1. Development of Application Software for Integrated Financial Management Systems Cem Dener ECSPE Washington, DC July 2007 Development of Application Software for Integrated Financial Management Systems Cem Dener ECSPE Washington, DC July 2007

2. IFMS Application Software1 Presentation Definitions Factors Affecting the Development of ASW Available Solutions IFMIS ASW Solutions in ECA IFMS Application Software

3. July 2007IFMS Application Software2 Definitions Computer Software (SW), consisting of programs, enables a computer to perform specific tasks, as opposed to its physical components (hardware or HW) which can only do the tasks they are mechanically designed for. [source: www.wikipedia.org] For IT Professionals, there are three major categories of computer software:  System Software helps run the computer hardware and computer system (e.g. operating systems, device drivers, diagnostic tools, servers, windowing systems, and utilities).  Programming Software provides tools to assist a programmer in writing computer programs (codes) using different programming languages in a more convenient way (e.g. code editors, compilers, interpreters, linkers, debuggers). Middleware is also a kind of programming software that connects software components or applications to support complex, distributed applications.  Application Software allows end users to accomplish one or more specific tasks. Typical applications include business software, industrial automation, educational software, medical software, databases, and computer games. IFMS falls into this category.

4. July 2007IFMS Application Software3 Definitions Application Software (ASW) For end users, there are two major types of Application Software:  Commercial-off-the-Shelf (COTS) Software is a term for ready-made application software, available for sale, lease, or license to end users. In most IFMIS applications, COTS requires modification (customization) of the code and integration work.  Custom Developed Software (CDSW) is a “user-written” or “in-house developed” (or “bespoke” or “tailored”) software designed to meet the specific needs of end users. In most IFMIS applications, CDSW is integrated to/linked with “customized” COTS software. Other common terms used in ASW development work: Customization (adaptation) is the modification of COTS software (ideally less than 10-20 % of the code) to meet individual needs or specific requirements of the application. Parameterization is the process of entering software specific parameters defined by the user according to technical requirements before testing and using ASW. Localization is the process of translating the user interface, menus and messages that a program presents to a user into various languages for a specific country or region.

5. July 2007IFMS Application Software4 Definitions WB Standard Bidding Document - Supply & Installation of Information Systems (March 2003)  Definitions (General Conditions of Contract) (vii)“Software” means that part of the System which are instructions that cause information processing Subsystems to perform in a specific manner or execute specific operations. (viii) “System Software” means Software that provides the operating and management instructions for the underlying hardware and other components, and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Systems Software. Such System Software includes, but is not restricted to, micro-code embedded in hardware (i.e., “firmware”), operating systems, communications, system and network management, and utility software. (ix)“General-Purpose Software” means Software that supports general-purpose office and software development activities and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be General- Purpose Software. Such General- Purpose Software may include, but is not restricted to, word processing, spreadsheet, generic database management, and application development software. (x)“Application Software” means Software formulated to perform specific business or technical functions and interface with the business or technical users of the System and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Application Software. (xi)“Standard Software” means Software identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Standard Software. (xii)“Custom Software” means Software identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Custom Software. (xiii)“Source Code” means the database structures, dictionaries, definitions, program source files, and any other symbolic representations necessary for the compilation, execution, and subsequent maintenance of the Software (typically, but not exclusively, required for Custom Software).

6. July 2007IFMS Application Software5 Definitions WB Standard Bidding Document - Supply & Installation of Information Systems  Appendix 4 (Sample Forms) COTSCDSWIFMIS

7. July 2007IFMS Application Software6 Definitions Integrated Financial Management System (IFMS) or Integrated Public Financial Management System (IPFMS) or Integrated Financial Management Information System (IFMIS) IFMS is a common information and communication technology (ICT) platform which integrates core public financial management (PFM) functions (e.g. budgeting, treasury operations, accounting, cash/debt management, auditing/reporting) to ensure efficient management of public resources. IFMS is usually a centralized system which supports distributed (countrywide) operations of PFM organizations on a unique central database containing all financial information. Reliable databases, enhanced business processes and consistent information flows between various PFM modules increase overall operational efficiency, improves planning and decision making process, and enhances transparency.

