November 29, 2009Doug Hadden
Government of Canada entering the Second Generation of Public Financial Management Automation
Tweeting, meeting, talking, walking, speaking, blogging – above all – listening. A busy week at the Financial Management Institute (FMI) Professional Development Week in Gatineau, Quebec. Presentations: product roadmap, technical deep drives, performance management and Government 2.0, the value proposition of ERP in government. Eight strategic customer meetings. Five days of conference presentations. A Canada Export Achievement Award. What did we learn? Public Financial Management (PFM) automation is transitioning the second generation in the Government of Canada.
Here are the transition signs:
- Government Resource Planning (GRP): from integrating software systems to integral software approaches
- Government Performance Management: from compliance to impact
- E-Government: from structural to social (Government 2.0)
From Integration to Integral
We’ve spoken about this transition to the second generation of PFM automation. Software applications were developed to support operational government requirements. These applications became a collection of automation silos. Commercial Off-The-Shelf (COTS) applications entered the government market. Some were government specific like the FreeBalance Accountability Suite. Some were generic applications customized for government. As we described in our presentation, the Business Case for ERP in Government, integration has become a transitional theme: integrate the silos. Vendors have promoted the notion of single enterprise software suite across government. Why? Easier to integrate. What is really happening in PFM in Canada?
- Mission-critical applications are difficult to satisfy with generic software because of the board range of government mandates and lines of business
- Cost to integrate within generic software suites and to custom-developed applications remains difficult because of proprietary monolithic approaches
- Automation gaps are revealing as government organizations think outside the confines of traditional enterprise software categories
This second generation of PFM automation in Canada is characterized by:
- Extending application categories such as government accounting or human resources to comprehensive process automation
- Breaking the distinction between applications focused on so-called “structured” and “unstructured” data
- Recognizing what can be standardized in government and what cannot, while on the road to shared services
- Integrating budget management across all automated tools
This integral approach is holistic. Government organizations at the federal and provincial levels are pushing the limits of traditional software approaches. Financial managers focus on needs and objectives. They recognize that integration points alone do not provide effective management insight – especially when application components were not designed with budgets in mind. We found creative thinkers over the past week and a half looking for intuitive solutions. Financial managers recognize that PFM automation is much more than a collection of features or integrated features. PFM automation needs the right set of intuitive features that span transactions, documents and collaboration.
From Compliance to Impact
Government performance management was an important theme at the FMI Professional Development week. As we have written before, governments have moved beyond budget compliance – ensuring that money is spent according to the budget. Governments are focusing on improving results. The Canadian federal government Treasury Board Secretariat has developed numerous standards for performance management. Standards for “value for money” that aligned to risk. Performance management made easy – high business case scrutiny when risks are high. Appropriate measurements when risk is low.
From Structural to Social
The Canadian public service is subject to demographic change. The millennial generation has entered the public service with advanced information technology expectations. The previous generation of PFM automation requires users to navigate through multiple tools to accomplish work. Through complex software generating visual noise. Public servants struggling through complex software rather than improving results.
Automating the structural “business process” represents the end of the first generation of PFM automation. The Canadian public service is beginning to understand the positive impact of Government 2.0. There are skeptics whose experience with the first generation of PFM automation across the “boom, bust and echo” believes that the culture of government will never change. Yet, the focus of the Professional Development Week was “leadership.” Leadership for change. Leadership at every level of the public service.
We’ve identified six technology and five functional trends in this second generation of PFM. Three of these were important themes at FMI and customer discussions.