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see also GovernanceStructure
The purpose of this document is to (1) explain the background of the Micro Banking Open Architecture Project (MOAP), and (2) propose a high-level business model for the sustainable development and support of an open source micro-banking product.
It is important to note that MOAP’s primary goal is to create a “reference implementation”—source code and documentation that MFIs (microfinance institutions) can leverage to develop a fully operational micro-banking MIS that meets their specific business requirements. It is the hope that the MOAP effort will eventually produce a finished, “out-of-the-box” product based on the reference implementation. Such a product would extend the reference implementation to include set-up “wizards,” configuration help, user help, sample data, multi-language support, etc.. The product could be deployed in a typical MFI without extensive customization.
This document proposes a business model to support a finished open source product based on the reference implementation.
MOAP Background
MOAP’s key objective is to accelerate the adoption of information technology by MFIs. To accomplish this goal MOAP intends to develop a reference implementation of open technology standards that includes:
- A flexible Management Information System (MIS) technology architecture i.e., “reference implementation”, that provides a technical framework to support key microfinance business processes. The reference implementation will encompass an accounting application and portfolio management application as well as an interface to exchange data between these applications. The reference implementation will serve as a starting point for MFIs to deploy and manage a MIS using local technical resources (software developers, implementation consultants, and technical support providers).
- A standard technology nomenclature that defines what problems specific technologies solve and how they solve them e.g., a standard definition of “portfolio management.” This standard nomenclature will improve understanding among MFIs about which technologies they can employ to solve specific business challenges.
- A standard data transfer format and metadata format for tracking MFI performance metrics. These standard formats will provide more consistent and transparent performance reporting and improve inter-linkages throughout the microfinance industry.
MOAP aims to develop an open source micro-banking product based on the reference implementation in order to ground truth the reference implementation and further develop the open source model. This is no doubt ambitious and will require well-conceived incentive mechanisms to sustain product development, implementation, and technical support. The following business model proposes a structure for such incentives.
In general, the product business model recognizes that short term the product will need a centralized development effort, to reach the point at which other contributors can provide add-in modules. It is hoped that a virtuous cycle of development, new demands, new development and further demand will develop, causing a gradual growth in features and developers.
The key stakeholders for the MOAP micro-banking product include:
- MFIs – Organizations that use the MOAP micro-banking product
- Donor Agencies – Organizations that fund MFIs and MFI-related organizations
- MOAP Product Development – Core team of project managers and software developers responsible for managing the base MOAP micro-banking product i.e., feature enhancements and bug fixes
- MOAP Product Support – Core team of software developers on MOAP team responsible for providing technical support to MFIs and Local Technical Support Organizations
- Software Developer – Individual who extends the feature functionality of the base MOAP micro-banking product e.g., developer hired locally by an MFI
- Local Hardware Technician – Individual local to an MFI who sets up hardware required to run the MOAP micro-banking product
- Local Implementation Consultant – Individual local to an MFI who installs required third-party software, installs and customizes the MOAP micro-banking product, and trains MFI users on how to use the product
- Local Professional Services Organization – Organization local to an MFI that implements the MOAP micro-banking product for MFIs
- Local Technical Support Organization – Organization local to an MFI that provides MOAP micro-banking product support to MFIs
MOAP is a non-profit endeavor. Its primary goal is to maximize adoption of information technology in the microfinance industry. An open source business model is particularly well suited to attaining this goal. The contributors to MOAP intend to release its source code and supporting documentation under the GNU General Public License (GPL). GPL stipulates that anyone altering source code licensed under the GPL must distribute any derivative programs under the GPL without a license fee. Additionally, source code from such derivative programs must be made publicly available.
MFIs must be able to hire local Software Developers to extend the functionality of the base MOAP micro-banking product. MOAP must therefore provide extensive developer documentation. The MOAP website will provide a central repository for all developer resources, including:
- Downloadable source code that is well commented in English
- Instructions for setting up a development environment
- Product feature descriptions
- Detailed use cases
- Architecture description including diagrams
- API description
- Data transfer format and metadata format for tracking performance metrics
In order for the MOAP product to evolve, monetary incentives must be put in place to urge Software Developers hired by MFIs to release product improvements into the public domain. A GPL license alone will not suffice. Given the global scope of the MFI industry and widely varying legal structures across different countries, enforcing a GPL through legal means is an unattractive (and unrealistic) option. Providing competition-based incentives is far more advantageous in maximizing product feature enhancements, bug fixes, documentation, and general know-how to the MFI industry. Such incentives might include:
- Grants to compensate highly qualified software developers interested in spending significant time contributing to the core MOAP micro-banking product.
- A MOAP preferred partner program to foster a competitive environment in which individual MFIs are recognized in the MFI community for their contributions to MOAP product development. Those MFIs who improve the product by releasing bug fixes, source code enhancements, and documentation into the public domain per the GPL license would be recognized on the MOAP website and in various press releases as MOAP preferred partners. The partnership program could consist of various tiers (e.g., silver, gold, platinum) based on objective metrics such as number of new features implemented and number of bug fixes. Going a step further, MOAP could pitch donor agencies and other funding groups to provide monetary incentives for reaching each preferred partnership tier.
