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IFMIS

VIEWS: 411 PAGES: 24

									Perspectives on IFMIS
Implementation in selected
Sub-Saharan African Countries


  [P. Murphy]




          P Murphy, IFMIS Nairobi November
                                             1
                        2004
Comparative Analysis
  This Session looks at IFMIS Implementation in
  terms of:

  • Change

  • Implementation Processes

  Using an organisational systems perspective.

  The objective is to share experiences from a
  selected group of countries that have had a degree
  of success in implementing financial systems.



P Murphy, IFMIS Nairobi November 2004                  2
IFMIS – Analytical Dimensions
Presentation looks at IFMIS
 implementation as a
 Change Processes

IFMIS Drivers of Change                IFMIS Transition Process &
Vision & IFMIS Change                   Transition Management
 Process.                               IFMIS Capacity Building &
IFMIS/ICT Acquisition Process           Sustainability
IFMIS/ICT Capacity to Change
IFMIS Transition Strategy


In the context of Govt Organisations – Systems Model
Bounded entities of interrelated sub-systems that interact with the
external environment. (P.E.T.S.) – Transparent/Opaque
Components.



P Murphy, IFMIS Nairobi November 2004                                 3
                              IFMIS Conceptual Framework
                                         External & Internal
            Political                         Drivers                                      Outputs
                                                                                  Social
Inputs
                                                                                           Improved
FISS                                           New Legislation                             Budgeting
                                                & Improved
IFMIS                                                                                      Accountability
                                                   PFM
Application                                                                                Transparency
                          Implementation                         IFMIS Software
Implementation              Strategies                           Implementation            Transaction
Methodology                                      Transition       Methodology              Processing
                                                Management                                 Efficiency
ICT
                               New                                 Processes &             Control
Contractors                 ICT(IFMIS)                             Procedural
                                                                     Change                Management
GoU Staff                                         Capacity                                 Information
Project Staff                                     Building                                 Decision
                                                                                           Making
Project                                                                                    Support
Management
                Economic         Public Financial Management                        Technical
                                      Task Environment
       P Murphy, IFMIS Nairobi November 2004                                                              4
IFMIS Processes
                                        Vision Financial
                                         Information
                                            Systems
                                            Strategy



      Acquisition                                              Implementation
        Process                                                  Processes
                                           IFMIS




                                           Drivers          Transition
           Capacity Building
                                                           Management


P Murphy, IFMIS Nairobi November 2004                                           5
    IFMIS Change Drivers
        Country          Key Issues (Context, Recognition, Willingness &
                         Ownership)
1       Kenya            IFMIS part of PFM reform. Limited Political/Economic Drivers. Urgent
        (Pilot ORACLE    need to replace outdated technology. DP Support -
        Financials)      PFM/Infrastructure.. Primary Ownership with AccGen. Variable
                         MoF/IT Agency Support. Some resistance from entrenched interests.
2       Mauritius        Strong Professional Demand (AccGen), Limited Political/Economic
        (Implemented     Drivers. Fiscal Discipline. Existing Bespoke System- Y2k Driver,No DP
        ORACLE           support. Proactive trusted ICT supplier with substantial experience of
        Financials)      working with Treasury. Availability of skilled/motivated Staff.
3       South            Strong PFM Reform -move to performance budgeting, accrual
        Africa           based financial reporting Limited Political/Economic Drivers. Extensive
        (Current Be-     legacy systems. Primary drivers need to replace aging expensive
        spoke Systems    Technology with limited functionality and respond to new legislation..
        Under Review)    Ownership has been diverse efforts now being made to internalise.
4       Tanzania         PFM Crises/Loss of DP Funding/Developing ICT Capacity. IFMIS part
        (Implemented     of PFM reform. Crises/New Management/DP support opened space for
        EPICOR           implementation. High risk AccGen Management Style. Early
        PLatinum ).      resistance but PFM ownership developed over implementation period.
5       Uganda           IFMIS part of PFM reform. Limited Political/Economic Drivers.
                         Capacity Issues.. Strong AccGen Ownership, MoF support
        (Pilot ORACLE
        Financials)
                         developed over time. Extensive DP support for holistic and
                         comprehensive approach.

