IFMS Implementation: Aspects for Consideration - Deepak Bhatia

Deepak T. Bhatia, ISG

IFMS IMPLEMENTATION

ASPECTS FOR CONSIDERATION

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What is an FMIS? Financial management system:

Information system that tracks financial events and summarizes information

supports adequate management reporting, policy decisions, fiduciary responsibilities, and preparation of auditable financial statements

Should be designed with good relationships between software, hardware, personnel, procedures, controls and data

Generally, FMIS refers to automating financial operations



What are core and non-core FMIS systems?

Core systems General ledger, accounts payable and

receivable. May include financial reporting, fund management and cost management.

Non-core systems HR/payroll, budget formulation, revenue

(tax & customs), procurement, inventory, property management, performance, management information



What constitutes a good system? Ability to*

Collect accurate, timely, complete, reliable, consistent information

Provide adequate management reporting Support government-wide and agency policy

decisions Support budget preparation and execution Facilitate financial statement preparation Provide information for central agency

budgeting, analysis and government-wide reporting

Provide complete audit trail to facilitate audits*from Core Financial System Requirement. JFMIP-SR-02-01. Joint Financial Management Improvement Program. Washington, D.C., November 2001.



Aspects to Consider for IFMS Implementation

Top level

sponsorship

Financial records management policies

Inter-agency co-ordination

Management of changes

Formal project planning including business cases

IT architecture

ICT procurement

Agreement/Collaboration within donor organisations, especially

related to IT investment

Institutional capacity and incentive scheme

Local technical support

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Source: IAS

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InstitutionalInstitutional OrganisationalOrganisational ITIT



Government Commitment

Legal FrameworkLegal Framework Business ProcessesBusiness Processes Financial FlowsFinancial Flows

GovernanceGovernance

IFMS implementations are complex undertakings and may require major institutional changes in the following areas:

IFMS implementations are complex undertakings and may require major institutional changes in the following areas:

The above changes are very difficult to implement without government commitment

The above changes are very difficult to implement without government commitment

Organisational and IT StrategiesOrganisational and IT Strategies



Resulting in clear and agreed-

upon results

Resulting in clear and agreed-

upon results

Government Sponsorship Will:

Necessary to engage various ministries in the common program Indispensable to gain acceptance of policy reforms such as data sharing Critical to overcome implementation deadlocksTasks: Define vision, goals, policies and objectives Allocate roles and responsibilitiesCommit stakeholders to high-level workplanMobilize necessary resources Legitimize monitoring and evaluation process

Necessary to engage various ministries in the common program Indispensable to gain acceptance of policy reforms such as data sharing Critical to overcome implementation deadlocksTasks: Define vision, goals, policies and objectives Allocate roles and responsibilitiesCommit stakeholders to high-level workplanMobilize necessary resources Legitimize monitoring and evaluation process



Institutional Capacity and Skills/Incentives

Assess capacity gaps (in skills, mindsets, performance, policy, resources, technology) by reference to goals and objectives.Redesign business processes leveraged by technology Design and implement training plan Rationalize staffing, compensation, and severance packages Question long-term in-house capacity to engineer, operate and maintain systems Engage private sector for development and operation of new systemsManage external service provision through service level agreementsEnsure integration between project and regular staff.

Assess capacity gaps (in skills, mindsets, performance, policy, resources, technology) by reference to goals and objectives.Redesign business processes leveraged by technology Design and implement training plan Rationalize staffing, compensation, and severance packages Question long-term in-house capacity to engineer, operate and maintain systems Engage private sector for development and operation of new systemsManage external service provision through service level agreementsEnsure integration between project and regular staff.



