FC 107/19

Finance Committee

Table of Contents

INTRODUCTION

I. ORACLE FINANCIALS

II. PROGRAMME PLANNING, IMPLEMENTATION REPORTING & EVALUATION SUPPORT SYSTEM (PIRES)

III. ORACLE HUMAN RESOURCES MANAGEMENT SYSTEM (HRMS)

INTRODUCTION

1. This report provides information to the Finance Committee on progress made with the Administrative Information Systems (previously titled Oracle Project) between February 2003 and January 2004, and plans for the period February 2004 – January 2005.

I. ORACLE FINANCIALS

Progress between February 2003 and January 2004

2. During the period from February 2003 to January 2004 the main focus of work was on further strengthening the financial applications following the successful upgrade of Oracle Financials during the previous reporting period.

3. As recommended by the External Auditor, work progressed on the review and revision of existing materials and the preparation of further documentation necessary to constitute a comprehensive corporate accounting manual. A new intranet site was implemented and is now being used to communicate authoritative policy and procedural documentation to user groups.

4. Further improvements were made in the interface monitoring environment comprising the documentation of existing interfaces and development of reports to provide positive assurance on the correct functioning of interfaces between Oracle Financials systems modules, and also between the Oracle Financials systems and other financials systems.

5. The adoption of a split currency system of assessment required the development of new reports to support corporate and budget holder requirements for the monitoring of Regular Programme resources. Work commenced in this area and will be completed in 2004.

6. An exercise to verify and improve the quality of vendor and banking information was initiated. This will facilitate the streamlining of Accounts Payable business processes and result in lower bank charges and more efficient payment processing. This work will continue in 2004.

7. Changes were made to the Atlas travel system and procedures to simplify the processing and certification of lumpsum entitlement payments.

8. The implementation of a new data set in the Data Warehouse of information sourced from the Accounts Receivable financial sub-ledger was completed. This will enable the development of management reports and financial analysis of Member Nation contributions.

9. The development of a new reporting environment for fixed assets data and development of new reports to improve management reporting in this area were completed.

10. In accordance with the decision approved by the Information Management & Technology Committee (IMTC) and the Director General, the migration of the OS390 server ("mainframe computer") to The United Nations International Computing Centre(ICC) in Geneva was completed.

Plans for February 2004 – January 2005

11. The work plan for the period February 2004 – January 2005 will focus on the following:

1. Redevelopment of Field Accounting System. AFF will analyse the business requirements and prepare specifications for a system that meets the expanding business needs of FAORs and Regional Offices as well as resolving performance and functional issues in the existing system.
2. Developments in the Accounts Payable (Payments) application. With regard to the Accounts Payable application, activities will now focus on exploring the scope for electronic workflows in support of accounts payable operations and processes and further improvements in relation to the maintenance of vendor and banking information masterfiles. This work has commenced and will continue throughout 2004.
3. Development of interface monitoring reports. Whilst a significant amount of work has already been completed, work will continue on areas where specifications have not yet been completed or where scope for improvements to existing reports has been identified. Improvements will include the use where appropriate of Oracle Financials release 11i workflow functionality in the interface monitoring process.
4. Preparation and publication of the Corporate Accounting Manual. Work will continue on the review and revision of existing financial policy and procedures and the preparation of further documentation necessary to constitute a comprehensive corporate accounting manual. This will include procedural and related documentation for all business units. This work has commenced and will continue throughout the current and following biennia.
5. Further developments in the Data Warehouse. Further development of the Data Warehouse to facilitate the implementation of specialised reporting functions (‘data marts’) based on information to be gathered from the financial sub-ledgers (Accounts Payable-AP-, Accounts Receivable AR, Procurement PO, Human Resources, and Fixed Assets) and other sub-systems.
6. Improved use of standard functionality in Purchasing business processes. A review will be performed to identify opportunities to make better use of existing Oracle Financials release 11i functionality to support AFSP business processes and further develop reporting and data analysis with particular focus on the contract and Request For Quotation (RFQ) business cycles which are presently performed off–system

Resource Utilization

12. The cost of work undertaken in relation to Oracle Financials is being funded wholly from arrears:

Issues and Comments

13. In line with the practice of applications upgrade followed by the Oracle Corporation and other package software providers, FAO requires to upgrade existing applications on a periodic basis (every few years). Such upgrades involve significant costs (the most recent upgrade in August 2002 was solely technical in nature with no functional improvements yet cost approximately US$2 million) and in view of the recurring nature of such exercises, upgrade costs should be foreseen as part of the regular budget of the Organization, possibly as part of the Capital Expenditure Facility.

II. PROGRAMME PLANNING, IMPLEMENTATION REPORTING & EVALUATION SUPPORT SYSTEM (PIRES)

Progress between February 2003 and January 2004

14. The Organization’s Programme of Work and Budget (PWB) 2004-05 was successfully prepared using PIRES capabilities. This included linkages with Field Programme Management Information System (FPMIS) for the collection of extra-budgetary information.

