NEW MANAGEMENT AND MONITORING INSTRUMENTS. OUTLINE Source: Item proposed by the Director-General.

Transcription

1 General Conference Thirtieth Session, Paris C 30 C/60 30 September 1999 Original: English Item 9.14 of the provisional agenda NEW MANAGEMENT AND MONITORING INSTRUMENTS OUTLINE Source: Item proposed by the Director-General. Background: UNESCO is involved in many future-oriented projects and activities, and it operates in an environment where speed, transparency and accountability are essential. The Organization s management procedures and the systems that support them, however, are less and less able to respond to these requirements. The existing procedures are built around obsolete and inflexible computer systems which are more than 25 years old and which act as impediments to change. The Director-General, therefore, proposes the introduction of new management and monitoring instruments. Purpose: This document provides further information concerning the new management and monitoring instruments proposed in paragraphs 13303B and 14403B of document 30 C/5. It also proposes that a special account be set up to group all the income and expenditure relating to the projects. Decision required: paragraph On the eve of a new millennium, UNESCO is increasingly involved in future-oriented subjects such as information highways, the human genome and education for the twenty-first century. The Organization, with its network of field offices, works with National Commissions, governments, universities, industry and other partners around the world to explore the challenges of the years to come. New modalities of action such as UNESCO Chairs and the Clearing House have been developed to meet changing needs. With these changes have come new requirements for speed, transparency, accountability and information

2 30 C/60 - page 2 for management and oversight. Unfortunately, the existing management procedures and the obsolete systems which support them are not capable of responding to these new requirements and it is necessary to replace the outdated computer hardware, software and administrative procedures with new management and monitoring instruments. 2. In the framework of the Information Resources Development Plan ( ) many information technology innovations and improvements were made, notably in improving access to information and in communication. Achievements included the UNESCO Internet and Intranet, electronic mail, computer networks and widespread use of microcomputers. A number of new computer applications were developed, but the basic management support systems developed in the early 1970s were not replaced because of a lack of resources. These so-called legacy systems (finance, budget, human resources management and payroll) are difficult and expensive to modify because of their outdated technology, and continued changes over more than 25 years have rendered the systems complex, fragile, slow and inefficient by modern standards. Thus these systems have become an impediment to change and an obstacle to improving the overall management of the Organization. Changes already proposed to improve efficiency and eliminate duplicated effort simply cannot be made due to the complexity of the systems and the lack of available human resources. In addition, the functioning of these systems relies on a few key staff members, which places the Organization in a highly vulnerable position. In fact, there is a growing risk of a major system failure if the systems remain as they are. The need to strengthen or replace these fragile systems has been cited several times by the External Auditor in reports to the governing bodies and to the Director-General. 3. The Information Technology Master Plan, developed in 1997, recognized the seriousness of UNESCO s problems, including those mentioned above, and proposed a series of projects to overcome them. Two of the projects concerned replacing the systems for finance and budget and for human resources management and payroll. As each of these projects is an immense task requiring careful planning and considerable financial and human resources, only the preparatory phase for the finance and budget project was planned for Many sister organizations within the United Nations system have found themselves in a situation similar to that of UNESCO. Their legacy computer systems have not been capable of meeting their current and future needs. Some of these organizations (UNICEF, FAO, ITU, WFP and IFAD are recent examples) have decided to replace their systems with integrated management software packages available in the marketplace. UNESCO has closely followed the progress of these organizations, and the Director-General has decided to propose a similar solution for UNESCO. 5. Integrated management software packages (sometimes called Enterprise Resource Planning, or ERP, packages) have been developed by several major software companies. They are used by many types of organizations, including those in the public sector, from the very largest transnational corporations to companies or entities employing less than 1,000 people. The packages employ best practices used in both the public and private sector, and by adopting the packages an organization has the possibility to improve and modernize its own management and administrative practices. Typically these packages contain modules which can be customized for an organization by using parameters or by doing specific development (that is, computer programming) for processes not found in the package. All of the modules of these packages store data in a central database, thereby greatly facilitating the retrieval and analysis of information emanating from different sources.

