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RE-ENGINEERING IFMIS 2011 - 2013

Presentation at Connected Kenya Conference

Leisure Lodge Beach and Golf Resort

April 18th – 21st, 2011

By A. Waiguru

Ag. D/IFMIS / HGU

PRESENTATION OUTLINE

Why develop a plan/expectations?

Where are we?

Where do we want to be?

How do we get there?

With whom?

By when?

How much?3

WHY DEVELOP A STRATEGIC PLAN?

Why develop a plan/expectations?

EXPECTATIONS 1. System Expectations -  All modules

integrated and functional inc stand alone systems

2. Process Related Expectations - Take every departments input, needs into considerations ensuring all end users requirements are met satisfactorily

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EXPECTATIONS2 3. People Expectations –

• Learn from past experience • Bring on board all stakeholders • Home-grown & practical solutions • Capacity enhancement Clear communication

and change management

4. Well defined Strategic plan – •With a clear Vision and Mission that communicates the Re-engineering process / rebranding of IFMIS•A strategy that defines risks and mitigates against them•Integrating all stand alone components•Strategy that ensures Leadership buy in and commitment

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BACKGROUND

• Assessment by independent consultants raised a number of technical and implementation issues that had to be addressed before IFMIS could be considered reliable and useful.

• This Strategic Plan seeks to enhance that process by identifying requirements, priorities and activities for the re-engineering of IFMIS.

Where are we?Where are we?

A PARTIALLY FUNCTIONAL IFMIS

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A PARTIALLY FUNCTIONING IFMIS

• The IFMIS is currently limited to the General Ledger (GL), Purchasing (PO) and Accounts Payable (AP) modules

• All have some technical limitations with functionalities that are not sufficiently interlinked and

• There is still significant reliance on manual processes even where the IFMIS has been implemented

A PARTIALLY FUNCTIONING IFMIS

•Budget Process•Budget planning is the process through which the government, according to a pre-defined process - the MTEF - sets budgets for the coming fiscal year.•Detailed guidelines provided to MDAs on how to define their funding necessities according to various sectors•As priorities are identified, budgets are assigned to various line-items such as fuel, office supplies, etc.•One key output of the budget planning exercise is the budget commitment ceilings that determine the monthly, quarterly and annual expenditure limits. •Currently budget preparation is facilitated by a stand-alone database application•No real-time linkage bet. this application and the IFMIS

A PARTIALLY FUNCTIONING IFMIS

• Expenditure to Payment • Following the attribution of budget commitments

and the release of funding, the expenditure and payment processes commences.

• The diagram in the next slide is a high level illustration of the Government’s expenditure approval process.

• Currently the most part of these processes are executed manually, and outside the system,

• Expenditure approval process mostly manual

• There is urgent need to automate them.

Creation of the Requisition (LPO/PV)

Procurement Officer Contacts

Suppliers

Requisition Sent to Head of

Accounting for Examination

Invoicing(Matching)

Validation

Head Cashier

Local Purchase Order manually created along with the Payment Voucher. All are signed in advance by the AIE, HoA and Budget Officer

Prior to initiating the procurement process, the AIE already knows if the Requisition must be sent to the Tendering Committee for approval and nothing is done until the TC provides guidance on how to execute the acquisition

The entire process is pre-determined so that the PO contacts suppliers in advance of receiving approval for the acquisition and instructs them on what process to adopt.

Documents are verified for accuracy and completeness

Inspection Unit

When goods are received the IU verifies that they match the Requisition and prepare the Inspection Certificate which is sent to HoA along with the Invoice.

When goods/services are received it is common practice for suppliers to provide the invoice upon delivery

LPO is entered into IFMS for the

first time

This is an additional step required by IFMS to ensure separate verification and authorisation of the accuracy and completeness of the LPO. Although the PV is attached, it is not entered into IFMS at this point.

