Budget Management System in the Cloud - Report Example

of the of the 8 October Executive Summary The report demonstrates the data capturing techniques from specificgroups or individuals by a budget information management system in the cloud. The cloud based model called as Infrastructure as a Service will be considered for this scenario. Moreover, the report also illustrates the methodology and type of data that is captured. After capturing data, the quality will be analyzed to evaluate the authenticity and size of data. Furthermore, rich graphics will illustrate the detection of correlation between queries that are coded. Security risks and accessibility factors will also be discussed, as the system will be cloud based. In the end, the report will conclude the contribution of budget information management systems in an organization along with the importance of authentic data, as the information system is based on the quality and size of captured data that need to be processed. Introduction Barry University, situated in Florida is a non-profitable organization which came into being in 1940. This independent university has its primary campus spread over an area of about 124 acre in Miami Shores, Florida. Another secondary branch is in Orlando, Florida which is stretched on about 15 acres. Apart from these two, there are other 26 premises which are leased and 33 delivery spots across the State of Florida, Bahamas and St. Croix. The aggregate number of students admitted in Barry University over the period of year 2010-2011 is 8,995. For the variety of ethnicity, Barry was rated in the 20 leading universities across the country, as per the News and World Report published in 2011 United States Best Colleges rankings. The Andreas Business School has been regularly ranked as the "Top Business School in the Southeast" by the Princeton Review. As declared by the Princeton Review’s publication: The Best 301 Business Schools: 2010 Edition: The students belonging different ethnic backgrounds had the third-best chances in The Andreas School of Business among the 301 business universities. In 2010, Barry University had also been titled by the Nonprofit Times as the ‘Top Non-profitable Organization for its Employees’. In a criterion of a workforce greater than 250 individuals Barry stood number 7 in the list of Top 50. Barry is a certified, privately monitored university of young men and women. It has over 100 degree courses available for undergraduate, masters, professional and doctoral levels. The process of budgeting at the Universities was very laborious and inept. The workforce acquired to attain nearly 9000 object-unit line items included: about a hundred budget managers, 15 Deans and Vice Presidents, and above 150 budget units. The cost allocation process depended on spreadsheet (excel). It required tiresome data entry and man power to feed the particulars of the budget into the system. To locate a change or determine the time of the change was impractical as no audit records were maintained. The budgeting started in November and extended till the beginning of March. During this time frame of four months there were several sessions of interpretation of the budget. Each of the 150 units had their own individual spreadsheets and extra ones were compiled prior to the finality of the budget. The process commenced with an inaugural gathering of all the budget managers, where the core/key points were reviewed. After about a period of 30 days, the initial blueprints of the budgets were made and then further on inter-department meetings preceded. Customarily, a large number of meetings with the budget managers were conducted, and two or three sessions with each Dean and Vice president were arranged. During this time span, budget managers may have unintentionally skipped or altered formulas in the spreadsheets, changed names of the present versions and then continued working in an irrelevant version, or erringly reprint the spreadsheet and forwarded with the incorrect version. The person who may have caused the errors could not be traced due to inadequate vigilance and lack of expertise. The procedure was disorganized and no check could be maintained for erroneous personnel. Soon after the budget offices assembled the files. A total of 150 files from various budget offices were combined to form a single document which was then transferred to the Barry’s enterprise risk management system, Colleague. This document was then accessible for all the budget managers. The completion of this process consumed a period of six months. It was very tough to conduct the budgeting process with Excel. Also faults flowed in excessively and it became challenging to tract down changes or variation of versions. The workforce at the office had to invest 60-80 hours per week during the budgeting term. The authorities were confident enough to conclude that the situation needs a resolution. The short-comings of the tedious budgeting process derived the personnel at Barry to arrange for an alternative for their spreadsheet-based budget procedure. The inefficiency also led to possibility of misinterpretation of calculations thus creating faulty declaration of income, expenditure and forecasts. It was expensive for Barry to use such excessive man power and time to gather the budget figures, therefore a replacement methodology: Adaptive Planning was discovered. Design of a Budget Management System At this stage of the Universitys budgeting process, modern practices of learning were highlighted, along with evaluation, manner and modes of communication. Project Scope, deliverables, objectives, training requirements, and participation were also brought to discussion. Scope of Project: The cope involves the process of re-tabulate the accounts, the structure of the budget and method of interpreting information in duration of five months. The experimental (beta) testing was completed in a week. The group responsible to carry out the experimental testing was asked for their suggestions on alterations or additions for improvement. An initial demo was viewed for a week while the beta check-session was conducted. The coordinator trained by Adaptive Planning for the remaining three months, and