8. Asset / Inventory Mgmt Procurement/ Purchasing Mgmt of Budget Authorizations Commitment of Funds Payments and Receipts Mgmt Cash Management Debt and Aid Management Fiscal Reports & Budget Review Audit and Evaluation Budget Preparation Policy Development and Review Definitions Budget Execution [ Treasury System ] Payroll Calcs HR Mgmt F M I S Web Portal Public Financial Management Cycle

9. July 2007IFMS Application Software8 Factors Affecting the Development of ASW Factors Affecting the Development of ASW for IFMS  IFMS Functionality and Scope  Technology Architecture (centralized, distributed, …)  Existence of secure countrywide Network infrastructure  Existence of ICT Standards and Regulations  Local capacity for software development and maintenance  Institutional capacity for system management and support

10. July 2007IFMS Application Software9 IFMS FunctionsCommon Implementation Options  Macroeconomic Forecasting CDSW / Existing Models  Budget Preparation CDSW / COTS  Core Treasury System COTS (customized)  Payment Management + Interface with banking system (TSA)  Revenue Management + Interface with revenue collection  Accounting (General Ledger)  Cash / Fund Management + Interface with banking system (TSA)  Commitments / Purchasing + Interface with procurement agency  Asset / Inventory Management  Financial Reports  Operational Support for SUs CDSW for Spending Units (e-Treasury)  Internal Debt Management CDSW / Interface with Debt Mgmt System  External Debt and Aid Mgmt. Interface with Debt Mgmt System  Personnel Database / PayrollCDSW / COTS  Support for Auditing Custom developed reports  Web Publishing (Web Portal)CDSW  Financial Mgmt Information SystemCOTS / CDSW [ COTS : “customized” Commercial-off-the-Shelf Software CDSW : Custom Developed Software ] IFMS Functionality / Implementation Options

11. July 2007IFMS Application Software10 IFMS : Information & Communication Technology  Modern integrated PFM systems are designed and implemented as centralized web-based applications  Implementation of the IFMS includes the following ICT components: [0]Establishment of countrywide network connections (communications lines) as Government contribution. [1]Development of web-based Application Software (ASW) as a combination of customized COTS package + custom developed software. [2]Installation of central servers (database & application servers) and data storage units (fiber disk arrays) at the main system center & business continuity center. [3]Installation of standard field hardware (domain servers, user workstations and peripherals) in central and field offices. [4]Installation of network equipment, system and user management tools and engineering support solutions.

12. July 2007IFMS Application Software11 B C C 12 M S C Local Server Firewall Database Server(s) MoF / Treasury District Offices Spending Units Application Servers Web Server Collection Point (city center) Dedicated line Spending Units Internet Virtual Private Network Tunnelling Encryption On-demand lines for towns PCs / Thin Clients [ 2 ] Central Servers [ 3 ] Field Hardware [ 0 ] Wide Area Network District Offices 3 A typical 3-tier web-based implementation and [ ICT ] components IFMS : Technological Architecture [ 4 ] Network Equipment [ 1 ] IFMS Application Software IFMS DB MSC : Main System Center BCC : Business Continuity Center

13. July 2007IFMS Application Software12 User Terminals System Center Database ServerApplication Servers Users Web Server Core PFMS modules Web Portal Customized COTS CDSW Internal + External IFMS Custom developed software modules COTS DB PFM Organizations Spending Units, Local finance directorates, local public authorities, municipalities, etc. Internal Access External Access CDSW DB CDSW : Custom Developed Software COTS : Commercial-off-the-Shelf SW VPN Internet 1 2 3 Interfaces Web-based Centralized IFMS Model Integrated IFMS DB Core Treasury System