Inter-agency Coordination

Implementing IFMIS is a complex undertaking

Very often skills are not available in single agency

Will require resources both within government as

well as external to government

Increasingly implementation partners are being

used to help buttress weak capacity - either for

project management, procurement planning,

software implementation

Implementing IFMIS is a complex undertaking

Very often skills are not available in single agency

Will require resources both within government as

well as external to government

Increasingly implementation partners are being

used to help buttress weak capacity - either for

project management, procurement planning,

software implementation



Project Management Aspects

Release project managers from regular responsibilities Bring in external consulting support for project managementRequire professional project management tools and techniquesMeasure, monitor and publicize progress Conduct periodic independent technical audits Carefully manage public relations and inter-agency politics

Release project managers from regular responsibilities Bring in external consulting support for project managementRequire professional project management tools and techniquesMeasure, monitor and publicize progress Conduct periodic independent technical audits Carefully manage public relations and inter-agency politics



Donor Coordination Aspects

Often overlapping initiatives in same business area at different levels of governmentEnsure that the processes and systems offered are compatible, working towards the same goal, and, given limited resources, that activities are correctly sequenced. This will also require fine-tuning as the project progresses, and the organizational goals shift. Options:

Multi-donor trust fund which can be used to support diagnostic work, capacity building, and allow for dialogue Each Donor covers a particular component, hardware, software, communications, change management, training, etc Each Donor covers a level of government, or group of states/regions or districts in the same development stage

Often overlapping initiatives in same business area at different levels of governmentEnsure that the processes and systems offered are compatible, working towards the same goal, and, given limited resources, that activities are correctly sequenced. This will also require fine-tuning as the project progresses, and the organizational goals shift. Options:

Multi-donor trust fund which can be used to support diagnostic work, capacity building, and allow for dialogue Each Donor covers a particular component, hardware, software, communications, change management, training, etc Each Donor covers a level of government, or group of states/regions or districts in the same development stage



IT architecture Develop information architecture to rationalize information

needs and flows. Develop data architecture to enable sharing, access,

management, security and integrity of data. Develop system architecture to computerize and support

business processes Develop technology architecture to support computerized

processes, information flows, and data mgmnt. Develop networking architecture to enable information flows

across space and institutional boundaries Develop security architecture to ensure protection, integrity

and confidentiality of data. Put in place management structure and systems to manage

operation of all the above architectures.



Financial Records Management

Development and implementation of economic and fiscal policy to:Development and implementation of economic and fiscal policy to:

Provide the audit trail and support the audit function

Provide the audit trail and support the audit function

Enable government meet its legal obligations for financial management

Enable government meet its legal obligations for financial management

Creation and management of authentic, reliable, and secure financial records are critical actions (paper/electronic)

Creation and management of authentic, reliable, and secure financial records are critical actions (paper/electronic)

Without effective and efficient records management in place, the desired impact of financial and governance reforms is often minimal at best

Without effective and efficient records management in place, the desired impact of financial and governance reforms is often minimal at best

Protect the integrity of key records and the information they contain

Protect the integrity of key records and the information they contain

Ensure the timely disposal of obsolete records

Ensure the timely disposal of obsolete records

Meet the financial management needs of the government, including:

Meet the financial management needs of the government, including:

Source: IRMT discussion on evidence-based governance



Critical Issues for Financial Records Management

The need to recognize the importance of protecting the authenticity and integrity of financial records

The need for effective legislative and organizational frameworks for financial management and financial records care

The importance of developing standards for financial records management and financial records care

The central role of education and training for successful records care

The need to raise awareness across government of the value of all records, including financial records


The need to recognize the importance of protecting the authenticity and integrity of financial records

The need for effective legislative and organizational frameworks for financial management and financial records care

The importance of developing standards for financial records management and financial records care

The central role of education and training for successful records care

The need to raise awareness across government of the value of all records, including financial records




Change Management Objectives

• Redesign budget, revenue and expenditure processes

• Redefine organizational, job and skill requirements

• Minimize resource requirements to implement IFMS

• Institutionalize service, efficiency mindset

• Gain staff commitment and feedback on redesigned processes.

• Help line ministries implement process improvements

• Create the foundation for a Government-wide communications strategy

• Redesign budget, revenue and expenditure processes

• Redefine organizational, job and skill requirements

• Minimize resource requirements to implement IFMS

• Institutionalize service, efficiency mindset

• Gain staff commitment and feedback on redesigned processes.

