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Silo Fighters Blog

Bringing Brazil back office innovations into the spotlight

BY Maria Helena Mizuno Moreira | December 6, 2017

At the beginning of 2016, Nesta predicted that back office innovations would take center stage.   In the case of the UN in Brazil, this prediction was spot on. If you work outside the United Nations system you might assume that we consistently pool our resources. But we don't. This is largely due to the fact that the UN organisations were created one by one by the UN Member States over the last 70 years, and the different UN organisations therefore had to set up their own internal management structures - not unlike different ministries in a government. In the past, cost savings have been pursued UN agency by UN agency within their sometimes very different business models. As part of the drive for better services and reduced costs, however, the UN has been reconsidering this model, and are trying out new methods for pooling back office functions to better serve the populations we work for.    The UN in Brazil is one of the four integrated business centers across the UN system that are piloting this new way of working. We named it the Joint Operations Facility, or the JOF (yes, we love acronyms in the UN!). The other integrated business pilots are in Cape Verde, Copenhagen and Viet Nam. In Brazil, we began 18 months ago with the idea of simplifying business processes and integrating services across UN entities. Out of 22 funds, programmes, and specialized agencies working in Brazil, six agencies endorsed this project: UNDP, UNFPA, UNESCO, UN Women, UNOPS and UN Environment, with UNAIDS as a partner agency. With the support of the UNDG Business Operations Working Group and the UN High-Level Committee on Management, we conducted a strategic review of business operations in the country. We assessed our procurement, IT and human resources needs and created a business case for pulling these back office functions together. This analysis was the official start of our Joint Operations Facility in Brazil. What does integrating business operations really mean? Setting up this facility meant creating a new team to fully address the new needs of these agencies in country. We created new positions for procurement, travel, ICT and a manager that oversees the work of the team. The JOF Manager reports to the UN Resident Coordinator, who shares the governance of the facility with the six agencies participating in the initiative. For decisions, we follow the General Assembly “one vote one voice” principle, so each agency has an equal say regardless of the size or volume of goods or funds they channel through the facility. Now 18 months later, we are proud to say that the members of this facility are working together on a single service platform centralizing procedures and business operations in the areas of procurement, travel, information and communications technology. Centralizing services allows for several benefits such a sharing the costs and risks, and allowing staff to specialise and therefore increase the quality of services. The bumpy parts As with any new endeavor, the UN in Brazil faced several obstacles including entrenched practices, cultural clashes, and different ways of thinking. Some entities felt that they took an unfair financial hit and perceived a disadvantage in their business services, while smaller entities already counted on the facility to sustain their activities. Other lessons that we learned during these 18 months of journey are: Never underestimate transition periods: What we realized during the process is that setting up solid administrative support services requires an investment, and the transition period shouldn’t be underestimated. Technology to the rescue: The ICT tools that the facility used were initially connected with specific UN entities’ requirement. We soon learned that this was too complex. A second generation of ICT applications and portal will be released soon allowing automated monitoring to improve control, transparency and operational efficiency. When duplication happens, breathe, and phase it out: Some of the participating agencies preferred to keep parallel internal operational structures. This was redundant to the purpose of the Joint Operations Facility, and agencies quickly realized that it was not sustainable and these structures are being phased out gradually. The lack of a global UN-wide common procurement manual has been a challenge, and we are trying to identify and adopt already existing operational good practices across the UN system to have a common framework. As a work-around, we are now working on our own common manual for procurement to consolidate practices including the adoption of a harmonized procurement manual. This has been a difficult and time consuming process. We believe that by expanding and providing additional procurement services, as well as launching the shared human resource services, we will ensure the sustainability and relevance of the facility. We are currently negotiating the provision of services to more agencies through service legal agreements, we will keep you posted in the number of agencies joining us! The silver lining It’s safe to say that our hard work ultimately paid off. Since launching the facility in March 2016, we are developing new procedures and tools to streamline our work. By simplifying and revamping our internal business flows, we are reducing our common operation footprint while improving the collective efficiency and saving costs. What’s next? In terms of next steps, some already see the opportunity to expand this facility into a regional hub. As the only integrated service center in the Latin America and the Caribbean region, building in the current structure we would have the potential to provide business operations services to multiple countries to increase cost savings and improve quality of office services. So we feel that this is just the beginning of an exciting project. Despite the hurdles, we trust that we are on the right track and will continue to support the United Nations to think outside the box and construct innovative, efficient and effective mechanisms to achieve the 2030 Agenda.