    P Murphy, IFMIS Nairobi November 2004                                                          6
 Lessons/Challenges – Change Drivers

Area            Lessons                           Challenges
Context         It is important to identify and   How can external drivers be
                engage external/internal          identified,engaged and
                drivers of change.                strengthened?

Recognition     Governance Arrangements           How can Stakeholders
&               often weak with insufficient      Participation (ie Budget, Public
Willingness     Stakeholder                       Service) and willingness to
                Participation/Support and         support change be improved?
                resistance to change.
Ownership/      AccGen usually nominated          How can executive ownership
Champion        executive owner but               be improved and how can
                difficultly in securing other     responsibility/accountability be
                MoF Depts inputs. AccGen          translated into necessary
                may often be given the            authority?
                responsibility but without
                the authority
                (HR/Organisational Issues).


 P Murphy, IFMIS Nairobi November 2004                                               7
    Vision of Change Process
      Country             Key Issues – PFM Reform, Use of IFMIS, Scope
1     Kenya               To progressively provide efficient and effective support to Budget,
      (Comprehensive      Financial Management, Control and Audit in MDA.
      Change as part of   Implementation (functionality/coverage)takes place over 5-10 year
      PFM Reform)         period. (Pilot, Rollout, Expansion)
2     Mauritius           To rapidly (2-3 years) implement a modern IFMIS
      (FM/Accounting/F    (FM/Accounting)that would resolve Y2K issues, improve efficiency
      R Reform)           of transaction processing and facilitate improved financial reporting.

3     South Africa To put in place an integrated financial management system built on
      (Comprehensive      standards and technologies required to facilitate interoperability with
      Change as part of   departmental core systems unique to national and provincial
      PFM Reform)         departments.
4     Tanzania            To progressively (2-10 years) implement a generic Public Sector
      (Comprehensive      Budget, FM, RM & FR System (and sustainable capacity) for MoF,
      Change as part of   CG Ministries and Departments using recognised PFM standards.
      PFM Reform)         Later expanded to encompass TRA/LG/Agencies with diverse
                          functionality according to organizational need. Implementation over a
5     Uganda              Progressive implementation (3-10 years) of a sustainable Public
      (Comprehensive      Sector Budget, FM, RM, FR & Auditing System. (CG/LG) with
      Change as part of   diverse functionality according to need. (Pilot, Rollout, Expansion)
      PFM Reform)

    P Murphy, IFMIS Nairobi November 2004                                                           8
IFMIS Lessons/Challenges- Vision
Area         Lessons                                 Challenges

PFM          PFM/IFMIS implementation requires       How can a broader shared
             substantive government wide             understanding/vision/involvement of
Reform       (often frame-breaking) change           PFM/IFMIS reform be developed such that
             (Policy & Operational) in the manner    reform initiatives are integrated, owned,
             in which Public Budgeting, Financial,   resistance to change minimized and
             Resource Management & Auditing          complementary organizational change
             processes take place.                   supported ?


Use of       IFMIS is a core component of            How can an evolutionary medium/long
             PFM Reform. Reform however              term IFMIS reform be made compatible
an           takes time to implement, an             with the need to achieve short term
IFMIS        evolutionary rather than                improvements in PFM to meet fiduciary
             revolutionary IFMIS approach            requirements ?
             increases chances of success.
             Results accumulate over a 2 to
             10 year period. Early Wins Helpful.

Scope        IFMIS system can facilitate             What criteria should be considered for
             comprehensive PFM reform                determining the scope of an IFMIS? How
             across Central and Local                should implementation be phased from a
             Government & Public Sector              functional and entity perspective?
             Agencies or it can be much more
             limited.


 P Murphy, IFMIS Nairobi November 2004                                                           9
    Acquisition
      Country             Key Issues – Preparation, Procurement
1     Kenya               Detailed FISS/PFM Review. Acquire comprehensive high end IFMIS.
      (ORACLE             Follow thorough procurement through open competitive methodology,
      Financials)         difficult process though eventually completed with many delays. ICT,
                          WAN provided separately and still are not yet fully installed.
2     Mauritius           Limited studies, Single source procurement. Proactive trusted
      (ORACLE             ICT supplier with substantial experience of working with Treasury
      Financials)

3     South Africa Well developed legacy systems that have existed for many years,
                          Detailed study undertaken for revamping system. In the process of
                          establishing framework for IFMIS acquisition.

