Sustainable Public Financial Management

Enterprise Software Success Myth #4

FreeBalance is a medium-sized Independent Software Vendor (ISV) with considerable success competing against very large Enterprise Resource Planning (ERP) vendors. We are sharing 16 lessons learned by bucking conventional wisdom to encourage industry innovation and creativity.

Conventional View

Improving process efficiency within an enterprise structure, particularly through Business Process Management (BPM), is considered a “best practice” within the Enterprise Software market. Standardization is often seen as improving efficiency. In this case, efficiency is achieved through improved and granular articulation of business processes that are common across the organization. Many large governments are attempting impose standardization.

Symptom

Best-of-breed workflow and BPM suites have been available for decades. Major Enterprise Software vendors including BPM functionality within product suites. Interest in workflow and business process re-engineering seems to come and go in waves in the technology press.

Emerging Trends

• Lean processes, as described a href=” http://theleanstartup.com/” target=”_blank”> by Eric Reiss in the Lean Startup demonstrates the high cost of building the wrong products when using the best process practices.
• Many organizations are finding diminishing returns to BPM by introducing unnecessary complexity that often fails to consider the human factor that provides context.
• Social media has introduces new forms of engagement as described by Ray Wang of the Constellation Research Group that largely defies articulation as business processes.
• There seems to be the realization that tools for creativity and innovation requires a different paradigm than BPM, although workflow is a part of a comprehensive enterprise software solution.

FreeBalance Approach

FreeBalance recommends practical approaches to improving GRP processes.

• Good practices that are appropriate for organizational risk and capacity should be leveraged. These are practices that are better for government organizations based on their context.
• Practices should evolve and mature based on the changing context such as government mandates, public service capacity and the results from performance audits.
• Financial and budget controls are critical to government fiscal discipline. But, the depth of these controls and the extent of discretion should be set based on context and risk. There is no improvement in efficiency by having complex but standardized processes.

Looking back 5 years, looking ahead 5 Years

Doug Hadden, VP Products

While getting ready for my presentation next Monday at the International Consortium on Governmental Financial Management (ICGFM) conference in Miami, I had time to reflect on my predictions for 2007. The presentation Monday is on the Social Future of Public Financial Management. 5 Years ago, it was “New Technologies for Public Financial Management.”

Configuration? Customization?

There is some confusion in the Government Resource Planning (GRP) market. Vendors like FreeBalance promote software configuration as an advantage. Other vendors promote customization. Generic software vendors tend to promote a broad array of options. This can be confusing – particularly when some of these options can be very expensive. It can also be misleading governments into thinking that requirements can only be satisfied through the code customization approach. It’s high time for someone to score configuration and customization options provided by enterprise and government vendors.

Configuration Methods

Parameters

• Description: Use of parameters or settings in software set-up pages.
• Implication: No change in source code. Parameters supported in upgrade to new versions.
• Generic Software Approach: Tends to support general system and basic set-up. Not intended to be comprehensive because of support for many markets.
• FreeBalance Approach:  All functions parameter driven. Intended to be comprehensive for governments (with other configuration methods). Supports progressive activation of features and functions over time.

Graphical Drag and Drop

• Description: Ability to configure complex concept through drag and drop methods with rich interface.
• Implication: No change in source code. Designed to facilitate complex configuration
• Generic Software Approach: Sometimes provides “wizards” to enable configuration.
• FreeBalance Approach:  Support of rich graphical drag and drop for complex design for Chart of Accounts, Logic Maps and Organizational Charts.

Rule and Workflow Parameters

• Description: Use of table-driven parameters to adjust business rules and workflow.
• Implication: No change in source code. Simple method of defining processes. Easy to adjust these to support progressive activation.
• Generic Software Approach:Generic vendors unable to provide simple table-driven methods because of the breadth of markets supported. Workflow often requires more complex Business Process Management approach (see below).
• FreeBalance Approach:  Uses table-driven parameters for workflow and rules. Supports progressive activation.

Adding Fields

• Description: Ability to add fields of information to support unique requirements.
• Implication: No change in source code.
• Generic Software Approach: Enables additional fields. Many are treated as generic text. Often not able to affect business rules or reports without code customization.
• FreeBalance Approach:  Full support of custom domains that enable adding tables, fields, field rules and validation. Used in reports and workflows.

Language and Localization

• Description: Methods used to support different languages and character sets to enable translation.
• Implication: Ease of translation and adjustment of terminology important for capacity building.
• Generic Software Approach: Support of many i18n methods. Requirement to localize large portions of software that may not be leveraged in public sector. Multiple entry points for translation – help, labels, documentation etc. Difficult and expensive to support and maintain.
• FreeBalance Approach:  Multi-lingual software. Unique translation method uses spreadsheet and uploads method. Easy to support and maintain. Ideal for countries with unique national language. Single entry point to translate help, documentation and e-learning.

Accelerators

• Description: Pre-configured set of default modules and default values for one of many vertical markets.
• Implication: No change in source code. Public sector often one of many verticals.
• Generic Software Approach: Accelerates implementation relative to other generic applications. Often includes so-called “best practices” from other markets. Some customization is typically required.
• FreeBalance Approach:  By definition, the FreeBalance Accountability Suite supports a single market – government. Rich out-of-the-box government functionality. Support of XML enables importing parameters and migrating data from existing systems to accelerate data migration.

