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Transcript of E. Talero - 11-11-04IFMIS Workshop - Nairobi 1 IFMIS Implementation Workshop Effective IFMIS...
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 1
IFMIS Implementation Workshop
Effective IFMIS Procurement and Management of Consultants
Eduardo TaleroSenior E-Government Consultant - The World Bank
(Retired)
Nairobi, November 11, 2004
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 2
9-15 months 6 months
Develop Functional/Technical Specifications
Advertise and receive bids
Prepare Bidding documents
Evaluate bids
Award contract
4-5 months 2 months 21-28 months
3-5 months 3 months3-4 months 2 months 11-14 months
Best case
Possible?
IFMIS PROCUREMENT IN AFRICA
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 3
OVERVIEW
How to be effective in IS procurement (and minimize headaches)
How to get maximum value from consultants
How to deal with the World Bank to prevent delays
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 4
Effective Procurement (or how to minimize headaches)
Acknowledge complexity Find the right skills & organize the
work Develop a sound strategy Manage timetable effectively Follow sound bid evaluation method Develop a smart, fair contract
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 5
The procurement process is difficult because
It is a heavily regulated, competitive process
It has antagonistic stakeholders It is complex and deals with high
stakes. It is corruption prone. It often has conflicting objectives.
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 6
Competitive Procurement
TRANSPA-RENCY
Potentially conflictive objectives in competitive procurement
ECONOMY
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 7
Competitive Procurement
TRANSPA-RENCY
Potentially conflictive objectives in competitive procurement
EFFICIENCY
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 8
IS Procurement is even more difficult because of:
Diverse, complex technical content Interdependency with organizational
& social dynamics Value from the whole, not the parts Mix of intellectual services & supply
of goods. High failure rate of IS Projects
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 9
Technology. (Goods)
Intellectual Services (Consultants)
Working Systems (IFMIS)
“DESIGN” RISK Supplier Client Shared
CSFs Tech. Specs Logistics
Prof. Expertise Communications
Prof. Expertise Process Mgmt.
QUALFICATION CRITERIA
Ability to supply
Fin. strength
Credentials Track record
Financial /operational capabilities
Track record Credentials
EVALUATION CRITERIA
Price Quality of
M&S
Quality of Proposal
Expertise Price
Quality of Proposal Expertise Price
PAYMENT TRIGGER
Delivery Work done
Acceptance of Deliveries
Procurement profiles
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 10
Acknowledge complexity Find the right skills & organize the
work Design a sound strategy Manage timetable effectively Follow sound bid evaluation method Develop a smart, fair contract
Effective procurement (or how to minimize headaches
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 11
Find the right skills & organize the work
Skill requirements: Domain knowledge: public accounting,
budgeting and treasury management. Expertise in management of IS projects Information technology knowledge Contracting knowledge Procurement knowledge
Effective procurement requires organized teamwork: authorities, responsibilities, schedule, resources.
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 12
Effective Procurement (or how to minimize headaches)
Acknowledge complexity Find the right skills & organize the
work Develop a sound strategy Establish feasible timetable Follow sound bid evaluation method Develop a smart, fair contract
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 13
Develop a sound strategy
Understand the solution market Consult with peer network Choose a packaging option Choose a process option Set a timetable
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 14
Supply & Maintenance of Technology
System Engineering/ Integration
Independent Audits
RFI & Pre-Qualification
Phase IIProject Strategy &
System Requirements
Phase I
System Engineering
Phase III
Implementation
Phase IV
Maintenance
Phase V
System Specification & Project Mgmt.
PROJECT PHASE
PROCUR. TRACK
Key: Competitive Bidding Packaging Option
Conflict of Interest
Consulting Services Supply &Maintenance System Engineering
Ponder packaging options carefully (1)
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 15
Supply & Maintenance of Technology
System Engineering/ Integration
Independent Audits
RFI & Pre-Qualification
Phase IIProject Strategy &
System Requirements
Phase I
System Engineering
Phase III
Implementation
Phase IV
Maintenance
Phase V
System Specification & Project Mgmt.
PROJECT PHASE
PROCUR. TRACK
Key: Competitive Bidding Packaging Option
Conflict of Interest
Consulting Services
Integration
Ponder packaging options carefully (2)
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 16
Choose between single and 2-stage process
Single stage when: Possible solutions are well known Outsourcing is not an option Procurement complexity and risk are moderate
Two stage when: Possible solutions are poorly known Outsourcing of operation or ownership is an
option Large scope or complexity pose excessive risks
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 17
Effective Procurement (or how to minimize headaches)
Acknowledge complexity Find the right skills & organize the
work Develop a sound strategy Establish feasible timetable Follow sound bid evaluation method Develop a smart, fair contract
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 18
At least a monthTime
Engineer system
Document System
Deliver test Hw/OS
Acceptance End rollout
Train users
Run Acceptance Tests
Deliver rollout Hw/OS
Begin Testing
Establish feasible timetable
Deliver pilot Hw/OS
Conduct pilot
Rollout system
End Pilot
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 19
Effective Procurement (or how to minimize headaches)
Acknowledge complexity Find the right skills & organize the
work Develop a sound strategy Manage timetable effectively Follow sound bid evaluation method Develop a smart, fair contract
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 20
Follow sound bid evaluation method (1)
Assemble a team beyond reproach Decide what features to evaluate Beware of evaluation tradeoffs Focus on features with high
discerning value Leave room for exercise of
judgment
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 21
Follow sound bid evaluation method (2)
Define & test the point/weight scheme
Plan effective system demonstrations
Carry out & document evaluation Keep evaluators to what they know Iterate evaluation rounds to achieve
consistency
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 22
Decide what features to evaluate
Known Un-known
Needed Unacceptable
Desirable
Undesirable
M
M
S +E
S +E
E
E
E
E
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 23
Beware of tradeoffs in quality evaluation
Importance of Quality Evaluation
Level of competition
Range of solutions considered
Precision of qualification requirements
Precision of Technical Specifications
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 24
Illustrative Top Level Scoring Table
Note: See IT Procurement Technical Note 10 at www.worldbank.org, procurement
Criterion Criterion1 Criterion 2 Criterion 3 Criterion 4 Total (Maximum)
Weight 40 20 20 20 100 Scores and Weight points [1] -10 -5 -5 -5
[2] 0 0 0 0
[3] 20 10 10 10
[4] 40 20 20 20 100
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 25
Evaluation Criteria
1: Quality of proposed solution
2: Bidder's expertise, performance record, business risk profile.
