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Why COTS (Commercial-off-the-Shelf) software for governments in Latin America?


October 22, 2009

We participate at numerous public financial management events such as ICGFM and CLAD.  We often point out the benefits of the FreeBalance approach – software that configures for Government Resource Planning. Often met with skepticism. Sometimes laughter. Many say that government requirements are so different that it is impossible to configure to meet the unique requirements.

It’s no wonder that we get this skeptical reaction. There has been a poor record of success in implementing COTS software in governments around the world. (Although, we have had a very high success rate compared to alternatives.)

Many governments cannot standardize processes within line ministries because of differences in mandates. It’s no surprise that most governments in Latin America opt for custom developed systems. Custom systems can meet 100% of the design requirement.

But there is a build to requirements dilemma. By building to 100% of the design, custom systems are not built to meet future requirements.  As we all know, governments are constantly modernizing.

For example, a custom financial systems built to operate on a cash accounting basis is difficult and expensive to adapt to run on an accrual basis.

When is Unique really Unique?

FreeBalance provides software for the entire budget cycle. We have implementations around the world – Africa, Asia, Caribbean, Latin America, Europe and North America.  Supporting over 10 languages and 3 character sets. National and sub-national levels.  We have been able to configure the FreeBalance Accountability Suite to meet unique government requirements. We have found that some government application rules and processes vary little among governments while others vary widely.

Low Variability Medium Variability High Variability
Budget ExecutionAccounting

Cash Receipts

Cash Management

PayrollBudget Preparation

Billing Systems

Property Tax

ProcurementHuman Resources

Grant Management

Income Tax

Applications with high variability require clever solutions to enable configuration and reconfiguration to support government modernization.  We have found that many core elements to a Government Resource Planning system can be configured while some require customization.

Ease of Configuration Requires Customization
Classifications ControlsWorkflow

User security Mandatory information Accounting methods

Accounting rules

:anguage and terminology

Organizational set up Salary scales

Fiscal periods and years

Approval mechanisms Payment methods

Output FormsReports



We’ve developed methods to support flexible workflow in applications with medium and high variability like our Performance Procurement and Civil Service Management applications.

When Unique is Unique

We know the benefits of COTS software: built-in quality control, robust feature set, and code maintenance.  Governments in Latin America can benefit from the approach in the FreeBalance Accountability Suite. Sometimes, unique is unique. Governments need to develop custom applications. Our alternative is the FreeBalance Accountability Platform – a government platform for the creation of custom developed applications that we’ve described in a previous blog post.

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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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