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On behalf of John Moore: JOHN: Thanks to Doug Hadden for a good discussion with many excellent points. Some of the critical comments may stem from semantic vs. substantive differences. It should be noted that a CMS based system can be a good way for small countries to quickly try different alternative approaches, gain experience, and build human capacity before making an expensive, decade(s) long commitment to a Commercial-Off-The-Shelf (COTS) budget formulation system. Let me comment on Doug's main criticsms: DOUG: "There are some unfortunate and significant flaws to this analysis. Most importantly, a CMS can be effective at managing the budget collateral, but has weaknesses in actively automating the formulation of the budget." JOHN: It is undoubtedly true that a CMS has weaknesses in actively automating the formulation of the budget, as is true of all budget formulation software. Budget formulation is a difficult activity to automate. The strengths of a CMS, particularly when integrated with an office automation suite, include empowerment of PFM professionals to dynamically adapt the system to changing budget formulation requirements with little direct intervention by ICT staff. It should also be noted that a CMS and COTS products like FreeBalance are not mutually exclusive. Rather, they can be very complimentary. A CMS can help ensure the success of a COTS budget formulation system by, among other things, strengthening the professional capabilities of PFM system users. Alternatively, a country may choose to begin slowly with a CMS based system, adding a COTS budget formulation system as they gain experience, confidence, and capacity. DOUG: "Content management systems like Alfresco are ideal to managing a repository of documents and enabling content. It supports version control and check-in/check-out control. The CMS would be ideal when a process is mostly document bound. (Mind you, there is nothing preventing a COTS budget preparation system from supporting repository functionality or integrating with Alfresco, Joomla, Drupal or any other open source CMS)." JOHN: In addition to documents, CMS products can also manage spreadsheets (e.g., Excel, OpenOffice CALC). In a simple budget formulation system, spreadsheets can be used to manage numeric budget version data directly. Then, as organizations gain sophistication, spreadsheets managed by the CMS may serve as the user interface to numeric budget databases, including multi-dimensional “business intelligence” OnLine Analytical Processing (OLAP) databases . The flexibility of a CMS permits budget shops to start with simple prototypes and evolve as needed in a timeframe of their choosing. Regarding integration of PFM systems with CMS products, there seems to be agreement. Yes, the two can absolutely complement one another. DOUG: "The CMS has no concept of transactions. The macroeconomic analysis of the current situation and historical "actuals" from previous years would need to occur outside the CMS. The budget calendar that requires submissions, drafts, approvals etc. would need to be programmed into the CMS, and, therefore, require IT intervention. At no time can the CMS provide a view on what the budget is looking like in aggregate. It can't tell you who has fallen behind in the schedule." JOHN: 1. Transactions - Pre-decisional budget formulation data is typically manipulated at levels well above transactional data. It is not clear what the issue is with transactions in this context. 2. Analysis - Integration of office suite software, including spreadsheets and business intelligence (BI) tools, with the CMS enables sophisticated budget analysis, including macroeconomic and historical trend analysis. As a result of this integration, government enterprises are able to leverage existing investments in office software, automated analytical tools, and staff training. 3. Calendar - Adding calendar events is a simple administrative function, no IT intervention required. 4. Aggregate - The integration of a CMS with analytical tools and the capability to manage documents, including budget reports, provides a rich medium for the display of budget data at all levels of aggregation/disaggregation. 5. Schedule Status -Workflow capabilities included in CMS products offer a range of options for monitoring who is ahead and who is behind schedule. Capabilities vary by product. Integrated analytical tools and reports add even more capabilities to the environment. DOUG: "The CMS cannot provide what-if scenario analysis. It does not track government assumptions on costs, so a line ministry could budget anywhere from 1$ to 1,000,000$ for a single computer system. The CMS cannot enable the budget office to adapt a single "cost driver" like currency exchange or cost for energy or cost for a salary increase and see the effect in the budget." JOHN: It is true and correct that an out-of-the-box CMS is not a budget formulation system. Nor does any CMS claim to be. The analytical tools, workflows, calendars, training materials, reference documentation, and many other details that would enable a CMS to help manage the budget formulation process will need to be integrated and added as needed. However, the advantage this provides is that budget professionals can add as much or as little functionality as they wish, at their own pace, and at relatively low cost. A CMS empowers budget professionals to iteratively and collaboratively try new functions until