Malawi Govt denies clinging to ‘Cashgate’ software

By Gregory Gondwe, Blantyre, Malawi

The Malawi Government will not exclude the software brand that has been in use for the country’s Integrated Financial Management System (IFMIS) as government prepares to install a new system at a cost of US$10m.

Officials have criticized Minister of Finance, Economic Planning and Development Goodall Gondwe for apparently favouring the existing software provider, Epicor, despite glaring challenges with the IFMIS system that have been blamed for a massive losses in public resources.

Government started calling for bids for a new ERP solution through the local press on 22nd January 2015, but withdrew the advertisement on Friday.

Finance minister Gondwe reacted to reports that the government is ‘clinging’ to the software, saying government would rather tender for new software as it is currently working to migrate out of the system.

He called a press briefing this week at his office in Lilongwe where he said Government would now tender for software companies and not packages as before, although he warned that the process will take four or more years to have it effectively operational.

“We were quite surprised to hear that we are clinging to the software. We have to tender so that people should apply and no decision has been made yet. We don’t want to sustain a Cashgate situation, no. In fact we are working day and night to close the gaps,” he said.

Top vendors to bid

According to a document that experts prepared before government started calling for bids for a new Enterprise Resource Planning (ERP) system, Treasury research ranked the top five appropriate ERP solutions as SAP; Oracle Financials; Microsoft Dynamics; Infor; and Epicor. The Treasury report indicated that it believed SAP and Oracle to be the best ERP solutions, with Oracle-based ERP described as being particularly suited to the Malawi Government due to its high customer satisfaction rate, wide range of functionality, far much more flexibility, and short implementation period.

Treasury Spokesperson Nations Msowoya says the provision of IFMIS services is a very sophisticated process therefore it is important that only leading and proven and reputable providers of such services throughout the world are invited.

“Such providers are not many,” he insisted.

But asked why they are still including Epicor ERP systems run by Soft Tech, Msowoya said even though Epicor ranks last on the top five list, it remains a reputable vendor in this area.

“The decision is to have only the world’s leading providers compete,” he said.

The Office of the Director of Public Procurement (ODPP) said they indeed had no objection to the restriction of tendering.

“This is where they identified a few that can ably do the job. But this is an open process to all those that can provide the services within the mentioned three,” explained ODPP Director Dye Mawindo.

The Ministry of Finance, Economic Planning and Development has through the Accountant General’s Department (AGD) invited sealed proposals for supply, customisation, installation, configuration, integration, testing, deployment and commissioning the ERP system to drive IFMIS.

Uncovering the flaws

Findings by the treasury in a report released in November 2014 indicated that the Government has been operating the Epicor-based IFMIS since 2005. The performance of IFMIS has been very slow, such that payments of goods and services by government are oftentimes delayed.

Government attempts to upgrade from Epicor version 7.2 to Epicor 7.3.5 in 2008 but this did not help as the current version cannot meet government requirements as required in the revised business processes in financial management.

“The main challenge of the current Epicor system is its extreme slow performance which is mainly attributed to poor database design, [the use of] an old version of Epicor and inadequate skills to manage and use the system,” the findings say.

Gondwe said that even despite the ‘Cashgate’ issues, it had been decided to include Epicor as a contender because it has a number of more recent versions. “The version we have now is 7 and it is out of date somehow. In Tanzania they have version of 9 and  we are hoping that we could have, if they offer it, version 10 that’s why we have put them there as a possible bidder,” he explained.

“I was told Epicor version 10 is much superior to everything else on the market but my people tell me that this is not true,” he added.

Gondwe denied accusations that he is influencing Epicor to make the list. “At first before I was told, I did not know much about these things but when it appeared to me that we should continue with one we have because I know about it, the officials have told me it will be better to look for something else also,” he said.

As a long term solution government resolved through the findings to implement a new IFMIS ERP platform based on defined government requirements.

Advert questions

On the reasons for the withdrawal of the tender advert, Minister Gondwe said the government had done so because it realised that it needed to do a lot more such as adding on specifications of the ERP to address current system’s weaknesses.

“We know that the current system has deficiencies and our policy is to enhance the efficiencies such as speed and particularly we need to have a new server to increase capacity of the present Epicor 7.3 software,” he said.

Meanwhile the treasury has put in place short to medium term strategies that will ensure that the current Epicor system operates optimally. These include improving the performance of the current system by reducing the size of the Epicor database and enhancing the server infrastructure by procuring new servers among others.

“The estimated total cost for the immediate solutions is US$1,700,000.00. The implementation period is eighteen months,” the report says. The estimated total project is around US$10,000,000, with an implementation period of four years. 

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