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Treasury Systems Custom Developed/ Bespoke Application Software Versus Commercially available Off The Shelf (COTS) Softw

Treasury Systems Custom Developed/ Bespoke Application Software Versus Commercially available Off The Shelf (COTS) Software A. Hashim Treasury Systems Consultant World Bank. Custom Developed / Bespoke Software versus Commercially Available Off the Shelf (COTS) Software

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Treasury Systems Custom Developed/ Bespoke Application Software Versus Commercially available Off The Shelf (COTS) Softw

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  1. Treasury Systems Custom Developed/ Bespoke Application Software Versus Commercially available Off The Shelf (COTS) Software A. Hashim Treasury Systems Consultant World Bank

  2. Custom Developed / Bespoke Software versus Commercially Available Off the Shelf (COTS) Software • Off the shelf (COTS) software: • Embeds best practice business processes and Internationally Accepted Accounting Standards • The better known ERP packages offer full function functionality • Includes modules that can record and process all transactions related to the Budget Compilation and Budget Execution Processes. Namely; • Initial Budgets, Budget Revisions/ Transfers, Commitments, Purchase orders, Goods Receiving Reports, Invoices, Payments; Tax and non tax Receipts; Journal vouchers, Interfaces with Banking systems, etc. • Canoffer a migration path from Cash to Accruals

  3. COTS Software (continued): • Offers Built in controls and audit trails; ( e.g. ensures the integrity of vendor file, personnel file etc.) • Offers good security features • All modules work against a common data base ensuring data sharing and data integrity • Rich end user features • Good documentation, • Technical support • Software updates

  4. However: • Only better known packages have transitioned to and incorporated public sector requirements related to budget control, budget releases, etc. (e.g. SAP, Oracle Financials, Free Balance) • Will only incorporate standard core functions • Ancillary front end features that support various administrative/procedural requirements (such as those supporting pre-audit) will need to be programmed separately using tools available with the package • Cost of package and recurrent license fees may be considerable • Recent World Bank Procurement experience has shown that only a few vendors have the required international support capability and respond to World Bank RFPs

  5. Custom Development versus Commercially Available Off the Shelf (COTS) Software- • Compare Like with like • Building in all COTS features (functionality, controls and integration) in a custom developed package : • will require extensive software development • can be very costly and time consuming • without extensive technical and project management expertise, can be very risky

  6. Bespoke software: • will provide a better fit with requirements; • this may not always be good; it allows replicating old business processes • implementation can be done more incrementally with only a subset of core features being implemented initially • this would be the low cost option for those countries which can only afford a subset of features to start with • It is these types of cases where it is stated that bespoke software is a cheaper option • However, even this requires availability of software development expertise in local market • can be used as a means of firming up requirements • often used as a first step of a two step transition

  7. Examples of two step transition • Be spoke Software first used to implement core Treasury functionality in; • Kazakhstan • Russia • Ukraine • Hungary • Turkey • Replaced by COTS Software (Oracle Financials) in Kazakhstan • Being replaced by COTS Software (Oracle Financials) in Russia • New Project in Ukraine envisages COTS Software

  8. Examples of where COTS Software was the first Option • Installed in: • Pakistan • Mongolia • Being installed in: • Azerbaijan • Uganda • Vietnam • Being selected for • Maldives • Indonesia

  9. Summary Conclusions: First Look for a COTS Solution It is costly- COTS Software and parameterization costs are a major component of costs In a situation where there is good software development expertise available locally, Bespoke software could offer a medium term option However, even here, these countries eventually move to COTS Software Bespoke software could be the first step of a two step transition and used as a means of firming up requirements Bespoke software could also be an option in very low budget/low capacity situations where the country can only afford a subset of core features. Note that in these situations: Availability of local / regional software development expertise is required Compare like with like- You will only get what you pay for (in terms of quality and functionality)

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