Perspectives on IFMIS
Implementation in selected
Sub-Saharan African Countries
[P. Murphy]
P Murphy, IFMIS Nairobi November
2004
1
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
Vision & IFMIS Change
Process.
IFMIS/ICT Acquisition Process
IFMIS/ICT Capacity to Change
IFMIS Transition Strategy
IFMIS Transition Process &
Transition Management
IFMIS Capacity Building &
Sustainability
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
Drivers
Political
Inputs
Social
Outputs
Improved
FISS
New Legislation
& Improved
PFM
IFMIS
Application
Implementation
Methodology
Implementation
Strategies
ICT
Transition
Management
New
ICT(IFMIS)
Contractors
GoU Staff
Budgeting
Accountability
IFMIS Software
Implementation
Methodology
Processes &
Procedural
Change
Capacity
Building
Project Staff
Project
Management
Economic
Public Financial Management
Task Environment
P Murphy, IFMIS Nairobi November 2004
Transparency
Transaction
Processing
Efficiency
Control
Management
Information
Decision
Making
Support
Technical
4
IFMIS Processes
Vision Financial
Information
Systems
Strategy
Implementation
Processes
Acquisition
Process
IFMIS
Capacity Building
P Murphy, IFMIS Nairobi November 2004
Drivers
Transition
Management
5
IFMIS Change Drivers
1
Country
Key Issues (Context, Recognition, Willingness &
Ownership)
Kenya
IFMIS part of PFM reform. Limited Political/Economic Drivers. Urgent
need to replace outdated technology. DP Support PFM/Infrastructure.. Primary Ownership with AccGen. Variable
MoF/IT Agency Support. Some resistance from entrenched interests.
(Pilot ORACLE
Financials)
2
Mauritius
(Implemented
ORACLE
Financials)
3
South
Africa
(Current Bespoke Systems
Under Review)
4
Tanzania
(Implemented
EPICOR
PLatinum ).
5
Uganda
(Pilot ORACLE
Financials)
Strong Professional Demand (AccGen), Limited Political/Economic
Drivers. Fiscal Discipline. Existing Bespoke System- Y2k Driver,No DP
support. Proactive trusted ICT supplier with substantial experience of
working with Treasury. Availability of skilled/motivated Staff.
Strong PFM Reform -move to performance budgeting, accrual
based financial reporting Limited Political/Economic Drivers. Extensive
legacy systems. Primary drivers need to replace aging expensive
Technology with limited functionality and respond to new legislation..
Ownership has been diverse efforts now being made to internalise.
PFM Crises/Loss of DP Funding/Developing ICT Capacity. IFMIS part
of PFM reform. Crises/New Management/DP support opened space for
implementation. High risk AccGen Management Style. Early
resistance but PFM ownership developed over implementation period.
IFMIS part of PFM reform. Limited Political/Economic Drivers.
Capacity Issues.. Strong AccGen Ownership, MoF support
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
engage external/internal
drivers of change.
How can external drivers be
identified,engaged and
strengthened?
Recognition
&
Willingness
Governance Arrangements
often weak with insufficient
Stakeholder
Participation/Support and
resistance to change.
How can Stakeholders
Participation (ie Budget, Public
Service) and willingness to
support change be improved?
Ownership/
Champion
AccGen usually nominated
executive owner but
difficultly in securing other
MoF Depts inputs. AccGen
may often be given the
responsibility but without
the authority
(HR/Organisational Issues).
How can executive ownership
be improved and how can
responsibility/accountability be
translated into necessary
authority?
P Murphy, IFMIS Nairobi November 2004
7
Vision of Change Process
1
Country
Key Issues – PFM Reform, Use of IFMIS, Scope
Kenya
To progressively provide efficient and effective support to Budget,
Financial Management, Control and Audit in MDA.
