Development of Application Software for Integrated Financial Management

Development of Application Software for Integrated Financial Management Systems Cem Dener ECSPE Washington, DC July 2007 IFMS Application Software

IFMS Application Software Presentation • Definitions • Factors Affecting the Development of ASW • Available Solutions • IFMIS ASW Solutions in ECA July 2007 IFMS Application Software

Definitions Computer Software (SW), consisting of programs, enables a computer to perform specific tasks, as opposed to its physical components (hardware or HW) which can only do the tasks they are mechanically designed for. [source: www. wikipedia. org] For IT Professionals, there are three major categories of computer software: u System Software helps run the computer hardware and computer system (e. g. operating systems, device drivers, diagnostic tools, servers, windowing systems, and utilities). u Programming Software provides tools to assist a programmer in writing computer programs (codes) using different programming languages in a more convenient way (e. g. code editors, compilers, interpreters, linkers, debuggers). Middleware is also a kind of programming software that connects software components or applications to support complex, distributed applications. u Application Software allows end users to accomplish one or more specific tasks. Typical applications include business software, industrial automation, educational software, medical software, databases, and computer games. IFMS falls into this category. July 2007 IFMS Application Software

Definitions Application Software (ASW) For end users, there are two major types of Application Software: u Commercial-off-the-Shelf (COTS) Software is a term for ready-made application software, available for sale, lease, or license to end users. In most IFMIS applications, COTS requires modification (customization) of the code and integration work. u Custom Developed Software (CDSW) is a “user-written” or “in-house developed” (or “bespoke” or “tailored”) software designed to meet the specific needs of end users. In most IFMIS applications, CDSW is integrated to/linked with “customized” COTS software. Other common terms used in ASW development work: Customization (adaptation) is the modification of COTS software (ideally less than 10 -20 % of the code) to meet individual needs or specific requirements of the application. Parameterization is the process of entering software specific parameters defined by the user according to technical requirements before testing and using ASW. Localization is the process of translating the user interface, menus and messages that a program presents to a user into various languages for a specific country or region. July 2007 IFMS Application Software

Definitions WB Standard Bidding Document - Supply & Installation of Information Systems (March 2003) u Definitions (General Conditions of Contract) (vii) “Software” means that part of the System which are instructions that cause information processing Subsystems to perform in a specific manner or execute specific operations. (viii) “System Software” means Software that provides the operating and management instructions for the underlying hardware and other components, and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Systems Software. Such System Software includes, but is not restricted to, micro-code embedded in hardware (i. e. , “firmware”), operating systems, communications, system and network management, and utility software. (ix) “General-Purpose Software” means Software that supports general-purpose office and software development activities and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be General- Purpose Software. Such General. Purpose Software may include, but is not restricted to, word processing, spreadsheet, generic database management, and application development software. (x) “Application Software” means Software formulated to perform specific business or technical functions and interface with the business or technical users of the System and is identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Application Software. (xi) “Standard Software” means Software identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Standard Software. (xii) “Custom Software” means Software identified as such in Appendix 4 of the Contract Agreement and such other Software as the parties may agree in writing to be Custom Software. (xiii) “Source Code” means the database structures, dictionaries, definitions, program source files, and any other symbolic representations necessary for the compilation, execution, and subsequent maintenance of the Software (typically, but not exclusively, required for Custom Software). July 2007 IFMS Application Software

Definitions WB Standard Bidding Document - Supply & Installation of Information Systems u Appendix 4 (Sample Forms) IFMIS July 2007 IFMS Application Software COTS CDSW

Definitions Integrated Financial Management System (IFMS) or Integrated Public Financial Management System (IPFMS) or Integrated Financial Management Information System (IFMIS) IFMS is a common information and communication technology (ICT) platform which integrates core public financial management (PFM) functions (e. g. budgeting, treasury operations, accounting, cash/debt management, auditing/reporting) to ensure efficient management of public resources. IFMS is usually a centralized system which supports distributed (countrywide) operations of PFM organizations on a unique central database containing all financial information. Reliable databases, enhanced business processes and consistent information flows between various PFM modules increase overall operational efficiency, improves planning and decision making process, and enhances transparency. July 2007 IFMS Application Software