• Help line ministries implement process improvements

• Create the foundation for a Government-wide communications strategy



Eight Key Steps To a Successful Transformation

1. Establish a sense of urgency2. Form a powerful guiding coalition3. Create a vision4. Communicate the vision5. Empower others to act on the vision6. Plan for and create short-term wins7. Consolidate improvements and produce still more

change8. Institutionalize new approaches

Adopted from Harvard Business Review March-April 1995

1. Establish a sense of urgency2. Form a powerful guiding coalition3. Create a vision4. Communicate the vision5. Empower others to act on the vision6. Plan for and create short-term wins7. Consolidate improvements and produce still more

change8. Institutionalize new approaches

Adopted from Harvard Business Review March-April 1995



What Is a Business case?

A business case outlines the overall business benefits that justify the initial and commitment of time, resources and

funding for technology projects

A business case outlines the overall business benefits that justify the initial and commitment of time, resources and

funding for technology projects

ROIROIOperational

Process improvements

(Tangible and Intangible)

OperationalProcess improvements

(Tangible and Intangible)

TechnicalBenefits to IT infrastructure and support for technology

strategy

TechnicalBenefits to IT infrastructure and support for technology

strategy

FinancialCosts, benefits and impact on business performance

measures

FinancialCosts, benefits and impact on business performance

measures

Source: SAP

StrategicNew capabilities and improved competitive

position

StrategicNew capabilities and improved competitive

position



Business Case for IT Initiatives

1. What problem exists that must be solved?

2. What people/stakeholders (how many constituents) does this problem affect?

3. What solutions are available to solve this problem?

4. What are the benefits of each solution?

5. What is the relative cost of each solution?

1. What problem exists that must be solved?

2. What people/stakeholders (how many constituents) does this problem affect?

3. What solutions are available to solve this problem?

4. What are the benefits of each solution?

5. What is the relative cost of each solution?

6. What stakeholders are affected by the intended solution?

7. Are stakeholders willing to pay for this solution or must government fund it?

8. Can other fund sources be used?

9. How can these stakeholders affect my political future?

10. If we pay to solve this problem, what other problem goes unsolved?

6. What stakeholders are affected by the intended solution?

7. Are stakeholders willing to pay for this solution or must government fund it?

8. Can other fund sources be used?

9. How can these stakeholders affect my political future?

10. If we pay to solve this problem, what other problem goes unsolved?

Source: Gartner



ICT Procurement Aspects

Find adequate and sustainable solution for project

management and implementation (appropriate

blend of own staffing, use of TA, and purchase of

technical capacity)

Organise procurement in manageable pieces Single responsibility (turnkey) contracts

Separate application software development

Phasing implementation

Splitting procurement and managing several suppliers

Find adequate and sustainable solution for project

management and implementation (appropriate

blend of own staffing, use of TA, and purchase of

technical capacity)

Organise procurement in manageable pieces Single responsibility (turnkey) contracts

Separate application software development

Phasing implementation

Splitting procurement and managing several suppliers



Typical Mistakes in ICT Procurement

Reliance on inadequate IT expertise Mindset fixed on obtaining specific brands Eager to receive hardware, with little

regard to use it productively any time soon Underestimation of effort and complexity in

preparing bidding documents Overestimation of internal technical

capacity

Reliance on inadequate IT expertise Mindset fixed on obtaining specific brands Eager to receive hardware, with little

regard to use it productively any time soon Underestimation of effort and complexity in

preparing bidding documents Overestimation of internal technical

capacity



Key Areas Needing Attention – Development of Bidding Documents

Knowledge of relevant solution market Functional, not technical specification of requirements Technical evaluation method Recurrent Costs Work planning Estimation of investment costs Payment schedule Project Management Approach to acceptance

Knowledge of relevant solution market Functional, not technical specification of requirements Technical evaluation method Recurrent Costs Work planning Estimation of investment costs Payment schedule Project Management Approach to acceptance



Key Areas Needing Attention – Technical Specifications

Hold in check strong opinions on technology and brands

But reflect reasonable economies of the installed base

Capture required quality/performance for equitable competition

Telecommunications components present extra descriptive difficulties (and may need specialist inputs)

