Following the explosive reports in 2017 that SAP Africa paid “kickbacks” to Gupta family-owned companies to secure contracts at state-owned enterprises, MD Cathy Smith has said the organisation is on the mend.
In a podcast interview with TechCentral (listen below), Smith said the South African subsidiary of the German enterprise software giant has been through a “difficult” time.
“When SAP asked me to join the company, it was with the intent of rebuilding the organisation and not necessarily to be involved in the detailed work … of what happened in 2017,” she said. “As much as possible, I have tried to focus on the future, while there was a whole team of people working on what had happened in the past.”
Smith was appointed in March 2018 to fill the vacancy left by former MD Brett Parker, who resigned the previous year following the revelations about the alleged kickbacks. She joined SAP from Cisco, where she was MD for sub-Saharan Africa.
Smith’s appointment came soon after SAP admitted it had made payments to Gupta-linked companies and uncovered irregularities in the “management of third parties” and adherence to its compliance processes.
SAP began internal and external investigations after investigative journalism units amaBhungane and Scorpio reported in 2017 that SAP paid a 10% “sales commission” to a company controlled by the Guptas to secure a contract worth at least R100-million from Transnet. According to the report, the terms suggested a “thinly disguised kickback arrangement”.
In the podcast, Smith said it’s critical to have a strong governance framework to ensure there isn’t a repeat of what happened.
“We have strengthened all of our processes, we have enhanced the team of people who are there to ensure we have all the checks and balances in place, we have driven a significant focus around education and training and awareness, but … those are all ‘policeman’ activities… We are living in the real world and on a day-to-day basis you have to make a decision and there’s not necessarily somebody watching over you.
“When we talk about how we avoid getting into this situation again, first of all it’s very difficult to guarantee that (it won’t) for any company, but it’s important that we focus on how we … deal with something like this, so we have started a partnership with the South African Ethics Institute and we are starting to have a dialogue around what is value and what is trust and what is good and what is bad.”
In the podcast, Smith talks about the current status of various post-scandal investigations, what must still be done and the lessons SAP both locally and globally has learnt from the scandal.
The conversation then turns to SAP’s broad strategy as the enterprise IT world moves to cloud computing and how the company is adapting to the changing requirements of its corporate customers.
Listen to the podcast
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