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Home / Interview / Public finance management reform: digitalization as a tool for elevating processes to a new level of governance and eradicating systemic problems
16.09.2025

Public finance management reform: digitalization as a tool for elevating processes to a new level of governance and eradicating systemic problems

Joint article by Oleksandr Hrubiyan, Deputy Minister of Finance of Ukraine for Digital Development, Digital Transformation and Digitalization, and Dragan Jeremic, International Key IT Expert of the EU4PFM Programme

In Ukraine, the digitalization of public services and business processes in state institutions is developing at an unprecedented pace. This progress supports the implementation of reforms driven by Ukraine’s aspiration to join the European Union. At the same time, the EU helps align Ukraine’s policies with the EU acquis while providing significant support in expanding infrastructure, developing new software solutions for state institutions, and training staff. One such initiative is the EU-funded EU4PFM programme, which closely cooperates with public finance institutions to strengthen their capacity and prepare them for digital transformation, the cornerstone of which is the consolidation of IT resources for the Public Finance Management (PFM) sector.

IT resource consolidation as a concept is a measure taken at the organizational or sectoral level to change the approach to IT management in order to reduce maintenance costs and optimize the use of existing resources — infrastructure, pools of qualified specialists, and other administrative expenses. Some estimates show that up to 70% of IT budgets in institutions are consumed by operational costs, which can be reduced if assets, human resources, and maintenance are centralized and managed through improved capacity planning.

As a result, instead of a decentralized and fragmented approach, a new and qualitative IT management model will be implemented, based on modern project management approaches. This will ensure the effective functioning of PFM IT units, the consistency and controllability of IT projects, synergies from shared solutions, improved manageability of IT processes and timely access to information, as well as the introduction of unified IT standards.

It is also worth noting the dynamic development of the IT sector, which requires regular updates of hardware and software components — not only due to security risks and the threat of data loss that could disrupt strategic systems and critical infrastructure, but also because of the need to improve the service model, enhance end-user support, and provide services for the private sector and the general public that are accessible, effective, and free from fraud and corruption.

Undoubtedly, IT consolidation is a long-term process that may take several years, especially when it comes to institutions responsible for processing all types of financial operations at the national level. The experience of other countries shows that such measures can bring significant benefits.

One of the quality steps taken by the Ministry of Finance toward IT consolidation in PFM was the approval by the Cabinet of Ministers of Ukraine’s Order No. 1467-r of 17.11.2021 of the Strategy for the Implementation of Digital Development, Digital Transformation, and Digitalization of the Public Finance Management System until 2025 (hereinafter — MoF IT Strategy).

The main approach defined by this Strategy is the IT consolidation of information resources and IT functions of the Ministry of Finance and central executive authorities, whose activities are directed and coordinated by the Cabinet of Ministers through the Minister of Finance. This includes prioritizing cloud technologies, creating a unified data repository, and gradually transitioning to a new level of service-oriented systems by ensuring online availability of public services.

As part of the MoF IT Strategy, the Ministry of Finance of Ukraine established the IT Governance Committee for the PFM system (hereinafter — IT Committee). According to its regulations, the Committee has the authority to review and approve digital development plans and individual IT projects, as well as to monitor the implementation of IT projects of PFM system entities financed from the state budget and international partners.

All these measures aim to address the following key problems:

  • insufficient influence and control in the field of IT systems and projects of PFM entities within the Ministry of Finance’s domain;

  • lack of full-scale end-to-end automation of business processes;

  • excessive fragmentation of the IT landscape, with low levels of integration and interaction;

  • inconsistency in the IT development of institutions, leading to excessive costs and high total cost of IT solutions;

  • lack of comprehensive information security and cybersecurity policies;

  • absence of shared IT services and consolidated data for timely and effective decision-making;

  • insufficient staffing levels to maintain and develop information and communication systems.

