Ontario winner: Software saviours

Written by Chris Atchison

Company: FreeBalance Inc.
Location: Ottawa
What it does: Develops financial-management software for governments

If trouble comes to call, then call in the Canadians.

When the Kosovo conflict ended in June 1999, the Canadian International Development Agency (CIDA) was one of the first organizations on the scene to kick-start the complex process of rebuilding the political, social and economic systems devastated by 18 months of fighting. Tasked in part with establishing a standardized system of financial authority, CIDA tendered a contract for software to help with the job. Ottawa-based FreeBalance Inc., a long-time supplier of public financial-management software to the Canadian government, won the bid.

Whereas a typical software deployment takes eight months, FreeBalance’s Kosovo project took just three and helped the embattled Balkan territory meet strict requirements for receiving international aid. The project also gave FreeBalance its first taste of exporting. Ten years later, sales to governments in developing nations continue to deliver profits — in more than just dollars. “When you have the ability to sell a product that you know is going to improve conditions in a country, you really participate in shaping a nation,” explains Manuel Schiappa Pietra, the CEO of FreeBalance. “We’ve seen the transformation of countries that use our software.”

FreeBalance generated revenue of $10 million in its most recent fiscal year, half of it from clients in Asia, the Middle East, Africa, Latin America and the Caribbean — including such failed states as Afghanistan and Sierra Leone. But to get to this point, FreeBalance had to navigate the disorder of such distressed markets, build a product that could easily be adapted to each local situation and sell itself, not only to the governments purchasing the software but also to the aid organizations that often foot the bills.

To the latter end, FreeBalance — which has won the 2009 Canada Export Achievement Award for Ontario — armed itself with client references and hired locals well versed in government policy-making and management roles such as audit, finance and diplomacy. These local staff help FreeBalance respond quickly to requests for proposals when financial aid is offered to a country, provide better customer service than people an ocean away, and collect market intelligence and contacts that help FreeBalance sell its software to subnational customers, such as the departments within regional governments. “Once we’re in a country, we might enter the ministry of finance, and then there is a world of opportunities to move to additional ministries, additional departments and agencies,” says Pietra. “It’s a whole market itself.”

Because FreeBalance serves an array of government departments in 15 countries, it has developed a highly flexible and configurable software platform. Additional languages can be added easily — a vestige of FreeBalance’s beginnings as a provider of software to Canada’s bilingual federal government. The software also eschews unnecessary private-sector functions that bog down implementation and training. “Our competitors have so much in their software to meet the needs of the private sector that it becomes too complex,” explains Pietra.

Still, FreeBalance has incorporated many helpful elements into its software, such as a graphical user interface that accelerates product training and an easily modified accounting system that allows countries to make gradual changes as their financial-management expertise improves. To support customers, FreeBalance and its 400 full-time and contract employees worldwide provide training and customer service at regional support centres. “We believe in having a local presence,” Pietra says.

The firm also believes in allowing customers to help shape its product. In 2007, FreeBalance formed the independent FreeBalance International Steering Committee (FISC), a client advisory board that helps set product-development priorities for the coming year — and controls more than 20% of the company’s R&D budget. “The steering committee has helped us understand the direction we have to go so our customers stay with us for life,” says Pietra. This year, the company also launched the FreeBalance Customer Exchange. In essence, it’s a Facebook for bureaucrats that helps government officials around the world exchange ideas and best practices while giving FreeBalance another source of new ideas.

As FreeBalance continues to grow, it aims to develop a stronger user base within its current client list while keeping an eye on new markets. According to David Mathias, social security director with the Antigua and Barbuda Social Security Board, which uses FreeBalance software, Pietra and his team have created the go-to solution for governments around the world — particularly ones in high-stress situations. “They’re well aware of the external and internal politics that impact some of the decisions that we, as business managers within government, have to deal with,” says Mathias. “It was said at a World Bank meeting that I attended once that ‘where there’s a crisis, there’s FreeBalance.'”

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