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Integrated Financial Management System
Finance Department
India

The Problem

IFMS (Integrated Financial Management System) is a unique initiative of the Finance Department; Government of Gujarat for improving the efficiency of the public financial resources management and providing citizen centric services in a reliable and transparent manner.

Before IFMS, there were multiple legacy systems implemented in different organizations without any automated mechanism for sharing of information between these systems. Many of the remote offices were not computerized due to which the data exchange was manual resulting into time consuming process of consolidation of data. It is very essential for the Finance Department to effectively manage the Budget, Expenditure & Revenue and to provide required support to the other Departments of the State Government. The major issues faced by the Finance Department were:

 Inability to monitor and control budget distribution & expenditure
 Significant time and efforts required for processing and tracking expenditure & receipt due to the existence of computerization in silos and lack of integrated approach
 Long and tedious process for pension payment and pay fixation/salary payment
 Data being maintained in multiple application systems and no decision support system
 Lack of integration with external agencies like Banks, Reserve Bank of India, Accountant General Office which affected the cash management of the state government, increased efforts for data entry and reconciliation and increased the probability of error.

All these issues were faced due to following problems which were proving to be major bottlenecks in improving the operational efficiency of the organization as well as employees,
 Real-time availability of state financial position is of utmost importance for effective fund utilization which is not currently available
 There is possibility of fraud, misclassification of transaction
 There is time lag between passing of Govt. Orders and its implementation in treasuries, sub-treasuries.
 Due to lack of integrated system, it is not possible to monitor the fiscal performance at the state level in terms of monitoring Budget Release, Expenditure against budget release with details up to object head level.
 There is lot of delay in finalizing the accounts
 It is difficult to implement proper verification and control over the expenditure due to lack of proper and timely information.
 There is delay in accounting of state receipts resulting into cash imbalances.
 Due to lack of linkages with Annual Development Plan, difficult to monitor progress of the schemes and comparing actual expenditure with targets achieved.
 There is no interlinking between Finance Department (Parent Department) and all its sub-ordinate offices due to which tracking and consolidation of data is huge task which may take at least 3-4 days.
 Due to decentralized system, the effort and cost of maintenance of the software solution at remote offices in addition to existing district offices adds up to significant amount.
 Data is transmitted to Banks daily twice in form of physical hard copies. This consumes time and runs risk of damage to physical papers and loss of information.
 Data from Treasury to AG Office is sent in form of vouchers / challans and other documents through physical delivery mechanisms.
 Pension cases are scrutinized manually based on case papers and service book.

Solution and Key Benefits

 What is the initiative about? (the solution)
Key Benefits of the project are:


Nature of Service Prior to IFMS After IFMS
Bill Processing 7 days 1 day
Pension Payment 15 days 1 days
Tax Payment 2-3 days Instantaneous
View State Financial Position 3-4 days Instantaneous
Pay Fixation 5-6 days 1 day


 The solution is built on latest/non proprietary technology and based on open standards which help in easy data exchanges with legacy system.
 Real time financial position of state finances by On-line updation and consolidation of Receipts & Payments.
 Effective and efficient monitoring and control of state revenue and expenditure
o By efficient management of funds
o By monitoring and controlling government liabilities
o By monitoring ways and means position
 Online Budget publication generation
 Single Treasury solution which covers all the sub-treasuries & treasuries resulting into a transparent and consistent view of all the treasuries across the state.
 Consolidation and online generation of expenditure and receipt accounts at unit office level as well as state level
 Easy analysis / prioritization of bills by amount and type of bill.
 Decision Support system and exhaustive MIS for all levels of organization
 One time data capture/entry at source only
 Rationalization of financial resources.
 Robust history / tracking of payment claim (bills).
 Effective and improved delivery of services to citizens.
 Multiple delivery channels (like internet, intranet, SMS, email) capable solution.
 Solution capable to generate Reminder/ Notification after specified event/milestone through SMS, email.
 Context sensitive helps and guided workflows require little or no training to new employees.
 Open technical architecture giving better performance, reliability, scalability, security, modularity and adaptability.
 Layered security control and services covering identification, authentication, authorization, administration and audit.
 Comprehensive bi-lingual (Unicode based) web-based solution.
 Open standards/Component based solution which can work on any platform.
 Facility of PKI enablement for enhanced security

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The solution was conceptualized by Finance Department, Government of Gujarat. Directorate of Accounts and Treasury (DAT), one of the sub-ordinate offices of Finance Department was given the task of implementation of this project. [DAT was entrusted with the responsibility of managing the operations of all District and Sub-district level offices that were involved in executing the function of disbursements and receipts.]