after these three months the University carried on the training. The final month of implementation comprised of the budget office carrying out a follow-up to make certain that the procedure of budgeting was effectively running. The course of training was done in a manner that each problem was answered through a sequence to demonstrate the productivity and perfection of the budget model. The training consisted of the core elements of policies and methodology introduced by the designers of Adaptive Planning. The budget managers at Barry were trained on the newly-introduced model of the budget and its reporting process. The key issues arising from the previous inefficient process were illustrated as problems and their solutions were derived using the Adaptive Planning. The aim of this training was to comprehend to the adaptability of the budget model and also its way of reporting. At the finality of the session, the budget managers had learnt how to develop a fresh budget for the relevant department using the process of Adaptive Planning. It also enabled an audit check at different managerial levels (hierarchy). The managers were made capable of: Feed cost and expense data for each month in the budget spreadsheets. Comprehend and finalize the staff model sheet. It is fundamental that information systems can be categorized as transaction processing systems (TPS), management information systems (MIS) and Expert systems (ES). Moreover, MIS can be further categorized as Decision Support System (DSS) and Executive Information System (EIS). In general, the role of MIS in terms of a DSS is to analyze and process business data that will aid business decision making efficiently (Nowduri, 2011). For instance, MIS provides comparative sales figures pertaining to a week, revenue figures projected on assumptions of a new product and history of decisions or workarounds performed (Nowduri, 2011). As mentioned in summary, report will demonstrate a role of a BMS in an organization that will capture or collect the data. The group of people is specified as ‘surrogate users’. Consequently, the project sponsor of this group i.e. the client, constructed a data entry system that will collect information from surrogate users related to personal data, transport data and the data that is collected up to five weeks. Information system is defined as “data converted into something valuable and usable for certain user” (, DEFINITION OF INFORMATION SYSTEM). In order to acquire cloud based BMS, the first aspect is the starting point. Likewise, every organization has to address the starting point of BMS acquisition differently. The starting point can be first allocate a task to a team that will analyze and define the type of information system is required. However, a consensus must be created before developing a business case that will be presented in front of the stakeholders of the organization. Employees associated with information system design must be incorporated for illustrating all aspects of the information system before the deployment or acquisition. Likewise, after the design, system implementation process takes place including a series of stages including hardware acquisition, software acquisition, user preparation, personal hiring and training, site preparation, data preparation, installation, testing, start-up and user testing (Stair, Reynolds, n.d). After figuring out the type and design, the next step involves cost/benefit analysis that includes expenditures and cost required for deployment, acquisition and maintenance of the information system. These detailed steps along with cost/benefit analysis will ensure that the acquisition of information systems is a correct and justified decision. Likewise the presentations must tie with key organizational objectives. The purpose is to automate organizational processes and procedures to complete assigned jobs accurately and easily. However, acquisition may contain one or more than one type of BMS that may serve their tasks in different functions containing dissimilar process, procedures and routines. Likewise, organizations must take a holistic approach to address issues where automation matters the most. Accordingly, implementing BMS in functions where the workload is high is most important and will deliver value, as the output and performance will be augmented. For instance, in case of a healthcare organization, one primary objective would be to enhance the process of patient treatment and care. This process needs to be automated for treating the patient as early as possible. Moreover, associated documentations must also be processed at the same time. Moreover, less human interaction can also be addressed during the workflow of several processes. (Sullivan, n.d) Similarly, information systems must support electronic medical records that are defined as per the national alliance of health information technology as “An electronic record of health related information on an individual that conforms to nationally recognized interoperability standards and that can be created, managed and consulted by authorized clinicians and staff across more than one healthcare organization” (Zaleski, n.d ).. The task of stakeholders is to identity the information system acquisition process that will best suit the organization. However, stakeholders can be an external or internal employee or a trade partner. We can categorize stakeholders in to separate sections i.e. Primary stakeholders and Secondary stakeholders. (Sims 2003) Primary stakeholders are most probably internal staff or members of the board having a direct stake in the organization and its objectives. Whereas, secondary stakeholders show interest associated with ‘public stake’ or \special stake’ in the organizational objectives. Likewise, patients of the healthcare organization are considered as secondary stakeholders who are aligned with the acquisition of information systems. However, primary stakeholders are considered as vital because they are the investors and bear all the financial issues for this acquisition. However, before investing funds, they must be sure that the investment is according to the required objective. The Importance of cloud based Budget