Programme, Financial and Administrative Committee
SIXTH ITEM ON THE AGENDA
Information technology in the ILO
1. A detailed Information Technology (IT) Strategy exercise for the ILO was completed in 1997 to cover the years 1997-2000, as an update on the previous 1992-96 IT Strategy. A paper(1) was presented to the 270th Session (November 1997) of the Governing Body highlighting the main features of the new strategy.
2. At the 271st Session (March 1998) of the Governing Body, during the preliminary consultation on the Programme and Budget proposals for 2000-01, the Workers' group requested that the Office prepare a paper covering a number of aspects of IT in the ILO.
3. IT supports the internal functioning of the Organization, communication with and access to information for constituents, and the promotion of ILO global activities. Just as the introduction of the desktop personal computer (PC) in the 1980s revolutionized the workplace, the explosive growth of the Internet and its associated technologies has enabled the Office to improve communications and to increase its information dissemination capacity.
4. The first part of the document describes IT applications that are of potential interest to the members of the Governing Body and other persons associated with the work of the Organization, as well as the public at large. It does not cover the purely internal applications in support of the activities of the Office. The second part, however, concerns two major systems that are more in the realm of the management of Office activities, namely the financial and accounting systems and the Personnel Information System (PERSIS). The reason for bringing these two major systems to the attention of the Committee is that they are both in need of funding that is well in excess of levels that could be accommodated in a programme and budget with zero real growth.
Internet and the dissemination of information
5. With the introduction of Internet technology, the Office has developed a public site on the World Wide Web in order to provide information about the ILO that is of interest to the outside world. The Appendix shows the main headings under which information is readily available on the ILO website. The areas that have been of particular convenience to delegates have been the documents of the Conference, Governing Body and other meetings. With the introduction of this information on the Web, delegates have been able to access the information more readily in their country of residence rather than awaiting the physical delivery of hard copies. Several other categories of information, such as the publication of press releases, job vacancies, etc. have also proven to be of practical value. Constituents and the general public now have access to information concerning the main resources and outputs of the Office. The ILO website is currently registering over one-and-a-half million hits per month.
6. The maintenance of various parts of the ILO website is decentralized so that programme managers are responsible for determining the information to be posted concerning their activities and also to ensure that such information is regularly updated. The Office continually reviews and improves the contents of the ILO website so that it can respond better to user needs. Comments received by the manager of the ILO website are analysed, and all useful and constructive suggestions are retained for future development.
7. The ILO has produced five major databases for its constituents. These are the CISDOC database (occupational safety and health bibliographic information), LABORDOC (bibliographic information on labour and social issues), LABORSTA (global labour statistics), ILOLEX (international labour standards) and NATLEX (national legislation on labour and social topics).
8. These databases are available in print and CD-ROM and, to a limited extent, on the Internet (NATLEX, ILOLEX and several subsets of LABORDOC are currently accessible through the ILO website and development is under way to provide Internet access to LABORSTA). As pointed out in the Programme and Budget for 1998-99, policies regarding the marketing and prices of these databases need to be made more consistent. There is also a need to improve the information available, determine common interface standards and make access to these databases more user-friendly.
9. A project is currently under development for electronic commerce (E-commerce) to sell ILO publications directly on the Internet via the secure use of credit cards. The secure credit card aspect of this project is being outsourced to the ITU, which has developed its own system and has been using it since 1996. The E-commerce system could also eventually be used to provide paid access to CISDOC and the entire LABORDOC database through the ILO website.
10. As well as the Internet site on the World Wide Web, there is also an ILO internal Intranet site which, in addition to the information contained on the main ILO website, includes internal information, administrative documents and directives for the management of the Office. This site is for the exclusive use of ILO officials.
11. For over two years, officials at headquarters have been connected to the Office-wide email system. This facility has also gradually been expanded to the regional offices, other external offices and the multidisciplinary teams, with the result that almost all officials are now able to communicate instantly with each other, regardless of their geographical location, at a small fraction of the cost using more conventional means such as telephone or facsimiles, etc. This means of communication also enables them to communicate efficiently and economically with persons outside the ILO, including officials of other organizations of the United Nations system and also with an increasing number of constituents as they acquire the necessary equipment and connections. Some 60 ILO offices worldwide now have the facility to communicate by email with each other, with headquarters and with the outside world.
12. In addition to achieving efficiency and productivity gains, the introduction of these modern means of communication has permitted the Office to decentralize important functions and responsibilities to the external offices. These include Imprest account management and the preparation and management of budgets and local payrolls.
Outlook for the future
13. A decade or two ago, the visible IT horizon was about five years. Today it is closer to three years, and with the dramatic and rapid technological developments in the IT field, it is difficult to predict where that horizon will be in five to ten years time. A vivid illustration of the inaccuracy of long-range IT predictions is the Internet. Five years ago no one could have predicted that it would become the overwhelming and almost revolutionary technology that it is now at the end of the millennium. The ILO's strategy for the introduction of new technology has been cautious and conservative to ensure that only mature and time-tested technologies are adopted. The following are some of the future applications that are under development or consideration.
