Sustainable Public Financial Management

This is section 6 of a series of blog entries creating a Government IFMIS Technology Evaluation Guide. This includes information to assist in evaluating IFMIS options and the technology requirements for FreeBalance IFMIS implementations. These series will be combined with feedback to produce a comprehensive Technology Evaluation Guide to be published on our web site.

Governments have choices to implement Integrated Financial Management Information Systems (IFMIS) for Government Resource Planning:

1. Custom developed by the government or consulting firm
2. Generic Commercial-Off-The-Shelf (COTS) business software, such as Enterprise Resource Planning (ERP), adapted to meet government needs 
3. Government-specific COTS GRP software

FreeBalance provides:

• FreeBalance Accountability Suite, a COTS GRP software suite
• FreeBalance Accountability Platform, a government-specific platform, (that forms the basis for the FreeBalance Accountability Suite) and enables the development of custom government applications

The checklist is designed to assist governments in evaluating GRP options.

Government focus – to what extent is vendor technology developed for government?

Government process – to what extent is vendor implementation and support developed for government?

Open technology – to what extent is vendor technology open, accessible and low cost to support?

Originally from the ICGFM Blog 

Government Performance Management requires Citizen Feedback

Government 2.0 and government transformation is inevitable, according to Doug Hadden, VP of Products at FreeBalance, and VP Communications for ICGFM. Government, society and technology trends are creating an environment for transformation. Citizens demand improved performance. Techniques used for Corporate Performance Management (CPM) are not effective in government.

Mr. Hadden introduced Web 2.0 and Government 2.0 applications. ICGFM has been leveraging social networking or Web 2.0:

• Blog: http://icgfm.blogspot.com
• Microblogging: http://www.twitter.com/icgfm
• Social networking: http://www.linkedin.com/groups?gid=1677477&trk=hb_side_g
• Photo sites: http://www.flickr.com/photos/icgfm
• Video: http://www.youtube.com/user/icgfm
• Presentations: http://www.slideshare.net/icgfmconference
• Documents: http://www.scribd.com/icgfmconference
• RSS Reader: http://www.pageflakes.com/dhadden/27960934/

The differences between E-Government and Government 2.0 were presented. The impact of cloud computing, semantic web and mobile computing was put into perspective. Mr. Hadden questioned the categories of unstructured and structured data used in the software industry. He predicts that the next generation of government applications will integrate transactions, documents and collaboration.

Corporate Performance Management techniques operate well in business because there is a bottom line – profit. There can be numerous unintended consequences of government programs. These impacts may not be measured giving and incorrect view of success. Government Performance Management focuses on structural concerns, according to Mr. Hadden. Internal and external social networks are required to provide a 360 degree view of government performance. Examples of the use of Government 2.0 to enhance government performance was presented.

Security is a concern for Government 2.0 adoption. Yet, the fastest adopters for this technology are in the Defence and Homeland Security departments in the United States. The US Government Intellipedia application has become the “meme” case study for Government 2.0 adoption, according to Mr. Hadden.

Inevitable Government Transformation

Mr, Hadden placed Government Performance Management in context to social change and social pressures. Globalization creates competitive pressures among countries. The desire for improved governance and transparency from citizens is creating more open governments. And, citizens and businesses have expectations set through the use of e-commerce and Web 2.0 tools.

This move to Government 2.0 and Government Performance Management is part of long-term trends. Mr. Hadden introduced theories presented by Marshall McLuhan. He suggests that government transformation is inevitable – that Government 2.0 is a technology enabler. The organizational and societal changes that make this inevitable are:

• Flattening of organizations
• Move from vertical to virtual integration
• Project and program focus in government
• Top-down to bottom-up organizations
• Role changes and the move to generalization

There will remain cultural barriers to adoption of Government Performance Management 2.0. Mr. Hadden described a number of government initiatives world-wide that demonstrate movement to this new model of social networking and performance. A scenario for the future was presented – showing the necessity of linking transactions, documents and collaboration in order to have a full picture of government performance.