This step relies exclusively on the documents prepared during the manual process

Validation of the LPO in IFMS

Auditing

Requisition sent to HC for processing of the payment

Internal Audit Verifies all supporting documents

AuthorisationPayment Request is authorized by the HC

Payment Request Entered into IFMS

Cash PaymentsIFMS Payment

List

Payments Entered into

GPAY

GPAY Report Signed by HC

Payment & Cash Requests Physically

Delivered to CBK

EFTs Processed the next day and Bank Statement

Generated

BS retrieved and new GPAY list submitted for processing

Cash Payments are still being executed and this process is managed outside the IFMS and GPAY

PR is entered into IFMS for the first time.

Because there is no link between the P and AP modules, PR may be

generated on any transaction or account because the information is not

cross-referenced to ensure there was an approved LPO. This process can

only be done manually.

GPAY produces a encrypted file of EFT requests along

with a hard copy report

CBK Manages a suspense account through which cash withdrawals can be made

Manual Process

IFMS Process

GPAY Process

CBK Process

According to Procurement Officers, IFMS is only accessed once the LPO

has been approved. So it is not part of the decision making process

Once entered, the GL is updated

General Ledger Updated

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A PARTIALLY FUNCTIONING IFMIS• Cash Management module• Module not implemented, therefore;• Bank Accounts are maintained manually• Reconciliation is manual• EXU not sufficiently supported• CBK – email to HEXU; distributes funds manually, -

advices • IFMISD (both commitment ceilings and exchequer

releases). • IFMISD uploads data manually into GL• Ideally, CMM would support cash-flow forecasting, bank

reconciliation, and bank account management. 14

A PARTIALLY FUNCTIONING IFMIS• EFT

–EFT Business Process not efficient–Currently under pilot ; –Challenges

• Other Stand alone systems–Debt mgt system, –Pensions –Payroll –Procurement,–Revenues ERD, KRA

A PARTIALLY FUNCTIONING IFMIS• ICT Infrastructure and Support• There is no proper management of Data Centre(s) and the

IFMIS Infrastructure does not always ensure network and application security, availability and reliability

• In addition - • The IFMISD has limited internal technical experts to provide

support to peripheral software and hardware required for IFMIS operation.

• The IFMIS network and infrastructure as exists is incapable of supporting the increased use as anticipated in this plan.

• The IFMIS has not been secure, available and reliable.• At the moment, in the case of catastrophic failure the MoF

would not be that is able to resume normal functions in a minimal amount of time.

CURRENT STATE OF AFFAIRS

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Missing functionality/modules, Low Ownership, Sustainability,

WHERE DO WE WANT TO GO?

Have a well functioning, user friendly Integrated Financial Management System

THE RE-ENGINEERING IFMIS STRATEGIC PLAN

How do we get there?

IMPLEMENTATION APPROACH

• Move from - • A modular approach which was earlier adopted where separately implemented modules are loosely linked to the GL,

To -• A full cycle end-to-end integrated approach

CORE IFMIS PROJECT MANAGEMENT COMPONENTS

Re-engineering for Business Results Plan to Budget Procure to Pay Revenue to Cash - CM Record to Report - GL ICT to Support Communicate to Change

RE-ENGINEERING FOR BUSINESS RESULTS• BPs are a pivotal element in the success or

failure of most ERPs, • Business Processes should be well

documented to facilitate accurate mapping into the IFMIS.

•  Provide a higher degree of data quality, • Improve the performance of the workforce, • Reduce duplication and redundancy, and

minimize opportunities for fraud and theft.• There is need for BPRs in a number of areas

to enable smooth IFMIS implementation.

RE-ENGINEERING FOR BUSINESS RESULTS Workflows

• The most fundamental omission from current IFMIS

• WFs ensure that approval roles are inbuilt into the IFMIS.

• They provide notifications for the respective officials in the approval hierarchy.  

• They allow automated delegation of privileges to ensure that approvals can continue in their absence

Strategic Actions

• Do BPR to implement suitable automated business processes before workflows are implemented.

