Background

In opening the agenda item on new business models, the HCLM Chair recalled that at its October 2015 meeting, HLCM had reviewed the ERP Interoperability Feasibility Study final report, prepared by an external consultant under the guidance of a steering committee led by the Chair of the ICT Network and consisting of ASG-level members from the UN Secretariat, UNDP and FAO. Noting the recommendations of the Study for business transformation overall, the Committee decided to establish a cross-functional Task Force, to conduct an in-depth review and assessment of recommendations contained in the Study report. The outcome of the Task Force’s review was available in document CEB/2016/HLCM/7.

Discussion

The Chair invited Mr. Ernesto Baca, United Nations Assistant-Secretary-General of the Umoja Project, to frame the discussion by sharing his experience on implementing a new ERP in a highly complex organization.

Mr. Baca observed that the UN Secretariat has many characteristics in common with the broader UN system, in particular with respect to its diversity of functions and practices.  Hence, the Umoja experience provided a useful example of the challenges of inter-agency ERP cooperation.

Mr. Baca emphasized the importance of aligning fundamental business processes before examining any technological solutions, especially in the area of ERP system interoperability, and that the UN system would benefit from a business strategy that balanced value for the entire system with requirements for each UN entity. He noted that there were potentially significant economies of scale for administrative services across the UN system, but these had to be explored and implemented in a way that did not affect the ability of individual organizations to deliver their mandates, and that finding this balance would prove challenging. 

Mr. Baca noted that one difficulty experienced by the Umoja implementation that would also impact the UN system was ensuring that each entity endorsed the same policies and that they interpreted them in the same way.  He suggested that the most challenging aspect concerned governance: internally, the need for a champion for the entire system and custodians for each and every policy, with process owners identified to set principles and policies; externally, the importance for governing bodies to be fully aligned and consistent in their guidance and expectations.  For a full process re-engineering to take place, the current structure of the UN system as a federation of many different entities would have to be re-considered. 

Following Mr. Baca’s presentation, the Finance and Budget Network, the Procurement Network and the Human Resource Network presented the outcome of their assessments of the ERP feasibility study, and their proposals for follow-up actions that they would take forward. The ICT Network noted that they saw themselves as enablers of change through technology and not as a substantive back-office function and did therefore not put forward recommended follow-up actions.  They did note that they would be ready to assist in implementation of any change required.

In the presentations that followed, the Networks looked at the recommendations in the consultants’ report from the perspectives of their potential value-added, their difficulty of implementation, their required investment, and also considered work that was already ongoing. The Co-Chair of the Finance and Budget Network stated that their review mapped out a path for the next level of work on the enablers of inter-operability.  The Network confirmed its intentions to increase efforts on Banking and Investments, building on the significant success already achieved there. It would also continue collaboration on digital payments and vouchers leading towards fuller payment harmonization. In the area of financial reporting, the Network had already carried out significant work related to IPSAS and was now looking at work related to full adoption of IATI standards. 

The Procurement Network observed that the enhancement of the UN Global Market Place was already addressing many of the recommendations that were found in the Study’s report.  This included enabling of country-level supply chain planning, supplier registration, tendering, contracting and data management.  In addition, there was ongoing supply-chain collaboration around commodity groups. An upcoming prioritization exercise of commodities for additional collaboration was expected to be carried out and this would lead to additional areas for common procurement and possibly to additional identification of commodities for which a center of excellence approach would apply.  The Network also noted that the collaboration that had been achieved was largely based on the mutual recognition concept.

The Human Resource Network presented their plans to work on joint job classification through the establishment of a system-wide center for this purpose. It was also mentioned that this approach could possibly be expanded to common reference checking. They further discussed collaboration in recruitment in relation to talent outreach. The Network also pointed at areas of collaboration within ERP vendor platforms related to the compensation package review, as well as management of learning and development through the UNSSC.

During the ensuing discussion there was broad agreement with the areas of collaboration discussed by the Networks.  The importance and benefit of continued expansion of procurement collaboration was seen as very clear and was encouraged.  The new approach of a common classification center was identified as an attractive area of work and was strongly encouraged, as it showed that as new needs emerge, the UN system can look at how these can be addressed together rather than trying to re-design structures in place on an organization by organization basis. It was noted that many systems that are currently in place have reached maturity and are well functioning, to meet the respective mandates as well as strategic needs of the different organisations. Some re-adjustment may be needed, including with joint efforts where a clear business case could be developed. For example, an area where such joint efforts would be important is related to all forms of data, including big data, data collection, and data privacy. This is a field where collective knowledge and thinking could be facilitated by HLCM.

Consensus also emerged on the importance of emphasizing what the UN system was already doing together and what areas of collaboration it will focus on as it moves move forward.  Furthermore, there was a broad consensus that the initiatives identified in the Task Force report should be incorporated into the next HLCM Strategic Plan. The Committee also noted that the integrated and collaborative approach put forward by the 2030 Agenda would well be served by an expanded use of existing collaborative bodies, such as the UNSSC.  Concurrently, the Committee noted the need to systematically develop business cases as a means to communicate with stakeholders around solid analysis and evidence. This would allow for informed evidence based decisions around future collaborative efforts. 

As a part of the discussion, the Committee was reminded of existing inter-agency arrangements for service provision, and that such arrangements were available to other organizations that may wish to use them. It was also noted that using each other’s processes through the mutual recognition approach often represented an effective and not expensive form of collaboration.

In conclusion, a vision of the UN system’s ambition in the area of business operations as the system moves towards 2030 was cited as a desirable outcome of the upcoming QCPR discussions, with innovative approaches to collaboration being part of this evolution. It was also recognized that significant work has already been done by the UN system and there are many flexible approaches in place that provide organizations with the possibility to work together as a whole or in clusters.

The Chair concluded noting that the HLCM could give a strong and positive “yes we can” message on the UN system’s readiness to align its operational infrastructure to the requirements of the 2030 Agenda, on the basis of the considerable achievements already made, as identified in the HLCM Strategic Results 2013-2016 Paper.  The UN system should continue to identify common capacity challenges and, where there are common platforms, the aim should be to mainstream them. Furthermore, Agencies, Funds and Programmes should continue to work together, including with stakeholders, bringing the parts of the system closer to each other and providing a natural push towards further collaboration, particularly in new areas of work as they emerge.

Action

The Committee:
Took note that the ERP Inter-operability Study identified numerous areas where efficiency gains can be obtained through the alignment and reciprocity of business operations that would make organizations administratively inter-operable.

Asked the HLCM Networks to reflect and take stock of the discussion on the outcome of the multi-disciplinary Task Force, and to further develop the follow-up actions identified, with a view to taking them forward as part of the new HLCM Strategic Plan.