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Government Decentralization & Centralization

 

March 14, 2016

Every so often a trend in Public Financial Management (PFM) runs counter to a technology trend. One such dichotomy was discussed at the FreeBalance International Steering Committee (FISC) conference last week in Managua, Nicaragua. There has been a push towards “fiscal decentralization” to improve decision-making because those closer to the problem can make better decisions.

Meanwhile, information systems in government are becoming more centralized thanks to shared services and cloud computing.

1 DecentralOne of the difficulties with fiscal decentralization is lower levels of human capacity, particularly in developing countries. The other significant exposure is how debt and revenue cycles between governments and State-Owned Enterprises (SOEs) that often tries to hide fiscal vulnerabilities.

2 SOE

Shared Services

Many governments leverage “shared services” to reduce costs. These can range from standardization of processes across many information systems to multi-tenant private or public cloud implementations. All FreeBalance customers at FISC operate shared information systems for financial management. Some governments have centralized all financial information systems through shared data centres. Although many governments express concern over the use of the public cloud, a recent FreeBalance customer provided lessons-learned about implemented financial software on a public cloud.

FISC attendees discussed cloud cybersecurity alternatives of public, community, hybrid and private clouds. As the FreeBalance customer pointed out, the technology for the FreeBalance Accountability Suite is identical in the public and private cloud versions so that it’s possible to take the public cloud version in-house, and vice versa.

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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