Configuration Scorecard

Generic Software Approach:

FreeBalance Approach:

Customization Approaches

Call-Outs

• Description: Ability to augment processes with call-out or exit to additional code.
• Implication: No change in original source code. Ability to add custom software code linked to existing code. Adds new source code that needs to be maintained.
• Generic Software Approach:Typical approach. Most enterprise software does not support atomic Service Oriented Architecture (SOA), so call-out is limited to what is exposed by the vendor. Approach often uses proprietary APIs. Sometimes requires the use of the vendor’s technical platform.
• FreeBalance Approach:  Support for component SOA. Atomic-level integration with augmented code is available. However, the focus on public financial management reduces the need for this approach because primarily handled via configuration.

Business Process Management

• Description: Use of workflow-based authoring tools to develop and adapt business processes.
• Implication: Like Call-Outs, can augment existing code. Creates new source but does not affect original source code. Workflow tools tend to be generic and require some programming or scripting. Approach can reduce the burden of upgrading, however, provides ability to change workflow to support poor practices.
• Generic Software Approach: Used by some generic software vendors in order to adapt processes and integrate with acquired software companies. (There has been a debate about this approach between the two leading ERP vendors.)
• FreeBalance Approach:  Table-driven workflow provided rather than complex because of FreeBalance single market focus. The workflow engine in FreeBalance software supports the WfML standard, so generic BPM suites are compatible. The call-out support can call-out to BPM workflow.

Code Customization

• Description: Adjust existing software code to meet unique requirements.
• Implication: Modifications change the software code making it difficult to development, test, maintain and upgrade.
• Generic Software Approach: Code customization is the typical approach to meet unique government requirements. Code is customized by system integrators or by the government.
• FreeBalance Approach:  Code customization rarely required. FreeBalance typically provides the code and exposes code as parameters for long term support. Nevertheless, code customization is available.

Custom Development

• Description: Develop software components using an Integrated Development Environment (IDE).
• Implication: Creation of new source code. Complex to develop requirements, design architecture, write code, maintain quality, and handle changes.
• Generic Software Approach: Technical platforms provide comprehensive tools for software development. COTS vendors with Financial Management applications view this option to be used for highly specialized applications that integrate with COTS. Governments looking to develop software in-house tend to start with generic technical development platforms.
• FreeBalance Approach:  Government-specific platform includes technical platform and set of reusable Government Entities to accelerate development and facilitate maintenance. Governments can acquire this platform to develop applications from “scratch”.

Customization Scorecard

Generic Software Approach:

FreeBalance Approach:

by Doug Hadden

VP Products

Andrew McAfee, the originator of the term Enterprise 2.0, suggests that “overuse of the word ‘social’” is not business friendly. Presenting Web 2.0 technology for companies or government as social suggests something other than work.   I commented on the blog article. This is an extension of that comment.

True: “Social” seems to imply ‘not work’. And, we know that work cannot be fun. (Except if you work for a For Profit Social Enterprise). But, social networking and communications is an integral part of business today. This is more than discussions around the water cooler – it’s about the virtual global water cooler. 

Computing solutions have focused on the more structural and procedural aspects of work. Hence, the attraction of “Business Process Management” (BPM) and “Business Process Re-engineering” (BPR). “Structural”, another S word.  Implies hierarchy. We’ve described this notion of structural and social in our Government 2.0 Framework. The diagram implies that structural and social are entirely separate. Structural processes can benefit from collaborative technologies that we call Enterprise 2.0 – such as documenting why a procurement or hiring decision was made. .

Social processes involve creativity, brainstorming, seeking out expertise, outreach to employees amd customers etc. Most pre-Enterprise 2.0 tools to accomplish these functions were structural in context, about ‘command and control’. These have proven somewhat inflexible in driving innovation and improved customer service.  The notion of the Discipline of Market Leaders  recommends three approaches. Operational efficiency is one of those approaches. My interpretation of “operational efficiency” is that all processes need to be defined, standardized and improved. It is difficult to re-engineer innovation or creativity event though these disciplines can form part of a process.

Enterprise 2.0 in Operation: FreeBalance Scenario

There’s a reason why we advocate the use of Web 2.0 and “social networking” to governments. We used these tools in-house. We’ve witnessed the effectiveness of Web 2.0 tools. A case: software requirements management.  Traditional pre-Enterprise 2.0 tools were highly structured. Many were client/server. Most required training on the methodology advocated by the provider of the tool. Larger software development organizations were more likely to adopt these tools.

Product portal includes requriements management, bug tracking, blog, wiki, and forum

FreeBalance uses an ISO-9001certified process for the entire software development lifecycle. This process was designed specifically for the government context. We needed to implement tools that adapted to our process rather than the other way around. We have implemented a number of flexible Web 2.0 tools since mid 2006 that enables the product teams around the world to collaborate. Today, FreeBalance has product managers and business analysts in Guatemala City, Washington, Ottawa, Lisbon, Pristina and Dubai. And, these people travel. Our product development is in Ottawa, Lisbon, Bangelore and Ulaanbaatar. We have project teams in customer sites providing feedback. It’s a 24/7 world that requires the use of traditional and Web 2.0 tools to achieve improved customer support and customer innovation. I can still remember 3 years ago entering some requirements into our Drupal-based system and getting an error because we’d exceeded 100MB of content – in less than 6 months. Today, there are gigabytes of vision cases, market requirements, specifications, project reports, design documents and test cases. We use numerous plug-ins, internal blogs, forums and other tools. We have been able to leverage these tools for discussions among technical and functional experts. We’ve extended this to a customer exchange. We’ve extended the tools to show market research and provide support for our sales group.

FreeBalance  Customer Exchange

My conclusion on “S” words? Social is work that augments structure and extends beyond structure.