The municipal sector is noteworthy in that it involves many stakeholders – the mayor, the opposition, councillors, the media, citizens and MAMOT (Ministry of Municipal Affairs, Regions and Land Occupancy) – all of whom are demanding greater transparency and access to astronomical amounts of information of every conceivable kind.
After the unprecedented transformation caused by the large number of municipal amalgamations occurring first in the 1990s and then at an increasing rate in the early 2000s, municipalities are being asked to reduce both staffing and costs in the name of efficiency. This puts a pressure on Finance Departments, since they must now both show and communicate how these goals are being achieved.
Cities are complex systems offering a wide range of services, from roads to recreation, from policing to snow removal, and including real estate. Each of these departments has vastly different management requirements and operational realities, and each one must allocate costs that behave in totally different ways.
Flexible and integrated tools are key!
Since Finance is tasked with responding to information requests regarding all areas of operation, it must have the tools it needs to communicate with as many partners as possible. These tools must be flexible, integrated and decentralized, so that the information thus obtained can be widely shared.
In order to make the budget process as efficient as possible and respond to the many information requests it receives, Finance must be able to quickly produce scenarios to justify its decisions. It must also be able to integrate the various collective agreements into a single solution, to manage them more easily and more efficiently administer the payroll. More than anything else, the Finance team wants to shorten the budgeting and forecasting process, and interpret the data, not just extract and collect it.
With few resources at their disposal yet obliged to work with many and varied collaborators, Finance teams must leverage the tremendous amounts of data they possess to improve performance. To this end, cities often choose systems that give the total cost of providing municipal services. These activity-based costing systems show the types of resources, activities and services offered in addition to providing reliable performance indicators.
More than a system, a performance management tool!
Finance Departments want to create reports and financial dashboards, easily publish them, drill down and go back as far as possible to get the most detailed and helpful information. Using activity-based management data during the fiscal year is key to creating scenarios and explaining variances. With these in hand, managers can explain to councillors, the opposition and the media what activities they are responsible for, and what the financial impact of change in the volume of goods or services will be.
Many Quebec municipalities have opted to modernize their financial systems by choosing an integrated solution to support them in their day-to-day operations and performance management.