Despite tight budgets, there are viable opportunities for the South African defence sector, including prioritising the right projects and optimising spend to ensure positive results.
Achieving efficiency and efficacy, doing more with less and becoming stronger in a tough economic climate, is not easy, as many businesses and government departments are finding out across the globe.
The South African defence sector is not immune to these pressures and, as such, have many competing priorities to optimise their budget, including training deployable soldiers, updating and maintaining existing military infrastructure, defending the country, and investing in new defence capabilities.
The challenges facing government and the defence sector are further deepened by South Africa’s bond credit rating being downgraded by S&P in 2017.
Nevertheless, the South African defence force remains a trusted ally to governments and international peacekeeping bodies on the continent, often called on to support other African nations in peacekeeping services.
Paving the pathway forward
Moving forward, a viable opportunity for improvement is having greater and ongoing dialogue between national government, the South African Defence Industries (SADI) and the private sector around areas of concern and opportunities for co-creating solutions.
It is essential for all parties to enable mechanisms for transparency and governance in public funding investment and infrastructure. This would be well supported by sustainable business offerings where guidance on how projects are managed, and where teams and stakeholders can be empowered through upskilling, is provided.
Aurecon Principal Programme Advisory, Kevin Nadasen, suggests the Infrastructure Delivery Management System (IDMS) is one way to create positive progress: “The IDMS is designed by the National Treasury and is a toolkit that assists the public sector in building better infrastructure delivery capacity.”
He further affirms that the IDMS “focuses on deliverables and value for money through effective and efficient functioning of procurement and delivery management in compliance with all legislation. Successful implementation of the IDMS drives increased capacity and reduced complexity. It is comprised of three interconnected systems, namely planning and budgeting; supply chain management; and asset management.
“Together with a performance management system, these processes and systems establish the institutional model for infrastructure delivery, particularly in a fiscally restrained environment,” said Nadasen.
Initially designed for provincial and national departments, the IDMS has recently expanded to include municipalities through the Cities Infrastructure Delivery and Management System (CDIMS).
Like personal financial considerations, public entities face one reality: if you have limited funds, what you spend it on is as important as how you spend it. The priority is to seek greatest value for money and optimum return on investment, objectives that will pave the way to a more prosperous South Africa.
The implementation challenge lies within the capacity constraints of governmental departments and municipalities. Typically, inefficiencies at this level are underpinned by a lack of suitably qualified, trained and experienced staff on the ground to implement the IDMS.
The positive improvement trends already seen in spending patterns and value for money achieved by the likes of the Western Cape Department of Public Works and the National Department of Health where the IDMS has been implemented, is motivation to address this implementation challenge.
Balanced approach is key
Global engineering and infrastructure advisory company Aurecon is experienced in delivering the IDMS and believes there are further ways to optimise and efficiently manage assets and projects under tough financial conditions to get positive results.
“At Aurecon, we have a specialised service offering that applies our global experience in advising clients on prioritising their spend on projects, and then working closely with the client to deliver those projects,” said Lizelle Botha, Principal Programme Advisory, Africa at Aurecon.
Once prioritisation has been identified, an analysis of the timing, cost and risks of implementation will then indicate whether a project can reasonably be delivered in the time-frame and budget provided.
“This prioritisation process and methodology can be termed ‘scrubbing’ as it essentially cleans out a portfolio of identified projects to focus on those delivering the highest return on investment with maximum impact. The approach includes parallel activities focused on tightening scope; improving project efficiencies through digital solutions; fast-tracking specific schedule activities; and the implementation of robust contracts. This methodology facilitates the institutionalisation of standardised project control mechanisms and adoption of strategic procurement and delivery approaches,” explained Botha.
Both the IDMS and the ‘scrubbing methodology’ entail components of asset management, programme management and/or multi-disciplinary engineering, all pivotal in achieving maximum results on tight budgets.