Abu Dhabi Budgeting by Hazem Turki El Khatib

Document No. ITO-FM-001-01 Restricted

November 27, 2013

Abu Dhabi ERP

Shared Service

7th OECD MENA SBO

Abu Dhabi, 10th December, 2014


● Introduction

● Case for Change

● Best Practices

● ADERP Solution

● Benefit Analysis

Agenda

3 Document No. ITO-FM-001-01 Restricted

The Abu Dhabi Shared Enterprise Resource Planning (ADERP) solution is an electronic shared service

allowing Government entities to manage their internal and external resources.

The ADERP platform also provides centralized reporting capabilities which empower the AD Government

with the visibility needed to manage the enablers of its 2030 vision.

Solution is deployed on shared infrastructure platform which leverages economics of scale.

Definition of the ADERP

Financials & Assets

Procurement Inventory &

Supply Chain

Human Resources

Projects

Business Intelligence

& Reporting


DoF Aspires To Establish A Centralized ERP As Per Executive Council Decree, And In-line With Its Vision

Department of

Finance’s Vision

DoF’s mandate for the Emirate of Abu

Dhabi revolves around five key areas

The Executive Council has decreed a centralized

ERP across Abu Dhabi government entities

“Achieving prosperity of Abu Dhabi through world-class financial management

and sound fiscal policy.”

• Foster an effective and prudent financial

management framework across the Abu Dhabi

government

• Provide proper financing for government initiatives

including private-sector participation

• Enable optimal use of financial resources through

sound planning and performance monitoring

• Advise on fiscal policies

• Provide world class customs administration

services for Abu Dhabi government

Source: DoF personnel interviews; www.DoF.gov.sa/english/

• The centralization of the

ERP system for 64

government entities within

Abu Dhabi into a shared

service instance

• Help decision makers.

• The unification of HR

system within Abu Dhabi’s

entities


Usage of the ADERP

AD Government entity employee: I use the ADERP to

run my HR, Finance, Procurement, Project and

Reporting internal processes

AD Government business operations employee: I use

the ADERP to run central HR, Finance, Budgeting,

Payroll and Reporting cross-Government processes

ADERP


Phase I

DOF Financials

& Payroll

Implementation

Phase II Phase V

1995 1999 2001 2007

Phase III Phase IV

FMS Upgrade to

Oracle R12 with

New COA

2010

Package

Selection Deployment of FMS

To Selected

Departments

FMS Deployment

To Remaining

Departments

ADERP Road Map (1995-2014)

Centralized ERP

across 64 Abu

Dhabi government

entities

Phase VI

2013


● Introduction

● Case for Change

● Best Practices

● ADERP Solution


Agenda


Abu Dhabi’s Centralized ERP Is Driven By Laws And Delivers Key Enhancements To Government Entity Operations

Laws drive centralization initiative… … which accomplishes numerous objectives

2030 vision

Compliance

Reporting

Cost effectiveness

Autonomy

Support

Ease of Access

Integration

Source: Executive instructions of the Financial Law #18 for the year 2006 ; Abu Dhabi Shared Government Enterprise Resource Planning Program (SGERP) objectives

Manage KPIs and benefits of all government initiatives

Consistent compliance with government regulations

Unified and holistic view of business information

Cost-effective infrastructure leveraging economics of scale

Flexible platform allowing autonomous entity operation

Expert and efficient support and training

Timely & efficient access to critical government information

End -to-end business processes across functional boundaries

Executive instructions of the Financial

Law #18 for the year 2006 assert that:

• DoF is to prepare

budget and closing

• Entities are to adhere

to a unified CoA

• Entities have certain

governance responsi-

bilities on their data

• HR payroll is to be

unified across entities


Various Clauses Within Executive Instructions Of Financial Law 18 Of 2006 Are Enabled Or Supported By A Shared ERP At DoF (1/5)

Source: Executive instructions of the Financial Law #18 for the year 2006

Section Article Clause Instruction Implication (required capabilities)

1 3 2 The Department of Finance

is to prepare the general

budget and closing accounts

(balances)

DoF needs comprehensive, timely access to entity

financials which would be highly optimized through

an automated system running on centralized data,

as opposed to manually polling entities for

information

2 7 1 It is required that all

government entities whose

budget is constituted within

the general budget to adhere

to the approved government

chart of accounts

The Instructions require a consistent implementation

of a unified chart of accounts across all government

entities, adhering to the approved DoF CoA. This is

not the case across all government entities today,

and would be both enabled and enforced through a

centralized system with one CoA

3 14 Several [entities are required to use a

unified payroll system

across the government, with

the DoF responsible for

reviewing payroll variance]

