When deciding to start using or switch to a new budgeting and performance management system there are a lot of different factors that need to be taken into account. The most important step is defining your local government’s requirements, both functional and technical. These requirements will allow you to easily choose the best software when you begin meeting with vendors and researching products. In addition to making it easier to sift through different software options having fully defined your requirements beforehand will save you money, speed up the software roll out, and ensure that everyone is satisfied with the final product which is important since most organizations use the same system for seven to ten years!

So what are functional and technical requirements and how can they be defined? Functional requirements come first and they are what does the budgeting and performance management system need to accomplish? There will be many answers to this question so it worth it to spend some time on this question and consider creating a committeeof members of the IT department, people who will be heavy users of the system, and other stakeholders. While this will take a little more time at the beginning then simply going straight to vendors it will ensure that you are getting a product that matches the unique needs of your local government. The same goes when soliciting sample RFPs from other local governments, make sure your committee analyzes them and changes them accordingly so they accurately reflect your needs.  During this time you can also think about organizational structure, unique requirements to your local government, the breakdown of the budget model, and compensation and budgeting methodology.

Finally the technical requirements are how the functional requirements are accomplished by the budgeting and performance management system. These are considered by the committee after the functional requirements are determined. They will also come up when you evaluate vendors as you ask how your functional requirements will be accomplished by the software. Your technical requirements do not need to be set in stone but having an idea of what you want can help to ensure you are getting what your local government needs.

Choosing a budget and performance management system is not an easy task but it can have an enormously positive outcome with teamwork and clearly defined requirements.

As you begin your journey search for a new system be sure to check out these resources on the Knowledge Network:

• “Organizational Culture: Its Importance in Performance Measurement” a brief document which shows how differences between local government organizational structure can mean different ways of measuring success.
• “Performance Management Plus Project Proposal” This guide shows how one local government learned how to track performance management efforts effectively.
• “New Framework for Public Sector Performance Management Helps Local Governments Improve Results During Tough Times” This leading report provides examples of how various local governments are tackling the challenges of creating a performance management system.
• For specifics on software read the answers to this previously answered question to get an idea of what other local governments are doing, or if you have a unique question ask it on the Knowledge Network!
• “Assessing an Organization’s Readiness for Performance Management” this article from PM Magazine teaches you how to get your local government ready for start measuring and quantifying performance management.
• “The Transformation from a “Trust Us” model to a Performance Based Organization” is a case study from Fort Collins, CO on how they made the switch in their local government and how your can too.

This blog post was inspired by NeuBrain’s Webinar How to Define Budgeting and Performance Management Systems Requirements.

Best, 

Robin Saywitz 

ICMA Knowledge Network Intern

rsaywitz@icma.org