4     Tanzania            Outline Study. Open Tender based on bilateral/local tender
      Epicor - Platinum   process. Mid Range system. Tender required local supplier
                          provision of internationally recognised software/consultancy/training.
                          Separate tender for ICT, software vendor co-opted to define and
                          evaluate ICT requirement.
5     Uganda              Detailed FMS/PFM Review. Tender documents outcome of the study.
      (ORACLE             Acquire comprehensive high end IFMIS/ICT in 2 phases on a
      financials)         turnkey basis. follow thorough procurement methodology using WB
                          Single Stage Bidding. Evaluate results of phase 1 before finalising
                          contract for phase 2.


    P Murphy, IFMIS Nairobi November 2004                                                          10
IFMIS Lessons/Challenges- Acquisition
 Area                Lessons                                  Challenges
 Preparation         Identify/emphasize unique PFM            Is it necessary to do a FMS study,
                     features and capacity building           cannot this be undertaken during
                     requirements in definitions.             BPR?
                     High end/Mid range Systems
                     offer similar levels of functionality.   Are High End Systems necessary for
                     However implementation,                  most Sub Saharan Countries?
                     licensing and maintenance costs
                     of high end system substantial.
                                                              How can early stakeholder
                     Budget, Cash and Commitment              engagement be ensured?
                     Management are not standard.
                                                              How can one commit contractor to
                     Early Stakeholder Engagement             providing required PFM functionality?


 Procurement         Turnkey solution provides a              Do lengthy formal rule based
                     single accountability relationship.      procurement systems lead to over
                     Need to ensure contractor                complex solutions?
                     provides for capacity
                     building/change management.              How can the concurrent/named user
                     Key issue is Contractor Capacity         licensing issues be dealt with?
                     and Support
                                                              How can the contractor be committed
                                                              to capacity building

 P Murphy, IFMIS Nairobi November 2004                                                                11
    Implementation Strategy
     Country              Key Issues –System, Implementation
                          Methodology & Sequencing.
1    Kenya                Initially core FM/Accounting Modules and interfaces in Pilot, Train and
     (Phased but          Test then Rollout. MTEF/Budget Module to follow as solution & PFM
     Comprehensive        Cycle Permit. Process delayed due to WAN approval difficulties. Testing
     Solution)            finalised with delays. FM/Accounting rollout now commenced.

2    Mauritius            Implement FM, Accounting and Financial Reporting Modules. Follow
     (Partial Solution)   rapid implementation methodology. Implementation of budget
                          module dependent on decision by MoF to use system to support
                          MTEF/Budget Reform. FM/Accounting fully implemented.
3    South                Evolutionary rather than revolutionary change in light of the
                          sustained development of systems and internal recognition of need to
     Africa
                          change at different stages of maturity. Internally led rather than
     (To be defined)
                          externally compelled change. From the FMS to BAS and now preparatory
                          activities for an IFMIS. A phased change strategy reflecting
                          capacity/policy issues.
4    Tanzania             Implement comprehensive mid range IFMIS but in phases as resources
     (Phased but          and capacity permits. Follow rapid implementation methodology.
     Comprehensive        Initially core Accounting Modules and interfaces in Pilot then rapid Rollout.
     solution )           Budget Module followed as solution, willingness, resources & PFM Cycle
                          permit. Currently consolidating system.
5    Uganda               Implement comprehensive high end CG/LG IFMIS but in phases.
                          Follow thorough implementation methodology. Initially core Accounting
     (Phased but
                          Modules and interfaces in Pilot, test and then rollout. Budget
     comprehensive
     solution)            Module to follow as Solution & PFM Cycle permit.
    P Murphy, IFMIS Nairobi November 2004                                                                 12
IFMIS Lessons/Challenges - Strategies
 Area       Lessons                                          Challenges
 System     Effective Governance, Project & Contract         What governance arrangements
 Transiti   Management Arrangements Essential with           should be put in place?
 on         specialist sub groups                            What should action plan cover?
            (ICT,Application,Capacity, Etc)
            Clear action plan with baseline, timelines,      How can Government specific MTFF,
            accountabilities etc.                            Performance Budget,
            Dedicated ICT/PFM team required.                 Commitment/Cash Control,
            Must ensure key application management           Revenue Management requirements
            and ICT staff involved at each stage of the      be met?
            implementation. Process is a major learning
            opportunity for client. Contractor also has to   How can joint working be
            learn                                            implemented.
            Train core application and ICT
            management group on
            Application/Architecture at the start of         How should sequencing be
            process.                                         organised?
            Provide early Sensitisation training
            important to manage expectations.
            Implementation typically starts with Core
            FM/Accounting Modules. However broader
            framework needs to be addressed even if
            not fully operationalised.