Imagine our surprise when we were invited to speak at the Financial Management Institute Professional Development Week about the value of ERP in government. Why? For one thing, FreeBalance is not an Enterprise Resource Planning vendor. We’re a Government Resource Planning (GRP) vendor, as we have spoken about frequently in this blog. ERP vendors operate in many vertical markets – FreeBalance provides software for governments only.

Nevertheless, we took up the challenge. The presentation was focused for Government of Canada financial managers, but it is applicable to many countries. We focused on three elements of the Treasury Board Secretariat Investment Planning Policy: value for money, total cost and project governance.

We think that we did a very good job presenting an objective viewpoint. We didn’t talk about FreeBalance and how our solutions are more applicable than generic software for governments.

Performance measurements are more difficult to determine for governments than companies. The private sector has an objective measurement for performance: profit.  FreeBalance presented the case for linking Government Performance Management with Government 2.0 at the recent Financial Management Institute Professional Development Week.

The technical discipline of “corporate performance management” provides governments with compelling planning and analytical tools. However, the “performance management” discipline is narrow focused and does not include all relevant aspects of government performance. Government 2.0 is a new trend in government transformation. Our presentation describes how Government 2.0 will transform the practice of public financial management. We describe how the government “back-office” benefits from citizen and civil society collaboration.

The practical application of performance management techniques in government has had mixed results. Unlike the private sector, Government Performance Management has no easily identifiable “bottom-line.” Government initiatives have unexpected positive and negative consequences. The selection of specific outputs and outcomes does not provide a 360 degree view of government performance.

Government 2.0 is the use of Web 2.0 techniques to enable collaboration among like-minded people in government. Government 2.0 provides the tools necessary to link government initiatives with societal impact. It also enables governments to improve performance by leveraging the wisdom of crowds.

FreeBalance_Cluster

Our Financial Management Institute of Canada (FMI) Professional Development Week started early with presentations to the FreeBalance Government of Canada Cluster and to our Performance Budgeting for Human Capital (PBHC) customers in Ottawa. FreeBalance has the largest cluster in the Government of Canada – 28 departments, agencies and commissions. And, PBHC has become the gold standard for civil service planning and salary planning. We’re participating in FMI as a sponsor. We’ll be talking about new product releases and describing how government performance management needs Government 2.0 in order to succeed.

The Cluster presentation was a deep dive into the technology of the FreeBalance Accountability Suite. Both presentations ended with invitations to join the on-line FreeBalance Customer Exchange. We started both presentations with a quick business update including mentioning the Uganda Civil Service Management implementation and the reduction of open support cases by 64% over the past 18 months.

This wasn’t your typical roadmap presentation: “this is what you’re going to get, this is when you’re going to get it, this is when you’re going to have to upgrade, if you don’t like it, it’s too bad.” After all, the FreeBalance roadmap is owned by customers. Our goal is to align our roadmap: government customers tell us what we are going to deliver and when we are going to deliver it.

 We described the FreeBalance Accountability Suite original design criteria. We believe that many problems experienced in the implementation of Government Resource Planning (GRP) systems originate with the design. We’ve written and presented our lesson-learned: the typical methods used by software vendors to design, develop and implement software needs to be adjusted to support Public Financial Management (PFM) needs.

Social networking capabilities, often called Government 2.0,  are required for the current generation of pure-web GRP. We showed part of our original vision case from 2005. This original vision included the fundamental integration of transactions, content and collaboration within a single system architecture.

We described:

• Use of software architecture best practices
• Component-based Service-Oriented Architecture (SOA)
• Open system and open source support
• Ability to choose open source or commercial middleware
• Support for government-specific requirements
• Configuration and progressive activation approach
• The product commitments and roadmap for the next 18 months
• Support for shared services and cloud computing
• How the FreeBalance Accountability Platform can help develop custom applications

There were many questions that we were able to clarify:

• Version 7 of the FreeBalance Accountability Suite provides comprehensive human resources and payroll functionality – full civil service management
• FreeBalance is testing  software using VMWare
• The technical infrastructure is open – we are prepared to support other operating system environments other than Linux and Windows
• How “custom domains” differs from the typical “additional fields” approach
• How the technology is scalable and the scale of recent implementations
• Exact method for multiple year chart of accounts
• How customers can customize help, documentation and e-learning
• Software deployment

We look forward to more dialog with our Government of Canada customers. We described how customers can participate to help design, adapt and test. Web 2.0 tools provide companies with the ability to support customer disruptive  innovation, as described by Clayton Christensen.  It’s a far cry from the days of “Mad Men” – creating demand when there isn’t any. The management of the Cluster has been enabling more interaction among customers and with FreeBalance. We are working together to leverage tools to enable more peer communications.