3: Quality of implementation plan and knowledge transfer strategy
40%
4: Quality of proposed technical environment. - Technical Risk Profile
Weight
20%
30%
10%
Illustrative Evaluation Criteria for IFMIS Contract
Note: See IT Procurement technical note 10 at www.worldbank.org, procurement
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 26
Follow sound bid evaluation method (2)
Define & test the point/weight scheme Plan effective system demonstrations Carry out & document evaluation Keep evaluators to what they know Iterate evaluation rounds to achieve
consistency Evaluate lifecycle costs
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 27
Plan effective system demonstrations
Choose one of two objectives: Evaluate attributes of proposed solution Build and evaluate a prototype solution
Predefine standard protocol Require PM to lead demonstration Watch for presentation order bias Iterate to ensure evaluation consistency Lower compliance cost to bidders
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 28
Follow sound bid evaluation method (2)
Define & test the point/weight scheme Plan effective system demonstrations Carry out & document evaluation Keep evaluators to what they know Iterate evaluation rounds to achieve
consistency Evaluate lifecycle costs
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 29
Effective Procurement (or how to minimize headaches)
Acknowledge complexity Find the right skills & organize the
work Develop a sound strategy Manage timetable effectively Follow sound bid evaluation method Develop a smart, fair contract
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 30
Develop a smart, fair contract (1)
Make contractor responsible for solving your business problem despite specification error or omission
Spell out client’s obligations and fulfill them.
Require formal work methodology Pay against intermediate deliverables
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 31
Develop a smart, fair contract (2)
Define the acceptance test protocol Test all the human/data/process
aspects before acceptance Do system stress tests Define the rollout protocol Define rollout readiness indicators
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 32
Develop a smart, fair contract (3)
Leave flexibility in rollout schedule Demand industry-standard
documentation
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 33
Develop a smart, fair contract (4)
Retain host computer flexibility Guard against default expiration of
licenses Consider concurrent user licenses Forbid cross-licensing conditions Disallow unilateral revocation of SLA,
disabling or impairment of system operation.
Software License Agreements (1)
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 34
Develop a smart, fair contract (5)
Require manufacturer’s authorization and concurrence on supplier’s SW licensing obligations.
Supplier must support an old version 24 months after new one is received by client.
If a new version causes problems, supplier must support the prior version until problems are solved.
Software License Agreements (2)
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 35
Develop a smart, fair contract (6)
Develop good M & S contract:
Ask for proof of local capability Commit M & S supplier for 5+ years Keep client’s right to exit after 1 year Block effectiveness of supply contract
until M&S contract is signed Retain performance security until
delivery capacity is verified.
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 36
OVERVIEW
How to be effective in IS procurement (and minimize headaches)
How to get maximum value from consultants
How to deal with the World Bank to prevent delays
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 37
Consultants: How to get maximum value (1)
Rely on peer network to: Identify skill / experience requirements Develop TOR. Develop candidate shortlist
Expect bias and neutralize through TOR
Watch out for conflict of interest rules
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 38
Supply & Maintenance of Technology
System Engineering/ Integration
Independent Audits
RFI & Pre-Qualification
Phase IIProject Strategy &
System Requirements
Phase I
System Engineering
Phase III
Implementation
Phase IV
Maintenance
Phase V
System Specification & Project Mgmt.
PROJECT PHASE
PROCUR. TRACK
Key: Competitive Bidding Packaging Option
Conflict of Interest
Possible Contractor Continuation
Consulting Services Supply &Maintenance System Engineering
Complex IS Procurement – Specify and Engineer Option
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 39
Consultants: How to get maximum value (2)
Define time and residence requirements for key personnel
Define knowledge transfer indicators Evaluate communication, social skills Use contract management
instruments consistently and forcefully
Control staff replacements
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 40
Consultants: How to get maximum value (3)
Brief/induct consultants thoroughly Control incidental costs separately Pay attention to fairness Do not expect fire fighting miracles Pay on time Manage client-side obligations
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 41
Dealing with the World Bank (1)
WB not staffed for major technical reviews Fiduciary responsibility imposes
constraints. Key recommendation: avoid triggering
reviews. Consequently, engage expert procurement
advice during process. You are the client. Do not hesitate to
complain.
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 42
Dealing with the World Bank (2)
Do not hesitate to ask for reasonable, well justified exceptions. Better evaluation formula Relief from COI provisions for pilot
consultants Justified sole sourcing decisions
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 43
Possible World Bank support
To develop and nurture IFMIS network
To develop baseline system requirement specifications
To analyze and compare technology licensing terms
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 44
9-15 months 6 months
Develop Functional/Technical Specifications
Advertise and receive bids
Prepare Bidding documents
Evaluate bids
Award contract
4-5 months 2 months 21-28 months
3-5 months 3 months3-4 months 2 months 11-14 months
Best case
Possible?
IFMIS PROCUREMENT IN AFRICA
E. Talero - 11-11-04 IFMIS Workshop - Nairobi 45
THANK YOU