FC
99/13  |
| FC
99/13 |
Ninety-ninth Session |
Rome, 6 - 10 May 2002 |
Progress Report on the Oracle Project |
1. The Oracle Project is a keystone for addressing the cross organizational strategy, as contained in the Strategic Framework 2000-15 endorsed by the FAO Conference, to continue to improve the management process. Besides reliance on proven system solutions, the project is based on firm accountability principles, realigning authority, responsibility and accountability. The resulting administrative and management information systems are aimed at supporting the management process in a cost-effective manner, to meet flexible demands for services in a large organization with an extensive field office network, and to facilitate the implementation of inter-disciplinary work.
2. The Oracle System has been conceived as an integrated corporate system in support of the administrative and financial requirements of the organization in planning, managing and reporting on the implementation of its substantive programme. The Oracle System is comprised of five main components: (i) Programme Planning, Implementation Monitoring and Evaluation Support, (ii) Human Resources, (iii) Procurement and Fixed Assets, (iv) Financial Modules, and (v) the Data Warehouse. Each of the components is tightly integrated into an overall corporate system.
| Programme Planning, Implementation Monitoring and Evaluation Support (PIRES) |
Human Resources (Oracle HR/Payroll) |
| Procurement and Fixed Assets (Oracle PO/FA) |
Financial Modules (Oracle AR/AP/GL) (ATLAS / FAS/BMM) |
|
Data Warehouse | |
3. The Programme Planning, Implementation Reporting and Evaluation Support System (PIRES) deals with programme planning and management including the preparation of the MTP, of the biennial PWB and of major corporate reports such as the Programme Implementation Report (PIR) and the Programme Evaluation Report (PER).
4. The Human Resources component, which is planned to be based on the standard Oracle HR functionality including Payroll processing, covers the support to the management, servicing and administration of staff human resources.
5. The Procurement/Fixed Assets module, which relies on the use of the standard Oracle Procurement and Fixed Assets functionality, captures information on suppliers (including consultants), requisition transactions and fixed assets recorded in the organization's inventory.
6. The Financial modules, which track the budgetary, accounting and cash aspects of all financial transactions, rely on standard functionality of Oracle Financials - General Ledger (GL), Accounts Payable (AP) and Accounts Receivable (AR) complemented by external modules dealing with Travel (ATLAS), Field Accounting (FAS) and Budget Management & Monitoring (BMM).
7. The Data Warehouse is the corporate repository of all budgetary, human resources, procurement and financial data handled by the organization. The Data Warehouse is also based on the use of standard Oracle business intelligence products which exploit the knowledge of the internal structure of the database supporting the Oracle Financials and Human Resources integrated package.
8. The integration of the FAO Oracle environment allows for easy exchange of data across different business applications and, through a tight data administration function, is targeted at eliminating data redundancy, at streamlining workflows and administrative procedures and at delegating authority to those responsible for project and programme implementation.
9. The system described above is being implemented in a phased approach:
10. The initial implementation of the Oracle System through the deployment of Phase I has identified the need for a much more robust communications infrastructure than the one implemented for the support of e-mail messaging back in 1996. This requirement became clear when, in addition to the first wave of decentralization to Regional Offices, the system was used to support a more advanced level of decentralization with responsibility for project management delegated down to the FAORs.
11. A tender for global Inter-Office Telecommunications and Email services was issued during 2000 in support of a major upgrade of the Wide Area Network (WAN) infrastructure and of the associated E-mail services. The project was approved and funded in July 2001 for a total of US$ 1.4 million one-time investment and estimated incremental ongoing costs of up to US$ 1.8 million per year as a constant from 2004 onward.
12. The new telecommunications infrastructure will consist of an outsourced Virtual Private Network (VPN) based on internet protocol services provided by the SITA "Intranet Connect" solution. SITA is a major telecommunications service provider which supports the WAN of several other UN organizations. The E-Mail system will migrate from Ms-Mail to Microsoft Exchange, with local servers installed in each FAOR and central E-mail directory services being provided from Headquarters.