Framework for Understanding Government 2.0 Effects

Government 2.0 will change everything. Government 2.0 will change nothing. There is a tendency for some experts to focus exclusively on technology change without a comprehensive viewpoint. And, some experts view technology change as nothing new. Our view is that Government 2.0 represents the technology continuum of e-government. We also see the linkage between Government 2.0 and government back-office technology.

We see government application categories as:

• Internal: internal by governments
• External: external to government with government involvement
• Structural: follow government structure and mandate
• Social: enable collaboration

This framework identifies three classes of applications:

• Back-office: operational budget, financial and civil service management-transaction management
• E-Government: exposing government information and transactions
• Government 2.0: social networking whether exclusively internal or collaborating externally

Relevant Government Trends

There are numerous trends in government that have technology implications. These implications can be mapped against the Government 2.0 framework:

• Collaboration: Use of Web 2.0 tools and metaphors is improving internal government efficiency and moving to external collaboration
• Transparency: Exposing more government information to citizens and businesses is moving from the structural to the social domain
• Accountability: More information from back-office systems is being presented to citizens. That information is being mashed up and analyzed and providing a feedback loop to government
• Performance: Internal social networking and feedback from citizens, businesses and civil society are improving government performance

Relevant Technology Trends

The government domain is affected by current technology trends. Technology adoption trends include:

• Cloud computing that is providing platforms for social networking. Open source technology is also linked with cloud computing enablement
• Mobile computing is affecting all structural and social computing in government
• Semantic web technology is making government information more accessible and usable internally and externally

Government 2.0 in Practice

Government 2.0 leverages Web 2.0 technology metaphors. Web 2.0 tools are leveraged or adapted. There are some emerging trends in how these metaphors are enabling governments.

Preliminary Framework

Government 2.0 lessons are still emerging. We look forward to continued feedback from the community to help us crystallize this framework. In response to one reader’s comment that citizen services have not been improved through Government 2.0 and a lack of use cases, we plan to provide use cases. These use cases will show the linkage of back-office, e-government, Government 2.0 and citizen services:

• Auditing
• Tendering
• Budget planning
• Regulatory reporting
• Travel & subsistence
• Permits & licensing
• Civil service recruitment
• Government project management
• Grants management
• Vendor management
• Balanced scorecard
• Government performance management
• Aid transparency
• Tax management
• Public works

Note: first 5 use cases published at http://www.freebalance.com/blog/?p=706

Benefit from Social Networking in Government

The November Government Open Source Conference (GOSCONDC) in Washington DC provided valuable lessons on implementing FOSS in Government. Most of the intriguing examples were about how to leverage open source software for social networking – Government 2.0.  Keynote speaker David Wennergren, the Deputy CIO of the US Department of Defence concluded that Government 2.0 with Service-Oriented Architecture is  a strategic inflection point for government: “a future much more quickly.” Another pointed out that open source technology has become the foundation for Andrew McAfee’s SLATES vision of Enterprise 2.0: Search, Links, Authorship, Tags, Extensions, Signalling.

Culture change and security risks were sited as the main barriers to adoption. The irony, of course, is that adoption of open source technology, particularly middleware, and social networking is highest in the Defence and Security establishments. As we tweeted after the event, Intellipedia has become the meme, or established standard for Government 2.0 and collaboration.

Security and Risk

Security and risk was addressed by many speakers. The availability of source code has enabled government IT groups to discover and trap security flaws. Of course, implementing software in closed networks can eliminate external threats.