3 30 C/60 - page 3 6. Once installed, an integrated package becomes the administrative backbone of an organization. Users initiate administrative transactions (such as hiring a staff member, establishing a contract or ordering equipment) through their own computer workstations and the system validates them (for example, ensuring that the user has the right to initiate such a transaction or verifying that funds are available in the specified budget) and sends the transaction electronically to the next person in the processing chain for validation or action. All information about what has happened during the processing of the transaction is retained in the system which updates all the necessary files in the database automatically. The result of using such a package is a reduction in the time needed by staff to process a transaction, a decrease in the elapsed time for the process, and the assurance that all accounting and other administrative information is automatically, immediately and correctly recorded. Processes will be simplified and accelerated, which should improve the reactivity of the Organization. 7. Even more important than the administrative benefits, an integrated system will provide a modern instrument for management and monitoring. Financial data will be available immediately after it is entered, not several weeks later. Information from the results-based programming and budgeting system will be closely integrated with the financial information to provide comprehensive, up-to-date information on all aspects of programme execution. Standard reports will be available, but other tools will permit ad hoc queries and reports to be obtained at any level of detail at any time. The improvements in the quality of information available will lead to significant improvements in management and oversight, including the following: more efficient use of programme funds will be possible due to the availability in real time of accurate expenditure information; the combination of financial and results-oriented information will permit the effectiveness of activities or modalities of action to be evaluated; treasury management and forecasts will improve since more current information will be available; better monitoring of key expenditure elements (travel, consultants, hospitality, documentation, purchasing, etc.) will be possible; accountability will be strengthened because precise data will be available for performance evaluation of units, field offices and individual staff members; easily available and up-to-date information on projects will facilitate reporting to donors; questions from Member States and governing bodies will be handled faster and with less staff effort; and staff time spent on administrative tasks will be reduced, freeing staff for programmerelated work. 8. These systems provide tools to ensure that only authorized users have access to information as well as tools to ensure the security of the database. They also relieve an organization of the continuing need to make the system evolve to keep up with technology or other changes since the software supplier will periodically release new versions of the package

4 30 C/60 - page 4 which include updates needed to take advantage of new technological advances. These features make such packages less expensive to maintain. 9. Since the rules and procedures of most organizations are complex, and this is particularly true for UNESCO, a great deal of detailed analysis and implementation work are required to ensure that the most suitable software is chosen and correctly installed. User training and motivation are extremely important since the working methods of the entire organization will be profoundly changed. In fact, the overall change management process, which includes communication and helping personnel with their natural apprehension at the change, is frequently overlooked in projects like these, often with serious negative results. Adequate funds for communication, training and motivation will be included in the project budgets. 10. Taking into account the complexity of the undertaking, it was decided to maintain two separate projects. The first project would be the implementation of a package for finance and budget, and subject to the availability of funds the project would be undertaken during the period , with a target date of 1 January 2002 for becoming operational. The second project would consist of implementing the modules for human resources management and payroll during the period with a target operational date of 1 January If adequate resources (both human and financial) could be found, the second project could overlap with the first for earlier deployment. There would be savings if the two projects could be implemented at the same time. 11. The procedure for introducing an integrated package at UNESCO will be similar to that used in other United Nations organizations. The first step, which has already been completed, was a feasibility study in which the overall scope of the project was defined, the required resources were estimated and a time frame was proposed. Different packages for the finance and budget project were examined and a short list of four was selected for further consideration, including the Integrated Management Information System (IMIS) developed by the United Nations. The next step, already under way, comprises the selection of the budget and finance package best suited for UNESCO and an analysis of the gap between UNESCO s requirements and the functions provided by the package. After the gap analysis is completed and the work required to fill the gaps is known, a more refined cost estimate will be made and an implementation plan developed. The plan will indicate the resources required, the sequence and content of various steps and a proposed implementation schedule. Up-to-date information will be presented at the 30th session of the General Conference. 12. The implementation of each project will be performed by project teams, made up of UNESCO staff and experts from a consulting firm, which will implement the projects under the control of a Steering Committee of high-level managers. Since the primary users of the new system will be the programme sectors, staff members on the teams will include those from administrative services in the programme sectors and the central services. This participation will ensure that the system developed is acceptable to the end users. The teams will also be in a position to take advantage of the experience of other organizations in the United Nations system and in other public sector organizations. In this way mistakes can be avoided and success stories can be used as examples. Cost and financing 13. Projects of this nature require an infrastructure (computer hardware and software) plus a combination of internal and external expertise. Given the investments already made in the

