Public Financial Management (PFM) is a journey, not a destination
By: Doug Hadden, EVP Strategy and Innovation
What’s the only constant in PFM? Change. Reform and modernization. That’s why the technical architectures of government financial management information systems (FMIS) need to support progressive activation.
But how do we know how to progressively activate? And how do we understand and respond to changing government customer expectations?
Understanding Changing Customer Expectations
- Let’s be clear: FreeBalance is not an IT company with an enterprise resource planning (ERP) for government.
- Reality: FreeBalance is a PFM company that happens to have a government resource planning (GRP) technology solution.
- Result: the FreeBalance business model does not conform to typical ERP or consultancy go-to-markets.
We’re embedded in the PFM community to understand changing expectations. We inform our work through:
- Deep PFM and country research, with event participation, to understand drivers for change
- Analysis of funders, standards organizations, PFM evaluation methods, and civil society organizations to understand influences for change
- Diverse local teams engaging with governments to understand country contexts for change
- Strategic executive engagement with governments, including the FreeBalance International Steering Committee (FISC) and the FreeBalance Ministers’ Roundtable (FMRT), to anticipate future change.
In summary: our business model aligns with the PFM business architecture (see our recent posts: Public Finance Technical Architecture: What is it? and Defining the Relevant “Architectures” for PFM Implementations). It’s customer-centric by building our business model with governments and PFM.
Responding to Changing Customer Expectations
As a PFM company, we recognize that not all aspirations are solved by software and technology. This is why we’ve leveraged our expertise to create a PFM-centric methodology, A-i3+qM. Within this approach, we have a range of tools and templates available to analyze and respond to changing government expectations:
- Country Context Canvas
- Governance Gaps Canvas
- National Development Strategy Canvas
- PFM Analysis Template
- Public Financial Management Component Map
- Solutions Architecture Template
We also know that technology design matters if the maximum benefits of PFM reform are to be realized:
- Design for the private sector means challenges to adapt to PFM and sustain change because of unique government needs
- Design for specific government requirements means challenges to sustain to future changes, and challenges to implement in other countries
- Design for PFM in a particular country, such as subnational governments in the United States results in challenges to adapt to other countries with different standards.
But, when properly developed, design for global PFM supports widest range of government needs while supporting change.
The FreeBalance Accountability Platform™ technical architecture aligns with the PFM business architecture. We say that the FreeBalance Accountability Suite™ is the first global GRP. How did we get here given that our previous client/server version was designed for the Government of Canada?
- We learned from our first international implementations in countries like Antigua and Barbuda, Guyana, Kosovo, Mongolia, and Sierra Leone that configurability was our major advantage – so, we built more configurability into our designs
- We saw that the approach used by leading ERP vendors to build on legacy client/server code was short-sighted, so we built from the ground up to align with the PFM business architecture
- We engaged customers at FISC, and reached out to well-known PFM experts, to determine the scope of the PFM Component Map
- We recognized that proprietary software stacks limits choices for customers, so we built on open technologies to make our software more affordable and financially sustainable.
Anticipating Changing Customer Expectations
The drivers for emerging PFM trends include:
- Good practice upgrades promoted and funded by the Development Finance Institutions and promoted by civil society
- Permacrisis changing the nature of government decision support on one hand, and fiscal transparency to improve trust in government
- Sustainable Development Goals (SDGs) and national development plans through effective public and social investments.
To find out how FreeBalance can support your organization’s ever-changing PFM needs, speak to one of our PFM experts.