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ICT can help with social change

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With the Minister of Public Affairs & Administration having thrown down the gauntlet to South African IT companies at this year's GovTech conference, challenging them to justify government's IT spend in terms of better deliverables, it turns out some local projects are among the best examples of public ROI (return on investment) in the world.

Ton Shirk, president of the global public sector operation at SAP, explains that while the challenges facing governments around the world are different, the underlying operations are fundamentally the same.
And one of the biggest problems they all have is in defining what value ICT brings to the party.
"We've got more than 800 customers and a problem we see all the time is how to define the value of ICT in the public sector," says Shirk.
"In the private sector it's easy – it's all about revenue and profit. In the public sector you have to address three different stakeholders."
In what Shirk calls public ROI, the first imperative is to achieve operational ROI. This holds true in any industry and revolves around cost savings and efficiencies.
"What often falls short is the benefit to the citizen," he adds. "You need to take your operational ROI and feed it into your social ROI."
This allows the savings gained from operational efficiencies to go back into the social system in the form of social benefits like housing, healthcare or education.
"Then there's the political ROI," Shirk adds. "There has to be a management agenda, and ROI in this area is calculated by how well the operational and social ROI advance the management objectives."
It may sound like a simple formula, but Shirk warns that the reality is very hard to achieve.
However, he adds, the city of Cape Town is a great example of real public RIO.
The city, having achieved its operational ROI – in two years as opposed to the expected four – was able to plough some of the efficiency savings into providing additional housing.
"Governments around the world are being forced to do more with less – and they're able to with the effective use of ICT," Shirk says.