Implementation (functionality/coverage)takes place over 5-10 year
period. (Pilot, Rollout, Expansion)
(Comprehensive
Change as part of
PFM Reform)
2
Mauritius
(FM/Accounting/F
R Reform)
3
4
South Africa To put in place an integrated financial management system built on
(Comprehensive
Change as part of
PFM Reform)
standards and technologies required to facilitate interoperability with
departmental core systems unique to national and provincial
departments.
Tanzania
To progressively (2-10 years) implement a generic Public Sector
Budget, FM, RM & FR System (and sustainable capacity) for MoF,
CG Ministries and Departments using recognised PFM standards.
Later expanded to encompass TRA/LG/Agencies with diverse
functionality according to organizational need. Implementation over a
(Comprehensive
Change as part of
PFM Reform)
5
To rapidly (2-3 years) implement a modern IFMIS
(FM/Accounting)that would resolve Y2K issues, improve efficiency
of transaction processing and facilitate improved financial reporting.
Uganda
(Comprehensive
Change as part of
PFM Reform)
Progressive implementation (3-10 years) of a sustainable Public
Sector Budget, FM, RM, FR & Auditing System. (CG/LG) with
diverse functionality according to need. (Pilot, Rollout, Expansion)
P Murphy, IFMIS Nairobi November 2004
8
IFMIS Lessons/Challenges- Vision
Area
Lessons
Challenges
PFM
Reform
PFM/IFMIS implementation requires
substantive government wide
(often frame-breaking) change
(Policy & Operational) in the manner
in which Public Budgeting, Financial,
Resource Management & Auditing
processes take place.
How can a broader shared
understanding/vision/involvement of
PFM/IFMIS reform be developed such that
reform initiatives are integrated, owned,
resistance to change minimized and
complementary organizational change
supported ?
Use of
an
IFMIS
IFMIS is a core component of
PFM Reform. Reform however
takes time to implement, an
evolutionary rather than
revolutionary IFMIS approach
increases chances of success.
Results accumulate over a 2 to
10 year period. Early Wins Helpful.
How can an evolutionary medium/long
term IFMIS reform be made compatible
with the need to achieve short term
improvements in PFM to meet fiduciary
requirements ?
Scope
IFMIS system can facilitate
comprehensive PFM reform
across Central and Local
Government & Public Sector
Agencies or it can be much more
limited.
What criteria should be considered for
determining the scope of an IFMIS? How
should implementation be phased from a
functional and entity perspective?
P Murphy, IFMIS Nairobi November 2004
9
Acquisition
1
2
Country
Key Issues – Preparation, Procurement
Kenya
Detailed FISS/PFM Review. Acquire comprehensive high end IFMIS.
(ORACLE
Financials)
Follow thorough procurement through open competitive methodology,
difficult process though eventually completed with many delays. ICT,
Mauritius
Limited studies, Single source procurement. Proactive trusted
ICT supplier with substantial experience of working with Treasury
(ORACLE
Financials)
WAN provided separately and still are not yet fully installed.
3
South Africa Well developed legacy systems that have existed for many years,
4
Tanzania
Detailed study undertaken for revamping system. In the process of
establishing framework for IFMIS acquisition.
Epicor - Platinum
5
Outline Study. Open Tender based on bilateral/local tender
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.
Uganda
Detailed FMS/PFM Review. Tender documents outcome of the study.
(ORACLE
financials)
Acquire comprehensive high end IFMIS/ICT in 2 phases on a
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
features and capacity building
requirements in definitions.
High end/Mid range Systems
offer similar levels of functionality.
However implementation,
licensing and maintenance costs
of high end system substantial.
Budget, Cash and Commitment
Management are not standard.
Early Stakeholder Engagement
Is it necessary to do a FMS study,
cannot this be undertaken during
BPR?
Turnkey solution provides a
single accountability relationship.
Need to ensure contractor
provides for capacity
building/change management.
Key issue is Contractor Capacity
and Support
Do lengthy formal rule based
procurement systems lead to over
complex solutions?
Procurement
Are High End Systems necessary for
most Sub Saharan Countries?
