Enabling PFM Reform that Matters since 1984
The company’s Canadian roots date back almost 40 years to when FreeBalance was founded in 1984. Since then, FreeBalance has expanded its partner and end-user bases, and now has a global footprint with operations in 25+ countries.
Ottawa-based Linktek engages Government of Canada departments and agencies to create a set of software products designed to improve fiscal controls and eliminate over-spending. Government organizations are able to see the amount available for spending, using commitment accounting functions, in real-time. The calculation of budget less commitments and actuals is known as the “free balance.”
Result: Linktek becomes so well known for “free balance” in real time that it changes its name to “FreeBalance”.
Public Financial Management Reform
The Government of Canada enters the 1990s having the largest debt to GDP ratio in the G7. Departments and agencies leverage FreeBalance software to improve fiscal controls resulting in the lowest debt to GDP ratio in the G7 by the end of the decade. Public finance reform concepts take hold in Canada.
Result: FreeBalance software incorporates accrual accounting, multiple-year budgeting, and fiscal transparency support because of the deep government focus.
Y2K brings financial system replacement, and FreeBalance grows and attracts venture capital. The post-Y2K world is challenging because of the rise of private sector software, like ERP, in government. Meanwhile, FreeBalance wins deals to implement in the new Canadian territory of Nunavut, and the post-conflict country of Kosovo, with the only software solution that can implement rapidly to meet government needs.
Result: FreeBalance expands presence within the Government of Canada with effective client/server software, while experiencing increasing market share in emerging economies because of ability to rapidly adapt software
Smart Government Emerges
The rise of new technologies like social media, big data and cloud computing disrupts traditional enterprise software vendors. Gartner recognizes the disadvantage of traditional technologies by coining the concepts of “legacy ERP” versus “post-modern ERP”. Many cloud acquisitions occur. This coincides with increased demand for government transparency. The notion of “smart cities” takes hold, especially after Bill Clinton, through his foundation, challenged Cisco to use technical knowledge to make cities more sustainable. A McKinsey study describes the rising “infrastructure gap” as governments grapple with the negative effects of growth. The United Nations develops the Sustainable Development Goals while the International Monetary Fund develops a public investment management evaluation tool.
Result: The FreeBalance decision to rewrite government financial management software, and the development of public investment management functionality based on Government of Canada and international best practices, is ideally suited for smart and open government. The extensible FreeBalance Accountability Platform™ enables the company to develop new modules and functionality faster than customizing ERP applications.
Manuel Schiappa Pietra is hired as President and CEO to drive international business. The company realizes that the portfolio of legacy technologies precludes using the conventional approach of web-wrapping. The “Public Financial Management Component Map” is developed to create a guideline for a modern Java EE platform with a larger footprint than in the product portfolio, with reusable business components, or “government entities”. The platform and suite are developed without additional investment.
Result: The FreeBalance Accountability Suite™ helps the company to grow with sales in more advanced countries with a broader and more sophisticated feature set. FreeBalance is able to win international competitive contracts versus Tier 1 ERP companies thanks to far lower implementation costs because of a product configuration approach.
FreeBalance continues to grow off the back of its customer centricity and social enterprise ethic. Our international steering committee and participation in the international public finance industry sees us develop advanced advisory capabilities. The global financial crisis demonstrates that many developing countries have better fiscal discipline thanks to the use of public finance best practices built into FreeBalance software. An advisory engagement with the Minister of Finance of Timor-Leste, facing the prospect of significant infrastructure investments coming from increasing oil revenues, provides funding to extend the product line.
Result: FreeBalance extends the product suite to support the public investment management cycle that includes budget preparation, fiscal information, procurement and investment results transparency. Civil servants in many countries remark that they can find more financial information from Timor-Leste than internally in their governments.
2020: COVID-19 Changes the World
The global coronavirus pandemic changed the world as we knew it and almost overnight governments around the world not only had to switch to remote working – something most unusual for the public sector – but had to deal with an unprecedented public health crisis and major economic turbulence. Diverting budgeted funds to personal protective equipment, hospitals and vaccines required a coordinated public service response. FreeBalance’s teams on the ground around the world, alongside our global subject matter experts, worked hand-in-hand with our customer governments to guide them through the crisis.
Result: New remote services offerings and the launch of The FreeBalance Academy help customers to work flexibly and build local capacity.