Government of Gujarat selected M/s TCS for the implementation of this project after following a competitive bidding procedure. Based on the concepts, M/s TCS designed, developed and implemented the IFMS solution in various offices of Finance Department across the state. M/s TCS is also responsible for providing training to more than 6200 personnel across departments and providing hand-holding support at various offices for 6 months as part of the Capacity Planning initiative. The initiative ensured continuous positive participation of all levels of employees of the organization. The stakeholder-wise contribution to the design and/or implementations of the initiative is as mentioned below:

 Senior Management (Civil Servants/Principal Secretaries/Secretaries to Govt.)
o Conceptualizing the solution
o Defining the vision and objectives of the department and how system should enable the department to achieve their vision and objectives.
o Policy level guidelines and Strategic direction to team
o Defining the components of dashboard for monitoring financial position of state

 Middle Management (Directors, Head of the Offices)
o Monitoring the progress of project on daily basis to ensure that all implementation issues are resolved in time
o Ensure that solution meets the requirements of various stakeholders
o Motivating the operational users
o Capacity Planning and addressing Change Management issues
o Continuous interaction with implementing agency M/s TCS so that project expectations are clear and all deliverables are satisfying the requirements

 Operational Users (Branch level users)
o Testing of the system so that all their functional requirements are met
o Provide critical inputs from the usability point of view so that system is easy to use
o Knowledge transfer to implementing agency
o Active participate in User Acceptance Testing so that solution meets functional requirements

 Citizens
o Valuable feedback regarding the problems faced in receiving the Pension Payment and tracking the status of their case in multiple offices
o Sharing of their experiences during the pilot run of the solution in which the payment was made electronically in their account addressing one of their pain areas related to Pension Payment
 Business Community
o Expressing their pain areas in the process of payment of government dues like taxes so that system can address the same in positive manner
o Testing of the online payment facility and giving valuable feedback to improve the process and make it more user friendly
o Designing the system for tracking of the transaction and online receipt of various alert/notifications
 M/s Tata Consultancy Services Ltd
o Requirement Gathering and Gap analysis, Design, Development and implementation of system as per user requirements
o Aligning the expectation of users with the business goals so that organization achieves their vision and objective
o Arranging brainstorming sessions with all stakeholders to get their valuable feedback regarding functionality, usability, user-friendliness and operational convenience

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
Objectives
The major objectives of the initiative were:

 Real-time monitoring and control of state revenue and expenditure
 Effectively manage the state finances so that funds are optimally utilized for various citizen centric projects
 Effective and Improved delivery of services related to pension processing, provident fund accounting, loans & advances
 Managing the total Budget process and timely release of grants/funds to Govt. departments/organizations
 Active communication with Banks/RBI and Accountant General (AG) office for finalization of state accounts, payments & receipt and managing grants/funds received from central govt.
 To help Finance Department to improve upon their existing processes for effective financial control through re-engineering of processes.

Strategies
Finance Department, Government of Gujarat decided to implement Integrated Financial Management System (IFMS) which is an integrated solution for the management of public financial resources. Finance Department adopted a two pronged strategy for smooth implementation of the project covering following two aspects.

 High level IT committee for resolving policy level bottlenecks, guiding the team for achieving the project objectives and overall monitoring of the project
 Operational committee headed by Directorate of Accounts and Treasury for resolving all operational issues, day to day monitoring of the project activities, working closely with TCS team (TCS is the selected partner for IFMS) for addressing all project related issues

Due to the varied skill levels of computers and on different processes at various levels of hierarchy, it is important to have common understanding of the system before implementation. Also, the drive and motivation of the officer heading the particular department would really boost the implementation and ensure that the activities are completed on time and IFMS rollout exercise is faster.

Hence, following strategy for implementation was adopted.

Pilot Implementation
 In view of the complexity of the system, it was decided to implement the complete solution on pilot basis in of the big location where all the functionalities can be tested for user-friendliness, performance, requirements coverage and overall quality of solution.

Capacity Building
 Regular training on various modules of IFMS application is imparted regularly to all stakeholders based on their roles in IFMS usage. Training objectives and contents are defined and customized as per the user’s level in organization hierarchy.

User Feedback
 Selected users were invited for brainstorming sessions and application demonstrations, where the domain specialist share their views and deliberate on various administrative, and operational issues related to the project implementation. This helps in incorporating the right changes and implementing in the right manner.

Hand Holding
 As part of IFMS implementation model, users at all levels are provided hands-on training where they are actually mentored for using the system for their business activity and help them during operational issues. This helps in resolving all initial teething problems and understanding new features. Hand-holding also helps in resolving the change management related issues increasing the sustainability of the project.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
The key development and implementation steps are as mentioned below in a chronological order.

