28 February 2012
Composition of Support TeamComposition of Support Team
Full Time Core Team members: Team Leader – Candidate has been identified and will be on board by 7
March 2012 Change manager Monitoring, Evaluation & Reporting Strategic Content Advisor Administrative support
Functional Specialists as an when required: Supply Chain Management Public Finance Management Built Environment Asset management/Property Management (lease mgmt) Human Resources/Legal
16Portfolio Committee Presentation 28 February 2012
Purpose/Functions of the Support TeamPurpose/Functions of the Support Team Oversees the Stabilisation Projects
• These projects have formal Terms of Reference• Specifically assigned Team Leader (DDG or CD )• Set out Performance framework and timeframes
Provides structure for the Systemic (Introspective) Reviews in each business area
• Business areas will be addressed• Responsibilities for performing the work• Framework to guide the work• Framework for documenting the results• Framework for the reporting of the results
Develop the framework for transformation based on further diagnostic, feedback and successes from the Stabilisation Process and Systemic Reviews
Crisis and damage control. This is important because there will be recurring crises that should not side-track or dilute the Turnaround.
17Portfolio Committee Presentation 28 February 2012
Turnaround Capacity Turnaround Capacity
• Human Resources– Change management is central to success– Recognition of and building on capabilities of existing staff– As per Dpt. of Home Affairs, use embedded knowledge to
optimise processes, controls, performance standards, reporting and management oversight.
– Recruit qualified staff while training trainable current staff; open recruitment to the international market; direct budget to critical skills; develop focused training programmes with tertiary institutions; fill vacancies
– Build an appropriate Corporate Services unit that recruits, serves and retains the right skills; develop a strong finance unit
– Deal decisively with wrongdoers
Portfolio Committee Presentation 28 February 2012 18
Operational Support improves efficiency immediately…
Time
Capa
city
of a
dep
artm
ent
Existing capacity of a department
Required capacity of a department for delivery
The Transformation Team builds organisational capacity over time.
… but often leaves the department worse off in the long run.
Ideally a Stabilisation Team providing operational support should be provided in the early stages of an intervention but should decreaseas organisational capacityincreases.
19
Combining operational support with organizational capacity building
Portfolio Committee Presentation 28 February 2012
Turnaround ActionsTurnaround Actions
20
Strategic Direction
Stabilisation ActionsStabilisation Actions Systemic ReviewsSystemic Reviews Transformation AgendaTransformation Agenda
• Asset Register• Lease Advisory Team• Clean Audit• PMTE debt recovery• IDIP Support• Audit of areas of progress
and challenges
• Asset Register• Lease Advisory Team• Clean Audit• PMTE debt recovery• IDIP Support• Audit of areas of progress
and challenges
• Structured review by staff in each business area
• Determine options for immediate business improvement
• Continuous system of reporting/feedback
• Structured review by staff in each business area
• Determine options for immediate business improvement
• Continuous system of reporting/feedback
• Will be informed by and follow on from progress on Stabilisation and System Reviews in the long term
• Will be informed by and follow on from progress on Stabilisation and System Reviews in the long term
Portfolio Committee Presentation 28 February 2012
Stabilisation ActionsStabilisation Actions
• Purpose– Stabilisation intention has already been specified– Contribution to transformation been defined– Governed by a specific Terms of Reference
• Responsibility– Oversight by the Director General and Support Team
• Capacitation– Will have dedicated resources
21Portfolio Committee Presentation 28 February 2012
Systemic ReviewsSystemic Reviews
• Purpose– Structured discussions on challenges and opportunities– Focus on what individuals can do to improve performance– Governed by a specific approach to be confirmed by the Support Team
• Responsibility– Oversight by the Director General and Support Team– Performed by the business unit heads– Reported back to Director General and Support Team
• Capacitation– Staff participation in each business area
22Portfolio Committee Presentation 28 February 2012
Transformation AgendaTransformation Agenda
• Purpose– Structured improvements to the way DPW delivers its services– Builds on Stabilisation and Systemic Reviews
• Responsibility– Oversight by the Director General and Support Team
23Portfolio Committee Presentation 28 February 2012
Time lines (Matrix)
24
Stabilisation Actions
Stabilisation Actions
Asset
Systemic Reviews
TransformationTransformation
Leases
Disclaimer
Short-Term Medium-Term Long-Term
2012/13Q1Q2Q3Q4
Q4
Q1Q2Q3Q4
Q1Q2Q3Q4
Q1Q2Q3Q4
2013/14
2014/15
2015/16
Ongoing
Improvements
Improvements
OptionsOptions
ReportingReporting
Ongoing
Sustain and Improve
OngoingRapid
Review of DPW
Rapid Review of
DPW
2011/12
Policy / RegulatoryPolicy / Regulatory
Asset ManagementAsset Management
Property Management& Facilities
Property Management& Facilities
Construction Project ManagementConstruction Project Management
EPWPEPWP
OutcomeOutcomeOutcomeOutcome
Optimised portfolio of assets(owned & leased)
Efficient records
Cost effective service delivery
Skills developedJobs created
Service AreaService AreaService AreaService AreaWell functioning built environment
(government & private sector)
“Special Functions”“Special Functions”
A
B
C
D
E Corporate ServicesCorporate ServicesFunctioning organisation
-Proper Accounts-Internal capabilities
-Efficient and effective SCM
Functioning Inner CitiesFunctioning industry
Standards maintained
25
Distinctive functional streams
SummarySummary
• Crisis areas need to be addressed quickly• Short term solutions must enable longer term stability• Some improvements are dependent on fundamental
transformation that will be time consuming to implement• Turnaround actions must not further reduce existing
levels of operational performance• Turnaround actions must be based on adequate analysis
and understanding of the problems and potential cost effective solutions
• Prioritisation of critical actions in a logical sequence• Adequate resourcing of turnaround actions
Portfolio Committee Presentation 28 February 2012 26
SummarySummary
• Staff must support and be part of the turnaround• Necessary external expertise must leave a legacy
in the department• Turnaround effort must be resourced with
dedicated capacity• Focus on the goodwill and positive contribution of
all staff;– Maladministration, corruption and poor performance
to be dealt with decisively
Portfolio Committee Presentation 28 February 2012 27
Concluding RemarksConcluding Remarks
Under the guidance of the Minister,
The Department has a structured Turnaround Strategy
A dedicated Support Team that will plan, manage, monitor and report on the Turnaround actions which include
• Stabilization actions• Systemic reviews• Medium term Transformation actions
Portfolio Committee Presentation 28 February 2012 28
Enkosi
Portfolio Committee Presentation 28 February 2012 29