Posted by Abdul Khan
Projects to implement government financial management information systems (GFMIS) often involve significant resources. However, international experience suggests that these projects are not always regarded as great success stories.
In a recent Technical Note and Manual[1] of the IMF Fiscal Affairs Department (FAD), Mario Pessoa and I suggest that the lack of a common and clear understanding of the conceptual parameters of the desired system is one of the main reasons why GFMIS projects are not always successful. We argue that a well-crafted conceptual design is an essential element of a successful GFMIS project, regardless of whether an off-the-shelf or a custom-made software solution is to be implemented. The paper stresses, however, that a conceptual design alone cannot guarantee the success of a GFMIS project—other important factors include sound project and change management, integration of relevant PFM reforms, and adequate resources.
We discuss the key elements of a sound conceptual design, including the scope, coverage, and outputs of the system, and a broad description of the overall budget management framework and the specific business processes that the GFMIS is intended to support. The paper also provides guidance on important issues that need to be taken into consideration in specifying the requirements in respect of each of these elements. We stress the importance of ownership and suggest that all key stakeholders, particularly the intended users of the GFMIS—both inside and outside the Ministry of Finance (MOF)—should be involved in the preparation of the conceptual design, not only the MOF department taking the lead in the development. Finally the paper suggests that the temptation to rush into procurement of hardware and software should be resisted until the conceptual design is agreed and formally approved at a senior level of the government. Where significant changes to the PFM framework are proposed, cabinet level approval may be required and legal implications may need to be taken into account.
[1] An earlier version of this text was posted in the PFM Blog as an FAD technical guidance note. The new Technical Notes and Manuals (TNM) series was launched by the IMF’s Fiscal Affairs in September 2009. This note has been issued as TNM/10/07, April 2010.
Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.
