Success and Failure in eGovernment Projects

Design-Reality Gap Case Study No.3

Computerised Integration of Two Pension Funds in Southern Africa

Case Study Authors

Mmapula Kekana and Richard Heeks


The national Welfare Agency administers a variety of social security funds, including a National Pension Fund (NPF) paid to those who retired normally from work, and a Workers' Compensation Fund (WCF) paid to those forced to retire because of workplace injury, or to their dependents in case of death. It receives contribution payments from employers and employees.

Application Description

The application was the planned introduction of IT into the Welfare Agency in order to computerise and integrate and decentralise the previously-separate, previously-manual, previously-centralised operations of the NPF and the WCF. This involved a national network of PC workstations and servers using a single national database of contributors and claimants.

Application Drivers

The Welfare Agency's two Funds were paper-based, resulting in many problems - the Agency had no idea how many members it had or overall/individual sums owed and owing. Payments both into and out of the Funds were delayed, and often made or recorded incorrectly. Because records had to be held on paper, all significant activities were centralised at the Agency office in the nation's capital, with outlying offices merely acting as claim submission points. This caused delays and errors. Finally, the two pension schemes had no way to talk to each other. This led to lack of an overall picture, to payment errors, and to duplication of a lot of activities - for example with employers all being sent two separate bills and payment records; one from each Fund. All of this created a head of steam for change. Externally, this came from pensioners who suffered from late or under-payments, from employees who feared such problems in the future, and from employers who were wrongly charged and suffered the costs of having to interact with two Funds. Internally, the change was supported by the Agency's Board for two main reasons. Politically, they wanted a better image and fewer complaints for the Agency. Financially, the Agency had a few years before been granted parastatal status which cut off government funding. It therefore had to cut costs to ensure Fund sustainability.


The employees and employers who were members of the two Funds represent the largest group of overall stakeholders, with fund claimants (retired pensioners and their dependents) being the specific external stakeholders most likely to be affected. The Minister of the line Ministry of Work and Welfare was the main political stakeholder. Other external stakeholders for implementation were two multinational consultancy organisations, and an IT supplier based in Western Europe. Internal stakeholders were the Agency's Board, including its CEO, and the remaining staff of the Agency.

Design-Reality Gap Analysis

Design-reality gap analysis compares the assumptions/requirements within the application design with the reality pertaining just before that design was implemented along seven 'ITPOSMO' dimensions:

Design-Reality Gap Reductions During Implementation

A medium-large/48-score design-reality gap is likely to bring significant problems for an e-government application.

However, the Welfare Agency took actions during the implementation process that helped to reduce the size of the gaps:

As a result, what was judged to be a medium/large design-reality gap at the start of the implementation process had been reduced somewhat to a medium design-reality gap later in the implementation process.

Evaluation: Failure or Success?

The Agency's computerisation project was partly successful, and partly not, as one might well predict from a medium design-reality gap.

In terms of successes, the project has improved service delivery:

This sounds very good, but it only relates to those parts of the system that have actually been computerised. The initial plan was for 100% computerisation within three years. In practice, after six years, only 40% of the system has been computerised, with the remaining 60% - including the main claims processing system - still undertaken manually. Thus, the benefits to claimants, reduction in complaints, availability of management information, all remain limited in scope. In part, this has related to hiring the consultants who had certain skills, but lacked others - particularly experience of developing complex claims systems.

Secondly, the envisaged cost cutting has not happened. Because of the need to hire consultants and the data conversion firm, costs spiralled from US$30m to US$60m (and far more in local terms given simultaneous and continuous currency devaluation). Because of the agreement to avoid job cuts, there has been nothing concrete to set down on the credit side against this debit.

Recommendations: Reducing Design-Reality Gaps

One of the good practices of this e-government project was that it was participative, ensuring that the design and implementation process involved a broad range of stakeholders. Quite radically, this extended to cover external as well as internal stakeholders. A project board was created consisting of ten members - a chair plus three members each from employers paying into the Funds, employees/trade unions paying into the Funds, and government. This ensured that the design represented the objectives and values of these key groups.

The other good practice was the incremental approach taken, which has broken the overall e-government project down into a set of smaller, discrete sub-projects. Within each of these sub-projects, the design-reality gap is significantly smaller than it would be for the complete project.

Finally, this project shows some of the challenges that can emerge in trying to reduce design-reality gaps in order to increase the likelihood of e-government success: making changes can result in one gap closing, but another opening up. Hiring consultants reduced the skills gap but increased the finance gap. Project implementers must therefore think carefully about the gap impacts of their actions.

Case Details

Author Data Sources/Role : Documents and Interviews; No Direct Role
Outcome : Partial Success/Partial Failure. Reform : eServices (improving public services).
Sector : Social Services (Social Security).
Region : Southern Africa. Start Date : 1996. Submission Date : January 2003

Last updated on 19 October, 2008.
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