A centralized HR system would greatly facilitate a

consistent system for payroll by entities and

variance review and analysis by DoF, which would

otherwise be very cumbersome to manually review

without errors

Not exhaustive


● Introduction

● Case for Change

● Best Practices

● ADERP Solution


Agenda


Besides Ensuring Fulfillment of Requirements, Looked at Best Practice Around Shared Services

Laws and

Requirements

Additional Best

Practices

• We will make sure that our way

forward both:

− Supports the law

− Fulfills entity requirements

and objectives

• In addition, best practices on

which the proposed solution will

be based

+

ADERP will respect the

law, take into account

the Executive Council

decree, ensure

fulfillment of entity

objectives, and be

based on best practices


Similar Implementations

UK

MoF, Bosnia

MoF, Egypt

MoF, Uganda MoF, Saudi

Arabia

MoF, UAE

MoF, Jordan

Ministry of

Treasury, Russia


ADERP Benchmark Analysis

S. No. Application Ministry of Finance,

Bahrain

Department of

Finance, Madhya

Pradesh - India

Department of

Finance, Dubai

Ministry of Finance,

UAE

Ministry of Finance,

Singapore

Department of

Finance and

Personnel, Northern

Ireland

1 Human Resource (HR) Oracle e-Business suite Custom Application based

on J2EE/SOA Oracle e-Business suite Oracle e-Business Suite

SAP Human capital

Management Oracle e-Business suite

2 Finance application(Budget) Oracle e-Business suite Custom Application based

on J2EE/SOA Oracle Application Oracle Hyperion Planning SAP Financial Management

Custom Application based

on J2EE/SOA

3 Finance (Accounting) Oracle e-Business suite and

custom application Oracle e-Business suite Oracle e-Business suite Oracle e-Business Suite SAP Financial Management Oracle e-Business suite

4 Finance (Treasury management)

Oracle e-Business suite –

and custom Treasury

contract system (based on

.Net)


on J2EE/SOA Oracle e-Business suite Oracle e-Business Suite SAP Financial Management Oracle e-Business suite

5 Finance (Asset management) Oracle e-Business suite

11.5.10


on J2EE/SOA Oracle e-Business suite Oracle e-Business Suite SAP Financial Management Oracle e-Business suite

6 Finance (Inventory, Purchase, Support,

Property management)

Oracle e-Business suite

11.5.10


on J2EE/SOA Oracle e-Business suite Oracle e-Business Suite

SAP Property and

Inventory Management and

Custom application based

on J2EE/SOA

Oracle e-Business suite

7 Business Intelligence/Reporting Crystal reports

Oracle BI Enterprise Edition Oracle BI Enterprise Edition Oracle reports

SAP Reports and Oracle

Reports Oracle reports


Shared Services Have Proven To Impact Cost Savings Significantly …

0.73

1.26

-42%

47

89

-47%

0.68

0.85

-20%

Finance Cost

As a percent of total budget

HR Cost

USD spend per employee

Procurement Cost

As a percent of total spend

Source: Hackett Shared Services Performance Study Results

Standard

Shared service


● Introduction

● Case for Change

● Best Practices

● ADERP Solution


Agenda


DoF Proposed Solution Was Carefully Composed To Address The Implications of Financial Law’s Executive Instructions (1/5)

Source: Executive instructions of the Financial Law #18 for the year 2006

Instruction Implication (required capabilities) Required Solution Components

The Department of Finance is

to prepare the general

budget and closing accounts

(balances)

