Panel offers tips on securing effective financial systems

When developing and implementing new financial management systems, federal managers must be sure to keep big-picture goals in mind, representatives of three consulting companies advised last week.

Managers should stay mindful of the larger objectives they are trying to achieve by installing updated technology, said Greg Pellegrino, the global managing director of the public sector practice at Deloitte, a consulting company with U.S. headquarters in New York. The House Government Reform Subcommittee on Efficiency and Financial Management invited Pellegrino and two other financial advisers to a hearing to discuss the general challenges faced by their government clients.

"The focus within the government too often tends to be on the process rather than the result," Pellegrino said in written testimony. "The emphasis on project management tends to evolve into designing specifications and meeting them, rather than developing solutions and achieving them."

David Halstead, vice president of the Bradson Corp., an Arlington, Va.-based consulting company, made similar observations, noting that "when implementing a new, integrated financial system, there is a tendency to focus on the procurement of the software package, rather than on the total business process."

Broader goals could include meeting the objectives outlined in President Bush's management agenda, Pellegrino testified. In the area of financial management, the agenda asks agencies to strive toward making timely and accurate data available to program managers upon demand. Program managers, in turn, could use this information to make more informed budget decisions.

The majority of federal agencies are having a hard time meeting this management agenda objective, in large part because they are working on technology upgrades that may take years, Office of Management and Budget officials have said. In a fall 2003 report (GAO-03-1062), the General Accounting Office noted that 17 of the 24 major agencies planned on establishing new financial management systems, and that completion could take as long as seven years. An update to that report is due out this fall.

Agency leaders most successful at designing new financial technology typically express interest in the system and dedicate adequate resources toward its design, but let program managers handle implementation details, said Robin Lineberger, senior vice president of the BearingPoint Inc.'s federal services practice. Clients of the practice include the Navy and the Veterans Affairs and Interior departments.

Lineberger suggests three layers of management. Ideally, he said, an executive management tier would "keep the program aimed at strategic goals and . . . stay abreast of federal management agendas and [their] impact on the program." A planning and development tier would "oversee performance of the program at a more tactical level," and a program management tier would concentrate on day-to-day issues.

Chief financial and information officers from across the agency should take part at the planning and development level, Lineberger recommended. Pellegrino also noted that CFOs and CIOs should play a central role in technology implementation, and should be "transformed from systems managers, financial scorekeepers, or czars of compliance to trusted advisers who leverage their perspective across a department's people, processes, technology and mission objectives to . . . ultimately drive performance standards."

Agency leaders should be sure to maintain a strong partnership with software providers, and to devote adequate staff resources, Lineberger and Pellegrino recommended. This approach ensures that agencies develop in-house expertise.

In the private sector, companies often assign one employee per every consultant to work on installing a new system, Pellegrino said. But in government, this ratio could be one federal employee to 15 consultants.

Finally, federal project managers must do everything possible to speed up the process of installing new technology, Pellegrino recommended. Some agencies spend half a year to a year simply procuring the technology, "adding considerably to the overall project time, [and leading to a] corresponding rise in costs for government as well as for private sector consultants and vendors alike," he testified, adding that when projects run longer than 18 months, technology is often obsolete by the time installation is complete.