 System Requirement Study
o Study and review the business needs, objectives, business processes of the Finance Dept. and all its sub-ordinate offices
o Recommendations for the re-engineering of the processes
o Defining interfacing requirements with external systems/organizations

 System Design
o Designing System Architecture, System Input/Output Design, Network Design, Data Design and Program Design
o Identification of IT infrastructure requirements with techno-commercial evaluation of technology options

 Application Development and Testing
o Development of the system as per the requirements and design finalized in earlier stages
o Unit level testing/debugging of programs

 Integration and Data Migration
o Integration with existing system
o Migration of the data from legacy system to newly developed system

 User Acceptance Testing
o Testing of the functionalities by end-user based on the requirements finalized
o Module level testing and testing of system as a single integrated unit

 Training and Capacity Building
o Training to more than 6200 officials of Finance Department and all its sub-ordinate offices
o Train the users on Operational and Administrative aspect of the system
o Optimum mix of class-room based and hands-on training for better understanding of the system

 Implementation and Roll-out
o Implementation of the system at pilot location as identified by government
o Incorporate all changes as suggested during pilot location
o Roll-out the system at all locations

 Handholding at User Locations
o Provide hand-holding support at more than 170 locations spread across the state mainly for the following activities.
 Assist the user in their day-to-day activities using IFMS
 Give demo of the applications as per user need
 Educate and train users on features implemented in solution

 Maintenance Support
o Provide Operations and Maintenance support for 48 months
o Maintenance support will mainly cover
 Database Administration Support
 System Administration Support
 User Maintenance and Authorizations
 Back-up management guidelines
 Provide help-desk support

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The major obstacles encountered during the implementation of IFMS were as follows:

 Change Management
o Resistance by government employees in using the new system
o Hesitance to share the knowledge and information
 Migration from Legacy Database
o Legacy data available in multiple legacy systems developed in obsolete technology
o Poor quality of the database with lots of inconsistencies and discrepancies
o The database spread across multiple locations and no standard master database available

 The obstacles were overcome by implementing the following strategy and setting up of proper Project Management organization by Finance Department.

 Overcoming Change Management Issues

 Bottom-up approach was adopted for involving the actual users right from the requirement gathering to final testing of the application

 Brain-storming sessions were organized with the key departmental users for getting their feedback on the system and implementing the necessary changes

 Regular refresher trainings were conducted for uses at all locations along with proper hand-holding support for assisting the user in using the application

 A two level committee was formed for providing the Project Management Support at Secretariat level and at the Directorate level for smooth operation of the project.

o High level IT committee for resolving policy level bottlenecks, guiding the team for achieving the project objectives and overall monitoring of the project
o Operational committee headed by Directorate of Accounts and Treasury for resolving all operational issues, day to day monitoring of the project activities, working closely with TCS team (TCS is the selected partner for IFMS) for addressing all project related issues

 The above structure helped in resolving the Change Management issue and proper communication of the department’s objectives up to remotest location of the department and its sub-ordinate offices.

 Overcoming Data Migration Issues.
o Initially Data Migration strategy was defined in consultation with all the relevant stakeholders
o Data integrity and consistency check was applied on the legacy database to filter the inconsistent data
o All inconsistent data at all locations were corrected based on the correction logic provided by domain experts of government
o After cleaning of legacy data by removing all discrepancies, migration scripts were executed to migrate the legacy data from old system to new system
o Proper checks were applied on the migrated database to check for correctness of the migration process
o After validation of the data, the migrated data was applied on the live system for access by end-user

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The details of the resources utilized are briefly explained below.

 Financial Resources
o The initiative was funded by the state government from their own funds.

 Technical Resources
o The IFMS application was designed developed and implemented by the implementation partner M/s TCS including providing training and maintenance support related to solution.
o The networking between different offices and the central location was provided by the State Wide Area Network set-up by Department of Science and Technology.
o The client side infrastructure at all locations, set-up of LAN (local area network) in all offices and Central Location Infrastructure was provided by the implementation partner M/s TCS on turn-key basis

 Human Resources
o The Head of the Offices in each office was responsible for ensuring the proper implementation and usage of the system in their respective offices.
o All the operational issues was highlighted to the implementation partner and also discussed in the meeting headed by Director, Accounts and Treasuries.
o The Implementation partner M/s TCS was responsible for providing training on IFMS to the employees of Finance Department and its sub-ordinate offices.
o M/s TCS was also responsible for providing onsite person for providing hand-holding support at various offices spread across the state.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
In no more than 500 words, describe how the initiative is being sustained (for example in terms of financial, social and economic, cultural, environmental, institutional and regulatory sustainability). Describe whether the initiative is being replicated or disseminated throughout the public service at the national and/or international levels and/or how it could be replicated.)


IFMS project is a sustainable project on its own. The project has been conceptualized and designed in such way that it will operate in a sustainable way both from the operational aspect and technological aspect. The initiatives taken towards sustainability are as mentioned below:

Financial Sustainability

 IFMS is 100% funded by State Government from their own fund without any external assistance. It is a turn-key project with single implementation partner responsible for application development and supply of necessary IT infrastructure at all project locations. Payment is dependent on the project milestones and NOT any transaction number/volume. Hence, the financial sustainability is taken care of by the implementation model itself.