Management System (BMS) The budget implementation and accounting procedures can be maintained in most developing countries with the help of timeworn techniques and software applications. The damaging effects can be experienced by the (PEM) public expenditure management. Moreover, the continuous absence over the income and expenses of the information leads towards the negative impression of budget planning, observing, expenses control, and broadcasting. The can result in a weakly controlled assurance related of government assets. These assets may be in a form of huge buildup of debts, extreme pirating, increased interest rates and gathering all the remote investment sectors. The misallocation of funds along with deflation related to the efficiency of services leads towards the mismanagement of assets. In fact, the government is not able to provide sufficient proofs of precise, comprehensive, and translucent accounts to the fellow Parliament and involved parties. Thus, it is comprised of all the contributors and the general community from all over the world. Therefore, absence of information leads towards the delayed transparency and the implementation of accountability in public sectors. Moreover, the government has professed the problems worldwide. Hence, the above discussion reveals that many countries are forced to implement the BMS to reinforce the PEM systems. For the allocation of resources, policy reinforcement and effective management procedures, the FMIS has become one of the core application for any country. However, this not a proper solution but the advantages of a BMS must maintained its thoughtful insights. Initially, the most enhanced footage along with the government procedures related to financial transactions are also allowed to give quick and effective financial information. Moreover, this supports the improved and the translucent accountability enhanced related to the managerial Parliamentarian. Subsequently, an FMIS reinforces all the financial controls that are providing full and updated facilities related to expenses that are based continuously. As soon as the commitments are made, the system is allowed to track all the phases that are related to the process of transaction of finances, sale purchase, and request for payments, bank statements and expenses of accounts. Thus allowing the inclusive image related to the execution of finance. Thirdly, the system is made to delivers all the related data that is needed to safeguard enhanced competence and success of government financial management. Features of Cloud based Budget Management System According to the vocabulary the meaning of Cloud based Budget Management System typically mentions as the computerization of all the community expenses and managing all the procedures that include accounts management, financial plan design and economical implementation. This computerization can be done with the support of fully incorporated system that helps in management of financial procedures long with expenditure agencies with the cloud. In addition, the system is fully secured for the implementation, as the risk is transferred to the cloud service provider and a non-disclosure agreement is signed between both the parties. The BMS is generally known or a component of a “integrated financial management information system” (IFMIS) due to the requirements related to the integration. Unluckily, while utilizing the term “integrated financial management information system” can sometimes be mistakenly taken as a system that can arrest all the functional Procedures. Moreover, it also includes all the financial flows that are related to the community expense management. However, the difficulty of information systems within the public sector is, to a great point this is because of the diversity of functions and procedures. In numerous functional regions that are specialized in information systems that are in place and are static needed to apply for a BMS. In this article the word BMS is used as a cloud based budget management system. The three features must be present in order to develop an effective cloud based BMS. It has high accessibility and works as tools for management. While developing an effective BMS it is significant to manage all the requirements by the organizations along with non-organization. In fact, working as a management tools it is used to manage all the changes. This is not designed to work only for the available requirements but must work for parallel budget reforms. The financial as well as the non-financial data is available by the system. This means that it can also work as a tool for managing the information that is needed in decision making. In addition, this can be implemented in public sectors in order to provide full functions of accounting and managing custom related reports for internal and external use. Moreover, this is not only made for financial information but can be used for non-financial information. For instance, the system is used to manage all the records of public sectors including grade, number of employees and salary packages. The performance based information is useful for managers to identify the programs, main purpose of programs and the kind of services and programs. In addition, the performance of the programs is also evaluated on their effectiveness. Initially, it is considered as a system. The main character of this system is to link and incorporate all the procedures along with the data that needs to be transferred to the clients continuously. The system must be accessed by all the clients that are included in the system. In order to originate particular data from the system, certain functions must be carried out. On the other hand, if the data is not provided by the BMS than no functions can be performed on the system to retain any information. Furthermore, the accountability and the financial controls must be reinforcing by internal controls and self-starting procedures. Strategic framework for introducing a BMS in a developing country The BMS system needs recognition in terms of long term reformation process for developing countries. Likewise, this long term reformation process may take years for completely deploying the system