• BPR means foregoing some existing business processes in favour of ERP leading Practice for more efficient performance IFMIS. 23

RE-ENGINEERING FOR BUSINESS RESULTS

• Strategic Interventions• Re-engineered business process for improved business results

• Define workflows for stricter controls• Integrate process to reduce duplication and parallel running

• Ensure higher degree of data quality• Improved workforce performance

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PLAN TO BUDGET

• Strategic Interventions• Document the automation requirements for the

Planning to Budgeting cycle• Fully integrate the Plan to Budget process and

system• Provide a platform for programme based budgeting • Automated system for commitment ceilings• Single, common Chart of Accounts• Enhance reporting capabilities to support budget

planning• Hire PFM Specialist to assist the BSD in the

undertaking these activities25

PROCURE TO PAY• Strategic Interventions• Automated procurement process, from online

tendering to award of contracts• Include the entering requisition, to generation of

System Purchase Orders, to payment• Payment initiation, online approval and system

generated Payment Vouchers• Enforcement of budgetary controls• Elevation of IFMIS from data capture to integrated

financial management

PROCURE TO PAY• Strategic Interventions• Review the Workflows and Dossiers in all

modules but especially for The Procure to Pay system and the General Ledger.

• Change of policy to accommodate system generated documents as official GoK documents.

• Design and implement secure printing of PO on pre-printed stationery.

• AIE holders / Vote controllers enabled to undertake online commitment of funds

• Real-time access to financial information.

REVENUE TO CASH

• Strategic Interventions• Auto-reconciliation of revenue and payment• Secure and seamless integration with GPAY

based on ‘straight through processing’• Automatic generation of EFT files and exchequer

releases within IFMIS• Encryption, authentication and secure

transmission of data• Automated revenue collections for improved cash

forecasting

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RECORD TO REPORT• Strategic Interventions• Electronic transmission of bank statements from CBK• Secure two way interface between IFMIS and CBK for EFT

instructions and statements• Automated bank reconciliation• Online maintenance of bank account details• Accurate and up to date information on the GoK financial

position• Eliminate GPAY terminals at line ministries.

ICT TO SUPPORT• Strategic Interventions• Establish a Service Level Agreement between MoF,

GITS and E- government/ICT Board to provide technical support and service to IFMIS Data Centres, Networks and other infrastructure.

• Dedicated IFMIS support function for software, hardware and infrastructure

• Help desk and call centre with expert technical support

• Improved availability and system performance • Operational security plan including business continuity

planning, back up and disaster recovery • Support the e-Government Shared Services strategy

COMMUNICATE TO CHANGE• Change management will focus on:

–Awareness presentment:–Building commitment: –Managing Expectations: –Coordination of Change: –Staff Development:

• The Change Management process–Preparation Stage – Acceptance Stage –

Commitment Stage

COMMUNICATE TO CHANGE

• IFMIS ACADEMY • Develop and implement capacity development/training programs to

ensure proper use and maintenance of the IFMIS • Objectives• Ensure MoF has required documentation to support IFMIS users and

technical staff.• Increase the competency of existing users and expand user base.• Develop additional expert and super –users.• Develop in-house capacity to provide IFMIS user training.• Deepening IFMIS to departmental Heads and management • Strategy• Training Needs assessment• Development of customised Oracle user guides and training materials.• Establish a state of the art Internal IFMIS Training Facility – IFMIS

Academy• Source competent firms for Oracle training• Source competent firm for ToT

SCOPING• Core Modules – CM, AR, AM • Other Modules – Plan to Budget – Piloted by end June• Stand alone modules Interfaces -• Organisations to be implemented

– Ministries and Departments – • Pilot ministries - MoF, MoE, MoIS, MoIRP, MoPH, &

SLO• Other ministries – MoLG, MoFA & MOA

– Local Governments – • ICT infrastructure – LANs in 61districts for IFMIS• However linkages only on pilot basis to 4 District

Treasuries• To discuss with MOIC on use of Fiber infrastructure

– Others – Link to shared services33

SYSTEM DOCUMENTATION

Strategic Actions• Regenerate documentation for the whole

implementation including;– Business Processes– User Requirements– System design and development – Quality Assurance– Integration Testing– User Acceptance Testing– Operational Acceptance– Operations Manuals

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GOVERNANCE STRUCTURE

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Steering Committee on IFMIS

Technical Committee on IFMIS

Director IFMIS

Head Application Development &

Support

Plan to Budget

Procure to pay

Revenue & cash

Management

Records to report – GL /

Head Procurement and Contract Management

Procurement, Contract

Management + M&E

ICT to support / ICT services

Audit and Security

Database Administrati

on

Hardware &Networks

Re-engineering for Business

Results

BPR

Policy

Communicate to Change

(Training!)