Definitions Policy Development and Review Budget Preparation Audit and Evaluation Budget Execution [ Treasury System ] Mgmt of Budget Authorizations Fiscal Reports & Budget Review Commitment of Funds FMIS Web Portal Procurement/ Purchasing Debt and Aid Management Payments and Receipts Mgmt Asset / Inventory Mgmt Public Financial Management Cycle July 2007 Cash Management IFMS Application Software Payroll Calcs HR Mgmt 7

Factors Affecting the Development of ASW for IFMS u IFMS Functionality and Scope u Technology Architecture (centralized, distributed, …) u Existence of secure countrywide Network infrastructure u Existence of ICT Standards and Regulations u Local capacity for software development and maintenance u Institutional capacity for system management and support July 2007 IFMS Application Software

IFMS Functionality / Implementation Options · · · · · IFMS Functions Macroeconomic Forecasting Budget Preparation Core Treasury System Payment Management Revenue Management Accounting (General Ledger) Cash / Fund Management Commitments / Purchasing Asset / Inventory Management Financial Reports Operational Support for SUs Internal Debt Management External Debt and Aid Mgmt. Personnel Database / Payroll Support for Auditing Web Publishing (Web Portal) Common Implementation Options CDSW / Existing Models CDSW / COTS (customized) + Interface with banking system (TSA) + Interface with revenue collection + Interface with banking system (TSA) + Interface with procurement agency CDSW for Spending Units (e-Treasury) CDSW / Interface with Debt Mgmt System CDSW / COTS Custom developed reports CDSW · Financial Mgmt Information System COTS / CDSW [ COTS : “customized” Commercial-off-the-Shelf Software July 2007 CDSW : Custom Developed Software ] IFMS Application Software

IFMS : Information & Communication Technology · Modern integrated PFM systems are designed and implemented as centralized web-based applications · Implementation of the IFMS includes the following ICT components: [0] Establishment of countrywide network connections (communications lines) as Government contribution. [1] Development of web-based Application Software (ASW) as a combination of customized COTS package + custom developed software. [2] Installation of central servers (database & application servers) and data storage units (fiber disk arrays) at the main system center & business continuity center. [3] Installation of standard field hardware (domain servers, user workstations and peripherals) in central and field offices. [4] Installation of network equipment, system and user management tools and engineering support solutions. July 2007 IFMS Application Software

IFMS : Technological Architecture A typical 3 -tier web-based implementation and [ ICT ] components B C 1 C M [2] Central Servers Database Server(s) SC 2 Application Servers [1] IFMS Application Software Internet Web Server IFMS DB Firewall [0] Wide Area Network Mo. F / Treasury District Offices [3] Field Hardware On-demand lines for towns Collection Point (city center) Local Server 3 Dedicated line Virtual Private Network Encryption Tunnelling District Offices PCs / Thin Clients MSC : Main System Center BCC : Business Continuity Center July 2007 [4] Network Equipment District Offices Spending Units IFMS Application Software Spending Units

Web-based Centralized IFMS Model Database Server 1 Application Servers System Center 2 3 Web Server User Terminals Users IFMS Customized COTS DB Internal Access Core PFMS modules VPN PFM Organizations External Access CDSW DB Custom developed software modules Web Portal Integrated IFMS DB Core Treasury System Interfaces Internal + External July 2007 IFMS Application Software Internet Spending Units, Local finance directorates, local public authorities, municipalities, etc. CDSW : Custom Developed Software COTS : Commercial-off-the-Shelf SW