14. The possible introduction of the type of applications mentioned above would depend on the evolution and the cost of the required technologies, as well as on cost-benefit analyses to determine whether their introduction was justified. The Information Technology and Communications Bureau (ITCOM) also maintains an ongoing technology watch and dialogue with the users of IT in order to remain up to date with their requirements. It is the intention of the Office to keep the Governing Body informed of all significant developments in the IT field and to submit to it the introduction of any technology that may require its approval because of policy or financial implications. Moreover, the Office would welcome any suggestions by members of the Governing Body for the improvement of the information and services currently being provided and for the development of new IT applications.
15. The Programme and Budget for both the 1996-97 and 1998-99 biennia drew attention to the inevitable need to replace the central budgetary/accounting system and the general ledger system. It will be recalled that these systems will be 21 and 12 years old respectively at the end of the current biennium. As foreseen in the Programme and Budget for 1998-99, the Office has completed a very preliminary study of the possible replacement of these systems. The study's objective was to determine the scope of a project to replace the financial systems, to propose a framework or methodology for the project, and to provide an estimate of its cost. The study was conducted with the assistance of an independent firm of professional consultants to ensure that the Office had access to the latest technological expertise and a wider breadth of experience. The principal conclusions of the study are summarized in the following paragraphs.
16. The financial information systems currently used by the Office may not be sustainable for much longer. Although projects are under way to address the Year 2000 issue, the long-term perspective for mainframe systems initially developed in the 1960s and 1970s is precarious. The computer languages used in the existing systems are outdated, and the new generation of programmers are no longer conversant with them. Therefore, the skills required to merely support these systems are becoming increasingly scarce and expensive. A major breakdown in the systems could have serious consequences.
17. The existing systems have become inflexible after having been repeatedly modified to meet changing requirements. They operate on multiple platforms, storage of data is fragmented, and there are difficulties in archiving data. Further modifications to the systems are becoming increasingly complex because of the difficulties of interfacing with other systems. In addition, potential improvements in the financial and administrative procedures of the Office to adapt best practice are hindered by the requirements of the financial systems which are not fully integrated and result in some duplicated data and redundant processes: for example, the lack of an integrated payments system results in cumbersome manual processes, and the inability to make full use of electronic banking systems.
18. There are also shortcomings in the areas of accounting, reporting and information dissemination, the timeliness of and ease of access to information, and links with other external systems (such as UNDP). These difficulties will limit the effective decentralization of certain financial functions outside headquarters and will also have an impact on the Office's ability to efficiently meet increasingly complex reporting requirements, including those of extrabudgetary donors.
19. The danger facing the Office, should it not proceed with the replacement of the central budgetary/accounting system, is that the time will come when these weaknesses could result in a loss of the Office's ability to meet its statutory duty to maintain accounts and could seriously compromise financial management. Although it is not possible to make a firm prediction, such difficulties may well arise in the next five years or so. It would be undesirable, when such a situation arose, if the Office were forced to implement hasty decisions on replacement systems rather than undertake a deliberate phased implementation over a prescribed period.
20. The introduction of new integrated financial systems will address all of the above problems. An important benefit of modernizing the ILO's financial management environment and replacing the existing systems relates to improved information quality due to the rapid capture and validation of data. Greater flexibility in reporting would be possible, as would ready access to more up-to-date information. The integration of systems throughout the Office would be assured, including interfaces with external offices, thus avoiding duplicated processing and storage.
21. Improved financial control would result from clearer methodologies and new automated tools. The greater consistency in processes and timely access to data would facilitate the management of programmes. The monitoring and support of external offices operating with decentralized financial authority would also be enhanced.
22. The use of modern tools and technology commonly found in the public and private sectors would eliminate the concern over system sustainability, reduce the support risk, and provide options for systems maintenance not currently available. Furthermore, the ability to accommodate future change and/or growth is inherent in the design of modern financial systems.
23. The experience of other organizations in the UN system in information technology projects of this size, together with the professional advice the Office has obtained, indicate that such a project could be expected to last some four to five years. This would include an intensive period of process re-engineering to ensure that efficient and modern organizational processes and procedures are determined prior to the implementation of any automated solutions. An important criterion for the success of the project would be to have assured full financing. The estimated cost of the project is between $15 to $20 million, i.e. $5 to $6 million per biennium for three biennia. The estimate includes some $9.5 million for consultancy services, some $5 million for hardware and software and some $3.5 million to cover the costs of short-term recruitment of staff either to work directly on the project or to allow the release of experienced ILO officials to work full time on the project. A more accurate costing would become available as more detailed analyses of the extent and user requirements are generated during the initial stages of the project.
24. One of the major information technology applications in the Office since 1992 has been the development of the ILO's Personnel Information System (PERSIS), based on the United Nations Integrated Management Information System (IMIS). The UN began development of IMIS in 1990-91. The General Assembly later offered the IMIS basic software to other UN organizations and encouraged use of the application, or parts of it, within the common system.(2) After exhaustive evaluation of IMIS and commercial packages, the ILO in 1992 chose IMIS Personnel, Entitlements and Payroll modules for implementation of the PERSIS project.
