Freebalance
Empowering Governments With PFM Reform That Matters
We are in a freewheeling conversation with the President and CEO of the Public Financial Management (PFM) solutions firm, FreeBalance. Manuel Schiappa Pietra is a global executive and entrepreneur with decades of experience in the management space. Under his leadership, FreeBalance has expanded its global footprint and grown its reputation as a purpose-led organization.
He has delivered better revenue, profitability and progress. For this exclusive read, he shared some unique perspectives and gave great insight into the PFM industry. Read the cover story to learn how FreeBalance grew to be one of the world’s leading Government Resource Planning (GRP) solutions providers.
INTRODUCTION
FreeBalance believes in fiscal transparency and exists to improve the wellbeing of citizens around the world. By helping governments to implement good governance and fiscal discipline, FreeBalance enables their customer countries to meet their national development objectives.
FreeBalance’s suite of advisory, technology and capacity-building solutions empower governments, improve citizens’ wellbeing, combat corruption and drive economic growth and prosperity around the world. Their teams in all corners of the world help create and deliver realistic and impactful public sector solutions that enhance transparency, improve effectiveness, restore trust, enable reform and create innovation breakthrough opportunities.
As a purpose-led organization, FreeBalance is committed to creating sustainable value for all stakeholders through their portfolio of government bespoke packaged services that offer technology agnostic tools and practices.
VISION AND MISSION: HOW IT ALL BEGAN
FreeBalance’s story begins in 1984 when it developed a system for the Government of Canada to work out the free balance available in the budget to fund expenditures. The solution designed, now known as the FreeBalance Accountability Suite™, is a Commercial Off-the-Shelf (COTS) GRP solution that covers the entire budget cycle and manages all critical government fiscal systems.
It is the only global GRP system that is designed bespoke for government and is developed in collaboration with customer governments to meet this sector’s specific needs. As governments are at the nexus of providing improved quality life to the citizens while addressing the global issues facing us all, FreeBalance specialized in this niche market. The FreeBalance team is driven by their passion to make a difference in the world. Their systems and services underpin the PFM reform programs of more than 25 countries, managing government budgets of over $350bn on behalf of 900 million citizens.
THE FREEBALANCE DIFFERENCE
With deep experience in both developed and emerging countries, FreeBalance has unparalleled experience in public finance reform. Having been at the coal face, implementing solutions in some of the world’s most fragile countries, the company understands what it takes to get PFM reform right and has designed its value offering to provide the right help at the right time.
- Their advisory services are customized for governments and include the identification of PFM reform sequencing based on priorities, modernization of institutional structures, operating systems and mandates, as well as policy and budget alignment to citizen wellbeing and sustainable development.
- Their GRP software is budget-driven through the use of commitment accounting, where the budget is the legal embodiment of government objectives. The FreeBalance Accountability Suite™ is available in six base configurations that can be progressively activated as a country’s legal reforms unfold. This highly adaptable software uses open standards and open approaches to deployment, and offers customers value for money by providing the lowest Total Cost of Ownership.
- Given the company’s commitment to enabling PFM reform that matters, over and above the services and solutions they supply, they are also fully invested in building government capacity in the countries in which they operate. To this end, The FreeBalance Academy provides practical government-bespoke training online and onsite.
FreeBalance is also committed to developing and maintaining global partnerships and alliances that strengthen government accountability, fiscal transparency and good governance. They believe that these relationships enhance their practice leadership in public financial management with local knowledge and global expertise. Alliances help extend the FreeBalance product footprint and service capabilities to better support government reform and modernization efforts.
PEOPLE FIRST
Perhaps one of the most striking features of the FreeBalance model is its approach to tapping into local knowledge and expertise. The FreeBalance team is composed of passionate and inspired people who build solutions that make a difference. With over 40 different nationalities in the team, they pride themselves on their diversity and are deeply committed to building local talent in the countries in which they operate.
This diversity of thinking helps them to create meaningful solutions relevant to the country context. Their ‘glocal’ model uses the metric 5:15:80 so that on every project there are only 5 international and 15 regional resources. Schiappa Pietra insists that 80% of staff on a customer implementation must be local. Not only has this created great career progression opportunities for local talent, but the model has created an environment where product development, implementation and support are integrated in cross-functional teams. This, he believes, has added huge value to customers.
“We have built a culturally rich company that leaves a positive footprint in the emerging countries we work in. We embrace the diversity in the team and regularly learn from each about local holidays and family life in these disparate markets. This has created a tight-knit team, many of whom have been with the company for many years. We work across language barriers, cultures and timezones with ease”, he added.
FreeBalance is known for its flat management structure with direct lines of communication between employees and senior executives. The company also has a number of formal communication channels such as a monthly ezine and regular news flashes. These channels ensure that employees are aware of global customer implementations, product development, as well as new employees and employee milestones. Though the pandemic initially posed some constraints to this communication model, webinars and other digital modes helped them stay in touch with each other.
