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What Practices Should be Implemented in New Government Financial Systems?

 

March 10, 2016

Problem of Best, Good and Bad Practices in Public Financial Management in Emerging Economies

Sometimes it’s the side conversation at events that can be the most thought-provoking. On Wednesday, during the FreeBalance International Steering Committee, I had a short conversation about “technical assistance” to developing countries. Should experts recommend countries go through a business process re-engineering exercise before acquiring a Government Resource Planning (GRP) system? Would it be better to use existing processes in order to overcome change resistance and enable the government to achieve some benefits faster?

This was presented as unrelated to technology. Just process.

In truth, there are technology constraints here. Many governments acquire software designed for the private sector, known as Enterprise Resource Planning or ERP. The fundamental characteristic of ERP is the need to customize code to meet government needs. The problem accrues so that future customization is even more costly. Therefore, there is significant technical debt when using legacy ERP. The compromise is to design the future system now in order to reduce the technical debt assumed by the government. In other words, implement the system to best practices. This often results in very long projects with significant change resistance.

It makes more sense to implement a system close to the current business processes, but to not implement bad practices. Small changes. Future progressive activation.

This approach is realistic in GRP software that supports configuration – little or no code required to change business processes. That was the fundamental design principle behind the FreeBalance Accountability Suite: the support the widest range of relevant good practices through configuration.

The result: less change resistance. Rapid return on investment. Agile governance.

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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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