Panelists like Martin Standtler pointed out that open and adaptable tools enable agility. Tools designed for a particular purpose often restricts users for leveraging for a similar situation. Recent experiences on the battlefield demonstrates demonstrated the value of hacking into open systems. His conclusion: “if you can’t hack it, don’t pack it”.

Dr. David Boyd of the Department of Homeland Security pointed out that information is central to the security mission. The after-action reports after 9/11 and Katrina demonstrated the breakdown in communications. He made a persuasive argument that risk is higher when information is not shared and collaboration is restricted.

Overcoming Cultural Resistance

Dr. Mark Drapeau pointed out at the FreeBalance-sponsored ICGFM DC Forumthat the opposite of Web 2.0 culture is Government. GOSCONDC panelists agreed: public servants who lead Government 2.0 initiatives have more to gain than to lose. Panelists Martin Standtler of Red Hat, Don Burke of the CIA, Eric Gundersen of Development Seed, and Rob Wolborsky of the U.S. Navy had very good advice including:

• Initiatives that advance the mission will get command approval
• Grassroots initiatives will work better than top-down – middle managers often resist top-down initiatives more
• Implement in a protected environment
• Quick wins – start small and implement incrementally
• Develop rapid prototypes
• Sell ideas that demonstrate asymmetrical advantages
• Seek out those willing to help – in any group of people will be found someone who recognizes how the solution will help them
• It is myth that social networking will only be used by younger people
• Demonstrate to users how the approach will enable them to do their job better
• Develop topical solutions rather than organization-centric solutions

Government is in the “information business.” Making information more available in the back-office can improve collaboration and government results. The Department of Homeland Security is finding inexpensive ways to coordinate across levels of governments and security organizations. Perhaps Intellipedia is the right place to start when justifying a Government 2.0 initiative.

This is section 5.4.2 of a series of blog entries creating a Government IFMIS Technology Evaluation Guide. This includes information to assist in evaluating IFMIS options and the technology requirements for FreeBalance IFMIS implementations. These series will be combined with feedback to produce a comprehensive Technology Evaluation Guide to be published on our web site.

Software engineering practices advance as technology modernizes. Many commercial software applications in use today were engineered based on obsolete practices. A fundamental requirement for the FreeBalance Accountability Platform was to support the most modern best practices in software architecture including: 

1. Service-Oriented Architectures
2. N-Tier Design
3. Pure Web
4. Cloud Computing support
5. Flexible deployment
6. Web 2.0
7. Open Systems

Development using a Service Oriented Architecture

Service-Oriented Architecture (SOA) is an established best practice in the development of new software. The techniques used to elaborate these components are based on a proven SOA architecture modeling tool. This maximizes the useful life of the software. Most commercial applications that support integration standards do not follow the best practice of component-based SOA where functionality is provided in small components. The component approach enables assembly, replacement and integration of components to form a complete application set. This differs from the approach of connectors on a monolithic application.

FreeBalance determined the high-level business components needed for an Integrated Financial Management Information System for national and sub-national governments in developing and developed nations. The results have enabled FreeBalance to:

1. Architect a ‘service-oriented architecture’ through service identification and definition into ‘business components’.
2. Determine the entire scope of the current and future FreeBalance product portfolio based on domain requirements.
3. Identify the relative value of any component through the use of a ‘component business map’, ‘business competencies’ and ‘heat map’. This allows FreeBalance to exceed typical COTS capabilities for components that are important for governments.
4. Identify reusable components and support extensibility to enable FreeBalance to support emerging government needs faster.
5.  Provide a technical approach that meets the high technical standards of the Governments of Canada the United States and many other countries that require a robust SOA approach.

N-Tier Design

Most government IT departments want software with 3-tier or n-tier architectures, which allows these applications to be scaled easier. Functionality can be extended to different devices. The FreeBalance Accountability Platform utilizes an n-tier architecture that includes the following:

• Separation of presentation, business logic and data layers. These three layers support extensibility including migrating to different display devices. It assists in identifying software problems and upgrading to new technology.
• Multiple business logic layers. The business logic layers of “entities”, “functions” and “applications” in the FreeBalance Accountability Platform can be viewed as multiple tiers.
• Scalability. Each tier can be scaled separately enabling governments to add equipment to meet added capacity. Vertical and horizontal scaling is supported.