along with its cost that is massive along with its substantial recurring cost. Therefore, a BMS should be considered as a foremost project that needs an approach of structured project management practices. Likewise, for this approach, we have four steps or stages in order to provide an introduction of a BMS system. These steps are: Preparation Step Design Step Procurement Step Rollout Step As these are the main steps for BMS system deployment. However, three other supporting steps in order to make the deployment successful i.e. professional project management, ample resources and a balanced development of an organization along with improvement in business processes and procedures backed by a regulatory compliance framework. Likewise, the reformation should not be ignored in the BMS system design and deployment, as the absence will not facilitate the BMS system to achieve optimal results. Requirements for Budget Management System There are issues associated with the downfall of BMS system based projects and it is very helpful to mention a detailed requirement document that must be fulfilled. However, the requirements can be categorized in to three groups i.e. project management group, organizational development group and reformation in parallel. Primary steps for initializing Cloud based Budget Management System includes: Step1: Preparation Step The primary design and its concept that incorporates assessment of an organization Analysis of the primary issues along with the operational reformation programs Study of Feasibility Project design and draft for the proposal of the project Approval of the project along with the approval of the government Stage 2: The Design Step The functional specification document development Highlighting the information technology strategy that consists of organizational problems and hardware (Not applicable, as the cloud based (IaaS) model will be used) Preparation of important documents Stage 3: Procurement Step Issuance of hardware and software tenders Evaluating bidding process and the provision of contracts to the selected bidders Stage 4: Implementation Step Analysis of the configuration and specification of additional information technology requirements, infrastructure and communication requirements Comprehensive gap analysis and business process linking that needs functionality for packaging and identification of detailed parameterization, customization along with changes in procedures. Comprehensive action plan is required for phased deployment and pilot testing for the system Agreement for system configuration and system customization Plan and conduct trainings of personnel as per requirements Running the system in parallel for resolving preliminary issues and evaluation of the system performance in order to roll out Phased approach for deploying supplementary modules Amplification of support for internal systems and phase out approach for consultation support Project Management As discussed previously, the complete process for constructing a BMS must be treated as a corporate project that needs professional project management encompassing best practices. The important steps for professional project management consists of participation, a management model and commitment Participation, a Management Model and Commitment The deployment of a cloud based BMS is a considerable responsibility for any organization and it is very important that all the stakeholder are fully aware of their responsibilities and accountabilities to the highest stage along with the continuous participation level from the end user or customer perspective that is essential for every project phase. Moreover, it is essential that the methods for project planning are utilized for planning, deploying and monitoring the project with adequate responsibilities clearly defined in project management. Likewise, the model for the management needs assurance for the highest participation of all the associated stakeholders that may be at key positions. As accounting is the strength of BMS, the treasury or finance will be heading this function. Moreover, the secretary of finance admits the responsibility for the design aspect, application development, application procurement, product training and deploying procedures associated with BMS System. Furthermore, the accountant needs collaboration with the Information Technology Chief for designing, developing and deploying the procedures. It is critical to manage internal resources and the finance secretary should be backed by the professional team of project management led by a project manager. Likewise, the project manager must have sound skills for Information Technology, accounting and budgeting process. Moreover, the project manager must also be supported by a number of project managers at associate level with the same skill set. For ensuring the continuous involvement of key stakeholders, establishing a steering committee led by finance ministry is essential for managing the complete design process, development process and deployment of BMS. Likewise, the project management steering committee must have a trustworthy and addressable authority and project meetings must be on a weekly monthly or quarterly basis depending on the nature and severity of the project. Study on BMS Implementation in different Countries After getting the comprehensive requirements for successfully deploying the BMS, it is not a surprising factor that we have established a fact that this system is a requirement for government based administrations in a developing country. Likewise, sharing an experience of project management in African countries demonstrates some of the essentials outcomes that decides a success or a failure of a project. If we take an example of Tanzania, the government of Tanzania is deploying a reformation program since 1994. Likewise, the program’s aim is to enhance financial management for the public sector that is primarily targeted on producing efficient budget formulation along with management of expenditure. In particular, there are total two projects that are sponsored by the Swedish government. In the year 1996, there was a major problem in the government sector for financial management, as the