14. T Transactions P Plans C Contracts A Accounts R Reports I Interface TSA Treasury Single Acct Spending Units Local finance directorates, public authorities, municipalities, public institutions Integrated IFMS Ministry of Finance Business Continuity Center + FMIS MoF IT Dept I I I State Property Fund Public Procurement Internet & Intranet IFMS Web Portal External Users Reports T, P T, C T,P,C,A Main Civil Service Department Internal Audit I P, R Payroll Calcs. Asset/Invent Mgmt Ministries & Departments P, R AuditReports Debt Mgmt Budget Formul. IFMS Main System Center I Customs Service T, P I Tax Administration T, P Core Treasury System Paym./receipts General Ledger Purch./Commit. Cash/Fund Mgmt Fin. Reports Macro Econ Forec IFMS DB @ MSC IFMS DB @ BCC Statistics Institute I P, R HR Mgmt/Pers DB National BankTSA Regional Treasury Dept District Treasury Div I Other Gov Agencies/Depts T Financial Reports IFMS : Functional Modules and Users

15. July 2007IFMS Application Software14 IFMS Technology Architecture

16. July 2007IFMS Application Software15 Available Solutions Some of the Available IFMS Solutions  FreeBalance eFinancials(FreeBalance Software, Canada)  Oracle E-Business Suite(Oracle Corporation, USA)  SAP R/3 (SAP AG, Germany) Other ASW options in ECA: FinancialOne (TechnologyOne, Australia); MS Dynamics NAV (Navision) (Microsoft Corp. USA); 1C:Enterprise (1C, Russian Federation)

17. July 2007IFMS Application Software16 IFMS ASW Solutions in ECA

18. July 2007IFMS Application Software17 ECA Treasury/IFMS Projects ECA Treasury / PFMS Projects 1995 2000 2005 2010 2015 AlbaniaP069939 PARP (TS)1993 AzerbaijanP066100 TIMS (TS)1998 Jul’07 HungaryP043446 PFMP (TS)1996 KazakhstanP037960 TMP (TS)1994 Slovak Rep**P069864 PFMP (TS)1992 GeorgiaP063081 FMIS (IFMS)1998 Kyrgyz RepP071063 TMIS (TS)1994 MoldovaP082916 PFMP (IFMS)1993 RussiaP064508 TDP (TS)1992 Türkiye*P035759 say2000i (TS+)1927 UkraineP049174 TSP (TS)1996 UkraineP090389 PFMP (IFMS)1996 TajikistanP099840 PFMP (IFMS)1997 UzbekistanP070084 PFMRP (TS)1999 TurkmenistanP034092 IBTA (TS)1992 CroatiaP050718 PFMP (TS)1992 Armenia**P081668 IDF (GFMIS)1996 Extension Implementation Prep.>Appr.>Effect. Treasury established  Preparation Dropped AH DR CD AH, CD CD DR CDDR AH DR CD AH Ali Hashim DR Dominique de Roquefeuil CD Cem Dener AH * The Bank funded the ICT consultant/prj coord only. ** The Bank funded the TA activities only. eGov starts eGov projects stall  World Wide Web Browsers Java  Web TV  Google  Wireless  Skype eGov recovery eEurope  Blogs  YouTube Completed In Progress Avg. completion time 7.1 yrs Avg. implementation 5.7 yrs Avg. compl. 7.2 yrs Avg. impl. 5.1 yrs Avg. compl. 5.5 yrs Avg. implem. 4.1 yrs Oracle / CDSW Oracle / COTS Oracle / CDSW Oracle + MS SQL / CDSW Oracle / COTS SAP / CDSW SAP / COTS Oracle / COTS COTS + CDSW

19. July 2007IFMS Application Software18 Challenges in IFMS Projects Other ICT Challenges  Government ownership and financial support  Recruitment and sustainability of IT specialists in public sector  Existence of a reliable countrywide network infrastructure  Realistic ICT cost estimates to reduce procurement risks  Web based applications & open systems to reduce cost and duration of implementation  Proper requirements for Records Management, Information/System Security and Digital Signature in design  Coordination with e-Gov activities (interoperability & resource sharing)  Project management, monitoring and evaluation skills

20. Development of Application Software for Integrated Financial Management Systems Thank You Washington, DC July 2007 Development of Application Software for Integrated Financial Management Systems Thank You Washington, DC July 2007