Operational Sustainability

 Capacity Building- Regular training on various modules of IFMS application is imparted regularly to all stakeholders based on their roles in IFMS usage. Training objectives and contents are defined and customized as per the user’s level in organization hierarchy.

 User Feedback- Selected users are invited for brainstorming sessions and application demonstrations, where the domain specialist share their views and deliberate on various administrative, and operational issues related to the project implementation. This helps in incorporating the right changes and implementing in the right manner.

 Hand Holding– As part of IFMS implementation model, users at all levels are provided hands-on training where they are actually mentored for using the system for their business activity and help them during operational issues. This helps in resolving all initial teething problems and understanding new features. Hand-holding also helps in resolving the change management related issues increasing the sustainability of the project.

 Committee formulation- High powered committee at the secretariat level and Project Execution committee at the Directorate level have been formed. Project Execution committee is involved in overseeing day to day issues and ensuring resolving of all operational issues during project implementation. High powered committee is involved in giving the broad direction to the project and resolving any policy related issues.

Technological Sustainability

 Solution has been developed based on the open standards – J2EE based technology which provides better performance, reliability, security and scalability.

 Also the configuration of IT infrastructure has been designed in such a way that it provides a truly scalable solution catering to large number of users.

Replicability

 The solution has been designed keeping in view the Public Financial Management requirement of the State Governments of India. Hence, the solution can be easily customized for any State Governments of India. It can be replicated in any state governments with minimal effort of application development.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The major outcomes of the project are:

All the district treasuries of the state are now online and Finance Department can see the details of expenditure and receipts online through dashboard with drill down facility. Earlier it used to take lot of time to consolidate the data from multiple locations and presenting in the required format to senior management which is now available on click of a button.

Pension Processing and Payment used to take lot of time as documents used to get scrutinized in one office (Directorate of Pension and Provident Fund) and payment was processed in different office (Treasury Office). Due to these, pensioners have to visit multiple offices and lot of time and efforts were spent in tracking the status of their pension payments. After implementation of IFMS, pension cases are electronically transferred from one office to other reducing the delay and effort of re-entry of pension case in Treasury office. The payment is also processed electronically in Treasury office and it is credit through ECS (Electronic Clearing System) directly in the bank account of pensioners.

For Government, fixation of pay of all the employees is one of the most complexes and time consuming tasks involving multiple levels of entry and verification and decoding the complex pay fixation rules. Through IFMS, finance department was able to complete online pay fixation of more than 470,000 cases and generate Pay Fixation orders electronically.

Through online portal, business community can make online payment of their taxes and receives electronic alerts/notifications about the status of their payment, any new govt. rules/regulation etc.

There is electronic sharing of data with external agencies like Reserve Bank of India (RBI), Agency Banks and Accountant General (AG) office. This resulted into lot of saving of time and effort of reconciliation of payment and receipts and re-entry of data in AG office. Also it reduced the probability of error improving the reliability of the data.

Apart from above, the other major outcomes of the initiatives are:

 Uniform MIS/DSS (Decision Support System)
 Multiple levels of security controls with security services to include identification, authentication, access control, administration and audit.
 Exhaustive and reliable data storage
 Generation of standard and typical reports
 Data to be entered only once and used multiple times thereby elimination of duplication of work
 Increased efficiency – Executives enabled to spend more quality time on main business than on less efficient work.
 Reduced cost & time of service
 Rationalization of resources
 Readily available information with 24 x 7 x 365 access
 Increased coordination and cohesiveness within the organization

Lessons Learned

 Innovative approaches are necessary - which take into account local capabilities for easy acceptability of the solution and covering all the requirements in a unique way
 Data Standardization—Lack of data standardization due to decentralized legacy system posed major challenges in migration. It is of utmost important to have all the data discrepancies removed with the help of government before it is migrated.
 The issue of effective change management has to be addressed early in the project
 Training is one of the key determinants for the success of project which if not taken in right manner may adversely affect the user acceptance
 The selection of Technology should allow for flexibility to address the issue of changing requirements as witnessed in a typical government scenario
 It is essential to have full time functional staff committed by the Government (customer) throughout the project life so that knowledge transfer is on continuous basis and all functional issues related to requirements are addressed in a timely manner

Contact Information

Institution Name:   Finance Department
Institution Type:   Government Department  
Contact Person:   Shri M. M. Srivastava Srivastava
Title:   Government Department  
Telephone/ Fax:   079 - 23220286
Institution's / Project's Website:   079 - 23250610
E-mail:   secfd@gujarat.gov.in  
Address:   Finance Department 4th Block, 5th Floor,
Postal Code:   382010
City:   Gandhinagar
State/Province:   Gujarat
Country:   India

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