DoF needs comprehensive, timely access to entity

financials which would be highly optimized through

an automated system running on centralized data, as

opposed to manually polling entities for information

Government entities are

responsible for setting up an

internal governance system

in compliance with financial

governance requirements …

Entities require consistent and comprehensive

governance tools to enable them to track and

monitor transactions and information access, as well

as log and report on these findings to ensure

compliance with law and financial regulations

The head of a government

entity is given the right to

delegate approval rights

and other authorities …

Entities require a system with a consistent and

comprehensive set of workflows for approvals and

devolution of power, in adherence with a consistent

set of laws, regulations, and instructions

Financials

Financial Mgmt

Planning

FDQM

Financial Mgmt

BI & Reporting GRC

Core ERP & HCM GRC


Change

Management

Use r

Productivity Kit

Master Data Management

Technology

Infrastructure

Business Intelligence & Reporting

Procurement & Spend Analytics

EPM GRC

Public Sector

Budget

Core ERP & HCM

Financial Analytics Human Capital Mgmt Analytics

Planning Financial

Management Project

Finance

Financial Data Quality Management

Financials Procurement

Human

Capital

Mgmt GRC Control GRC Manager

GRC Intelligence

Data Relations Management Sites Banks Customers Suppliers Inventory Others

DoF Proposes A Robust, Functional Solution To Support Abu Dhabi’s Centralized System ...


ADERP Is Designed To Meet Abu Dhabi’s Requirements With Best Practices In Mind

ADERP proposed solution … … is designed with several key considerations in mind

• Unifying the government’s chart of accounts

consistently

• Effectively extending the successful DoF ERP

footprint for the benefit of all 64 Abu Dhabi government

entities

• Consolidating and centralizing the government ERP

and largely standardizing its utilization

• Enhancing the data quality across entities’ financial,

customer, supplier, and other data for improved

consistency across the government

• Improving governance and visibility on government

data and information


DoF Will Also Create A Competency Center To Provide All The Support And Continuous Improvements For The Shared ERP

Organizations are

establishing

competency centers

to leverage on the

gained experience and

trained resources to

maintain continuous

improvement and

solution evolution to

get the best outcome

of system investment

Develop

strategy

Build

business case

Manage

programs

Prioritize

requirements

Implement

requirements

Develop

knowledge

Develop talent

Manage

complexity

Develop strategy and

roadmap to accomplish

DoF’s objectives

Build ROI/Business case

for each project and

manage the funding

Manage and control the

approved projects /

programs

Prioritize and evaluate the

business and technical

change requests

Implement new

requirements based on

business priorities

Develop knowledge to

increase the efficiency and

effectiveness of processes

Retain and develop talents

who participated in the

initial implementation

Manage the cross-

functional complexity of

the ERP solution

Roles of DoF Competency Center


● Introduction

● Case for Change

● Best Practices

● ADERP Solution


Agenda


Abu Dhabi Stands To Realize Benefits, Not Only In IT, But Also In Other Business Metrics Across Its Government Entities

Proposed solution accomplishes the

initiatives’ aspirations and objectives …

… bringing tangible IT as well as other business benefits

Value

IT Benefits

Business

Benefits

• Savings in:

− Implementation

− Support

− Infrastructure

• Metric improvements in:

− Time / effort to carry out

operational tasks

− Transaction and

information governance

− Others

2030 Vision Alignment

Enhanced Compliance

Visible Reporting

Cost effectiveness

Autonomy

Improved Support

Ease of Access

Integration


108

50

60

126 98

-88%

Cost of Shared

Service ERP

Additional

module cost (+)

34

Infrastructure

savings (-)

Support

savings (-)

Implementation

savings (-)

594

Distributed

816

630

Overall, The Recommended Solution Would Result In Substantial Savings And Deliver A Best Practice Solution To Entities

Summary of shared service savings

AED millions

Sources: DoF cost assessment workshop

Non-shared

deployment

Savings from shared service

(AED 752 million)

Best practice

additions

Shared service

deployment

Infrastructure

Support

Implementation

Additional modules


Conducting A Case Study On DoF Itself Suggests Promising Improvements For Entities, Especially Ones Not Running An ERP Sample metric improvements at DoF

Sources: DoF ERP results assessment workshop

Finance

Bank

Reconciliation

(days)

Procurement Human Resources

Annual close

(months)

Budgeting

process

(months)

Payables

(days)

1

10

1.5

4

1

3

3

45

Purchasing

cycle

(days)

Supplier

registration

(days)

Receiving

Leave request

processing

(days)

Payroll

processing

(days)

Hiring cycle

(months)

Production of

salary cert.

(days)

1

7

1

5

minutes

hours 3

instant

1

7

2

15

1

4

Before ERP implementation After ERP Implementation


Thank You

Abu Dhabi Budgeting by Hazem Turki El Khatib

Government & Nonprofit

Transcript of Abu Dhabi Budgeting by Hazem Turki El Khatib