The Ministry of Finance also oversees the state institution “Open Public Finance” (hereinafter — IT Institution), which, according to the MoF IT Strategy, is responsible for providing IT services to PFM entities. Currently, the IT Institution has a flexible organizational structure, enabling it to attract highly qualified IT professionals. It already administers most of the Ministry’s information resources and services.

The results of the MoF IT Strategy will include:

  • the introduction of a unified information and communication system for public finance management, built on the interoperability of electronic information resources, combined with comprehensive information protection, technological independence, and real-time data exchange;

  • increased public trust in PFM institutions due to improved transparency and openness of data through IT solutions;

  • improved quality of state services and administrative services, as well as better inter-agency cooperation between central executive authorities coordinated by the Minister of Finance and other state bodies;

  • implementation of a unified information security policy within the unified system, enabling automated processing of information, including restricted data, in compliance with information security regulations;

  • elimination of human factor influence on automated information processing, as staff administering the unified system will have no access to primary accounting data or modification of business processes and their execution algorithms.

Since the start of Russia’s full-scale invasion of Ukraine, the Ministry of Finance, with the support of the EU4PFM project, has launched and in some cases implemented several projects:

  • procurement of server and network equipment to ensure the support and uninterrupted operation of IT products, IT infrastructure, and IT services by creating and commissioning a backup site, enabling full deployment of MoF and PFM system IT resources and services;

  • organization of remote access for MoF staff to the Ministry’s information and communication system and information resources, including the implementation of a hardware and software complex to ensure remote access;

  • launch of a new information system for planning and monitoring the implementation of the state budget, consisting of two subsystems: “State Budget — MoF” IT system and an automated online information system for interaction with state budget spending units;

  • implementation of measures provided by the MoF IT Strategy.

An important measure in implementing the MoF IT Strategy is preparing to establish a private cloud for PFM institutions. Since these institutions handle state revenues and expenditures, they process confidential information that must be properly protected, and business continuity is also critical. Storing and managing data in a private cloud will increase transparency of operations — monitoring actions will make it possible to trace every activity back to its source and executor. Reliance on commercial cloud solutions is potentially unsustainable in the long term and may serve only as a short-term emergency response tool, while a sectoral (private) cloud will serve long-term goals at a reasonable cost.

For Ukraine, as a source of highly qualified IT specialists, it is natural to rely on domestic IT developers and service companies. For all services planned to be provided in the private cloud, the Ministry of Finance will create a standardized architecture that ensures the same level of security and reduces operational costs. An incident monitoring system with a service desk will be set up to promptly respond to user requests. The ultimate goal is to build a modern and efficient IT management system to support and further advance the digital development of an effective and transparent PFM system.

Thus, the Ministry of Finance assumes the role, risks, and responsibility for administering the relevant infrastructure, but in the end, this will ensure a viable and secure solution, eliminating the need for each PFM institution to purchase its own IT systems, which will significantly save public funds.

All of the Ministry’s initiatives listed above are complex and lengthy to implement but achievable. In the context of ongoing war, their necessity becomes even more evident, making partner support crucial. Through the EU4PFM programme, the EU provides methodological and material support to the Ministry in the reform process. Ukraine has already shown the world its ability to meet challenges and remain resilient. Public sector reforms that replace outdated and inefficient practices through IT optimization will undoubtedly succeed and deliver the expected results in the near future. The commitment and cooperation of all stakeholders are among the key success factors. Best European practices will serve as a model, enabling Ukraine to implement what has proven effective and applicable in its context. Step-by-step but continuous introduction of new IT management models will lead to significant change.

Achieving IT consolidation is not easy, and at the initial stage, it will bring additional workload, but it will significantly improve the efficiency of IT infrastructure management and application development. It will also ensure the same level of cybersecurity, integrity, and availability with standardized operations such as incident, problem, and capacity management, end-user support, and more. Developing a dedicated roadmap for each PFM institution will facilitate the step-by-step implementation of IT consolidation and deliver some quick wins that will build trust in the process.

EU accession constantly poses new challenges for PFM institutions, which they can only meet through close cooperation. IT consolidation will be an excellent support along this path.

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