25. Development and implementation of IMIS at the UN has taken much longer than planned, with the UN in New York implementing the Personnel module in 1993, Finance in 1995, Entitlements in 1998 and Payroll expected in 1999. So far only the Personnel and Entitlements modules have been implemented in the UN's external offices. In addition, UNDP and UNICEF have already adopted portions of IMIS and both will use the Payroll module when it is ready.
26. As it is directly dependent on the UN delivery of software, the timetable for the introduction of PERSIS at the ILO has also been delayed. In 1995, the ILO was the first organization to implement the IMIS Personnel module. Due to delays in the availability of the UN development contractor, Entitlements will now be completed in 1999. Only about half of the work on preparations for the use of the Payroll module will be completed by the end of 1999. This work includes most of the "gap analysis" of differences between ILO and UN payroll processing, the development and implementation of the Automated Financial Clearance subsystem and the development of requirements and systems design on the critical PERSIS Finance system interfaces covering general ledger, salary distribution, advances, etc.
27. While the IMIS system has been provided by the UN, implementation of the ILO's PERSIS has required considerable work in terms of customization, testing and training. The costs for the PERSIS project, provided for in major programme 160, from 1992 through 1997 were US$5.4 million, and allocations for 1998-99 are US$0.86 million. These costs include all expenditure relating to development, ongoing support and maintenance of the system.
28. Since the introduction of PERSIS at the ILO significant benefits have accrued. These include the accumulation of nearly four years of comprehensive personnel information in the database, a considerable reduction in manual paperwork for many personnel work flows such as contract processing, conference payrolls, medical clearances, etc., much tighter control and follow-up on personnel actions through reports on pending matters, and the automatic and precise application of certain staff regulations.
29. When the Entitlements and Payroll modules have been fully operational for about 18 months, the major return on investment will accrue: reduced staffing requirements (approximately four GS work-years) and greatly reduced processing time for many personnel/payroll transactions, which are currently done manually (e.g. creation of obligations and processing historical payroll actions) yielding higher productivity; automatic calculation of staff members' entitlements to be printed on contracts providing improved accuracy and efficiency; elimination of the existing personnel/payroll system and all resources dedicated to supporting it (reduction of approximately three GS work-years). An added benefit for all participating organizations in the IMIS project is that improvements and subsequent developments made by any one organization can then be automatically shared by others.
30. The full completion of the PERSIS Payroll module -- including parallel testing and implementation -- is foreseen for the 2000-01 biennium, provided sufficient resources are made available. The projected need for additional resources above those foreseen under major programme 160 for 2000-01 is $1.6 million. The ILO will then have accomplished the major objective of implementation of all the Personnel and Payroll modules of IMIS.
31. The nature of IT is such that investment requirements both for the purchase of hardware and the development of software can be very substantial and occur at irregular intervals that are difficult to forecast. With the budgetary practice of the ILO, such investment needs are extremely difficult to provide for in the programme and budget, particularly within the constraints of zero real growth. Moreover, the Financial Regulations do not permit savings in one biennium to be carried forward to meet expenditure requirements in future financial periods. This has led to difficulties in the past and the required investment funds only became available when substantial cash surpluses arose due to unusual financial circumstances, thus enabling the Governing Body and the Conference to waive the provisions of the Financial Regulations so that a part of such surpluses could be used for investments in IT. While these decisions by the Governing Body and the Conference were vital in order to meet the urgent needs at the time, it is clear that a more practical budgetary arrangement is desirable to meet the long-term investment requirements of the future.
32. One possible solution to this dilemma, which the Committee may wish to consider, would be to create an extrabudgetary fund, which would be financed by regularly recurring payments from the programme and budget. The fund would be carried forward from one financial period to the next. In this way, a reserve would gradually be accumulated which, with the prior approval of the Governing Body, would be used for investments in IT as and when they become necessary. In the absence of such a funding arrangement, it will be very difficult to make coherent plans for future development work in the field of IT.
33. Even if the Governing Body were to accept the principle of establishing and financing such a fund, it could only begin to meet future needs once it had reached an appropriate level. It would unfortunately solve neither the more immediate requirements of financing a new financial and accounting system over the next four to five years nor the need for a further $1.6 million funding for PERSIS in 2000-01.
34. With the constraints of zero real growth it would not be realistic to expect to finance expenditure of such magnitude from the regular budget unless an exceptional increase, for a determined period and for the exclusive purpose of financing the project, were to be authorized. Unless financing could be assured, the Director-General would have no alternative but to delay implementation, with all the risks and disadvantages that this would entail.
35. The Director-General would welcome the views of the Committee as to the financing of these large IT projects, particularly that relating to the development of a new financial and accounting system, because of the substantial sums involved.
Geneva, 29 October 1998.
2. A/C.5/46/24, para. 8; A/C.5/50/35, paras. 73-76; A/C.5/51/23, para. 75.