TAKING CUSTOMER CENTRICITY TO THE NEXT LEVEL
Customer centricity is not just a buzzword for the FreeBalance team. Their customers truly are at the core of everything they do. Which is why they co-create their systems with their customers and their government customers drive FreeBalance’s service and product development.
Schiappa Pietra believes that engagement leads to a better understanding of the future of government, putting governance and digital transformation in perspective, and ensures that there is alignment between the company and its customers.
The FreeBalance International Steering Committee (FISC) is an annual interactive forum. FISC attendees consider public finance, government performance and policy and public sector implications of new agile processes and new technologies. FISC insights adapt the FreeBalance vision for the ‘future of government’ and attendees provide input into the FreeBalance services and product roadmap, and help set priorities.
FreeBalance also hosts a bi-annual Ministers Roundtable which provides Ministers of Finance from customer governments with an opportunity to share effective practices to support PFM reform and economic development. Ministers and global thought leaders discuss digital transformation, citizen wellbeing and good governance. Ministers leave the event with policy lessons from peers and content to support government reform and modernization.
PFM SYSTEMS – BUILT TO FIGHT CORRUPTION
FreeBalance’s products and services are designed to improve governance and combat corruption. As a result, it is imperative that FreeBalance operates with a level of integrity that is beyond reproach. The FreeBalance Integrity Compliance Program is designed to help advance and preserve this trust and to meet the evolving compliance guidelines of International Financial Institutions (IFIs) and international law.
Schiappa Pietra explains: “Integrity is one of the core values of FreeBalance and our commitment to act with the highest standards of ethics is reflected in all of our activities. Our approach to compliance puts us at the forefront of the international fight against corruption and is a clear, practical demonstration of our fundamental principles – honesty, integrity, transparency and a commitment to “doing the right thing”.
PFM TRENDS
Given the reliance on governments to address the issues of the day, it is tempting to tout PFM reform and technology modernization as the silver bullet cure-all. There’s no question that reform and modernization are part of the toolkit that finance ministries can use to improve resilience. However, they are only two pieces of a bigger puzzle.
Schiappa Pietra explained how the pandemic, COP-26 and natural disaster ‘wake-up’ calls around the world have tested public sector resilience. He believes that there are five clear imperatives that governments and PFM practitioners need to embrace.
TRUST REFORM
- Erosion of trust in key institutions in both the public and private sectors continues unabated and urgently needs to be addressed. Transparency is the antidote to distrust and can easily be promoted through dashboards and transparency portals linked to the government’s financial management information system.
FISCAL POLICY MODERNIZATION
- Adopting a modern approach to fiscal policy by, for example, embedding Happiness Economics, would extend the benefits of good PFM beyond economic measures to the elements that citizens really value.
- The Sustainable Development Goals and citizen wellbeing need to be embedded into policy and budget classifications. And national and sectoral strategies should be included in both the budget formulation and implementation phases.
- Fiscal decentralization needs to be ramped up and fully implemented for accounting and budget execution functions. This would improves outcomes and resilience by enabling finance ministries to focus on critical issues rather than routine functions.
RISK MANAGEMENT MODERNIZATION
- The risks faced by humanity are growing and the potential social, environmental and economic costs of these risks is growing too. Now more so than ever, risk management needs to be included in budget formulation. Planning for expected fiscal shocks helps to improve resilience.
GOVERNMENT DIGITAL TRANSFORMATION
- The pandemic massively escalated the move online in both the public and private sector. The future is definitely digital and unfortunately, governments tend to lag in this important aspect.
- Digitalization would improve the Citizen Experience (CX) of government services which would deliver improved outcomes through improved and simplified digital experiences that increase revenue and support social spending.
DATA MODERNIZATION
- Governments need to mature their approach to data management to create a data-driven public sector that integrates governance, public value and trust. Having integrated metadata across financial systems would provide a timely and accurate “single version of the truth” to decision-makers at all times, in real-time.
WHAT’S NEXT
FreeBalance’s President and CEO is coy about the company’s future plans but said that they have some big announcements to make this year. He stated that 2021 was a watershed year for the business with significant effort channeled into setting the foundations for future growth.
For example, FreeBalance signed up as a signatory to the United Nations Global Compact and developed its own sustainability strategy; launched its ISO 27001 certification process alongside annual updates to its ISO 9001:2015 quality management certification; invested heavily in its Research and Development capacity; and signed a number of strategically significant partnerships such as with ACCA (the Association of Certified Chartered Accountants) – the world’s most respected accountancy body.
Given Schiappa Pietra’s remarkable achievements for FreeBalance to date, we are sure that the business will thrive in the year ahead.
PARTING WORDS BY THE CEO FOR ENTREPRENEURS
“A good entrepreneur is someone who is curious and can leverage their insatiable curiosity to bring innovative products or services to market. However, it is also important to be able to lead with passion and purpose. If your work is meaningful and impactful it will inspire your team to achieve the impossible.”
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