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Guidance on IFMS Implementation May 2007 ICGFM Miami Implementing an IFMS
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ICGFM – IFMS Implementation - 2May 2007 imcl Setting the scene You are the Secretary, Department of Finance in Country X You have just signed a multi million dollar contract with a Supplier to implement the IFMS across the whole of Government You are happy! But now what do you do?
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ICGFM – IFMS Implementation - 3May 2007 imcl You start worrying! Why? –Because most IFMS projects to some extent fail And –Because you should already have made a series of preparations But mainly –Because this is where the work really begins!
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ICGFM – IFMS Implementation - 4May 2007 imcl Major stages of an IFMS implementation
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ICGFM – IFMS Implementation - 5May 2007 imcl Configuration design Vendor has to configure their package to meet specification –Configuration must be within system options –Hence carried through to system upgrades Budget classification/chart of accounts –Most critical and most difficult aspect of configuration –This establishes the accounting and reporting structure A task for accountants not IT specialists –Each package has own constraints and terminology Workflow –Defined in most packages –Changes to package workflow may cause major problems –Balance against need to adhere to government procedures and practice –Ensure Financial Rules/Regulations are either complied with or amended
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ICGFM – IFMS Implementation - 6May 2007 imcl System architecture Central database or Distributed databases Central database Central general ledger Ministry A Ministry B Ministry C Ministries & other agencies enter data locally but all processed on single database Distributed databases Ministry A ledger Ministry B ledger Ministry C ledger Central consolidation & management Ministries & other agencies have own ledgers and databases but managed centrally
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ICGFM – IFMS Implementation - 7May 2007 imcl Hardware & network requirements Development site –For vendor to develop & test systems Training site Production servers –Depends on system architecture –Likely to be multiple servers for different functions –If distributed databases replication at each site Backup & disaster recovery arrangements –Balance of cost and risk Networks linking sites –Wide area and metropolitan area networks –Technology options E.g. fibre optic, wireless, satellite Networks at individual sites –Whose responsibility?
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ICGFM – IFMS Implementation - 8May 2007 imcl Testing –Extensive testing of live data –Likely to be a series of modules which will developed and tested separately, e.g. Budget, commitment, general ledger, revenue, reporting, payroll, etc Requires –Test scripts –Development of output formats –Compliance with IPSAS Must be project structure for testing –User teams to carry out tests –Sign off required at series of stages Configuration design, pilot system tested, live system(s)
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ICGFM – IFMS Implementation - 9May 2007 imcl Organisational changes Implementation IFMS typically requires organisational change –Often ignored or underestimated Typical changes –Business rules enforced by system –New workflows –Electronic authorisation –Must be consistent management structures IFMS changes across government requires whole of government “ownership” –Other Ministries, Departments and Agencies must be involved as early as possible –An exercise in change management
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ICGFM – IFMS Implementation - 10May 2007 imcl Training of users Can only start when system configured Training laboratory with copy of system Training for: –Users –Managers –Technical support Capacity for ongoing training –Needs of new/transferred staff –Training management structure –Training of trainers –Permanent training unit
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ICGFM – IFMS Implementation - 11May 2007 imcl Migration of data and balances Simpler under cash accounting –Only bank and cash balances - must be reconciled If moving to modified or full accrual –Loan balances, advances and prepayments - reconcile –Other assets & liabilities balances under full accrual Map budget to new coding structure –Budget will have been prepared under old codes Consider creating a Statement of Affairs –If no reliable brought forward balance Will previous years’ data be entered for comparison?