15. Considerable analytical, consultative and development work was completed in 2003 for modules of the Departmental Programme Managers’ Toolkit (DPMT), but no systems capabilities were released. The solution for Annual Assessment, a key module of the DPMT, has since been combined with the development of the new Programme Implementation Report (PIR), and the prototype has been developed and was well-received.

16. The pilot project to investigate work measurement approaches based on an enhanced Work Measurement Survey (eWMS) was completed and submitted to the Field Programme Committee through the Working Group on the Participation of the Technical Departments in the Field Programme.

17. Collaboration with AFH on integration issues between planning systems and HR systems continued. Functionality to support the collection of data and review of post actions proposals was developed as part of the PWB module, based on AFH specifications.

18. Provisional 2004 allotments were calculated and released in December 2003 using a new PIRES module that provides details of the allotment calculation for reporting and analysis.

19. Integration of PIRES data with the corporate data warehouse started, beginning with the loading (through the Oracle General Ledger) of institutional and working allotment data

Plans for February 2004 – January 2005

20. The PIRES Project Team prepared a proposed work plan for 2004 which was reviewed and endorsed by the PIRES Inter Departmental Working Group (IDWG) in November 2003.

21. The resources available to the project were significantly expanded in June 2003 with an allocation from the arrears. In its submission for this allocation, PBE provided a broad updating of the proposed project outputs and work plan provided in the Project Charter. The revised outputs represent a new performance baseline for the PIRES Project.

22. Within this framework, the following outputs will be completed during 2004:

1. Approved budget level for the PWB 2004-05. In the first quarter of 2004, PIRES will support the revision of the PWB 2004-05 to reflect the resource level approved by the Conference in December 2003.
2. Work planning. A new work planning facility is under development and will be released as soon as the approved budget level scenario is completed. The work planning facility builds upon the three outputs of the PWB and allotment-setting processes: (1) staff resources by programme entity (PE); (2) non-staff resources by PE; and (3) a planning framework at the biennial output (BO) level. From this starting point, the work planning prototype will support allocation of staff and non-staff resources to the BO level and the recording of other BO characteristics (implementation responsibilities, deadlines, etc.).
3. Annual Assessment and PIR 2002-03. Release of the Annual Assessment module and collection of the first set of data, for use in the PIR, will commence in April and be completed by the early May. Key data collected through this process will include biennial and major output delivery status, progress towards achieving outcomes and objectives as defined in the MTP and identification of emerging issues. Since 2002-03 represents the first biennial implementation period in which results-based principles will have been applied throughout the full planning cycle (i.e. MTP, PWB and PIR), the process of implementation reporting and the PIR will have a more results-based focus as requested by FAO Members.
4. Medium-Term Plan 2006-11. The most significant aspect of the MTP 2006-11 preparation process is the intention to bring “non-technical” programmes into the New Programme Model. This has only limited implications on PIRES systems development but quite significant impact on the divisions involved as well as on the PBE staff needed to support the process. In general, the intention is to build on the substantial progress that was made in the last MTP in terms of the quality of programme formulation. There may also be opportunities to improve and streamline the Organization’s overall planning processes.
5. Corporate Budget Monitoring and Forecasting. The Departmental Toolkit Subgroup of the PIRES IDWG is completing a major revision of its analysis of role-based requirements for RP budget monitoring and forecasting, as originally formulated by PBE and AFF. Concurrently, quite significant analyses have been undertaken by the Field Programme Committee (FPC) and it can be assumed that the policy framework for FP planning and monitoring, which will emerge over the coming months, will also have implications for PIRES and related systems such as the enhanced Work Measurement Survey (eWMS) and the Budget Management Module (eBMM). Given the complexity of the integration and other issues, it is unlikely that any systems development work will begin in this area within the planning period. Instead, the present analytical work will concentrate on extending and clarifying the functional model.
6. Regular Programme/Field Programme (RP/FP) Interactions. There is a growing recognition of the need for better integration of RP and FP data and, in some cases, business processes. In particular, there is a perception that country strategies need to be integrated into corporate planning systems such as PIRES although the practicality of doing so needs more analysis. Some experience was gained in integration challenges during the collection of extra-budgetary data for the PWB 2004-05 through a one way integration point from FPMIS to PIRES. The requirements for a fully integrated budget monitoring and forecasting system are considerably more complex and require two-way integration (FPMIS-PIRES-FPMIS). Such efforts will need to be supported by the appropriate management structures.
7. Integration with Oracle HRMS. Based on discussions with the HRMS Project Manager, it is anticipated that analytical inputs and the exploration of the various integration points between PIRES and the HRMS will begin in 1Q04 and increase steadily thereafter. Three major integration points have already been identified: HR Planning, Post Management and Performance Management.