5 30 C/60 - page 5 context of the Information Resources Development Plan, computer networks and workstations are in most cases already available. The cost of additional hardware and software specifically used for both projects is estimated at $2.4 million. Other directly related costs amount to $7.05 million for the finance and budget project, primarily for outside expertise in implementing the chosen software package. These experts will provide methodological support, analysis, programming, parameterization and support for change management. UNESCO will be expected to provide a considerable amount of staff time during the same period. Since it will not be possible to liberate an adequate number of staff to work on these projects during their two-year duration, temporary replacement staff in the various units will be required at an estimated cost of $1.25 million for each project. The funds to implement the finance and budget project, therefore, would be some $10.7 million (including infrastructure used for both projects) and for the human resources and payroll project, $8.3 million. 14. In the Draft Programme and Budget for (30 C/5) the budget of the Bureau of Documentation, Informatics Services and Telecommunications includes, under Scenario A, a total of $3.2 million for all the activities of the Information Technology Master Plan for the biennium. The Director-General considers that of this amount he could propose at least $2.4 million for this project, with an additional $2.7 million included under Scenario B. (This latter amount includes $2.5 million from paragraph 14403B and $192,800 from paragraph 13303B.) In addition, some other funds earmarked for specific computer developments made unnecessary by the new developments might also become available. Even so, it is clear that the regular programme alone will not be able to fund the first part of this development in the next biennium. 15. For this reason, the Director-General proposes to open a Special Account to receive voluntary contributions from Member States and others, and into which would be transferred any available extrabudgetary funds as well as the regular programme funds approved by the General Conference. The Special Account would therefore provide a transparent accounting of the development of the projects by grouping together all the income and expenditure relating to them. The World Food Programme adopted this procedure for their major computer development budgeted at $37 million; at 31 December 1998 they had some $20 million available of which $8 million came from their budget and the balance from voluntary contributions. 16. The success of satisfactorily implementing the new management and monitoring instruments will therefore depend on the commitment of UNESCO s senior management and donors, including Member States. Proposed resolution 17. The General Conference may wish to adopt a resolution along the following lines: The General Conference, Having examined document 30 C/60, Recognizes the need to provide UNESCO with modern management and monitoring instruments, as well as the need to replace the legacy computer systems, especially those for budget, finance, human resource management and payroll, in order to produce needed efficiency gains, improve services to the governing bodies, Member States and other UNESCO partners, and improve the quality of information available to management and the governing bodies;

6 30 C/60 - page 6 Decides to replace the existing systems by integrated management software packages during the financial periods and ; Invites the Director-General to make use of the experience gained in other international organizations; Takes note that the overall cost of these replacement systems is estimated to be in the range of $20 million; Invites the Director-General to use other available extrabudgetary funds to help cover the shortfall; Welcomes the proposal of the Director-General to open a Special Account to group all the income and expenditure relating to the projects and requests that he submit its financial regulations to the Executive Board at its 160th session; Approves the use of up to $ million from the regular budget for this purpose during and authorizes the transfer of this amount to the Special Account; Invites Member States to make voluntary contributions in order to enable UNESCO to implement these projects with the least possible delay and in the most efficient way; Further invites the Director-General when preparing the Draft Programme and Budget for (31 C/5) to earmark the funds necessary to complete the projects; Requests the Director-General to report regularly on the status of the project to the Executive Board as well as to the General Conference at its 31st session.

7 General Conference Thirtieth Session, Paris C 30 C/60 Add. 4 October 1999 Original: English Item 9.14 of the provisional agenda NEW MANAGEMENT AND MONITORING INSTRUMENTS ADDENDUM Paragraph 11 of the main document states that up-to-date information on the selection of an integrated management software package will be presented at the 30th session of the General Conference. The selection step has been completed as well as an analysis of the gap between UNESCO requirements and the functions provided by the chosen package. This addendum contains a letter from the consulting company retained to assist UNESCO in the selection and gap analysis phase. The letter summarizes the results of their study.