  P Murphy, IFMIS Nairobi November 2004                                                       13
IFMIS Lessons/Challenges - Strategies
 Implement-     Ensure BPR/Solution definition        How can cooperative working be
 ation          stage reflect desired medium term     ensured?
                PFM changes. Minimise
                customisation.
                Contractors tend to try to water
                down requirements Govt tends to
                expand..
                Ensure in-country solution
                development and client team
                involvement.
                Important to encourage cooperative
                not conflicting working
                arrangements between
                Contractor/Client.
                Contractor must provide PFM, ICT,
                CM & Project Management
                Capacity.
                Some flexibility required as PFM
                requirements changing over time.
                Ensure attention given to reporting
                tools



   P Murphy, IFMIS Nairobi November 2004                                               14
    ICT Architecture
     Country             Key Issues
1    Kenya               Central Database Server, In-house IT Unit, DRC yet to be
                         implemented, Limited WAN solution. Recently developed E Governance
                         Policy yet to be fully integrated with IFMIS. HR System supplied
                         separately with little integration. Support, Maintenance and Warranty
                         arrangements with Local Software & Hardware Contractors
2    Mauritius           Central Database Server, small AccGen supported Data Centre.
                         Leased line based WAN. DRC yet to be established. ICT Agency used to
                         Quality Control. Support, Maintenance and Warranty arrangements
                         with Local Software & Hardware Contractors funded by Govt Budget.
3    South               Strong ICT Agency(SITA) runs all ICT infrastructure for bespoke
                         systems. Large IBM mainframe based servers. Extensive country wide
     Africa
                         WAN. DCR etc

4    Tanzania            Central Database Server, MoFPED LAN, Redundent Wireless WAN
                         11Mb Bandwidth, Low cost terminals, Citrix Server. Attempt to
                         establish internet based VPN. Internal ICT Group established. Weak
                         ICT Agency focussed on Payroll Maintenance and Development.
                         Transitional ICT Strategy Developed. DRC being tendered. Support,
                         Maintenance and Warranty arrangements with Local Software &
                         Hardware Contractors funded by Govt Budget.
5    Uganda              Central Database Servers, MoF LAN, MDALG LANs, Redundent
                         Telecoms provider based WANs. DRC being established. ICT
                         Agency being established. Long term warranty/maintenance/WAN
                         arrangements made with service providers.
    P Murphy, IFMIS Nairobi November 2004                                                        15
IFMIS Lessons/Challenges - Architecture
 Area         Lessons                                        Challenges
 Data         Undertake thorough ICT Architecture            How do we ensure provision of
 Centre &     Planning. Provide upgrade Path.                DCR?
 site         Include substantive site supervision
 Infrastruc   arrangements.                                  What are key operating conditions
 ture         Ensure integrity & security.                   for Data Centre.
              Deploy either in-house or facilities
              management capacity. Establish
              sustainable support framework
              Ensure Backup and DRC and support
              arrangements.
              Provide for maintenance and
              replacement policy.
              Secure power supply.
 ICT          In house ICT capacity and external             How can local support capacity be
 Capacity     local and international support                developed for centre and
              necessary.                                     periphery?
              Secure Core/Periphery Remote Operation
 WAN          Options include Fibre Optic, Wireless, Vsat,   What criteria should be used to
              Leased Line & Internet.                        make choice.
              Need to monitor and mange WAN                  How can WAN performance be
              Performance                                    addressed