Silo Fighters Blog

The ripple effect of UN transparency: the case of procurement in Ukraine

BY Sandra Cavallo, Anastas Boiko | March 7, 2018

Times have never been easy for small businesses in Ukraine. Since the conflict broke out  in east Ukraine, the Ukrainian GDP plunged by over 10 percent in 2015 alone. Since then, welfare, livelihoods and social cohesion have been directly affected by the consequences of the conflict. Many entrepreneurs have moved away from the conflict zones due to the disruption of basic services and the risk of shelling. Thankfully, things are starting to get on better footing. As the country’s economy steadily began to recover in 2016 and 2017, with a GDP growth slightly above 2 percent, new opportunities for Ukrainian businesses began to emerge. This included the introduction of a free-trade zone with the European Union. This is good news, but success stories of local businesses making their way to EU markets are still scarce. Small local businesses, we hear you The UN’s operations in Ukraine have grown since the events of 2014 and the subsequent armed conflict. More UN projects mean more procurement needs, and it is no secret that some businesses stand to gain from an increased international presence in conflict-affected areas. At the UN, we deal with mostly medium and small-sized Ukrainian businesses on a daily basis.  When we issue procurement notices, we know from experience how difficult it can be for a local company to successfully fulfill the criteria of a transparent, international tender. In some cases, we have to reject up to 30 percent of tender proposals due to errors in their submissions. To become a provider for a UN agency, businesses need to meet high standards, including accountability and transparency. Is there something we can do to turn this situation into a stable positive effect for local businesses? A new way of doing business: Increased transparency The local companies that we work with get the message: to seize new opportunities, they need to step up their organizational standards and increase transparency, no matter how big or small the business. Transparency is on the rise in Ulkraine, and in some ways is even seen as a way to attract customers. For example, a searchable e-declarations database, launched among international fanfare in 2016, is now where all Ukrainian public servants declare their assets. Also, some anti-corruption organizations are developing tools to verify conflict of interests and cross-check public contract award decisions with a list of companies owned by city council representatives and their family members. And Ukraine’s ProZorro system won international awards for making all public tendering transparent and verifiable by any citizen online. A core principle for the UN, transparency, is essential for high-quality public procurement. An open and transparent procurement process improves competition, increases efficiency and reduces the threat of unfairness or corruption. With this core principle in mind, we asked ourselves: How can we be more transparent? Demystifying UN procurement Our solution to this big question was: let’s take the streets! And we (kind of) literally did… Instead of using the usual communication channels to disseminate our tenders, we adopted a more proactive approach and reached out to the wider private sector with a series of public meetings where we talked about the ins and outs of procurement as practiced in the UN. We talked about how all bidders are evaluated equally from the solicitation stage, throughout the evaluation process and until the contract is signed. Apart from making the organization more transparent, our second goal was to support local bidders to improve their working practices and be able to meet the high demands of our tenders. The hope is that this will increase competition helping to ensure that we, the UN, receive the best value for money in our procurement processes. In our effort to take procurement out on the road, we went beyond the capital city of Kiev and travelled to key cities across the country: Lviv, Kharkiv and Odessa in the west, east and south of Ukraine. We made special efforts to connect with those companies that were internally displaced by the ongoing conflict. In one year, we met face-to-face with over 400 representatives of local businesses from many different industries: food production, construction, pharmaceuticals and advertising. This gave us the opportunity to engage with local businesses, hear their concerns, and answer their questions. At these public meetings, companies that previously worked for the UN spoke about their experiences sharing why they had failed several times before succeeding. They talked about the importance of needing to rely on quality, transparency and demonstrated results, instead of personal contacts, unofficial payments, or other non-transparent practices, were some of the issues highlighted. This is still a mindset change from the still widespread practices of the old times! And we got ambitious… All these interactions with local vendors raised another  question: can our initiative have a ripple effect so local businesses will be prepare to compete beyond the UN market? It may still be too early to tell but we are eager to see the results. We can always hope that this will be only the first step on a thousand-mile journey: the journey towards conquering world markets, rephrasing the idea of the Chinese philosopher Laozi. Meanwhile, we are getting great signs of success: one of the agencies working in Ukraine, UNDP, is already seeing an ever-growing number of new bidders. Having more companies to choose from will always help us ensuring best value for money, a sacred principle in our procurement processes. The end result: helping the organization spending taxpayers’ money in the most effective way. Come back to learn how we are doing!