Improving the quality and usefulness of business information through full and timely capturing of relevant data on costs and activities This shall be supported by:

§ The introduction of a timesheet system that will allow Budget Holders and Management to have a complete (and constantly updated) view of current human resources effort and cost;

§ The tracking of all other relevant information currently not captured by corporate systems, including local commitments. With regard to this point, it is essential to ensure the full funding and completion of IPSAS project and Field Accounting System (FAS) replacement.

To fully support the introduction of these improvements, an integrated and fully accessible corporate information system will be required, in order to:

§ Reduce manual / redundant activities, integrating the different planning and monitoring tools currently in place and replacing the existing “shadow systems” (stand alone spreadsheets); § Provide relevant information and reporting flows to support the decision-making process.

If considered as a “stand alone” initiative, the full deployment of the new P&B model will require no less than 24 / 30 months. This timing includes:

§ The detailed design of processes and management reporting requirements;

§ The analysis and definition of the best solution to upgrade and rationalize current IT systems; § The testing and fine tuning of the new model on a pilot project basis;

§ The full deployment of the PWB system (and related support).

1 _{For the purposes of this document, there are no difference between Strategic Objective and Functional Objective. In the following}

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However, taking into account a broader perspective, it must be stressed that the definition of a realistic and sustainable road map for the implementation of the new P&B model should also consider the coordination of these activities with the other ongoing interrelated key initiatives such as IPSAS, FAS replacement, RBM, MIS and necessary upgrade of Oracle. This will require a better understanding of the real effort needed in terms of human and financial resources, to ensure the expected results.

FAO currently has many concurring and parallel initiatives. These initiatives and related investments should be clearly prioritized according to their strategic relevance, in order to be fully funded and to achieve the expected results within the planned timeframes.

Along the line of the analysis described above, in the following sections the main outcomes of the workstream are explained, according to the following:

§ New Planning and Budgeting model;

§ High-level business requirements for reporting; § New Programme of Work and Budget;

§ Organizational impacts; § Transition map;

§ Costs & savings; § Final recommendations.

2.4.1.1. New planning and budgeting model

Following from the final report of Stage 1, the proposed new model tries to overcome the main issues there identified. As mentioned above, the two different sources of funding are reflected in two separate and different planning and budgeting models. While the Regular Programme follows a quite standard (but improvable) corporate planning cycle, the Extra-budgetary cycle is focused on specific projects, with few links to the overall organizational strategy and long-term objectives.

Consistently with the issues identified in Stage 1, in the new P&B Model the RBR has tried to achieve four critical objectives:

§ Improve the effectiveness of the P&B processes, integrating all activities and all funding sources; § Make the P&B exercise a result-oriented management process, in line with the RBM project, in

order to create organizational alignment with strategic objectives;

§ Strengthen FAO transparency and accountability in the use of resources toward the Members; § Enforce financial discipline and control.

Consequently, in designing the new model, three main general principles have been taken into consideration:

§ Negotiation;

§ Integration and coordination; § Accountability and empowerment.

Negotiation refers to the ability of the model of enhancing people’s commitment around agreed

(negotiated) objectives. This principle is also related to the creation of a positive competition on resource allocation: indeed, in a negotiated cycle, activities will be prioritized according to their capacity of achieving results and their coherence with corporate objectives. Resources will be then allocated to those activities that appear to be more effective and more consistent.

Integration and coordination refer primarily to all activities and funding sources that, as mentioned

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the need of creating a tight connection between the results chain and the organizational structure, as well as strengthening the connection between MTP, PWB and AWP.

Finally, accountability and empowerment imply assigning responsibility for results to managers, as well as giving them a fair degree of authority and flexibility in using budgeted resources to achieve agreed objectives. According to this principle, the model has also identified high level requirements for reporting and monitoring, in order to provide FAO management with better business information.

Based on these principles, the new Corporate P&B Model will bring large structural improvements in the activity of FAO, in terms of effectiveness and coherence of the strategy formulation and organizational alignment, financial discipline and transparency versus external stakeholders.

2.4.1.2. Principles of an activity-based planning model

The main feature of an activity-based planning model is to define which “tasks” need to be completed in order to meet expected results and, ultimately, to accomplish the corporate strategy.

Best practices in organizations comparable with FAO adopt P&B models based on “projects”. A project can be defined as a set of coordinated activities, able to produce a significant and measurable output2_, through the delivery of a specific series of products / services and aimed at achieving a specific outcome. At FAO the term “project” is currently used with reference to Extra-budgetary activities. In the following pages the word “project” has to be understood according to a broader definition (unless differently specified) and regardless of its funding source.

MISSION