Finance and Technology for More Effective Systems

Finance and Technology for More Effective Systems A CFO Perspective ICGFM Conference May 21, 2009

Content
Overview
Key challenges
Systems can help
Managing IT System projects
Summary

Overview
Governments are making significant investments using stimulus packages.
Scepticism on effectiveness:
“What did you get for it?”
“How will you know if there is fraud?”
“Government procurement is not flexible enough.”
“How will you get the money spent in order to make a difference this year?”

Key challenges
To achieve success:
Clear objectives need to be set
Process with risks need to be identified
Internal controls need to be established and
Reporting on progress will be essential
Need effective IT Systems

Processes with risk
Budget bill to departmental accounts
Project design/determination
Procurement
Vendor selection
Environmental assessments
Project initiation
Project Implementation
Monitoring and Reporting

Internal Controls & Reporting
Related to every process.
Risk tolerance level needs to be understood.
Timely and accurate information that is:
Easy to access at any time
Organized to report many different ways

IT Systems can help
For Vendor selection:
Financial assessment
Report on performance on previous projects and audit results
For cash use:
Spending trends
Comparison to other projects

IT Systems can help
For Results:
Progress on stimulus procurement and spending
Progress against plan by project – financial and non financial
For Fraud/Waste:
Statistical sampling
Analytical models

New IT Systems needed
Befriend the Chief Information Officer (CIO).
CFO and CIO are partners in achieving organizational goals.
CFO must understand what IT is planning, spending and delivering.
Standard IT principles apply.

Managing IT System projects - Key principles for success
Clients are accountable for the effectiveness of their systems, not IT.
Processes first, technology second.
IT labour is the cost to watch – not hardware & software costs.
Funding limits are established.
Costs need to be understood.

Key principles for success (cont)
IT Strategic Plan
Investment Plan & Governance
IT Costs Clear
Common Approach to Managing Projects

Strategic Plan
“How will IT support departmental goals?”.
Period of 3 to 5 years.
Vision – “What will be different in year 3 or year 5”?.
Clear performance measures.
Demonstrate “What will it take to achieve success?”.

IT does not own most systems – it operates them on behalf of the organization.
Investment Plan for all IT spending managed by Investment Committee.
New projects reviewed and approved by committee.

Investment Plan adjusted to add new project – reprioritize other projects.
Regular updates to Committee on progress.
Committee commitment and support is paramount.

IT Costs Clear
Organization’s cost - not the CIO’s cost.
Consistent and agreed upon approach to costing.
Separate costs – project vs. on-going.
Hidden costs exposed – example on-boarding cost of new hires/consultants.
Show costs or bill costs to clients.

Common Approach to Managing Projects
Standard governance, processes & tools.
Includes hardware, software and custom systems.
Understand linkages to external systems and initiatives.
Implementation impact is considered – costs, employee down time, training etc..

Common Approach to Managing Projects (cont’d)
Business case developed every time.
On-going costs approved when project approved.
Sun-set dates are established.
Asset management processes in place.

Summary
Stimulus money implementation will be challenging.
Process risk, internal controls and reporting need to be managed.
IT systems will be important.
Risk of implementing new systems must also be managed.

Summary (cont’d)
Impact on all IT plans to be assessed.
Normal IT Management practices still apply.
Clients, Finance and IT understand their roles and accountabilities.
Just like the stimulus money - IT spending must be clearly managed, understood and explained to all.

Questions?

Finance and Technology for More Effective Systems

by icgfmconference on May 21, 2009

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