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November 11, 2015

Is all Commercial-Off-The-Shelf (COTS) enterprise software much the same? This seems to be the observation from many government organizations in Latin America who read about the challenges of Enterprise Resource Planning (ERP) software in government.

Government organizations can chose to acquire ERP software from large software firms whose software is used in multiple “vertical” markets or Government Resource Planning (GRP) software designed exclusively for governments. FreeBalance is unique among the three leading COTS FMIS vendors to government according to reports from USAID and the World Bank through a 100% GRP focus.

A World Bank report found that “commercial ERP packages require a substantial and costly change in the ways companies do business. In most cases, it takes several years to implement such changes” in public sector projects

A significant advantage of GRP systems is that “the package vendor provides configuration/ parameterization assistance as may be required… [and] no major customization is required.” On the other hand, Panorama Consulting found that “COTS ERP systems are rarely implemented without customization”.

Customization vs. Configuration

All modules in the FreeBalance Accountability Suite are deployed through configuration with a minimum of code customization. This configuration uses parameters for business rules, workflow, language and additional fields of information. A World Bank analysis found that “in parameterization, COTS packages offer facilities to parameterize the software to country specific requirements. This includes facilities to configure Charts of Accounts, business process work flows, configure controls, and select from Cash or Accrual basis of accounting. This requires no changes in the source code of the package. Customization involves changing the source code of the package to accommodate a specific system requirement.” Panorama Consulting found that customization can create future problems because “code often needs to be rewritten to support newer versions of the software…[where many] are looking to replace their old ERP systems largely because they’ve customized the software so much that they can’t (or aren’t willing) to take advantage of newer versions of the software because of the risks associated with doing so.”

An article in MIS Review concluded that “Packaged ERP system often does not meet the existing information processing requirements and demands”. And, governments tend to have different computing requirements than businesses such as the need for commitment accounting and budget controls across all financial subsystems. More and more businesses are avoiding customization according to an article in CIO Magazine. However, government organizations are unable to adapt to practices within ERP software without legal reform. This has led many Public Financial Management (PFM) professionals in Latin America to conclude that packaged software is not appropriate.

Is Configuration Realistic for Latin America Governments?

The FreeBalance Accountability Suite is part of a new breed of modern technology. Unlike traditional packaged or COTS software, FreeBalance focuses on a single market – government.  These 30 years of experience in 25 countries around the world, in all regions, has taught us that it is possible to provide parameterized products. That’s not to saw that FreeBalance software can’t be customized. In fact, government organizations can use the FreeBalance Accountability Platform to accelerate custom development of PFM applications. Our latest GRP cloud offering is designed for small and medium-sized government organizations. It’s designed to be rapidly configured. What does this mean for all practical purposes?

  • Entire budget cycle from planning through execution is already supported and available for adaptation
  • Business rules are configured through parameters
  • Screen information and mandatory fields can be selected
  • Budget and accounting classification are adapted through a graphical tool
  • Workflow rules are also configured through parameters
  • Fields, tables and validations can be added
  • Help content can be extended
  • Translation and terminology can be adapted

It is unrealistic to expect that this level of flexibility can be achieved for many markets by packaged software. It is possible for GRP. That’s why GRP isn’t ERP.

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Matthew Olivier

Matthew Olivier

Vice President, Marketing at FreeBalance
Matthew is responsible for providing strategic marketing, communication, and business development direction for FreeBalance products, solutions and services. Matthew leads marketing and business development activities to support FreeBalance growth and brand awareness in the GRP market.

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