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ICGFM – IFMS Implementation - 12May 2007 imcl Merits of different architectures Central databases typical of IFMS –Ensures common coding and standards –Easier to manage –Data automatically consolidated for analysis But –Bigger = more complex –Expensive software & hardware –Critically depends on network linking sites –Difficult to cater for sector specific requirements in a centralised system e.g. public works, health care, education each have unique information requirements
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ICGFM – IFMS Implementation - 13May 2007 imcl Go live Critical stage when system “goes live” - beginning of operational use of system Go live likely to be phased, e.g. 1.By module 2.By phasing Ideally go live at start of financial year –Whole years transactions processed on one system –Same coding structure for whole year –No need to transfer balances part way through year
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ICGFM – IFMS Implementation - 14May 2007 imcl Need to plan for overlapping operation of IFMS and legacy systems Inevitable situation: –IFMS at some sites –Old (legacy) systems at other sites Legacy systems may be manual or computer based Legacy systems must be operated and maintained for several years: –As IFMS is rolled out –To provide access to historic data Problems with maintaining legacy systems: –May use old technology –May use different chart of accounts –How to consolidate data for reporting
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ICGFM – IFMS Implementation - 15May 2007 imcl IFMS rollout IFMS will be progressively rolled out across government Horizontal or vertical slicing? Ministry A Dep’t 1Dep’t 2 ProjectAgency Ministry B Dep’t 1Dep’t 2 ProjectAgency Horizontal slicing Phase 1: all Ministries Phase 2: Departments Phase 3: Projects & agencies Vertical slicing Phase 1: whole of Ministry A Phase 2: whole of Ministry A
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ICGFM – IFMS Implementation - 16May 2007 imcl Rollout Plan – for each group of sites
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ICGFM – IFMS Implementation - 17May 2007 imcl Other issues Security –Who owns the information and controls security? Should be users, e.g. Ministry of Finance, not IT Department –Access rights Levels of access and controls –Physical security –Backup and disaster recovery Records management –Will records on legacy system remain accessible? –Retention and control over records Electronic and paper
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ICGFM – IFMS Implementation - 18May 2007 imcl Project Management IFMS implementation is a major project –Needs structured project management –Preferably use a standard project management methodology E.g. PRINCE (Projects IN a Controlled Environment) developed for UK government IFMS implementation managed by government not supplier –Major contract management exercise –Project management may be sub-contracted
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ICGFM – IFMS Implementation - 19May 2007 imcl The PRINCE II Project Components
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ICGFM – IFMS Implementation - 20May 2007 imcl Project organisation Project Board Senior user ExecutiveSupplier Project Manager Team 1 Team Leader Team members Team 2 Team Leader Team members Project assurance Project support
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ICGFM – IFMS Implementation - 21May 2007 imcl Balance between supplier & government roles
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ICGFM – IFMS Implementation - 22May 2007 imcl Matrix of roles RoleGov’tSupplierComment 1. Project management May be sub-contracted 2. Legal and regulatory framework 3. Software delivery & configuration 4. Hardware and networks May be separate contracts or combined with software - turnkey 5. Initial user training Should be training of trainers 6. Ongoing training Could be continued by supplier or outsourced 7.Preparing data for migration to IFMS 8. Organisational changes and change management 9. Ongoing system operation Could be operated by supplier or other contractor – out-sourcing 10.Ongoing support Could be outsourced
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ICGFM – IFMS Implementation - 23May 2007 imcl Ongoing sustainability of IFMS Many IFMS are proving: –Difficult to sustain and/or –Only cover part of government Major problems –Cost Ongoing operational costs Maintenance costs Software licenses –Organisational Inadequate technical support structure Inadequate training resources Shortage/turnover of skilled staff –System design System design inadequacies become increasingly apparent over time
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ICGFM – IFMS Implementation - 24May 2007 imcl Realising the benefits of an IFMS Better fiscal management –Only if information is utilised More optimal resource allocation –Only if budget system is linked to strategic objectives Improved management of resources (value for money) –Only if managers utilise financial information Reduced fraud and corruption –If system is designed and used to improve controls Improved transparency and accountability –If system information is published in a useful format, e.g. IPSAS compliant financial statements on Government we site
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ICGFM – IFMS Implementation - 25May 2007 imcl Conclusions An IFMS can lead to real benefits Implementation is challenging –Must be recognised as a major project impacting across government –Requires substantial resources –Do not underestimate time Sustainability issues must be addressed from the start IFMS benefits are not automatic –Must be a strategy to realise the benefits
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