IFMS IMPLEMENTATION ASPECTS FOR CONSIDERATION

1. Informatics • Advisory Service IFMS IMPLEMENTATIONASPECTS FOR CONSIDERATION Deepak T. Bhatia, ISG

2. 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 Deepak T. Bhatia, ISG

3. 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 Deepak T. Bhatia, ISG

4. 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. Deepak T. Bhatia, ISG

5. Aspects to Consider for IFMS Implementation Formal project planning including business cases Institutional capacity and incentive scheme Top level sponsorship IT architecture Local technical support Governance Risk Management Agreement/Collaboration within donor organisations, especially related to IT investment Financial records management policies ICT procurement Inter-agency co-ordination Management of changes Institutional Organisational IT Deepak T. Bhatia, ISG Source: IAS

6. Government Commitment IFMS implementations are complex undertakings and may require major institutional changes in the following areas: Legal Framework Business Processes Financial Flows Organisational and IT Strategies Governance The above changes are very difficult to implement without government commitment Deepak T. Bhatia, ISG

7. 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 deadlocks • Tasks: • Define vision, goals, policies and objectives • Allocate roles and responsibilities • Commit stakeholders to high-level workplan • Mobilize necessary resources • Legitimize monitoring and evaluation process Resulting in clear and agreed-upon results Deepak T. Bhatia, ISG

8. 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 systems • Manage external service provision through service level agreements • Ensure integration between project and regular staff. Deepak T. Bhatia, ISG

9. 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 Deepak T. Bhatia, ISG

10. Project Management Aspects • Release project managers from regular responsibilities • Bring in external consulting support for project management • Require professional project management tools and techniques • Measure, monitor and publicize progress • Conduct periodic independent technical audits • Carefully manage public relations and inter-agency politics Deepak T. Bhatia, ISG

11. Donor Coordination Aspects • Often overlapping initiatives in same business area at different levels of government • Ensure 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 Deepak T. Bhatia, ISG

12. 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. Deepak T. Bhatia, ISG

13. Financial Records Management Creation and management of authentic, reliable, and secure financial records are critical actions (paper/electronic) Meet the financial management needs of the government, including: Development and implementation of economic and fiscal policy to: Provide the audit trail and support the audit function Enable government meet its legal obligations for financial management Protect the integrity of key records and the information they contain Ensure the timely disposal of obsolete records Without effective and efficient records management in place, the desired impact of financial and governance reforms is often minimal at best Source: IRMT discussion on evidence-based governance Deepak T. Bhatia, ISG

14. 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 Source: IRMT discussion on evidence-based governance Deepak T. Bhatia, ISG

15. 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 Deepak T. Bhatia, ISG

16. Eight Key Steps To a Successful Transformation Establish a sense of urgency Form a powerful guiding coalition Create a vision Communicate the vision Empower others to act on the vision Plan for and create short-term wins Consolidate improvements and produce still more change Institutionalize new approaches Adopted from Harvard Business Review March-April 1995 Deepak T. Bhatia, ISG

17. 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 Financial Costs, benefits and impact on business performance measures Technical Benefits to IT infrastructure and support for technology strategy ROI Strategic New capabilities and improved competitive position Operational Process improvements (Tangible and Intangible) Source: SAP Deepak T. Bhatia, ISG

18. Business Case for IT Initiatives What stakeholders are affected by the intended solution? Are stakeholders willing to pay for this solution or must government fund it? Can other fund sources be used? How can these stakeholders affect my political future? If we pay to solve this problem, what other problem goes unsolved? • What problem exists that must be solved? • What people/stakeholders (how many constituents) does this problem affect? • What solutions are available to solve this problem? • What are the benefits of each solution? • What is the relative cost of each solution? Source: Gartner Deepak T. Bhatia, ISG

19. 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 Deepak T. Bhatia, ISG

20. 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 Deepak T. Bhatia, ISG

21. 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 Deepak T. Bhatia, ISG

22. 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) Deepak T. Bhatia, ISG

23. Key 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 Deepak T. Bhatia, ISG

24. 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 Deepak T. Bhatia, ISG

25. 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 Deepak T. Bhatia, ISG

26. IAS is presently capable of leveraging IT element of projects that inform Bank programs in four major areas: National Strategies E-Government Government-to-Government • IAS assists in the re-design of public administration systems in general and of treasury, government networks, custom and taxations systems in particular. • 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; Government-to-Business • IAS assists in the engineering of e-procurement systems and of SME promotion tools. Government-to-Citizens • 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. Sectoral Applications Procurement Reviews • 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 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.

27. Informatics • Advisory Service For further information, please contact: Deepak Bhatia, Manager, ISGIA dbhatia@worldbank.org 202-473-6515 Deepak T. Bhatia, ISG