they shape a toolset that works for them with little to no IT intervention needed. It should be noted that any information system, including FreeBalance, will also require a significant amount of configuration in order to become useful for budget formulation activities. DOUG: "The CMS cannot provide linkage to the Chart of Accounts/Budget Classifications to create budget appropriations in the IFMIS. It also can't analyze budget execution data during the fiscal year. So, the budget appropriations would need to be stored in a different system or the budget would need to be manually coded into the IFMIS." JOHN: These are relevant points. Any linkage to the CoA/BudClass would occur through analytical tools. It is questionable whether pre-decisional budget appropriations should be added to a production FMIS. It is also unclear under what circumstances budget formulation analytical tools would be used to analyze budget execution data during the fiscal year. Live production post-decisional budget execution data should generally be kept completely separate from pre-decisional budget formulation data. Budget data should not be transferred to the production FMIS until all CoA/BudClass questions have been resolved. There are a number of reasons why pre-decisional budget formulation data should be managed separately from post-decisional data, including the fact that pre-decisional data is often highly aggregated/summarized well above the levels of detail required for budget execution. DOUG: "Although the CMS can be used to assemble the final budget book through revision control, the charts and tables required would typically need to be assembled manually rather than automatic through document automation functionality. (Some countries in the CARTAC region are able to create budget books automatically from the budget formulation system.)" JOHN: This is a very good point. Integration of the CMS with an office automation suite such as Microsoft Office or OpenOffice enables numbers, charts, and tables to be dynamically and automatically configured and updated as data changes. In addition, indices, tables of contents, figures, photographs, and many other elements of a complex budget document are dynamically and automatically updated with each new version. Some CMS products with a document management or publication heritage have many of these capabilities directly included and do not require integration with an office software suite. DOUG: "No Standards for Budget Preparation ----------------------------------- This assertion is absolutely true. There is no established international standard or "best practice" for budget formulation. Most budget formulation systems in use by governments appear to be custom developed to follow the legal budget cycle. (And, private sector budget systems do not seem to operate well in government.) My observation is that these systems tend to support limited functionality to enable line ministries to enter budget proposals. As such, the use of a CMS represents an improvement." JOHN: Agree. At a minimum, a CMS represents a significant improvement in the management of budget formulation workflow and improved two-way collaboration between the MoF and line ministries. DOUG: "Our experience with developing budget formulation software tells a different story. It is possible to model a system that supports a broad range of budget calendars with adjustable rules and approval methods. It is possible to support multiple year historical data and MTEF 3-year (or more) forward years. Macroeconomic analysis and cost drivers can be created. As can full support for a changing multiple year chart of accounts. As can assembling a budget book. And, the toolset can be used for virements, supplemental budgets and scenario management during the fiscal year. With version control. All with no more IT intervention than a CMS." JOHN: As described, this sounds like a remarkably useful budget formulation system. A CMS, on the other hand, is a cost effective, general purpose system that can be used alone or in combination with other software, including office automation and information management software. A CMS can be used to collaboratively develop a variety of complex documents, including budget documents, as well as facilitate business intelligence, build human capacity, enhance government continuity, and minimize the impact of staff turnover. As such, it represents a strategic investment that can help governments become more efficient and effective across a range of functions. This may be an important consideration for cash strapped governments in the context of overall value and utility.
Commented Aug 2, 2011 on
Creative Use of IT Systems in the Budget Office: Collaborative Budget Formulation Systems Show Promise
Creative Use of IT Systems in the Budget Office: Collaborative Budget Formulation Systems Show Promise
Posted by Sandeep Saxena Automation of budget formulation processes has had limited success compared to the strides taken by many countries in computerization of budget execution and accounting functions. There have been fewer successful examples of computerized budget formulation. This an...
The British love “Who Do you Think You Are” a BBC TV programme that explores celebrity family history. I tried to explore mine. The West Midlands Edwards family tree ran out with my great great grandfather when all I could find was that he was born in Wales – there...
Posted Feb 11, 2011 at
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