Data integration and analytical model improvements of Gove solution and the fiscal efficiency gains for Brazilian municipal administrations

Abstract

The target of this research project and its application is the improvement of Gove Solution, currently in beta version and being commercialized to municipalities, by (a) the construction of data integration mechanisms of Gove Solution with accounting systems of city administrations and (b) the improvement of the analytical models that Gove Solution already uses that either validates or refutes city level inefficiencies hypotheses in the the public expenditures and tax collection. The above-mentioned targets (a) and (b) are directly related with the challenge number 7 "Transparency and efficiency in the usage of public resources" on this process, more directly and specifically relating to the itens 7.10, 7.1 and 7.12, and, more indirectly, to the itens 7.8 and 7.6. The majority of Brazilian cities currently uses accounting systems that do not provide municipal public servants access to analytical tools that can help their decision making processes. Municipal public servants constantly find themselves in a vendor lock-in situation that prevents them from accessing more advanced systems with tools that help their decision making processes. The major players in the market for such systems already have long-term contracts along with city halls and do not update their softwares because their business model rely on consulting services that these same companies offer to municipalities, and a change for a new accounting software company involves high costs to the city treasure, a fact that discourages public servants from promoting major system changes. This scenery ends up generating and contributing to the persistency of municipal inefficiencies, biased decisions and waste of public money. The success of this proposal will have as a result the expansion of archives accepted and processed by Gove Solution, allowing it to be implemented as a complimentary system along with a larger variety of accounting systems municipal administrations currently use, without migration/implementation costs, enabling better tools, information and analysis to the public servants at municipal level, improving therefore the decision making capacity and, consequently, improving the efficiency of the municipal budget. In addition to that, we expect to increase our number of fiscal inefficiency hypotheses that Gove Solution already has, allowing it to perform new verifications in every municipal administration that subscribes our solution. In practical terms, we estimate that municipal administration can subscribe Gove Solution for an average price of R$ 1000.000/year (current price of our solution) and they will have as a return of investment in efficiency gains at least 5 times the value invested (currently we guarantee 3 times the return) in our solution for every year they subscribe it. In a nutshell, the project will be implemented in 7 stages following an agile methodology normally used to develop technology: 1) Field research with the main systems and benchmarkings; 2) Construction of the passive data collection; 3) Construction of the active data collection; 4) Creation of a software for data processing; 5) Construction of data warehouse; 6) Implementation of Gove Solution in a pilot project; 7) Comparisons and documentation of the fiscal efficiency gains Gove solution is already commercialized in beta version and was awarded by several organizations such as Massachusetts Institute of Technology, Banco Interamericano de Desenvolvimento and Facebook for its innovativeness and impact. (AU)