13. The approach selected for the deployment of this project is based on a steady-paced rollout of "Intranet Connect" to Offices over the 2002/2003 biennium, with E-mail being deployed at the same time as the WAN. This scenario minimizes the overall costs, while eliminating the risks associated with an accelerated deployment. Deployment of "Intranet Connect" will be staggered over three phases, breaking down the deployment into manageable units and allowing for the consideration of experience from previous phases, and for regular interjection of OCD-based priorities into the selection of offices. Phase I is scheduled to cover all ROs/SROs/LOs and nine country offices (Cambodia, Lebanon, Mexico, Togo, Cuba, Iran and Nepal) for completion during 2002. The following phases will be scattered over late 2002 and 2003.
14. Oracle Phase II comprises two elements, (i) Human Resources (HR) and Payroll and (ii) Budget planning and monitoring (PIRES). The approved Programme of Work and Budget 2002-03 (C 2001/3) provides US$ 985,000 for Oracle HR, US$ 875,000 for Oracle payroll, and US$ 475,000 for Budget Planning and Monitoring.
15. A further provision of US$ 24.7 million is included under Conference Resolution 6/2001, Use of Arrears, for the development of corporate administrative systems if and when additional funds become available to the Organization in the form of payments of arrears of contributions, in particular by the major contributor, with US$ 23.7 million being earmarked for the Human Resources (HR) and Payroll modules and US$ 1 million for budget planning and monitoring.
16. Furthermore, at its 97th Session, the Finance Committee was advised that funds were forward spent on the purchase of equipment and Oracle software maintenance under the Information Systems and Technology Division (AFI) Computer Pool Account. That forward expenditure will be available in 2002 to support the implementation of the upgrade to Oracle 11i.
17. The scope and the extent of the systems development work to be undertaken in 2002-03 will be tailored to the resources available from the regular budget and from arrears. However, projects to improve and enhance the Oracle administrative systems cannot be undertaken without allocation of the appropriate resources.
18. Learning from previous experiences, the approach to the introduction of a major project such as Oracle HR and Payroll has been to divide it into two stages - (a) analysis and design and (b) development and implementation, with the understanding that the latter will not be started unless and until the project is adequately funded.
19. Phase I of the Oracle project covers all FAO's financial business processes world wide. It covers all aspects of business transaction management (generation, authorization, processing, service delivery, financial control, accounting and reporting - to donors, budget holders, senior management and regulatory authorities). It is comprehensive in its breadth and depth as it touches all areas of FAO activities as well as staff and consultants.
20. After a difficult start up period (as reported to the Joint Programme and Finance Committees in June and September of 2000), covering the first year of operations, the Finance Committee supported the Director-General's request for additional funding to address problems in the original implementation and at the same time pave the way for the next upgrade of the Oracle software. The funding was made available over an 18-month period (July 2000 to December 2001) to:
21. Through the end of 2001 this work programme achieved very good results in the following areas:
22. The highest priority task planned for completion in 2002 is the upgrade of the Oracle software to release 11i. A detailed project report is provided in Part III of this paper.
23. In addition to the upgrade of the standard Oracle modules, major developments are foreseen in the following areas:
24. The progressive move of the corporate administrative applications to a Web-based technology will exploit the ability of the Organisation to communicate and function effectively. The improved connectivity made available through the WAN project will allow more and more FAO offices to access and use the new applications.
25. Oracle Corporation announced in early 2000 that it will not support the version of Oracle software in use by FAO beyond December 2002. This placed a burden on FAO to upgrade the software to the latest release before December 2002, but also offered an opportunity to review the current system set-up so that effectiveness and efficiency of FAO business processes could be improved.
26. The project approach comprised application and technical workstreams, bringing together a wide range of inputs in a structured manner from the Business Offices, the Management Support Service (MSS) and Field Offices.
27. The first half of 2001 was dedicated to a full review of business requirement in the various system areas. Some delays were experienced due to a lack of functional resources that could be allocated to the project. However, progress was made in the second half of the year in preparing a full specification of changes to the financial systems.
28. During the second half of 2001, the technical team completed tests of the upgraded software during which over 150 errors were logged and resolved. In general the standard functionality operated correctly for the Accounts Receivable, Accounts Payable, General Ledger and Fixed Assets modules. Problems arose in the Purchasing and Human Resource modules and in modules where customisations had been carried out by FAO, but these were mainly corrected during the technical testing and no major issues remain outstanding.
29. Initial functional testing has progressed with support from the Finance Division and the 11i system is now ready for "Integration and User Acceptance" test.
