Why has FreeBalance been so successful in government resource planning systems, even under stressful conditions: low human capacity, limited infrastructure, post-conflict?
The secrets will be revealed
Drive for “best practices” results in something that doesn’t work right nowTo paraphrase Churchill, a successful implementation is not the end. It’s not the beginning of the end, it’s the end of the beginning. Many years of reform and capacity building remain.Frankly, developing country governments are not well-served by software vendors
COTS software – government only – implemented in many countries around the world. Covers the entire budget cycle. We call it GRP. Many call it IFMIS or FMIS or GFMIS. Go to www.freebalance.com to learn more.
For example, we can argue that the implementation in Kosovo is successful, after more than 10 years. From core treasury functions run by the United Nations to full government accounting, purchasing, cash management and decentralized budget management to every government organization in the country. PEFA assessments are improving.
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Project management methodologies that are effective elsewhere need to be tuned to the context.And there is a need to look at good practices. Capacity is the linchpin for success.
Where to start?
Imagine three options for Government Resource PlanningA simple piece of softwareTraditional ERPAnd something that addresses the capacity of the government
There is an infrastructure for public financial management capacity.
Therefore, a need to match human capacity building with infrastructure as part of the country context. Many GRP projects go awry when capacity building is centred on software training. ITC and public financials training are even more important.
The problem of making something foolproof is that someone invents a better fool.
This is where success needs to extend beyond project management on auto-pilot.Capacity is an on-going challenge. There is a high risk of turnover. And, there is a need to sustain capacity building for the long term.GRP is government. That makes everything political.There is a special flavour of scope management in government. Countries have viewpoints about reputation and how they compare intellectually. This creates pressure to do too much when trying to do better than the neighbouring countries.Almost all analysis of developing nation financial management systems points out that change management is important. In what way? Mostly, the original requirements were developed somewhat in a vacuum – based on a previous system and there is rarely an understanding of how everything will work together. It’s often best for the government to make changes in milestone functionality – sometimes doing less functionality in a faster period of time. Or, changing the sequence of mdoules.
The difficulties with standard project management approaches includes:Thinking that governments can quickly adapt laws.Save money on training a small group of people who leave, rather than a larger group who can sustain turnover and keep knowledge in the government.Address politicians and their needs, but not at the exclusion of public servants.Slowing down to do something “right” increases resistance to change.Functionally, budget planning should never be the first step.
In summary, focus on context and look at project management holistically.
What often happens is that the IT department is running projectsThat, in Donald Rumsfeld’s nomenclature, we don’t acknowledge that there will be things that we don’t know.Most importantly, over time, the country context changes. PFM reform is accelerating from adopting international standards, program budgeting, open data
This means a need to modernize over time because of reform and build appropriate capacity.
That’s why a phased approach is needed.
That is based on the country context. For example, implementing procurement reform may be important in one country while civil service reform is more important in another.
No matter what the context, modernization is inevitable, so systems much adapt easily.
Take a look at this slide. Fairly impressive series of reforms. Today, this country has performance dashboards for managers and ministers. And, today, this country is launching a transparency portal that enables drilling into 10 years of budget information. How advanced is this country?
The Democratic Republic of Timor-Leste is moving forward with functionality many mid developed countries have yet to consider.
Using a phase approach
Should acquiring GRP be a gamble? It seems so given so many high profile failures. In 2003, the World Bank found that only 6% of implementations they funded were sustainable by the government. There is a new study coming out shortly, but it sounds like there is still room for improvement.
Software designed for a different type of customer is often difficult to adapt, often requires code customization to work in governments.
Many vendor contend that government should be run as a business.It seems to me that specialization creates problems in developing countries in understanding real needs, in providing an opportunity for consultant firms to not build capacity. Software companies are mostly at arms-length from the situation, so they can easily blame the victim if something goes wrong.
As is having software vendor expertise with the domain in question.
This presentation with notes, extra slides, screen shots of the Timor-Leste transparency portal can be found here.