How can early stakeholder
engagement be ensured?
How can one commit contractor to
providing required PFM functionality?
How can the concurrent/named user
licensing issues be dealt with?
How can the contractor be committed
to capacity building
P Murphy, IFMIS Nairobi November 2004
11
Implementation Strategy
1
Country
Key Issues –System, Implementation
Methodology & Sequencing.
Kenya
Initially core FM/Accounting Modules and interfaces in Pilot, Train and
Test then Rollout. MTEF/Budget Module to follow as solution & PFM
Cycle Permit. Process delayed due to WAN approval difficulties. Testing
finalised with delays. FM/Accounting rollout now commenced.
(Phased but
Comprehensive
Solution)
2
Mauritius
(Partial Solution)
3
South
Africa
(To be defined)
4
Tanzania
(Phased but
Comprehensive
solution )
5
Uganda
(Phased but
comprehensive
solution)
Implement FM, Accounting and Financial Reporting Modules. Follow
rapid implementation methodology. Implementation of budget
module dependent on decision by MoF to use system to support
MTEF/Budget Reform. FM/Accounting fully implemented.
Evolutionary rather than revolutionary change in light of the
sustained development of systems and internal recognition of need to
change at different stages of maturity. Internally led rather than
externally compelled change. From the FMS to BAS and now preparatory
activities for an IFMIS. A phased change strategy reflecting
capacity/policy issues.
Implement comprehensive mid range IFMIS but in phases as resources
and capacity permits. Follow rapid implementation methodology.
Initially core Accounting Modules and interfaces in Pilot then rapid Rollout.
Budget Module followed as solution, willingness, resources & PFM Cycle
permit. Currently consolidating system.
Implement comprehensive high end CG/LG IFMIS but in phases.
Follow thorough implementation methodology. Initially core Accounting
Modules and interfaces in Pilot, test and then rollout. Budget
Module to follow as Solution & PFM Cycle permit.
P Murphy, IFMIS Nairobi November 2004
12
IFMIS Lessons/Challenges - Strategies
Area
Lessons
System
Transiti
on
Effective Governance, Project & Contract
Management Arrangements Essential with
specialist sub groups
(ICT,Application,Capacity, Etc)
Clear action plan with baseline, timelines,
accountabilities etc.
Dedicated ICT/PFM team required.
Must ensure key application management
and ICT staff involved at each stage of the
implementation. Process is a major learning
opportunity for client. Contractor also has to
learn
Train core application and ICT
management group on
Application/Architecture at the start of
process.
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
Challenges
What governance arrangements
should be put in place?
What should action plan cover?
How can Government specific MTFF,
Performance Budget,
Commitment/Cash Control,
Revenue Management requirements
be met?
How can joint working be
implemented.
How should sequencing be
organised?
13
IFMIS Lessons/Challenges - Strategies
Implementation
Ensure BPR/Solution definition
stage reflect desired medium term
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
How can cooperative working be
ensured?
14
ICT Architecture
1
Country
Key Issues
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
Africa
Strong ICT Agency(SITA) runs all ICT infrastructure for bespoke
systems. Large IBM mainframe based servers. Extensive country wide
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
Data
Centre &
site
Infrastruc
ture
Undertake thorough ICT Architecture
Planning. Provide upgrade Path.
Include substantive site supervision
arrangements.
Ensure integrity & security.
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.
How do we ensure provision of
DCR?
ICT
Capacity
In house ICT capacity and external
local and international support
necessary.
Secure Core/Periphery Remote Operation
How can local support capacity be
developed for centre and
periphery?
WAN
Options include Fibre Optic, Wireless, Vsat,
Leased Line & Internet.
Need to monitor and mange WAN
Performance
What criteria should be used to
make choice.
How can WAN performance be
addressed
P Murphy, IFMIS Nairobi November 2004
Challenges
What are key operating conditions
for Data Centre.
