Vanuatu's new financial management system

Penny Gregory

A new financial management system across Vanuatu's public service will speed up payments and improve financial reporting. The system is part of an ongoing plan by the governments of Australia and Vanuatu to improve the efficiency of government, as well as making it more transparent and accountable.

N'guyen and Toner implement Smartstream.

The new system has earned some high praise. It has been described as amongst the best in the South Pacific by the International Monetary Fund and the Pacific Financial Technical Assistance Centre.

A recent report from the European Union described its tight cash disbursement control as a significant contributor to macroeconomic stability.

Vanuatu may be a small country-its population is around 200,000-but it still has a complex set-up. Manager of the new system, Valentine N'Guyen estimates that every year they process over 30,000 payments and issue 20,000 invoices to customers. The fortnightly payroll covers over 4500 employees.

Among its many benefits is that local staff can manage this system on a day-to-day basis.
Feedback from users of the system has been very positive: When an independent survey asked users if they would like to go back to their old legacy system, none said yes.

Budget Manager for the Government of Vanuatu, Benjamin Shing, points to the flexible way the new system can extract data. This enables him to easily produce complex financial reports to meet international standards such as the IMF Government Financial Statistics formats.

The implementation of the system is a clear result of the productive and cooperative working relationship between the governments of Vanuatu and Australia. Approximately A$2 million has been invested in the system by the two governments as part of a $12 million, five-year development project.

Design and implementation has taken almost five years of work within the Vanuatu Ministry of Finance and Economic Management. Throughout that time, the project has been supervised by PDP Australia Pty Ltd, the managing contractors for the AusAID-funded development project in the ministry.

SmartStream system was selected from over 30 vendors after a detailed request for information was issued in late 1999.

SmartStream was selected as the best fit for Vanuatu and implementation started in January 2001, with the main modules going live 12 months later.

SmartStream is developed and supplied by Geac Computers Ltd, a global enterprise software company. It is used by more than 1000 mid-sized entities throughout the world.

Within the government of Vanuatu, it caters for financial management, payroll, purchasing, payments, billing, receivables, human resource management and budget control for all Departments.

About 300 government employees in 14 ministries use the system on a daily basis. A government-wide area network has been developed so that all users can access the system from their desks in over 70 locations in various islands throughout the country.

Implementation of an Enterprise Resource Planning System for a whole government is a complex process and there are many examples of failed projects. So why has this one been so successful?

I asked the project manager for the implementation, Brendan Toner from PDP Australia Pty Ltd, and Valentine N'Guyen, the System Manager, what they thought contributed most to its success.

Firstly, they stressed that the whole process was driven by accountants, not by technical IT staff. Accountants with systems expertise developed the functional specifications, ran the selection process, implementation and ongoing management of the system.

Another key to its success was its simplicity. A decision was made from the start of the process to keep changes to source code to a minimum. Customising a system to meet your specific requirements is expensive, it makes the system more complicated and harder to support and makes upgrading in the future difficult. SmartStream was able to meet all of the government's high priority functionality requirements without any changes to source code at all.

Where an existing process did not fit 100% into the SmartStream way of doing things, the team chose to change the process rather than change the system. In many cases they found the new process worked more effectively than the old one.

In keeping with the simple approach, the main features of the system were implemented without adding all the bells and whistles that were available within the system. This made it easier for local staff to learn the new system. Three years after going live, additional functionality is still being added as needed.

Training was of course a crucial element. A lot of training was provided by PDP and Geac to all staff using the system, but especially to the Financial Management Information System Section who are now managing the system on a day to day basis. The advisers assisting with implementation were all experts in their fields, but more importantly they were all able to work alongside local staff and pass on their knowledge effectively.

PDP advisers all speak fluent Bislama, the local pidgin language.

The SmartStream system is now being extended to other non-core government agencies such as the Vanuatu Institute of Technology. Work is also underway within the Public Service Department to introduce the human resource modules. The government is looking for a similar smooth implementation process.

Director-General of the Ministry of Finance, Simeon Athy, is pleased with the functionality and effectiveness of the new system. But he points out that the challenges are by no means over yet.

One of his most worrying issues is how to make sure the system can be sustained.

“In any small government, it is a huge investment to train specialist staff and a major loss when those skilled people move on to new opportunities. Each individual becomes crucial, and that is not sustainable,” he says.

The whole implementation has been a success story. It has been an effective collaboration between the private sector, through PDP and Geac Computers, and the government sectors in Vanuatu and Australia, to achieve a solution that meets local needs. What has worked well in Vanuatu can provide a model for similar developments in the region.