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

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?”

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

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

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

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

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

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

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.

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.

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

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?”.

“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?”.

Investment Plan & Governance 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.

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

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.

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..

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.

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.

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.

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?