decision makers decided to close down all payment offices located in the ministries, agencies and department. Likewise, the aim was to create a centralized payment system that will not be dependent on ministries, agencies and departments and individual bank account will be opened. Moving further, in the year 1998 and 1999, a decision was taken by the government to assimilate the financial information management system in the ten preferred ministries, agencies and departments. By incorporating this change, a centralized information system was located at the treasury department. All the users will connect this particular system by a dedicated network connection. Moreover, workstations were located at every ministry, every agency and every department and these workstations were used for connecting to the server. For setting up a database, every government department will be incorporated by its own database located in the centralized server. Likewise, whenever there is any transaction by one of the governmental functions, the database is automatically updated in real time; as a result, the general ledgers were also updated and reflect real time cash flow at any time of the day. As the time passed by, in the year 2000, there were above 500 hundred system users demonstrating 85 sites altogether in Tanzania. As a result, the system was recognized as a generic public sector based BMS that is utilized by all the public sector entities. Moreover, by the perspective of local government, the introduction of the system was presented to 32 local organizations along with a roll out adding up 30 more organizations was an achievable goal by the end of 2004. The application of BMS can be categorized as a medium size accounting and financial management build. Currently, there are many features operational in the application by different modules i.e. Cash management, Budgeting, multi-currency, general ledger, accounts payable, accounts receivable, purchase order and reports named as crystal reports. Likewise, the maintenance of accounts is based on cash; still the associated authorities are defining a strategy for utilizing other modules such as inventory management and asset management. If we talk about the benefits of BMS, they are cascading and augmenting with the span of time. For instance, control on expenditure and enhanced transparency along with accountability, many bank accounts are minimized and converted in to a single entity i.e. server located at the central bank, availability of reports at any time of the day and automated reconciliation at any time One more real world deployment example BMS took place in Ghana. The government of Ghana introduced a reformation program called as multi-faceted public financial management reform program in the year 1996. The system was focused on introducing expenditure management and budget management procedures. The multi-faceted public financial management reform program consists of a main component i.e. a framework for medium expenditure along with the computerization of government based BMS. However, in the initial stages of these projects, there was a clash between the working progresses, as both were on a different pace. This caused a massive issue that led to major accounting and reporting errors, bugs and conflicts. Likewise, a major improvement has been made in terms of maturing the process for expenditure management and budget management. In short, the design stage, development stage and the pilot deployment is not to the mark. Likewise, the design for the current manual budget finishing and the accounting procedures are automated on a large scale, exclusive of considering the fact that there are other efficient methods for retrieving the desired results. Conclusions and Recommendations BMS require best practices for project management along with involvement of key personnel or stakeholders in order to deliver the project successfully. Moreover, a steering committee is required to make the progress of the project transparent. We have discussed a project with realistic facts and findings. Inappropriate BMS can be disadvantageous as it will contribute in a critical decision making process and lead to wrong decision and incorrect financial results influencing the performance of an organization. We have incorporate real world examples from different regions and discussed the pros and cons of a successful or unsuccessful deployment of BMS systems. The designed information system named as Transport system is compatible to construct information from different data inputs along with indicating linkage with queries. However, in this scenario, if a proprietary BMS is acquired, there is no integration requirement, as the system will operate from the cloud based Infrastructure as a Service (IaaS) model. Moreover, the quantity of data was not reliable as the data demonstrated the popularity of tube users. Accordingly, by collecting more data, the results will be more accurate and viable. Moreover, large sample of data can also facilitate accurate results as small data sample can lead to a considerably unacquainted examination. If tuck man model was followed, the team may have followed an informative approach, as the model illustrates the stages and progress of a team. References OBrien, J., Marakas, G., (2010). Management Information Systems. 9th ed. New York McGraw Hill DATA MONITOR: Dell inc. (2009). ().Datamonitor Plc. Kedar, S. (2009). Introduction to data processing In Database management systems (First ed., pp. 1). India: Technical Publications Pune.. Nowduri, S. (2011). Management information systems and business decision making: Review, analysis, and recommendations. Journal of Management & Marketing Research, 7, 1-8. STAIR, R.M. and REYNOLDS, G.F., Principles of Information Systems (with Printed Access Card) Course Technology. SULLIVAN, J. n.d, HIPAA: A Practical Guide to the Privacy and Security of Health Data American Bar Association. SIMS, R.R., 2003. Ethics and corporate social responsibility: why giants fall Westport, Conn.: Praeger. ZALESKI, J. n.d, Integrating Device Data into the Electronic Medical Record: A Developers Guide to Design and a Practitioners Guide to Application Wiley-VCH. Read More