30. The major project tasks planned for 2002 are:
31. Failure to formulate and execute full and comprehensive tests would again expose FAO to implementation problems as experienced during the implementation of Phase I. It should also be noted that further delays in the upgrade could expose the Organization to the risk of being left on an obsolete version of the package, which would no longer be supported by Oracle.
32. A "proof of concept" study was undertaken in 1997 and 1998 to evaluate whether Oracle HR and Payroll could deliver the required entitlements and payroll processing functionality to meet FAO requirements. The conclusion was that while it could, at that stage the costs associated with customization of the Oracle HR package were deemed to be too high to handle this work. It was decided that the scope of the project was such that the limited available resources (financial and human) could only be targeted at the Oracle Financials implementation. In 1998 it was therefore decided that the implementation of the human resources components of the Oracle project, in particular the staff entitlements and payroll components, were to be decoupled from the implementation of Oracle Financials and placed in a Phase II implementation. Although initially presented as the replacement of the existing PERSYS/Payroll, the Oracle HR project scope is actually much wider, as it must include the business requirements of a new generation of human resources management system at FAO.
33. The Human Resources Division commissioned a consultancy study to evaluate the various options available for Phase II implementation. In particular, it was deemed necessary to assess whether there would be any reason to change the original decision to utilize the Oracle HR and payroll systems for staff entitlement and payroll processing (e.g. due to changes in functionalities of packages, changes in the cost/benefits of the core strategy, etc.). The consultant's study was not intended to develop or review the HR business requirements for Phase II nor to be the basis for a project plan for this phase. It was rather to be a "due diligence" assessment or review of the prevailing systems environment and costs in order to assess whether there was any reason to vary the original strategy to implement Oracle HR as part of an overall integrated solution.
34. The consultant's report concluded that the strategic decision made in 1997 to acquire an integrated finance/human resources package from Oracle remained sound, although the products on the international market, and Oracle business applications in particular, had significantly changed during this period. He recommended pursuing the implementation of the HR/Payroll component of the enterprise resource planning system (ERP) based on Oracle, which would be adapted to the specificity of FAO.
35. In October 2001, the Oracle Project Management Committee (OPMC) agreed to recommend the launching of the requirements definition stage of Phase II (HR and Payroll) of the Oracle Project in 2002, the results of which will determine the scope of the project. The OPMC agreed to the establishment of a small project team comprising a project manager, staff from various Divisions and external consultancy support to undertake the initial phase of the project (business process streamlining and definition of the business requirements in full collaboration with the team developing the new Programme Planning, Implementation and Evaluation Support System (PIRES)).
36. Since October 2001, the structure of the project team has been outlined, and the project manager is being recruited.
37. The organization plans to commence the implementation of Phase II in 2002-2003. The project will be divided into two main workstreams - functional and technical. The project will be divided into four phases: business process streamlining and definition of the business requirements; development; user acceptance and training; and installation and production.
38. The initial phase of the project (business process streamlining and definition of the business requirements) will start in March 2002 with an objective to be completed by the end of 2002. The analysis will start with a review of the existing system and the work previously done on the project for recruitment, entitlement and payroll functions. Opportunities for further business process re-engineering (BPR) and streamlining of procedures will be identified. The output of this initial phase will be a detailed document describing the business requirements to be met by Oracle HR, Oracle payroll and the Data Warehouse.
39. The importance of ensuring that adequate human and financial resources are allocated to the project cannot be over-emphasized. A provision has been made in the PWB 2002-2003 of US$985,000 for Oracle HR and US$875,000 for the payroll parts of Oracle Phase II. As mentioned above, it has been recommended that a small project team be established to undertake the initial phase of the project. The cost of the initial phase has been estimated at US$2 million and is almost fully funded by the 2002-2003 PWB allocation. The implementation of Phase II beyond this initial phase will however remain subject to the availability of additional resources.
40. The scope of the new planning and monitoring system is to replace the current procedures and information systems for programme planning, implementation monitoring and evaluation with a new, integrated solution which fully reflects the concepts underlying the recently adopted Strategic Framework and the new programme model. The objectives for the project stress the importance of efficiently integrating the Strategic Framework and results based budgeting approaches into the Organization's programme planning and management processes and recognize the importance of working within the Organization's information systems standards and data management strategies.
