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The Government of Israel’s Merkava Project (Case Study)

Abstract

Introduction

The Merkava Project

Context Factors

Initiation

Where It is Now

Delivering on the Value Proposition

Implications for Public ROI Assessment
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Delivering on the Value Proposition

Internal Returns

The plans and descriptions of the Merkava project describe a substantial list of internal returns and strategic advantages to be obtained. The claim for the project is that both service quality and greater internal efficiency and effectiveness will flow from integrated information, improved controls, better input for decisions, and more accountability and transparency. Evidence for improved overall efficiency, while sparse, is impressive: elimination of 143 legacy systems during the roll-out to less than one-third of the agencies and a reduction of 45 percent in overall IT expenditures. At the agency level, however, there is limited evidence on how these managerial and operational improvements play out. Fortunately, there has been some detailed analysis of the impacts in one of the largest roll-outs, the Ministry of Health. This analysis provides a useful model of the kinds of impacts that may be found generally.

The Ministry of Health is responsible for 26 government hospitals and clinics as well as health policy, disease prevention, health research, and related functions. It was one of the early Merkava implementation sites. The Ministry’s report of the positive impacts of the Merkava ERP on internal operations is summarized below.

Strategic Advantages:
  1. Improved information for decisions; improved control and supervision; manager access to analyses without staff assistance; top executives have overview of operations not previously available.
  2. Provides accounting detail by unit and activity beyond gross categories in budget statutes.
  3. Ability to aggregate budget detail across units for comparison, standard setting, monitoring, and performance assessment. This includes monitoring laboratory performance and grants management.
  4. Process integration reveals connections across units and activities and opportunities to improve efficiency and detect waste. For example, the logistics system showed a supplier was also a client of the government, allowing for offsetting payments in the amount of NIS 1.8 Million.
  5. Tools for increased tax collection, such as reminder letters and label printing with debt data.
  6. Accounting for assets, income and expenses on the accrual basis provides obligations transparency and better budget control.
  7. Foundation for improved citizen service by connection with payment server.
Tactical Advantages:
  1. Preservation of investment in unique systems for emergency inventory and reserve management to work with the SAP-ERP system.
  2. Improved decentralization and delegation of authority for lower ranked tenders.
  3. Standard procurement system allows monitoring across departments.
  4. Combined tracking of department budget reserves and inventory.
  5. Unified data and language supports faster updates of policies and business rules.
  6. Expanded capability to manage both internal and external work force.
  7. Provides income analysis of remote public health offices.
Similar operational and managerial benefits were described in the other ministries we included in the case study data collection: Science, Immigration & Absorption, Finance, and Transportation. The Ministry of Immigration & Absorption obtained some additional returns from information integration linked to their responsibility for large numbers of immigrants—as many as 100,000 per year. The scope of social and economic services provided is large and the rules for eligibility for citizenship are complex. Information integration within the financial and procurement systems in Merkava, linked to the citizen data and business rules, provided the capability to identify improper or duplicate payments and manage payments to municipal agencies and other organizations operating immigrant programs. The Merkava HR system also provided the foundation for a business intelligence application to process rules for civil service pension eligibility. This application speeded and standardized the eligibility review for thousands of government employees.