How to Make IFMIS Implementations More Affordable class=

How to Make IFMIS Implementations More Affordable

There is a desperate need to address the lack of financially-sustainable Integrated Financial Management Information Systems – particularly in smaller countries

Financial sustainability of Integrated Financial Management Information Systems (IFMIS) is a critical problem, particularly for governments of smaller economies such as in Latin America and the Caribbean. It is sadly ironic that governments have difficulty affording the very systems that are designed to better manage public finances.

What is the Financial Sustainability Problem?

Governments in the Latin America and Caribbean region have found that financial management solutions which are based on Enterprise Resource Planning (ERP) systems, need to be supported by external consultants, including for operational work after the implementation. IT costs for maintaining, upgrading, updating and troubleshooting tend to be far higher than expected.

Graph by FreeBalance showing what the total cost of ownership (TCO) is comprised of
Total Cost of Ownership (TCO)

Countries with larger populations and broader economic resources are more able to afford these additional costs. However, that doesn’t make it right.

We’ve been working with governments around the world for nearly forty years. Time and time again Government Resource Planning (GRP) systems such as the FreeBalance Accountability Suite™ have proven to have a significantly lower TCO. This is partly because our system is designed specially for government and therefore doesn’t have to be customised. However, the main reason why our solutions offer better value for money is our implementation methodology.

Graph showing cost of FreeBalance software versus competitors
FreeBalance software costs an average 225% less than Tier 1 ERP providers as shown in this analysis of the five year total cost of ownership including software, middleware, implementation, training and support, and in some situations, servers.

Towards Improved Implementation

There is significant specialization in the enterprise software industry for government: Public Financial Management (PFM) specialists in budget formulation, financial controls and audit; project and change management specialists; IT specialists in networking, cybersecurity, middleware and systems management; contracting, training and business analysis specialists…

It’s this specialization approach, that often includes multiple companies, that makes implementation coordination difficult. In addition, this approach means that there are often perverse incentives. For example, systems integration firms reduce capacity building in the initial implementation in the hope of generating future support contracts.

It’s More Than Technology

Successful and financially sustainable IFMIS implementations require change management, capacity building, systems designed for government, and manufacturer support.

FreeBalance approach to IFMIS implementations

A more integrated approach improves long-term financial sustainability.

Change Management

Up-front investment in explaining change, gathering user feedback, charting new career paths, and project communications reduces internal resistance and eliminates parallel manual processes, so that GRP systems optimize public finance efficiencies.

Read more about FreeBalance’s approach to change management here.

Capacity Building

Capacity management expectations need to be extended beyond software functional training. Implementations must include PFM, project and technical training by providers who can prove how they have delivered capacity so that governments become self-sufficient.

Learn more about how we build government capacity here.

Government Design

Government-first GRP systems such as the FreeBalance Accountability Suite™ reduce code customization through its massively configurable design, improves maintainability and enables future reform through progressive activation. All of which reduces long-term costs.

FreeBalance Accountability Suite

Manufacturer Support

Software manufacturers, whether GRP or ERP, should be contractually involved in implementations to change design or add necessary features, to reduce customization costs over time. This is how FreeBalance works with customers with the result that governments benefit from the years of experience we have working on the ground, delivering PFM reform that matters.

FreeBalance Approach to IFMIS Implementations

FreeBalance has developed a proprietary, ISO-9001:2015 certified agile implementation methodology called A-i3+qM which is unique in that it covers software implementation, software customization for customers, and software product development.

It is not a generic project management technique. It’s a government specific project management methodology, having evolved from almost 40 years of experience in Public Financial Management and government transformation.

A-13+qM

To speak to a Public Financial Management expert, get in touch now.

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