IFMS : Functional Modules and Users Integrated IFMS External Users Ministry of Finance Ministries & Departments Tax Administration T, P Customs Service I Reports T, P State Property Fund I T Main Civil Service Department I T, C Public Procurement I P, R Statistics Institute I P, R Other Gov Agencies/Depts Mo. F IT Dept Reports Audit Internet & Intranet IFMS Main System Center Reports IFMS DB @ MSC IFMS Web Portal Core Treasury System National Bank • • • TSA Reports Local finance directorates, public authorities, municipalities, public institutions Paym. /receipts General Ledger Purch. /Commit. Cash/Fund Mgmt Fin. Reports Business Continuity Center + FMIS IFMS DB @ BCC Macro Econ Forec Budget Formul. Debt Mgmt Asset/Invent Mgmt HR Mgmt/Pers DB Regional Treasury Dept Spending Units July 2007 I I P, R T, P, C, A I District Treasury Div IFMS Application Software Payroll Calcs. Internal Audit Financial Reports T P C A R I TSA Transactions Plans Contracts Accounts Reports Interface Treasury Single Acct 13

IFMS Technology Architecture July 2007 IFMS Application Software

Available Solutions Some of the Available IFMS Solutions u u u Free. Balance e. Financials Oracle E-Business Suite SAP R/3 (Free. Balance Software, Canada) (Oracle Corporation, USA) (SAP AG, Germany) Other ASW options in ECA: Financial. One (Technology. One, Australia); MS Dynamics NAV (Navision) (Microsoft Corp. USA); 1 C: Enterprise (1 C, Russian Federation) July 2007 IFMS Application Software

IFMS ASW Solutions in ECA July 2007 IFMS Application Software

ECA Treasury/IFMS Projects ECA Treasury / PFMS Projects 1995 Hungary Kazakhstan Türkiye* P 049174 TSP (TS) P 069939 PARP (TS) P 081668 IDF (GFMIS) 1993 1996 Slovak Rep** P 069864 PFMP (TS) P 064508 P 066100 P 071063 P 082916 1992 1998 1994 1993 Georgia P 063081 FMIS (IFMS) P 090389 PFMP (IFMS) P 099840 PFMP (IFMS) 1996 1997 DR TDP (TS) TIMS (TS) TMIS (TS) PFMP (IFMS) Turkmenistan P 034092 IBTA (TS) Croatia P 050718 PFMP (TS) Uzbekistan P 070084 PFMRP (TS) Prep. >Appr. >Effect. Implementation Extension Treasury established AH Ali Hashim DR Dominique de Roquefeuil CD Cem Dener * The Bank funded the ICT consultant/ prj coord only. ** The Bank funded the TA activities only. July 2007 1992 1999 2015 CD Oracle / COTS CD SAP / CDSW DR 1998 Ukraine Tajikistan CD 1992 Russia Azerbaijan Kyrgyz Rep Moldova 2010 Jul’ 07 Avg. completion time 7. 1 yrs Oracle / CDSW Avg. implementation 5. 7 yrs AH Oracle / COTS AH Oracle / CDSW AH Oracle + MS SQL / CDSW 1996 Albania Armenia** 2005 AH P 043446 PFMP (TS) 1996 P 037960 TMP (TS) 1994 P 035759 say 2000 i (TS+)1927 Ukraine 2000 Oracle / COTS AH SAP / COTS AH CD COTS + CDSW DR COTS + CDSW Avg. compl. 5. 5 yrs Avg. implem. 4. 1 yrs Completed AH, CD Avg. compl. 7. 2 yrs Avg. impl. 5. 1 yrs CD CD CD In Progress CD Preparation CD DR AH Dropped DR Google Web TV World Wide Web Browsers Java e. Gov starts Blogs Skype You. Tube Wireless e. Gov projects stall e. Europe IFMS Application Software CD e. Gov recovery

Challenges in IFMS Projects Other ICT Challenges u Government ownership and financial support u Recruitment and sustainability of IT specialists in public sector u Existence of a reliable countrywide network infrastructure u Realistic ICT cost estimates to reduce procurement risks u Web based applications & open systems to reduce cost and duration of implementation u Proper requirements for Records Management, Information/System Security and Digital Signature in design u Coordination with e-Gov activities (interoperability & resource sharing) u Project management, monitoring and evaluation skills July 2007 IFMS Application Software

Development of Application Software for Integrated Financial Management Systems Thank You Washington, DC July 2007 IFMS Application Software