41. In 2001, priority was given to:
42. Three broad software options are being examined: (1) software developed by other UN agencies; (2) a package solution; and (3) bespoke software development. A survey of other UN agencies' programme management systems has revealed useful concepts and insights but has not permitted the identification of a specific software solution that could be brought into FAO in a cost-effective manner. The investigation of package solutions has indicated that the introduction of a major new software product from a third-party provider other than Oracle would not be cost-effective. Thus, the software strategy for PIRES is to:
43. The scope and strategy for building the new system was documented in a Project Overview and Charter, which was reviewed by FAO's Oracle Project Management Committee (OPMC) in December 2001. The basic elements of the proposed approach received OPMC endorsement and the project has proceeded into implementation.
44. PIRES functionality will be released in 2002 covering the following corporate planning and reporting processes:
45. In addition, PIRES tools will be provided that contribute to improved programme management at the working-level:
46. Finally, essential integration questions with other major corporate systems will be addressed during 2002 as a prerequisite for defining business processes for workplanning and revamping PIRES design requirements for the budgeting module ( to support PWB 2004-05 production):
47. All of the critical business objectives envisaged for 2002 can be achieved with the US$ 475 000 budget provided for PIRES under the approved funding levels of the PWB 2002-03, partly because the systems development strategy stresses the use of internal staff and private consultants on the project rather than more costly external management consultants. For example, the requirements analysis and system design is being performed largely by internal staff. However, the budget does not provide sufficient funding for the acquisition and implementation of the Oracle Public Sector Budgeting package should this eventually prove necessary.
48. Additional resources for the project resulting from arrears payments would be dedicated to the following areas:
49. The DataWarehouse has been a strategic component of the Oracle Applications Implementation project from its inception in 1996. The requirement for easily available and up to date management information had been one of the longstanding unaddressed issues for FAO administrative systems, and one of the main reasons for their replacement.
50. The main objective of the FAO DataWarehouse is to make financial and administrative data easily available to managers and staff, to eliminate data redundancy and inconsistency, to standardise outputs and to provide up to date information to all users in all FAO locations.
51. The DataWarehouse scope includes all the main administrative data sources, namely Financials, Human Resources, Budgets, Procurement. Within these broad categories, smaller specialised data groups are planned to be made available: Travel, Accounts Payable and Receivable, Field, Projects.
52. A DataWarehouse typically evolves over time, and FAO is no exception. After the initial implementation of the Financials DataWarehouse in late 1999, a major rewrite of the main reports followed in 2000. The release of a Web-based reporting tool in the second half of 2000 constituted a major step towards the availability of financial information to all FAO offices, including the field where Internet connectivity is available. Secured, encrypted Internet access and password protection were implemented at the same time.
53. The data warehouse is used widely across the organization as the key mechanism for accessing financial detail and summary information. Usage statistics for the month of May 2001 indicate an average number of data warehouse queries in excess of 600 each day. Financial transaction listings, financial statements and Trust Fund project status reports are the most popular reports used, and each of these have more than 3,000 queries each month.
54. The "Human Resources" Datawarehouse was developed during 2001, and was ready for user testing in the second half of 2001. Following full user acceptance testing, it will be released in production during 2002.
55. The development of a Corporate MIS, which was started in the second half of 2001, is in full development. It will be released for user testing in the first quarter of 2002.
56. The software on which the DataWarehouse itself is based has to be upgraded to a new release as part of the Oracle 11i upgrade. Plans for this upgrade are well advanced and the new version of the DataWarehouse software will be released in 2002 in full co-ordination with the 11i upgrade.
57. In addition to the plans for release into production of the Human Resources DataWarehouse, the corporate MIS reports and the new DataWarehouse software, a number of developments are planned in 2002 to expand the DataWarehouse content. These include the incorporation of historical and reference project data, extensions to the range of Human Resource information, and incorporation of further details from the financial subledgers.
58. The development of reports based on DataWarehouse information is expected to continue at the same pace as the previous period in 2001 during which some 60 additional DataWarehouse reports were added to the basic set.
59. Large information systems projects are already using or planning to use the DataWarehouse as the source of their corporate data. It is essential that this system design concept continues to be followed by both corporate and departmental users, so that quality and consistency of data and outputs is ensured at all levels.