1. Deepak T. Bhatia, ISG IFMS IMPLEMENTATION ASPECTS FOR CONSIDERATION I nformatics A dvisory S ervice

2. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

3. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

4. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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.

5. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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 Governance Source: IAS Risk Management InstitutionalOrganisationalIT

6. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG Government Commitment Legal Framework Business Processes Financial Flows Governance 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 Organisational and IT Strategies

7. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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 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  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

8. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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.  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.

9. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

10. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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  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

11. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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  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

12. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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.

13. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG Financial Records Management 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 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 Protect the integrity of key records and the information they contain Ensure the timely disposal of obsolete records Meet the financial management needs of the government, including: Source: IRMT discussion on evidence-based governance

14. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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  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

15. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

16. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG Eight Key Steps To a Successful Transformation 1.Establish a sense of urgency 2.Form a powerful guiding coalition 3.Create a vision 4.Communicate the vision 5.Empower others to act on the vision 6.Plan for and create short-term wins 7.Consolidate improvements and produce still more change 8.Institutionalize new approaches Adopted from Harvard Business Review March-April 1995 1.Establish a sense of urgency 2.Form a powerful guiding coalition 3.Create a vision 4.Communicate the vision 5.Empower others to act on the vision 6.Plan for and create short-term wins 7.Consolidate improvements and produce still more change 8.Institutionalize new approaches Adopted from Harvard Business Review March-April 1995

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

18. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

19. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

20. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

21. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

22. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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)

23. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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  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

24. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

25. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG 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

26. IAS is presently capable of leveraging IT element of projects that inform Bank programs in four major areas: Sectoral Applications E-GovernmentNational 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-Government Government-to-Business Government-to-Citizens Procurement 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.

27. I nformatics A dvisory S ervice Deepak T. Bhatia, ISG I nformatics A dvisory S ervice For further information, please contact: Deepak Bhatia, Manager, ISGIA dbhatia@worldbank.org 202-473-6515 For further information, please contact: Deepak Bhatia, Manager, ISGIA dbhatia@worldbank.org 202-473-6515