Lessons Learned in Government Smart Finances

Observations from public financial management and government human resources practitioners on: methodologies, change management, capacity building, performance, accountability and policy.

  1. The FreeBalance International Steering Committee (FISC) met from March 13 to 15th. in Miami. FreeBalance, a social enterprise that provides smart public financial software and services globally, leverages FISC to better understand emerging government requirements. Representatives from governments using FreeBalance software share lessons and adapt the product and services roadmap. FISC attendees came from developing nations and emerging economies.
  2. 12 country governments and speakers from many others attended FISC 2017. The general theme was wellbeing in government policies and budgets. This linked with the World Happiness Summit, also in Miami.
  3. There were numerous workshops and discussions. We collected some interesting insight that should be shared with public sector practitioners.
  4. Methodology Shifts
  5. It has become clear that traditional approaches to PFM reform and IT implementations have not resulted in positive outcomes. Reform efforts lag. Information technology implementations, such as Government Resource Planning (GRP) or Integrated Financial Management Information Systems (IFMIS), often fail to deliver expected results. Many IT projects in advanced countries are delivered late and over budget.
  6. There was general agreement that complex project design following so-called "best practices" were responsible for delays and confusion. In the case of GRP systems, contracts require that vendors follow terms and conditions rather than what is most needed. This combination of legacy ERP processes focused on code customization, complicated implementation methodologies and donor-designed projects was seen to be a major contributor to implementation challenges.
  7. There is a paradox in adapting new systems to meet public finance requirements: the importance of articulating exact needs yet the lack of capacity, knowledge and time for public servants to do so. The implementation contract is often finalized before the requirements are fully understood. FISC attendees pointed out that dedicated staff is needed for PFM reform and GRP projects. And, the practice of financial management often defies the design resulting in inefficiency, manual processes and corruption opportunities.
  8. There is an "agile" intersection of IT and government reform practices. Information Technology firms have experienced improved results when leveraging aspects of "design thinking", "lean", "agile development" and "DevOps." Meanwhile, there is an emerging development and reform practice of PDIA (Problem-Driven Iterative Adaptation) and DDD (Doing Development Differently). These ideas were frequently discussed at FISC.
  9. Public finance professions are struggling with change management. Change is often underfunded. Attendees agreed that this needs to change. There was also consensus that the PDIA process for planning communications and identifying change agents could make a significant positive difference. That's assuming that politicians recognize the change problem that new behaviour cannot be mandated from the top.
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