Hold in check strong opinions on technology and brands

But reflect reasonable economies of the installed base

Capture required quality/performance for equitable competition

Telecommunications components present extra descriptive difficulties (and may need specialist inputs)


IInformaticsnformatics AAdvisory dvisory SServiceerviceKey Areas Needing Attention

– Bidding and Bid Evaluation Stage

Ensure an open clarification process

Composition of evaluation team

Letting evaluators do their job

Handling of non-conformities (since bids are rarely perfect)

If technical merit is scored, then bid evaluation method must be carefully designed and pre-tested

Ensure an open clarification process

Composition of evaluation team

Letting evaluators do their job

Handling of non-conformities (since bids are rarely perfect)

If technical merit is scored, then bid evaluation method must be carefully designed and pre-tested



Key Areas Needing Attention – Contract Execution

Maintain focus on milestones, goals Prevent premature delivery and payment of

hardware and user licences for packaged software Carefully assess proposed replacement of supplier

staff and resist if appropriate, especially at the start of the contract

WB involvement typically is a positive factor outside the contractual conflict resolution framework but WB policies typically are very restrictive in times of contract implementation catastrophes

Maintain focus on milestones, goals Prevent premature delivery and payment of

hardware and user licences for packaged software Carefully assess proposed replacement of supplier

staff and resist if appropriate, especially at the start of the contract

WB involvement typically is a positive factor outside the contractual conflict resolution framework but WB policies typically are very restrictive in times of contract implementation catastrophes



Acknowledgements In addition to the sources listed in the

slides this presentation has had the following peer-reviewers William Dorotinsky, PREM Ali Hashim, ECSPS Eduardo Talero, ISGIA Friedrich Konigshofer, OPCPR Giorgio Valentini, ISGIA Suparno Banerjee, EDS

IAS is presently capable of leveraging IT element of projects that inform Bank programs in four major areas:

Sectoral ApplicationsSectoral Applications

E-GovernmentE-GovernmentNational StrategiesNational Strategies

IAS offers IT advice for Country Assistance Strategy (CAS)

formulation process Poverty Reduction Strategy formulation

process technology integration frameworks national ICT strategies and operational

requirements.

IAS facilitates the identification of the proper role of IT in the construction and/or re-engineering of legal structures, of policies and regulations and of business processes.

IAS offers IT advice for the design, modeling and implementation of e-government programs.

IAS facilitates access to know-how in specific aspects of e-government, such as:

Change management; Knowledge management; Risk management; Economic analysis of informatics impact; Regulatory capacity building;

IAS offers advice on the optimal use of IT for ICT applications in the areas of:

Health; Education; Energy; Water and sanitation; Urban management; Public finance; Land and cadastral management; Administration of justice.

IAS facilitates access to expertise in specific sectoral needs such as:

Accounting systems; Applications support; Hardware and software consultancy services Quality control (e.g., ISO, CMM, etc.); Security; Web and Internet.

IAS assists in the design and implementation of electronic voting systems and of electronic public assistance services systems, like telecenters and integrated citizen services centers.

IAS assists in the re-design of public administration systems in general and of treasury, government networks, custom and taxations systems in particular.

IAS assists in the engineering of e-procurement systems and of SME promotion tools.

Government-to-GovernmentGovernment-to-Government

Government-to-BusinessGovernment-to-Business

Government-to-CitizensGovernment-to-Citizens

Procurement ReviewsProcurement Reviews

IAS offers advice and facilitate the appraisal of technical specifications, bid evaluations documents and procurement complaints so as to ensure that The World Bank IT procurement guidelines are met

IAS experience in IT procurements of goods, works and consultant services covers:

Enterprise application infrastructure; LAN/WAN environments; Networking equipment; Security; Management of information systems; Desktop computing; Call centers; Training; Disaster recovery; Hardware/software contracts management; Web and Internet.



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For further information, please contact:Deepak Bhatia, Manager, [email protected]

For further information, please contact:Deepak Bhatia, Manager, [email protected]

IFMS Implementation: Aspects for Consideration - Deepak Bhatia

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