16
Capacity to Change
1
Country
Key Issues (PFM, ICT,Training & CM Capacity)
Kenya
Enhance capacity with PFM Advisor and appoint Project Manager.
Rely on existing ICT Capacity. Create project implementation
teams from existing qualified PFM & ICT staff. Contract
international vendor with local presence. Provide extensive
training.
(Some
Strengthening)
2
Mauritius
(In house)
Utilise existing staff under direction of AAG. Utilise existing strong
Software/ICT provider. Establish in-house implementation team
under direction of experienced and qualified AAG.
3
South
Africa
Strong ICT & FM Capacity Developed. Budget Management
Capacity needs further development. Implementation
arrangements to be decided.
4
Tanzania
Enhance capacity with PFM Advisor and part time ICT Advisor. Recruit
and train (12 +25+70) young PFM/ICT graduates for FSDU & User
Depts. Utilise local contractor with support from international vendor.
Restructure AccGen’s Department. Provide extensive training. Use
FDSU as implementation team.
(Extensive
Strengthening)
5
Uganda
(Extensive
Strengthening)
Enhance capacity with PFM Advisor, Training Advisor, Project Manager
and 7 FMS. Recruit 20 graduates for AccGEN. Recruit 6 ICT/Data
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
required to assist with policy/process
framework definition.
Carefully position PFM Advisor(s).
Consider needs of
Budget/Accounting/Audit
Essential to establish/recruit and
train application implementation
management group
How can resistance to use of external
consultants be overcome?
ICT
ICT Advisor(s) required to support ICT
interaction and capacity building
Essential to establish/recruit and
train ICT implementation
management group
How can sustainable ICT management
group be created?
Training
Provide for extensive
PFM/ICT/Application training.
Plan training at relevant times. Quality
Control, Adopt Training of Trainers
Approach.
Who should provide training facilities.
How should training be programmed
and monitored.
P Murphy, IFMIS Nairobi November 2004
How can sustanable application
management groups be created?
Is a change management advisor
required.
18
IFMIS Transition Methodology
1
Country
Key Issues (Implementation Teams, Process,
Testing/Pilot, Evaluation,Rollout)
Kenya
Plan & Implementation Team established, BPR, Solution Design,
UAT, Data Migration, Production Testing, Training & Parallel
Running/Implementation. In parallel ICT infrastructure design and
deployment. Contractor team onsite, Evaluation Undertaken
Implementation 5
Plus Years
2
Mauritius
Implementation 2
years. Operational
4 years
In house implementation – 6 Months. Setup, Training,
Implementation. System Overlaid and progressively
implemented, functionality increased over time.
3
South Africa
Bespoke solution - (IFMIS proposals now being considered.)
4
Tanzania
Interim System installed (One Year). Parallel implementation
team/SDU formed. Detailed BPR/Solution Design, Pilot Running
with Core System – all in 6 months. System Overlaid. Phased
increase in functionality and coverage over first year. Evaluation and
roll out over subsequent years with increasing functionality and
coverage.
Implementation 2
years, Operational
4 Years
5
Uganda
Plan and Implementation Team(s) established & trained, BPR,
Solution Design, Offshore build, UAT, Production Testing, Training,
Implementation 3
Data Conversion, Parallel Running, Pilot Stage, Pilot Evaluation.
years.
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)
essential Application, ICT, Training,
Security/Controls/Change
Management/ Project Management
etc
How/where should implementation
team(s) be established
Process
Detailed implementation plan
covering all relevant stages and
components with timeframes outputs
and accountabilities. Agreed and
realistic sequencing with early wins.
Conflict between Results and
Capacity Building.
How can results/capacity building
conflict be dealt with?
Flexible Cooperative
Implementation Methodology
required that ensures action learning
and continuous active client
contractor dialogue,rapid feedback.
What key issues must the
implementation deal with?
How can flexible cooperative
arrangements be evolved?
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
Africa
Current in-house bespoke system supported by outsourced consultants
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 framebreaking) 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