Capacity Enhancement (Training)

Communication and Change Management

DIIUs

GOVERNANCE STRUCTURE• Steering Committee on IFMIS (SCI)• Technical Committee on IFMIS (TCI)• IFMISD• DIIUS• Supporting documents

–Strategic Planning document–IFMIS Charter –Change Management Strategy–Job description document

POST IMPLEMENTATION SUPPORT

Strategic Actions• Dedicated Helpdesk established to offer 1st level

support.• Implement a web based solution to for online

logging, recording, tracking and reporting on progress of logged issues. www.IFMISupport.go.ke;

Email:- IFMISupport@treasury.go.ke

ifmis@treasury.go.ke

2nd level support to be outsourced to certified vendor under a service level agreement.

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BY WHEN?

• Short Term

• Long Term

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ROAD MAP

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Feb March April May June July

Current Functional Assessment

Target Process Design Workshops

Develop skills building approachMap roles to

approach

Develop Target Organization

Define Roles & Responsibilities

Requirements & Design*

Build* Test & Deployment*Monitoring &

Support*

Budgeting Initial Deployment

1. Process Design(OTC, P2P, Plan to Budget, Record to Report)

2. Organization Design

3. Capacity Building

4. Budgeting Deployment

Leading Hyperion practices input to target process for Plan to Budget

Capacity building approach aligned with target organization

Review Gaps; Update Target Processes

Establish Governance

Stakeholder workshops complete

Target Processes & Recommendations to address gaps complete

Current State Assessment

Define approach to deploy target org

Current State Assessment

High level approach complete

Target processes feed into target organization design, roles and responsibilities

Capability development approach feeds into budgeting training for end users

Skills building aligned with target organization

Dependency on target processes to complete organization design

Joint activities to confirm current state for org and capacity building

Project Management Support

*Budgeting deployment activities delivered by other teams (Oracle, etc.)

Program Management

Scope confirmed

Current state assessment complete

Target Organization Structure complete

Develop curriculum and training tools/templates

Roles/Responsibilities complete

High level deployment approach complete

Kick off workshop

Mobilization Activities Confirm readiness to commence Process Design

ROAD MAP• Plan to Budget, Revenue to Cash, Cash to

Report, EFT Pilot/Phase I by June 2011– Roll out to Central Government June 2012– Roll out to County Government June 2012

• Procure to Pay, Pilot/Phase I by Dec 2011– Roll out to Central Government June 2012– Roll out to County Government June 2012

• Others – Continuously through out the year

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APR

CRITICAL SUCCESS FACTORSPersonnel - Competence & establishment –

Short Term - Request SecondmentsProject ownership and sustained commitment and

support by top management of MoF We are the champions

Business continuity PlanningAdequate programme financing Capacity building Change Management ICT to support

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VISION & MISSION

• Our Vision is to have - • “An excellently secure, reliable, efficient,

effective, and fully integrated financial management system”.

Our mission is to - • “ To Passionately and with commitment

continuously enhance our capacities to innovate and leverage on the best of technology to provide for a fully integrated financial management

CONCLUSION

• This strategic plan has therefore been developed to –

1.Provide a structured methodology for stabilisation of the current IFMIS on one hand, and,

2. To facilitate development of a comprehensive, consolidated and integrated financial management system

CONCLUSIONAt this stage everything is on the critical path

which comes with distinct challenges of pressured implementation

It calls for full support by ourselves and all stakeholders, team dedication and attention to every detail to ensure successful planning and implementation to meet stakeholders expectations

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CONCLUSION• In Managing Expectations, we will bear

in mind - • That – “No two men ever judged alike

of the same thing, and it is impossible to find two opinions exactly similar, not only in different men but in the same men at different times.”

• ~ Michel Montaigne ~•   - We will keep learning and adjusting

We Thank you for listening

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