Resource Utilization

23. The resources from the arrears have permitted the PIRES Project to stabilize its integrated team structure for 2004-05. The utilization of the arrears and RP resources is foreseen as follows:

Issues and Comments

24. An important lesson being learned is that those aspects of PIRES, which have been most easily and successfully developed and implemented, are those which did not require major integration with other systems. Future work on modules, which by their nature rely on integration between systems (e.g. the Corporate Budget Monitoring and Forecasting, the DPMT, RP/FP Interactions, the PIRES/Oracle HRMS interfaces), will need to put more weight on the organizational structures in place to manage corporate systems development.

III. ORACLE HUMAN RESOURCES MANAGEMENT SYSTEM (HRMS)

Progress between February 2003 and January 2004

25. During the period from February 2003 to January 2004 the HRMS project staffing issues highlighted in the previous report were successfully addressed by the implementation of a new staffing policy for the project. Project posts were established in April 2003 and filled from September 2003 onwards.

26. The recruitment process, although fast compared to the organization average, has introduced a six-month delay in the project timetable, and therefore progress has been slower than anticipated in the last report. The new target date for implementation is end of 2006.

27. The project is built around three phases:

• Phase 1 - Business Requirements and improvements – fully document current business processes and agree on areas for improvement to these current processes. Undertake a Gap Analysis to map in detail the Oracle package functionality to the improved FAO business processes;
• Phase 2 - Design and Development – configure the Oracle package to meet the FAO business needs, undertaking alternative measures where the Oracle system cannot fully support the improved FAO business processes
• Phase 3 - Testing and Preparation for Implementation – fully test the new system, convert data from the current systems and undertake staff training in preparation for system introduction.

28. Phase I is still in progress and is planned to be completed in the second half of 2004. The documentation of current Human Resource processes has been completed for the following areas:

• Appointment and Entitlements Administration
• Recruitment
• Staff Development
• Performance Management
• Post Management

and is almost complete for Payroll.

And work has started for

• HR planning
• Policies and Procedures

29. A contract has been signed for high level external assistance to support the identification of areas for streamlining current HR processes and procedures.

30. The HRMS system scope will be defined in detail following the Gap Analysis. At this point the degree of fit of the Oracle software to the updated FAO requirements will be ascertained and solutions for the resolution of functional gaps identified.

Plans for February 2004 – January 2005

31. The documentation of the current processes and the identification of process improvements are planned to be completed by the end of 2004. The gap analysis will start in the last quarter of the year.

32. Recruitment to project posts will be completed no later than the third quarter of 2004.

33. As prescribed by the PRINCE2 methodology adopted for the project a contract for Quality Assurance services will be issued and the first of a series of regular quality review reports will be produced by the external contractor towards the end of 2004.

34. A User Communication plan has been prepared and a User Group established. The plan includes periodic meetings of the User Group, with involvement of its members in key project activities, participation in Business Improvements workshops and formulation of recommendations for change, regular project bulletins, videoconferences with Regional Offices, regular contacts with other field offices, a project website, participation of the users in the Conference Room Pilot and in the user acceptance activities.

Resource Utilization

35. The cost of the project in the biennium 2002-2003 was US$1 443 000 of which US$286 000 was funded from arrears. While a definitive estimate will not be available until completion of Phase I and, in particualr, the Gap Analysis, a new project cost estimate has been prepared totalling US$19 000 000 to cover the remainder of the project (2004-06). This represents a reduction of about US$1 700 000 compared to the previous estimate, contained in the progress report FC 102/27.

36. The breakdown of the available resources is as follows:

The current forecast spend for the project in 2005 is US$8 200 000, while the estimate shows US$9 004 000 available to commit before the end of the biennium under the conditions of Conference Resolution 6/2001. This would leave a balance of US$800 000 on the arrears allotment for the HRMS project.

Issues and comments

37. According to the Conference resolution 6/2001 it was planned that the project would be funded from arrears. Due to the reduced level of arrears available to the project and based on the new project cost estimate there is a potential shortfall of approximately US$6 100 000. The project is an essential element of the FAO Human Resources Management Reform, for which the Finance and Programme committees have recommended adequate funding is made available, as also noted by the Council in November 2003. It will therefore be necessary to identify alternative sources of funds for the project once the definitive costs estimates can be made available.

38. Options for further cost reduction have been identified and will be analysed in detail following the Gap Analysis to quantify cost savings. Primary options currently being considered are training-of-trainers and execution of some of the system development tasks from a lower cost geographic location.

39. Due to the delays in the project it will not be possible to fully deliver the arrears funded portion of the project by the end of the 2004-2005 biennium. A mechanism to carry over the unspent balance into 2006 therefore needs to be devised.