  P Murphy, IFMIS Nairobi November 2004                                                          16
Capacity to Change
      Country           Key Issues (PFM, ICT,Training & CM Capacity)
1     Kenya             Enhance capacity with PFM Advisor and appoint Project Manager.
      (Some             Rely on existing ICT Capacity. Create project implementation
      Strengthening)    teams from existing qualified PFM & ICT staff. Contract
                        international vendor with local presence. Provide extensive
                        training.
2     Mauritius         Utilise existing staff under direction of AAG. Utilise existing strong
      (In house)        Software/ICT provider. Establish in-house implementation team
                        under direction of experienced and qualified AAG.

3     South             Strong ICT & FM Capacity Developed. Budget Management
      Africa            Capacity needs further development. Implementation
                        arrangements to be decided.

4     Tanzania          Enhance capacity with PFM Advisor and part time ICT Advisor. Recruit
      (Extensive        and train (12 +25+70) young PFM/ICT graduates for FSDU & User
      Strengthening)    Depts. Utilise local contractor with support from international vendor.
                        Restructure AccGen’s Department. Provide extensive training. Use
                        FDSU as implementation team.
5     Uganda            Enhance capacity with PFM Advisor, Training Advisor, Project Manager
      (Extensive        and 7 FMS. Recruit 20 graduates for AccGEN. Recruit 6 ICT/Data
      Strengthening)    Centre Staff. Create project implementation teams from existing
                        qualified PFM & ICT staff. Contract international vendor with local
                        presence. Dedicated team for procurement/contract maangement.
    P Murphy, IFMIS Nairobi November 2004                                                         17
IFMIS Challenges/Lessons Learnt - Capacity
Area           Lessons                                    Challenges

PFM            PFM/PM/CM Advisors typically               How can resistance to use of external
               required to assist with policy/process     consultants be overcome?
               framework definition.
               Carefully position PFM Advisor(s).         How can sustanable application
               Consider needs of                          management groups be created?
               Budget/Accounting/Audit
               Essential to establish/recruit and         Is a change management advisor
               train application implementation           required.
               management group

ICT            ICT Advisor(s) required to support ICT     How can sustainable ICT management
               interaction and capacity building          group be created?
               Essential to establish/recruit and
               train ICT implementation
               management group


Training       Provide for extensive                      Who should provide training facilities.
               PFM/ICT/Application training.              How should training be programmed
               Plan training at relevant times. Quality   and monitored.
               Control, Adopt Training of Trainers
               Approach.


 P Murphy, IFMIS Nairobi November 2004                                                              18
    IFMIS Transition Methodology
     Country              Key Issues (Implementation Teams, Process,
                          Testing/Pilot, Evaluation,Rollout)
1    Kenya                Plan & Implementation Team established, BPR, Solution Design,
     Implementation 5     UAT, Data Migration, Production Testing, Training & Parallel
     Plus Years           Running/Implementation. In parallel ICT infrastructure design and
                          deployment. Contractor team onsite, Evaluation Undertaken
2    Mauritius            In house implementation – 6 Months. Setup, Training,
     Implementation 2     Implementation. System Overlaid and progressively
     years. Operational   implemented, functionality increased over time.
     4 years

3    South Africa         Bespoke solution - (IFMIS proposals now being considered.)


4    Tanzania             Interim System installed (One Year). Parallel implementation
     Implementation 2     team/SDU formed. Detailed BPR/Solution Design, Pilot Running
     years, Operational   with Core System – all in 6 months. System Overlaid. Phased
     4 Years              increase in functionality and coverage over first year. Evaluation and
                          roll out over subsequent years with increasing functionality and
                          coverage.
5    Uganda              Plan and Implementation Team(s) established & trained, BPR,
      Implementation 3   Solution Design, Offshore build, UAT, Production Testing, Training,
      years.             Data Conversion, Parallel Running, Pilot Stage, Pilot Evaluation.
                         Phased increase in functionality and coverage over first year.
                         Evaluation and roll out over subsequent years with increasing
                         functionality and coverage.
    P Murphy, IFMIS Nairobi November 2004                                                          19
IFMIS Challenges/Lessons Learnt - Transition
Area            Lessons                                 Challenges