Pure Web

Web-based systems provide many organizational benefits including simplicity and reducing administration costs. Most business software available today for financial management is not purely web-based. These software applications often have client/server functionality at its core. The functionality is presented on the web via a browser and appears to be fully web-based, but is not. A significant portion of the “business layer” is in client/server. Many aspects of the ‘business layer” are often expressed in the “data layer” with proprietary database calls or stored procedures. These characteristics reduce the each of use and administrative costs. The FreeBalance Accountability Platform is “pure web” technology supporting:

• Web Browsers. Displays information to users in web browsers using industry standards including HTML, W3C and CSS. Ease of use supported through Java Server Faces. Does not require special plug-ins to operate.
• Web Server. Data sent from servers in standard web format using web servers.
• Application Server. Java-based application server follows industry standards and contains business logic.
• Databases. Supports different relational databases. Does not generate proprietary database instructions or use stored procedures.

Cloud Computing

Many organizations are acquiring software on-line without using their data centers. This is often called Software-as-a-Service (SaaS), on-demand, or cloud computing. Some governments are prepared to have financial applications hosted by third parties. Many governments wish to consolidate data centres by providing shared services. Shared services enable a government entity to provide software on demand to many government organizations. The FreeBalance Accountability Platform supports cloud computing deployment by supporting multiple instances to run different configurations on the same server or group of servers.

Flexible Government Deployment

Many governments implement financial software across all government tiers. The national political structure of countries ranges from highly centralized unitary governments to highly decentralized federal governments. Many countries are decentralized where government entities require some degree of financial autonomy. Some government organizations operate in areas without reliable access to computer networks. The integration of government functions among tiers of governments differs in scope. Most commercial financial software designed for the private sector assumes always-on and highly reliable computer networks. These systems also assume tight hierarchical control from the head office that may not apply in government.

The FreeBalance Accountability Platform has been designed for deployment options encountered in multi-tiered governments. It has also been designed to enable centralized and decentralized deployments and synchronization. The FreeBalance Accountability Platform supports the following deployment options:

• Centralized Web-Based Deployment. Support the traditional method for the deployment of pure web-based solutions is through a centralized structure.
• Decentralized and Developed Deployment. Support decentralized deployment of PFM functionality and multi-tiered synchronization for federal political systems or in situations where there is insufficient or non-existent network connectivity. This approach deploys simple government financial management functionality to sub-national governments with data synchronization (budget allocations from the central government and outturns from the sub-national government) when bandwidth is available or through the physical transfer of data.
• Hybrid Centralized and Decentralized. Support a combined approach that can include regional centres.

Web 2.0

Web 2.0 technology provides rich user interfaces to the web. These interfaces can be as functional and rich as traditional client/server. The FreeBalance Accountability Platform supports rich Web 2.0 interfaces to improve usability through:

• Rich User Interfaces. Support of Java Server Faces (JSF) and Asynchronous JavaScript and XML (AJAX).
• Content Management Integration. Support of web content and document management including rich text editors and adaptable help.
• Notation. Support of notation, narrative and threads to enhance collaboration.

Open Systems

Governments want technology choices. Some large software companies attempt to lock customers into proprietary technology. This enables software companies to charge more for support and additional software. The FreeBalance Accountability Platform is a standards-based open system providing choice to government through:

• Java Enterprise Edition. Support the broadest range of open source and commercial operating systems. Java software operates on all major computer brands.
• Web Services Support: Support standards to enable more effective integration among government systems.
• Open Source Support: Support open source and commercial database management, application and web server technologies to give governments the broadest choices.

This is section 3.1.2 of a series of blog entries creating a Government IFMIS Technology Evaluation Guide. This includes information to assist in evaluating IFMIS options and the technology requirements for FreeBalance IFMIS implementations. These series will be combined with feedback to produce a comprehensive Technology Evaluation Guide to be published on our web site.