Skip to main content
Context Factors

Historical Context

The impetus for the Merkava effort developed from a mix of conditions in the government and in the environment in 1998-99. Pressures for government reform grew in part from the effects of a deepening economic recession, dating from at least 1994, interrupted in part by a one-time massive infusion of IT investment in 2000. In addition, the threat of major computing and economic disruptions from possible Y2K problems prompted the government to suspend virtually all new computer system development in order to prepare for January 1, 2000. Internal financial reforms were hampered in part by the government’s accounting system. That was a cash-based central accounting system, dating from 1989, with limited functionality beyond basic bookkeeping. An attempt had begun earlier to implement a new accrual accounting system, but that project was not successful. And in general the government computing systems were not well suited for major reform. Separate systems dealt with logistics, human relations, and other cross-government functions with little or no integration of information among them. Individual Ministries had their own stand alone systems for their specific functions, with few data or process standards among the various units.

The national elections in May 1999, brought in a new government and provided a major impetus for change, in particular the project proposals from Nir Gilad, the new Accountant General (AG). Gilad had served in earlier governments, and was a private sector executive prior to rejoining the government in 1999. During his private sector tenure he had researched ERP systems and had developed a detailed knowledge of their potential for integrating information and transforming management operations. He wanted to shape government financial management, and ultimately all systems, into a much more integrated whole. The policy of the previous AG, suspending system development in preparation for the Y2K changeover, presented an opportunity to move in that direction. However, when Gilad took office in October 1999, there was good reason to believe that the Y2K preparations were largely complete. The government systems had experienced no major problems during the “mini-Y2K” test point on September 9, 1999.3 During the moratorium, a backlog of demands had accumulated from the agencies for new projects. To open a flow of funding to these existing plans and projects would be to continue building on the old disconnected, limited systems. This would not deliver the kind of value available from greater integration or provide a foundation for service improvement.

Instead, Gilad and his team decided to continue the moratorium. They thought a possible ERP implementation would work to achieve their goals. However, once past January 1, 2000, the team would lose the justification for the moratorium. They decided that a vision, if clear and powerful enough, would be a workable substitute for the Y2K threat. As Gilad put it, “we used these drags [the moratorium] to create the Archimedic point to change the way that we’re working …. Y2K was the explanation, now there’s no explanation, so we have to come up with the vision. We created the vision, and a tender, and used it to make a landslide.”4 That vision, known now as Merkava, along with the five layers, provided both the rationale and the overall design principles for the project and its relationship to generating public value.

3On 9/9/1999 a four character date field would contain “9999,” which was also the end-of-file code in some software. Programs could act erratically at that point if the Y2K preparations were inadequate. The government computer systems passed that date with no major problems.
4The Archemedic point refers to a remark attributed to Archimedes: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”