- A feature enhancement/ bug fix “bounty” to foster a competitive environment in which individuals/organizations (individual open source developer, NGO, for-profit company, MFI, etc.) can make money by achieving a specific MOAP objective. MOAP could pitch donor agencies to provide funds for this purpose. For example, MOAP might offer $2,000 to the first developer who can implement a particular feature enhancement first or by a particular deadline.
Structurally, the product development model requires a set of bug tracking and feature request mechanisms as well as quality control. The bug tracking mechanism will need to be heavily managed in the initial stage in order to ensure that implementators have the ability to respond to critical faults in the system. Eventually, the bug tracking can be centrally managed but with more decentralized troubleshooting and resolution, and the bug fix "bounty" can then be utilized. The feature request mechanism will need to be fairly detailed and include a tiered implementation process. If the feature rises to the level of needed core functionality, the central MOAP team will take it on, while features that are applicable to only a small number of organizations will be referred back to local developers and the requesting MFI. The process will need to be spelled out in the support mechanism description, essentially welcoming suggestions for features but not committing to new features until an analysis of its priority is done.
MFIs must be able to hire a Local Hardware Technician to set up hardware as well as a Local Implementation Consultant to install and configure the MOAP micro-banking product and third-party software e.g., web server, and train MFI users. MOAP must therefore provide extensive product implementation and training documentation. The MOAP website will provide a central repository for all product implementation and training resources, including:
- Instructions for deploying the MOAP application in a production environment
- Hardware requirements
- MOAP micro-banking product installation and configuration instructions
- Third-party software requirements
- Detailed training materials targeted to specific Donor Agency and MFI audiences. When appropriate, training documentation shall employ diagrams to convey key ideas.
- For MFI donor agencies and senior MFI managers: A document that provides an overview of the key business benefits of using an open source MIS micro-banking product. This will include a standard technology nomenclature that defines what problems specific MFI software can solve and how it solves these problems.
- For MOAP micro-banking product users: Comprehensive user manuals describing exactly how to use the MOAP product (accounting and portfolio management applications). The user manuals will initially be in English and can later be translated into French, Spanish, Chinese, and other languages.
Both non-profit and for-profit organizations could fill a niche in providing local professional services to MFIs wishing to implement the MOAP micro-banking product. The latter is not inconceivable should sufficient MFI market demand exist and could be highly decentralized e.g., for-profit corporation with regional branch offices within a particular country. In both cases, monetary incentives must exist to attract the highly skilled local resources necessary to implement complex software products such as the MOAP micro-banking product. Such incentives might include:
- Donor grants given to non-profit Local Professional Services Organizations to provide product implementation services to MFIs for no/minimal compensation.
- Private equity investment from international agencies (e.g., IFC) to establish for-profit Local Professional Services Organizations.
- Project-based compensation paid out by MFIs to for-profit Local Professional Services Organizations (money coming out of MFI budget or through requests to donor agencies).
In addition, given the multiple country and multiple-language approach of MOAP, the localization effort will need to be managed in a distributed manner from the beginning. For example, while MOAP will provide implementation documentation, translations will be needed and version control will become very important for consistency and coordination with new features. The preferred approach will be to have a very simple help file fully translated that comes with the software and a separate implementation help file that will be managed separately.
MFIs must be able to get “premium” technical support for time-sensitive issues from a Local Technical Support Organization. Premium technical support will typically have an objective measurement benchmark e.g., resolution timetable based on issue severity levels. Premium technical support may be requested from a variety of stakeholders, including MFI users and in-house technical staff, Software Developers, Local Hardware Technicians, and Local Implementation Consultants. For low-priority issues and questions, MFIs (and anybody else) can contact MOAP Product Support directly via the MOAP website and await a response free of charge.
In order to minimize the time and cost overhead of providing technical support, MOAP must provide extensive online technical support documentation and tools for Local Technical Support Organizations and MFIs. The MOAP website will provide a central repository for all technical support resources, including:
- Online troubleshooting FAQ
- Online knowledge base
- Message board for low-priority technical support issues
- Trouble ticket application for premium support issues (with user name/password authentication)
Both non-profit and for-profit organizations could fill a niche in providing premium technical support locally to MFIs that use the MOAP micro-banking product. MOAP Product Support will at least to some degree rely on financial incentives to provide premium support to Local Technical Support Organizations (in cases when local providers are unable to resolve issues themselves and need additional information from MOAP Product Support to reach a resolution) and directly to MFIs. Various monetary incentives must exist to attract the highly skilled personnel necessary to provide local and remote technical support. Such incentives could include:
- Donor grants given to non-profit Local Technical Support Organizations to provide premium technical support to MFIs for no/minimal compensation.
- Donor grants given to MOAP Product Support to provide premium technical support to Local Technical Support Organizations/MFIs.
- Private equity investment from international agencies (e.g., IFC) to establish for-profit Local Technical Support Organizations.
- Per month/per issue compensation from MFIs to for-profit Local Technical Support Organizations (money coming out of MFI budget or through requests to donor agencies).
- Per month/per issue compensation from Local Technical Support Organizations (non-profit and for-profit)/MFIs to MOAP Product Support.
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