Teams           Dedicated implementation team(s)        How/where should implementation
                essential Application, ICT, Training,   team(s) be established
                Security/Controls/Change
                Management/ Project Management
                etc

Process         Detailed implementation plan            How can results/capacity building
                covering all relevant stages and        conflict be dealt with?
                components with timeframes outputs
                and accountabilities. Agreed and        What key issues must the
                realistic sequencing with early wins.   implementation deal with?
                Conflict between Results and
                Capacity Building.
                                                        How can flexible cooperative
                                                        arrangements be evolved?
                Flexible Cooperative
                Implementation Methodology
                required that ensures action learning
                and continuous active client
                contractor dialogue,rapid feedback.

                Weekly Monitoring by Project
                Management Group.


 P Murphy, IFMIS Nairobi November 2004                                                      20
IFMIS Capacity Building
      Country            Key Issues (Application & Facilities Management, User
                         Training, Resources, Warranty, Maintenance)
1     Kenya              Capacity building integral to implementation approach. In-house
                         Application Group Established, Existing ICT Data Centre Group.
                         Extensive training provided.

2     Mauritius          Application & ICT managed by AccGen Department, no formal Data
                         Centre but small ICT support team,


3     South              Current in-house bespoke system supported by outsourced consultants
      Africa             with small core in-house team.

4     Tanzania           Capacity building integral to implementation approach. AccGen
                         Department Restructured, FSDU Application Group Established, ICT
                         Data Centre Group Established, Extensive training provided,

5     Uganda             Due to early staffing difficulties, large team of FM Specialists, IFMIS
                         Accountants and Data Centre Staff Recruited. Extensive training
                         provided. Aim is to provide for a) Recruitment of IFMIS Accountants
                         during next phase and b) Further develop FM & ICT skills of existing
                         staff. Long term warranty/maintenance/WAN arrangements made with
                         service providers




    P Murphy, IFMIS Nairobi November 2004                                                          21
Key Issues
 • Implementation approaches, although often sharing common technical
   features, depend also on the Country Context.- Recognition, management
   support, willingness to engage in change and establish capacity are
   critical issues.

 • IFMIS implementation involves substantive government wide (often frame-
   breaking) change in the manner in which Public Budgeting and Financial
   Management Processes take place. – The core IFMIS Group
   vision/strategy must recognize this, commitment to specific PFM
   changes is essential for successful IFMIS implementation.

 • IFMIS although often perceived as a technical IT based issue has both Hard
   (ICT, Software, Processes) and Soft Dimensions(Power, Politics, Culture,
   People) – The IFMIS design, implementation and change management
   processes need to reflect this.

 • The intended scope of an IFMIS can vary, from simple General Ledger System
   to a comprehensive system addressing Budget, Revenue, Financial
   Management, Resource Management, Payroll, Accounting, Financial Reporting,
   Auditing and Accountability processes across Central and Local Government &
   Public Sector Agencies. – Scale, scope and sequencing of the changes
   are important.

P Murphy, IFMIS Nairobi November 2004                                            22
Key Issues – Cont’d
 • Competent Transition Management Capacity is a key issue in ensuring
   successful IFMIS implementation. The requires PFM, ICT and CM skills. -
   IFMIS Project Management teams should encompass these skill sets.

 • Capacity building during the transition stage facilitates sustainable
   operational capacity. Implementation is a major learning opportunity.

 • PFM is an extensive area change is continuous implementation does not end
   with functionality/coverage but rather with internalized capacity

 Costs

 Depends on what is planned/expected,choice of system and
  context?




P Murphy, IFMIS Nairobi November 2004                                          23
     Key Risks
• Lack of Engagement and Political/ Management Support.
• Inadequate Preparation (Vision, Policies, Capacity)
• Weak Governance Arrangements.
• Over Complicated Expensive Systems
• Inadequate acquisition and contract management.
• Unrealistic action plans.
• Non participation, lack of dedicated teams.
• Inadequate training
• Weak, contractor with technical/commercial focus




P Murphy, IFMIS Nairobi November 2004                     24

								
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