8 30 C/60 Add. UNESCO 7, Place de Fontenoy Paris 07 SP For the attention of Mr Matsui Paris, 28 September 1999 Object: PricewaterhouseCoopers Report Summary Dear Mr Matsui, I am delighted to confirm that we have completed our study (Phase 1 of the financebudget project) and the results have been presented and validated by UNESCO management at the meeting on 17 and 24 September The final deliverable taking all remarks into account will be sent to UNESCO later this week. It will include a management summary (in both French and English) and a detailed report (in French). I have set out below the key findings from our study. UNESCO needs to renew gradually its information systems Over the last 25 years, UNESCO s information systems have been developed in response to needs as they arose. The systems work, but the overall architecture becomes increasingly complex, based on outdated technologies; the systems lack the flexibility to meet changing users requirements; maintenance is becoming harder and more expensive. An Information System Master Plan Study carried out for UNESCO in 1997 identified the major projects required. However, given the size of these projects and resources constraints, UNESCO decided upon a modular and progressive approach, starting with the budget and finance system to be carried out during the period if financial resources are available. (The Human Resources and Payroll System is to be replaced during , subject to the availability of resources.) Implementation of other systems (programme equipment purchasing, building maintenance, marketing, CLD, UPO,...) has not yet been decided. The selection of an integrated software package emerged as the best solution to meet user requirements and technical constraints Further to this overall objective, PricewaterhouseCoopers was retained to help UNESCO in selecting the package to be used to support the budget and finance applications. In addition, we were requested to define the appropriate project organization and estimate the costs and other resources needed for the successful implementation of the package. The work was carried out by a team made up of UNESCO staff and our consultants. The first step of the process was the selection of the most appropriate software package, with the final choice being narrowed down to three commercial packages and the Integrated Management Information System (IMIS) developed by the United Nations. The selection criteria included the lowest overall cost of implementation and the best fit for UNESCO s

9 30 C/60 Add. - page 2 needs. After an evaluation of their ability to accommodate UNESCO s critical requirements, we considered with UNESCO that the package most suited was SAP because, of the four, it was the best fit and as a result required the least modification. The same package is also being installed at other United Nations system agencies. IMIS, although available from the United Nations without charge, was not selected for technological reasons and due to high adaptation and maintenance costs. In addition, there were several major functional gaps. After selecting the package, the team analysed the gaps between UNESCO s needs and the facilities offered by the selected package. These gaps will determine the complexity and therefore the cost and time required for implementing the package. This detailed analysis concluded that the standard features of the package fit most requirements. The few gaps identified can be bridged with pragmatic and lost-cost turnaround solutions. It is recommended that the software package used for heavy through-put transaction processing be complemented by a simplified application based on Intranet/Workflow state-ofthe-art technologies in order to: Improve control and efficiency of procedures (workflow features); Facilitate the use of applications (user friendliness, intuitive user interface). Finally, we estimated the time and resources needed to implement the package for budget and finance. The new software implementation provides a unique opportunity to improve the UNESCO administrative processes Implementation of a new system is an opportunity to rethink the ways of working and control mechanisms. SAP embeds in its standard features process best practices developed by its users. Simplifying current business processes while implementing the new software will maximize the benefits for UNESCO. In this respect, we recommend that UNESCO s administrative processes be studied and simplified before the implementation of the new system, or at the very least as a second best during the implementation. Only in this way would significant improvements in work methods and related savings be accomplished. The project implies significant change Recognizing the scope of the project and the implied change required on working habits, such system implementation can only succeed with the committed sponsorship of top management. A dedicated team of UNESCO staff members with consultant support will be required for the duration of the development together with extensive and timely change management to involve, train and motivate staff (users of the future system). We have designed several change management scenarios and actions to secure ownership of the new solution by UNESCO staff and management teams. Resources required for the project have been identified The workload for the project in work days is estimated as follows:

