1 IFMIS Implementation Conception, Implementation and Challenges: The Uganda Experience By G.O.L. Bwoch Accountant General

2 The Case for IFMS  In the 1980 ’ s the Government recognized that availability of information was a prerequisite for Economic and Financial Management improvement  Of many problems faced by GOU, was lack of accurate, timely and appropriate Budget & Accounting Information. Characterised by:  Manual & Partially Automated systems  No Systems for Independent and decentralised Local Govts  Weak capacity in implementation and inspection  Inadequate systems for collection and tracking of revenue  Backlog of unreconciled bank accounts  Lack of a uniform Chart of Accounts that Complies with GFS  Endemic Budget Overruns  Ad-hoc & Uncoordinated IT Acquisitions; and  Non-compliance with International Public Sector Acctg Standards

3 Attempts at Setting Up IFMS  : Financial Information Systems (FIS)  To provide Strategic Plan for Information systems. This identified 40 systems across Government that needed to be implemented  Study recommended implementation using internal capacities in Uganda Computer Services (UCS)  Because of Lack of funds, recommendations were not implemented.  : Implementation of Budgeting & Accounting Systems  In this study a budget system was to be implemented and UCS was to be Strengthened to custom develop systems for GOU.  Contracting could not proceed as IGG suspended the process due to concerns on the procurement process.

: Implementation of Budgeting & Accounting Systems: Any learning Points  Bidder Interference: This negatively impacts the process  Internal Capacity: This was clearly lacking. UCS was poorly staffed, remunerated and motivated. Nothing much could be done with the team in UCS.  Integration: Highly integrated systems (budget & Accounting Should be supported with Integrated systems  Study: Implementation should be based on a study that would determine user requirements and derive corresponding specifications.

FMS Study 1 st Consultancy  1998 GOU put together ToR for this study. The study required:  Standardisation of Technologies  Develop a Uniform Chart of Accounts  Derive functional & User Requirements for for critical processes  In 1999, a Firm was contracted to carry out the study assignment  After 6 months, three unsatisfactory Inception Reports had been submitted by the Consultant to GOU!!!!!!.  Government had no option but to Terminate the Study Contract on accord of non-performance. Basic reasons for termination included: The Consultant was insensitive to Government concerns Consultant had difficulty grasping decentralisation issues Consultant had a language barrier Consultant failed to resource the team and was not willing to engage the consortium partners Consultant undermined the Government Supervising Team and was quick to engage Superior Management in disregard of established structures

6 1 st FMS Study: Lessons Learnt  Tightly Manage the Selection process  Fluency in the official working language is crucial  Locate the Consultant on the Government Premises for Effective Supervision  Institutional Conflict Across MALGS is a big risk. Coordination must exist but there must be one bull in the Kraal.

: Uganda Explores Experiences  Between March – July 2000 Uganda Visited three countries I.e. Tanzania, Ghana & Zimbabwe  The following were lessons learnt from the Study Tours  Involve key stakeholders such as OAG early  Avoid Custom Built Software I.e use package based solutions  Get realistic with Scoping, put in place well defined roles & rules  You need high political support  You need credible local support for the software and hardware Solutions  Strengthen internal support teams and remunerate in a special way key IFMS staff involved in ICT, Finance and Accounting

8 Further Consultations led to the following strategic decisions  View project as an institutional reform/ capacity building project rather than an IT project and hence promote change management  revise the ToRs to take into account the important lessons for the study and implementation  Put emphasis on business process changes & minimise customisation  Totally eliminate custom development of the application. Emphasize Change management  start sensitisation early and keep stakeholders informed  Be realistic about Financial & Time Resources  Adopt a Turnkey Approach  Document a Project Management Charter  Recruit more Resources with sound IT, Accounting & Financial Management Resources to support the Implementation

9 FMS Study: Second Consultancy  Marked Improvement Registered over the previous Consultant  Better response not withstanding, Consultant needed tight supervision from the GOU. In particular  Consultant under represented the costs of the study and had difficulty deploying promised resources  Consultant was skewed to tailoring solution to previous experiences rather than tailor solution to local needs especially the ITAP  Analysis of business process needed to be much deeper and more specific  We learnt a lesson that negotiation for the contract must be with the team leader & key consultant staff. Joint venture members must be part of the negotiation team.

10 Current Status  IFMS is fully functional in 11 sites and runs with a common chart of accounts across Government  Oracle is the package in use with following modules in operation, GL, Purchasing & Commitment Accounting, Accounts Payable, Cash Management & Accounts Receivable  The Public Sector Budget module has passed User Acceptance & is yet to go undergo parallel run testing  Training has been delivered to all key users  Infrastructure and a state of the Art Data Centre is in place.

11 Implementation Strategy: From Study to an Operational System  Enactment of a New Law, I.e. the PFAA 2003  As much as possible don ’ t waver from the FMS study outputs. Use the outputs in tendering and as a basis for procurement and Implementation  Adopted a phased approach to implementation of modules and sites  Turnkey concept was upheld  Adopted a strong policy focus e.g. make it Public Finance Management Driven with improvements such as MTEF etc  Adopted a holistic change management approach  Bought an off shelf package and avoided custom development.  Put in place implementation Governance Structures that ensure top level support, efficient project management plus User Involvement and ownership  Put in place resources (ICT and Accounting) to support the Implementation.

12 Challenges in Implementation!!!!  Project Management  Understanding by integrator of Turnkey Concept was hard  In some areas inferior deliverables were submitted to GOU without good Quality Assurance in a bid to beat time targets  Approval process of deliverables took a number of iterations  Training, Change Management & Capacity Building  Scheduling of training was not easy since implementation activities were competing for human resources at the same time.  Adequacy of training delivered by the Systems Integrator  Training durations were short  Application  Limited Contractor knowledge base and experience in Public Sector Financial Management  Solution was built offshore. This curtailed capacity building efforts  Data Conversion Challenges existed  More user needs and requirements are emerging. These should be managed to keep the project on time, to specification and within budget

13 Challenges in Implementation (Continued)  Changes by the Contractor from Concurrent User Licensing Regime to Named User Licensing Regime is a threat to system sustainability. This raises maintenance costs.  Poor appreciation of re-engineered processes by Internal Audit  Developments in Technology are rapid and perhaps much faster than we are able and willing to absorb. Oracle Database versions have moved from 8i to 10g in a short spell of time. Questions arise on ability of supplier to support old versions.  Inadequate quality assurance activities by supplier resulted into many logged bugs. These continue to be resolved.  Organisation Restructuring must take place rapidly. However, key stakeholders such as Public Service do not make decisions at the pace that is required of such an implementation.  Once the system is in production, you need to quickly adopt new change management procedures. Otherwise you lose out on warranty arrangements if Govt staff change profile options in uncoordinated manner.

14 Critical Success Factors  Stakeholder Involvement is paramount  Legislation must be revised  Provide sufficient time and resources  Ensure Top level commitment and support  A turnkey implementation arrangement delivers results  CONSULTANT: No matter who they are, they need to be managed closely. Consultants are in it for a commercial benefit!!!!!