2011 03-15 achieving government financial management implementation success
What is Success?<br />On budget <br />On time<br />Addresses local capacity<br />Is financially sustainable<br />Is sustained by the government organization<br />Requires a minimum of foreign consultants<br />Modernizes with the government<br />
Typical Project Management methodologies<br />Lack of focus on what’s important in the context<br />Focus on “best-practices”<br />Focus on what is theoretically best vs. what is important now<br />Extends the capacity gap<br />What’s Wrong?<br />17<br />
Human resources & capacity more thought and more risk<br />Communications is highly political, cross-cultural<br />Scope creep directly related to “reputation”<br />Flexibility in change management needed<br />known knowns, known unknowns, unknown unknowns<br />Beyond Project Management 101<br />
Weakness of typical Project Approaches<br />Business Process Reengineering<br />Train the trainer as key capacity building approach<br />Focus on the politicians<br />Long implementation cycles: curb enthusiasm<br />Macroeconomic planning and budget preparation<br />Many process changes require legal reform<br />Train the cadre, give them tools<br />Politicians change<br />Builds opposition momentum<br />What budget?<br />25<br />25<br />
Need to focus on the country context<br />Civil service capacity<br />Ease of use is critical<br />Needs for improved governance: quick wins<br />Holistic project management<br />IT, software & PFM capacity<br />Good practices, not “best” practices<br />1.Perfection is Enemy of the Good <br />26<br />26<br />
Concerns about Sustainability<br />the complexity of the system, structure and vocabulary alienates and further hampers participation.<br />concern has been that the system itself might be too advanced and complex, <br />will become underutilized and that the costs involved won’t pay off.<br />concerns that budget experts of the consultant implementing the system may not fully have understood the procedures in place<br />
What’s Wrong?<br />Often have an “IT” definition of success<br />Measure now and assume everything will be fine<br />Unknown unknowns<br />Changes to country context<br />Rapid and almost unprecedented in public financial management reform<br />32<br />
Capacity Balance<br />Years<br />Customization<br />Laws need to be modernized to accommodate software (accrual, electronic cheques, automated budgets)<br />Infrastructure upgrade<br />Significant functional and technical training<br /><ul><li>Significant internal resistance to massive change
Unprecedented Reform Momentum?<br />PFM Reform tied to Country Context<br />Resource rich<br />Full IPSAS, GFS, COFOG support in COA<br />Support for program budget <br />Ministerial (including sector-specific) dashboards<br />Development of Key Performance Indicators<br />Transparency portal<br />10 years of budget information<br />E-Procurement portal<br />
Timor LesteEast Asia & Pacific<br />DILI<br />
PFM – Foundation for Country Growth<br />39<br />Public Financial Management<br />GoTL LAWS<br />Human Resource Development<br />Decentralization<br />FMIS<br />(software and hardware)<br />Autonomous Agencies<br />Procurement Commission<br />Capacity Building<br />(Training)<br />Ministries<br />
Improve government performance<br />Improve transparency & accountability<br />Improve budget execution<br />Improve government capacity<br />Phased Approach<br />40<br />
Financial sustainability is about TCO<br />PFM sustainability is about government self-reliance<br />Capacity<br />Reduce need for foreign consultants<br />Sustainability is about reform and modernization<br />IFMIS as a foundation for adaptation<br />Sustainability<br />41<br />41<br />
3. The traditional software model is not workingfor developing nation governments<br />42<br />
Government is one of many “verticals”<br />Product developers have no expertise in government financials<br />Salespeople want to sell to every possible market.<br />Product<br />Development<br />Sales &<br />Marketing<br />Product<br />Management<br />Customer<br />Support<br />Product often designed with different customers in mind<br />Consulting firms generate revenue from customization.<br />Trainer<br />Consultant<br />User<br />Government needs may not go into upgrades<br />Consultants help customers to customize code.<br />Typical<br />
When all you have a nail….<br />Specialization across the value chain<br />Loss of holistic understanding of customer needs<br />Incentives for making solutions not sustainable<br />Focus on “technology” rather than customer<br />Ability to “blame the victim”<br />What’s Wrong?<br />47<br />
Developers visit customers and are part of “SWAT” teams.<br />Customers visited at least once every year.<br />All problems & feature requests are tracked – management dashboard<br />Vendor consultants bring experience to write specifications.<br />Steering Committee sets product direction.<br />Local in-country support pass on needs.<br />User<br />Customers interact with Vendor staff and other customers on collaborative plafrom<br />Solution: Customer Centric Approach<br />Product Development<br />Product Management<br />Consultant<br />Customer Support<br />
Blaming the Victim?<br />Customer didn’t articulate business processes properly<br />Customer had unrealistic expectations for delivery<br />Customer changed requirements after the first phase<br />Customer did not dedicate enough staff to manage project<br />Customer did not train enough staff<br /><ul><li>Vendor should understand the government domain.
Product should be designed for rapid implementation.
Product should be designed for progressive activation.
Product should not place a significant burden on the government.
Vendor should know how to build capacity</li></li></ul><li>
review<br />Strengthening Public Financial Management in Timor-Leste <br />54<br />
review<br />Strengthening Public Financial Management in Timor-Leste <br />55<br />