Sustainable Public Financial Management

Doug Hadden, VP Products

One of my former bosses, when asking for input, made this warning: “just don’t confuse this with a democracy.” This is a premise from Gartner Group Vice President and Distinguished Analyst Andrea Di Maio in this post yesterday: The Main Obstacle to Government Efficiency is the Cost of Democracy. He pointed out that electoral cycles can play havoc in achieving government-wide IT goals. And, that strong central governance for IT projects is often difficult to achieve.

This created an interesting twitter conversation when Alan Silberberg, well known Government 2.0 consultant tweeting “don’t agree” to the article.

I’m more inclined to agree with Di Maio than Silberberg on this discussion. It’s hard to disagree with Di Maio’s assertion that “government is usually considered less efficient that the private sector. Sometimes this is a wild generalization, since government deals with a level of complexity that is unparalleled in almost any other industry sector.” (Mind you, there is this persistent notion that government should be run like a business.)

Do election cycles disrupt IT planning and implementation?

Di Maio points out that political priorities change depending on where a government is within an election cycle. Silberberg sees elections as having an effect, but less than other factors. A statistical study would be very valuable here. I have encountered this reality in numerous government situations:

• IT Director in a Government of Canada department telling me, years ago, to be aware of what year the government mandate was in before advocating new technology
• More than one Latin American and Asian government pushing forward on large IT-related projects for public financial management or e-government in order to show accountability progress within a year of the next election
• New government in post-socialist country disrupts large IT implementation after more than 8 years of planning because of political vendetta against the former government – although this is standard in large programs like the Liberal Party in Canada cancelling the order for military helicopters and the current Conservative Party government cancelling the long gun registry (speaking of complex government software implementations and cost overruns…)
• Complete replacement of top public servants in African country required comprehensive retraining on IT systems – this is not an usual situation because many countries have a complete “civil service in waiting” for government changes

Are shared services or e-government programs particularly affected by politics?

Di Maio suggests  that “shared services, for one, do require a fair amount of time and a stable, well-thought-out governance framework to deliver business value. But the cost of democracy either prevents implementing strong, centralized governance , or challenges the ability to keep it in place for a long enough time.” Anecdotal evidence supports this assertion:

• The Chorus “shared services” ERP project in France went back and forth a few times before the Sarkozy government latched on the project. (Yes, it’s late and costing a lot more than expected, with major glitches, but that’s what happens when you implement ERP in government).
• IT shared services (data centres, e-mail etc.) is an idea that has been floating around in Canada since the Chretien government – possibly before that. There was no execution on the idea until recently. My sense is that consecutive minority governments meant that the governing party was not willing to encounter upset trade unions. Now that there is a majority government, in the first year of the mandate, it’s full steam ahead.
• There had been an e-government funding farce in the United States during the Bush administration where congress cut back funding significantly because of politics (or because Senators and Congressmen aren’t exactly technology-savvy. Darrel Issa is the exception that proves the rule.) This farce continues with bills that have cut e-government and open government initiatives dramatically.
• Introduction of the SOPA law in the United States and similar “privacy” laws around the world hinders open data initiatives. (Another example is how Canada Post is trying to prevent private sector organizations from using postal codes.)
• The rapid drive to open government by the current government in Canada, spearheaded by Treasury Board President Tony Clement including joining the Open Government Partnership shows the impact of positive political motivations.
• Push to open government and transparency in Kenya, India, Timor-Leste and other countries shows the impact of politics on e-government initiatives.

Is the United States unique where elections impact IT less?

Silberberg suggests that elections may have more of an IT project impact in Canada and the EU than in the United States. He has far more US government experience than I do. I’m clearly suffering from confirmation bias in my assessment of American politics.

I find American politics highly intrusive into government program implementation. The system of “checks and balances” with “separation of powers” makes strong central initiatives difficult. Almost any aspect of a government program can get overly politicized and polarized in the United States. (I’ve lived in the US since 2006 and have had to cut cable because I can’t put up with what passes as cable news where even the innocuous gets politicized.)

Top civil service positions in the United States are political appointees. (This might seem to be a controversial statement to Americans, but there are no political appointees in Canada or the UK in government departments except for the Minister. In Canada, the equivalent of Under-Secretary – Deputy Minister, or Assistant Under-Secretary – Assistant Deputy Minister does not change when there is a new government or new Minister unless the person had become politicized.) It in my view that elections impact major program decisions as much in US as Canada, if not more. Remember the President’s Management Agenda and “Faith Based Initiatives“?

Impact of budgets

It’s hard to say whether the United States or Canada has the more dysfunctional budget process. Democratic and non democratic countries have budgets. The political dimension and budgets has a significant effect on IT decisions such as Congress cutting back on e-government budgets in the United States described above. The mad dash for savings in Canada with the Shared Service initiative and spending reviews that has been highly disruptive on program implementation according to people I met at the FMI conference last month.

Other Factors

Silberberg suggests that long IT cycles (longer than government mandates),  resistance to change, and lack of funding play a larger role than elections on large IT projects. Again, some confirmation bias here. My sense is that:

• Long IT cycles get disrupted through changes in government
• Resistance to change is partly motivated by the fear of perceived political risk by changing “something that works”
• Lack of funding is because of budgets. Budgets are political.

Some Conclusions

I think Di Maio is “on to something” with his analysis. The subject probably deserves academic study (maybe it has, but an Internet search was dominated by ICT4D, open government, digital divide and Arab Spring content – rightfully so.)

Let’s say for a second that Di Maio is right. Can governments act on this insight to improve information technology? Perhaps this can help create a government-centric “change management” discipline. It’s hard to envision how the election dimension can be overcome.

Many Caribbean governments face similar challenges. These challenges are being discussed at the Caribbean Regional Technical Assistance Centre (CARTAC) FMI conference being held in Belize. IT retention is a shared challenge.

Many emerging economy countries struggle with civil service capacity building. Caribbean countries appear to have a higher capacity than many emerging economies. Yet, there is an economy of scale problem – Caribbean countries are small with vibrant economies Vibrant economies have strong private sectors. Governments in the Caribbean compete against the private sector for IT jobs. And, fluency in English gives IT government professionals in the Caribbean with many emigration options in North America.

Caribbean governments have succeeded in building IT capacity. This capacity can be quickly lost to the private sector. One presentation today showed how IT turnover was the highest of any category in the government.

Lessons Learned

CARTAC is a unique organization – run by regional governments who set priorities, rather than donors. These governments share practices and technology. Caribbean governments can leverage lessons learned from software steering committees like the FreeBalance International Steering Committee (FISC) and government user groups as practiced by Government of Canada clusters like:

• Setting the direction of financial software management companies
• Certifying new versions of software as acceptable
• Managing software customization (for vendors other than FreeBalance)
• Collective support and assistance

Civil Service Reform

Many Caribbean countries are reforming the civil service to support retention. Incentives and changes to salary scales have been used. Caribbean countries have discovered that salaries are not enough to retain IT employees. Retention has been improved by providing training to improve skills and presenting IT professionals with new challenges. Government benefit programs can provide good value and stability. Succession planning helps staff to foresee advancement.

Interesting Ideas

There were some interesting ideas advanced that could improve IT capacity building and retention. An appropriate management of outsourcing non-core functions can release IT professionals to handle important functions. The use of multimedia and Web 2.0 technology can improve capacity building and training.