July 1, 2017 has come and gone, and with that, the deadline by which South African municipalities were to successfully implement the Municipal Standard Chart of Accounts (mSCOA) regulation. This retrospective article highlights three main challenges the IMQS Asset Management Team encountered in their efforts to help municipalities become mSCOA compliant.
mSCOA is part of the National Treasury’s ongoing budget and reporting reforms. mSCOA-ready means that municipalities are able to capture all their financial transactions against a predefined classification framework. mSCOA regulation has not only been a financial reform, but an entire overhaul of municipal business processes.
Since not only financial and budget oriented practitioners are involved, implementation has required organisational change across the entire municipality and integration of accounting systems. Consequently, implementation has involved system conversion and/ or re-implementation, with all the associated challenges and risks.
Due to the various stakeholders involved, integration is no small feat. Unforeseen challenges emerge over time that can only be brought to the fore through the process of retrospection. This article therefore briefly looks at some of the main challenges that have emerged that, from IMQS’s perspective, have hindered the timeous implementation of msCOA. By going through this retrospective, we hope to share our experiences with other stakeholders to avoid similar pitfalls in the future.
For mSCOA to successfully be implemented, all municipal accounting systems, including IMQS, need to be integrated. IMQS provides Infrastructure Asset Management Software to South African municipalities such as Buffalo City and King Cetshwayo. In order to ensure mSCOA-compliant accounting and budgeting for the IMQS Asset Register, the IMQS Asset Management Development team has been at the forefront of the mSCOA implementation process.
From the onset, a major obstacle to mSCOA implementation and integration was uncertainty. mSCOA has been a massive undertaking by National Treasury. Understandably, there are going to be different understandings regarding implementation. While national treasury was at pains to outline mSCOA segments and processes, these definitions have, according to IMQS Product Manager Rudi Louw, remained highly changeable from version to version.
A major result of the above uncertainty has been a lack of clarity among stakeholders, especially ERP-system providers, on how to implement mSCOA. The resulting trial-and-error process, in turn, has had a negative impact on timely integration. If vendors, like IMQS, were approached directly from the onset, and allowed to take part in this process, a greater buy-in could have allowed all stakeholders to be on the same page come time for implementation.
Lack of clarity among stakeholders has also been a result of a failure to communicate effectively between them. According to the IMQS Development team, “you need to ask questions, to be open to answering them honestly, and then to update your own specifications from the lessons learned”. Workshops are a viable tool to overcome this challenge. They help one to gain clarity on how different partners approach mSCOA, offer a forum for exchange of lessons-learned, and give one the opportunity to your align specifications with those of other implementation partners.
A second challenge that was observed by the IMQS Asset Management team, was the reluctance of vendors to cooperate freely due to their competitive nature. An unfortunate result of business-as-usual practices is that different vendors with similar product offerings tend to compete. This competitive nature results in a hesitance between vendors to play open cards and maintain open lines of communication necessary for timely integration.
In order to successfully implement a major, cross-organisational project such as mSCOA, is to enter into the process with a willingness to cooperate. Danielle Hendricks, IMQS Product Owner for Asset Management, notes that, “it is important to always put the client’s needs first. All vendors have been chosen as part of a greater solution. It is only through open cooperation that the client’s goals are achieved.”
A final challenge relates to the role of the client. According to Hendricks, client involvement is a key ingredient for the successful implementation of any project. In other words, if the client is well informed and clear about their needs, more decisive action can be taken and the project management process benefits.
With regards to managing mSCOA implementation and integration, the IMQS Development team observed “a lack of decisive knowledge on the part of the client, which made an iterative project management process difficult”.
In this regard, the existing mSCOA committees could have been used more productively. These committees are the appropriate forum for the client to build a clear understanding of goals, needs and outcomes. The forum allows stakeholders to workshop exactly what needs to be implemented, so as to be clear when signing off on work.
What IMQS has learned from its experience with mSCOA implementation is that the key to successful project management is communication and transparency. This is why IMQS’s products, such as its Asset Register and Project Control System, serve to break down silos across departments and enable communication and information exchange. For more information on IMQS’s mSCOA approach, read our blog article or check out our mSCOA technical paper. If you want to hear more about our Asset Management Team’s experiences, contact us directly. We would love to hear from you.