August 30, 2010Doug Hadden
Doug Hadden, VP Products
Executive meetings with customers is a cornerstone of our customer-centric approach to Government customers. After all, why should salespeople have all the fun? More importantly, executives in companies need to have direct unfiltered feedback from customers. It provides the context for decision-making. And, it is particularly important in our case because we focus exclusively on a single market – government. Hence, a deep understanding of the customer context is critical to our continued growth and success. We’re in the midst of engaging our Government of Canada customers. We’ve also met with policy stakeholders and customers from other vendors, particularly at conferences.
There are some interesting trends in Public Financial Management (PFM) in the Government of Canada.
Transparency and Government 2.0
FreeBalance Government of Canada customers discussed openness and Web 2.0. There is a general trend about Government 2.0 adoption in the Government of Canada. Our discussions transcended the typical concerns over quality, privacy, security and risk of open data. Internal transparency among government organizations was an unexpected theme. Transparency in government tends to cover budget and financial disclosure, open procurement and civil service recruitment and spending. It is often assumed that the government acts as a single actor in these transparency categories. Yet, there is an overlap in policy and budget transparency between policy and executing agencies. This mirrors the need for policy and budget transparency with civil society and businesses.
Governments are under significant pressure to achieve better value for money: improve results with fewer resources and lower budgets. In Canada, this has created a portfolio of policy analysis covering the entire spectrum of PFM. Communications between policy and executing organizations can be improved and harmonized through the use of new technologies, often called “Government 2.0.” There is a concern that traditional methods of policy information gathering and policy making may not have the desired result. Particularly when these policies are intended to cover emerging technology and new paradigms. There is a need for the type of continuous engagement on ideas and solutions enabled by blogs and wikis to achieve value for results.
We also found that the transparency categories listed above does not address the holistic transparency footprint. For example, policies on budget transparency can affect civil service reporting. General policies to improve effectiveness have significant impacts on procurement and civil service processes and transparency. Government of Canada policy and political organizations are also struggling with notions of privilege and confidentiality in the development of policy.
Functional Gaps Remain
There is a major trend to process standardization within the Government of Canada. Standard processes and classifications provide for more effective decision-making at lower costs than unique processes and classifications. Yet, there are unique requirements in most government organizations. That’s why these organizations are separate. Virtually every Government of Canada organization has at least one unique requirement that impacts information systems. This complicates standardization of processes, systems or classifications. Integration with unique applications has become a key need for information systems within the Government of Canada.
Of course, we also see many functional gaps within Commercial-Off-the-Shelf (COTS) information systems designed for the private sector. Many of these systems have to be enhanced with software applications designed for government. In particular, there are gaps in generic budget awareness in financial and human resources systems.
Risk of Legacy Technology
Government of Canada organizations are struggling with modernizing the software portfolio. There is a range of legacy technology in use by the Government of Canada including custom-developed mainframe and client/server applications that were designed to address functional gaps. Sometimes the COTS private sector software alternatives were too expensive with unneeded feature sets. And, this older technology is often difficult and expensive to maintain. And, difficult to integrate. Yet, functionally critical.
Many Government of Canada organizations are leveraging the older generation of web-enabled software. This appears to be a risk. There are many definitions of web enablement that has creating confusion. Many software vendors position products as web-based when the user interface is presented in a browser and there are no plug-ins required to operate. However, many enterprise applications have client/server software at the core. This software operates through a translation layer that reduces performance and limits integration – particularly in the Service Oriented Architecture (SOA) environment envisioned in Enterprise Architectures.
The use of Cloud Computing and Software as a Service (SaaS) is growing dramatically in the private sector. Many incumbent enterprise software vendors not yet adapted to this market. For example, Salesforce.com provides configuration tools and integration points meet customer needs. The technology centrally hosts many customers with many configurations. Software designed for single on-premises deployment are difficult to adapt for the Cloud. And, for hosted shared services.
Total Cost of Ownership (TCO) and Sustainable PFM
The emphasis on value for money has enabled Government of Canada organizations to track the true cost of PFM software. Software, consulting, support and training services are often acquired seperately by Government of Canada organizations. The focus on TCO had identified the previously hidden costs for sustaining the PFM investment. Many Government of Canada organizations are discovering that some COTS and custom software requires significant on-going consulting fees. Training and certification requirements for some software applications have high recurrent annual costs.
Government of Canada organizations are discovering that cost saving associated with pooling resources are not significant. This seems to be dependent on the COTS solution selected. Despite savings through clustering departments, shared hosting, or centralizing data centres, there remains a high cost for Government of Canada organizations. It seems that economies of scale are hard to achieve when the software solution is not designed for this purpose. Of course, our position is that FreeBalance software has been designed for the government domain and new methods of deployment.
I wroter earlier about improvements in FreeBalance customer support metrics. These metrics are outputs and may not be related to customer experience or expectation. And, improving processes to improve customer-centricity tends to have a delayed outcome as past problems are solved. Our Government of Canada customers told us that we have improved support. This was also confirmed in meetings that we have had with central authorities who also recognize how well we are supporting customers. Although, it should be noted that customer engagement is a journey and not a destination. We are always looking at ways to improve customer support and embedding customers into our software development processes.
Our Government of Canada customers are proud of the contribution they have made to FreeBalance GRP products. They know that the respected discipline in PFM in the Government of Canada is being used to improve governance in countries around the world. They are also benefiting from this market. The scalability and hosting requirements for international customers has been important in the technology design of Version 7 of the FreeBalance Accountability Suite. Functionality richness has also increased the product portfolio to meet more PFM needs in Canada.