10 30 C/60 Add. - page 3 Base Scenario Optional Scenario Total Scenario SAP implementation 7,740-7,740 Complementary application Change management ,430 Process simplification Total 9,170 1,070 10,240 Based on a 60 per cent external/40 percent internal balance, the team required (not including project office and clerical assistance) would be the equivalent of 8-9 UNESCO staff full time and consultant staff full time for the duration of the project. Our estimate of the total cost of the project is: Base Scenario $ 000s Optional Scenario $ 000s Total Scenario $ 000s Software and hardware infrastructure 2,380-2,380 SAP implementation 5,560-5,560 Complementary application Change management ,160 Process simplification Subtotal outside expertise 7,040 1,080 8,120 Temporary replacement staff costs 1, ,480 Total 10,670 1,310 11,980 The overall project cost is therefore $10.7 to $12 million, with $1.2 to $1.5 million internal costs and $9.5 to $10.5 million external costs. The project would have to begin by April 2000 if the target date of January 2002 is to be met, and considerable preparation will be required before then. The project is under control The workload/cost estimates are based on clearly stated assumptions (scope, SAP modules, interfaces,...). The sizing model used makes it possible to understand the consequences (in terms of costs/time frame) of changing assumptions. The remaining project risks have been identified and risk mitigation actions have been recommended. Critical success factors are: Effective support from the Director-General and top management; Rapid decision-making process; Strong in-house project leadership, representing the principal functional users of the project; Commitment of key users to the project.

11 30 C/60 Add. - page 4 The project will deliver significant benefits to UNESCO The benefits UNESCO will derive from a new state-of-the-art software solution implemented with simplified business processes include: Transparency on roles and organization; Effectiveness of controls; increased accountability; Efficiency and optimization of processes; reduced operating costs; Integrity of information; timeliness of information; easier access to financial information; Facilitation of decentralization process; Reduced administrative paperwork; quicker decisions; Resources focused on programme strategy, design and implementation and not on administrative tasks. Looking forward, we understand UNESCO faces a difficult decision about how to proceed, especially given the high capital cost of the project and given human resource constraints. We believe, however, UNESCO faces considerable risks in remaining with its existing systems. And benefits will justify the required efforts. I am confident that the Phase 1 finding provides UNESCO with the key elements that will shape your finance-budget project and will enable you to manage it successfully. Yours sincerely, F. Lanquetot (signed) Partner PricewaterhouseCoopers Management Consultants

12 General Conference Thirtieth Session, Paris C 30 C/60 Add.2 27 October 1999 Original: English Item 9.14 of the provisional agenda NEW MANAGEMENT AND MONITORING INSTRUMENTS ADDENDUM 2 OUTLINE Source: Item proposed by the Director-General. Background: The Director-General submitted documents 157 EX/46 and Addendum, concerning the implementation of new management and monitoring instruments and the means of financing the corresponding projects within the framework of document 30 C/5. Purpose: To transmit to the General Conference, for its consideration, the decision adopted by the Executive Board at its 157th session (157 EX/Decision 4.1). The Executive Board examined documents 157 EX/46 and Addendum presented by the Director-General and adopted a decision thereon (157 EX/Decision 4.1, Part III) which reads as follows: The Executive Board, 1. Having examined document 157 EX/46 and Add., 2. Recognizes the need to provide UNESCO with modern management and monitoring instruments, as well as the need to replace the legacy computer systems, especially those for budget, finance, human resource management and payroll, in order to produce needed efficiency gains, improve services to the governing bodies, Member States and other UNESCO partners, and improve the quality of information available to management and the governing bodies;

13 30 C/60 Add.2 - page 2 3. Takes note that the overall cost of these replacement systems is estimated to be in the range of $19 million, of which some $10.7 million relates to Finance and Budget with implementation foreseen for and some $8.3 million relates to Human Resources and Payroll with implementation foreseen for ; 4. Welcomes the proposal of the Director-General to open a Special Account to group all the income and expenditure relating to the projects and requests that he submit its financial regulations to the Executive Board at its 160th session; 5. Recommends to the General Conference to authorize that any amount from the regular budget foreseen for this purpose in document 30 C/5 be transferred into the aforesaid Special Account; 6. Invites Member States to make voluntary contributions in order to enable UNESCO to implement these projects with the least possible delay and in the most efficient way; 7. Further invites the Director-General to use available extrabudgetary funds to help cover the shortfall and not to start the project unless adequate funding is available; 8. Requests the Director-General to report regularly on the status of the project to the Executive Board as well as to the General Conference at its 31st session.