By George Russell, ,
Published December 14, 2016
The biggest high-tech fiasco in United Nations history -- the creation of a computerized management system known as Umoja -- is likely to cost another $104 million beyond its current $439 million budget before it is finished at the end of 2018 -- a full six years beyond its original completion date, according to the most recent estimates.
The price tag is likely to reach just under $544 million by project’s end -- a 23.8 percent increase beyond the current budgeted total, and nearly double the project’s original cost figure of $248.3 million -- with no guarantee that the end is fully in sight, and despite what the U.N.’s budget advisory committee calls “insufficient transparency on the total project costs.”
Meantime, overall operating and maintenance costs for the info-tech system are likely to bring the total to more than $1 billion over the next 15 years, according to a report by the U.N.’s independent Board of Auditors.
Even then, governments financing the complicated and frustrating installation -- led by the U.S., which is likely paying somewhere between 22 percent and 28 percent of the overall Umoja total -- are far from sure that the U.N. has come clean about the ancillary costs of preparing for Umoja, meaning that the actual tab could be bigger.
Nonetheless , U.N. officials say the good news is that after years of deeply unimpressive trying, they are finally turning around the project that is supposed to drag the creaking and far-flung U.N. bureaucracy into the 21st century, reorganize its management and business practices, and “enable a more streamlined, cost effective, agile and accountable United Nations,” as one early U.N. report put it.
“For the first time,” U.N. Secretary General Ban Ki-moon declared in his most recent progress report on the automated management system, “the [U.N.] Secretariat has a single, modern administrative solution that will enable the efficient and transparent management of the organization’s resources,” which has had its “first successful deployment of such functionality on a global scale.”
The same U.N. budget advisory committee, composed of all 192 member states, in a report late last month lauded the rollout so far, which affects some 33,000 U.N. employees at 400 locations around the world, as a “major achievement for the United Nations.”
The committee called it a “consequential business transformation,” and says it “provides a sense of confidence” that the “full scope of the project . . . can be delivered,” putting real-time financial data and analytics in the hands of U.N. managers across a dizzying array of U.N. funds, programs and peacekeeping operations, and leading to real efficiencies and economies of scale.
The tone of the committee’s assessment differed dramatically from post-mortems of Umoja in the past, when announcements of “transformative” change were followed by a mudslide of U.N. malpractice, with deadlines that slipped and slipped again, incoherent project management, and tens of millions were spent without much explanation of where the money had gone.
For four years, Umoja didn’t even have a system in place for ensuring that it was actually being built to specification and on schedule. Time and again the U.N. said it had the problems under control, only it didn’t.
After years of effort at building Umoja that had added up to not very much, the advisory committee praise at its current progress was understandable, but by some other lights perhaps over-enthusiastic. It came despite the fact that the recent rollout was greeted by the confusion and frustration among many of the thousands of U.N. staffers who have had to deal with it as the system has gone into action.
According to an external U.N. Board of Auditors report earlier this year, many of them were “inadequately trained” before they were required to use the new system, as a result of previous scrambling to get the stalled project back on track.
The auditors’ report pointed to tens of thousands of blocked U.N. payments and stalled travel requests, clogged service queues , and “substantial challenges” that needed to be overcome to “ensure the integrity of data underlying” last year’s financial records.
“Six months of the rollout were rocky,” admits Chandramouli Ramanathan, acting project director for Umoja since last April (his predecessor, Ernesto Baca, bowed out for personal reasons). But he claims that now “people are getting information of a kind they never had before,” as the system has “stabilized,” with real gains in efficiency and cost controls.
He also pointed to a November 1 deployment of parts of the Umoja system to some 18,800 U.N. personnel in the U.N.’s peacekeeping and special political missions which, he said, “has been remarkably successful with very few complaints from such a vast array of staff in 37 missions.”
That said, some of the most important elements of the Umjoa transformation still lie ahead -- the application of new systems to crucial budgeting and forecasting, where the U.N. has often been woefully deficient, as well as the real measuring of U.N. performance, outputs and achievement -- where simply spending money and holding meetings have often served as milestones of accomplishment in the past.
The U.S., for one, is continuing to stick up for Umoja as a U.N. managerial necessity -- and in a statement last month declared it “continued to support continued implementation of critical elements of Umoja to reach its full potential.”
The U.S. has also declared “credible” U.N. figures on “quantitative” financial benefits from the high-tech overhaul that have been long promised, but never specifically detailed, that the U.N. said would total between $140 million and $220 million by the time all of Umoja is up and running in 2019.
The latest secretary general’s report contains a table of claimed savings in areas ranging from peacekeeping procurement to better management of the U.N.’s portfolio of real estate holdings that total up to a projected $163.7 million in “cumulative benefits” from 2014 to 2019, rising to 205.5 million by 2021, that fulfills the promise.
For how much money, though, is still a central issue. Many of the promised benefits depend on the next phase of Umoja expansion, which demands spending of nearly $100 million more on the system in the next two-year U.N. budgeting cycles, as well as a new demand for $26.8 million to finish out 2016-2017.
For all of its praise for the U.N.’s progress so far, the countries represented on the budget advisory committee are a little more cautious about putting their money where their mouth has been.
The group has genteelly expressed “disappointment” that “further increases to the project budget could not be avoided.” It suggested doling out only $13.4 million of the latest cash request now, and holding onto the remaining half of the money until next May, after a longer look at the even bigger price tag that still lies ahead.
Whether that resolve will stand up to the U.N.’s traditional pre-Christmas budget approval scramble, which is now under way, remains to be seen -- and won’t appear in the U.N.’s own reporting of all those budget issues, in all likelihood, until January.