The Use of Organisation Number Has Been Extended
1
Session No. 1
Paper No. 4
Country: Finland
Progress Report
Tuula Viitaharju
Statistics Finland
The use of organisation number has been extended
0 The organisation number given to all legal persons has been in general use in Finland. The number is issued by the National Board of Taxation. Natural persons engaged in business activities have been identified by their personal identification number. Since the beginning of 1998, the National Board of Taxation has also issued an organisation number to all unincorporated businesses and farms. This is a part of a more general development work initiated by the Ministry of Finance, the object of which is to create a general register of legal units and to co-ordinate the registration of business units for the Trade Register and customer register of the Tax Authorities.
The Business Register Redesign project
1 The Business Register (BR) development project was concluded in June 1998 (The Final Report on the Project is in Annex 1). The project lasted 3.5 years and it used 25 person years of resources and its costs amounted to nearly FIM 10 million ($ 2 million). We have now started to use the new database system, although it is estimated to be ready to the degree of about 90 per cent. The implementation of the new system and converting the whole production to it produced an updating delay of approximately six months for the Business Register.
2 The new system is organised into two databases: the operational part of the system has been put into practice by stages since the beginning of 1997 and the query system has been in use in customer services since April 1998. The query database is provided at an updating frequency of one month.
3 The main results of the project are as follows
- the Business Register system is built into an open environment on the basis of client/server architecture. The data are distributed into 70 relational database tables (25 for the observation units, 10 for the statistical unit, 35 parameter and other auxiliary tables).
- data processing programs were updated in their contents and implemented using the tools of an open environment,
- change of coverage, expansion of types of units and new characteristics data,
- outsourcing of mailing and reception of questionnaires to an outside operator, exploitation of data storing associated with optical reading and processing of questionnaires in electronic image format
- improvement of quality as basic data for all units are updated four times per year, maximum amount of data checking at the entry stage, availability of basic data in time series.
4 The historical data are available on-line for each unit since the year 1994. The annual time series data is stored in the respective database tables. Some basic data also appear as separate values for the latest available situation and the changed values are moved to the historical data with the respective date of change.
5 The Business Register system has links to industrial and regional classification databases of Statistics Finland. For address and regional code checking we have built beside the BR system an address database to where data are provided by the National Post.
6 At the moment the following elements are still unfinished: some minor parts of the online system, some stored procedures for checking and formation of derived characteristics are not yet ready to use, the database operates only by observation units (legal units, local units, local kind of activity units), the statistical units part of the database being unfinished. The central and local government units have not yet been converted into the new database.
Use of administrative files
7 The Business Register coverage is improved to some degree by the quarterly entry of the smallest business units (e.g. the units not liable to pay VAT or not registered employers or below the threshold for these declarations). This became possible after the National Board of Taxes started the advance tax registration practice.
8 Monthly data on wages and salaries and VAT-sales are available from the respective declarations and they are updated with a time delay of only two months. This gives a very up to date size estimate for the active units in the Business Register.
The Enterprise Group unit
9 The enterprise group unit has been introduced into the new Business Register database. The concept and the characteristics of the enterprise group were delineated in a special project. The data updating possibilities were tested in a pilot project and data on 550 enterprise groups with 10,000 affiliated companies were updated. Since data collection is manual and difficult, when using financial statements which are stored and only available as microfilms at the Trade Register, Statistics Finland has not yet made the decision of regularly updating enterprise group data. This data is however necessary when introducing the enterprise unit.
Business Register Services
10 As a result of the delay the Business Register met in the first round of operating with the new database, the several statistical systems that use Business Register data also failed to keep to their own production schedules. The structural business statistics and regional employment statistics were harmed most. The object is now to diminish the delay to the minimum and to eliminate it completely during the next two rounds of updatings.
11 The Business Register also has chargeable customers outside Statistics Finland. The total annual income from outside customers rose by 3.3 per cent and were amounted to some FIM 5 million. Internet has been adopted as a tool for marketing and a channel for orders.
12 The regular publications are the annual Enterprises in Finland, the quarterly Enterprise openings and closures and CD of Organisation numbers.
13 Certain pressure for the correctness of the Business Register's local unit data is brought about the new system for allocating the tax revenues to local government. In Finland tax revenues collected from companies and organisations are allocated to central and local government and state churches. The Ministry of Finance has now decided to use the Business Register's employment data as a measure to allocate the local government share of tax revenues between municipalities. The object is that each municipality will receive a just share of the taxes paid by the companies situated in its area.
ANNEX 1
Business Register Redesign Project
Final Report on the Project
Man power usage in years
1.1.1995–30.6.1998
text: Project Manager Anita Heinonen
1. Introduction
General
The main tasks of the Business Register are the maintenance of a statistical basic register of units engaged economic activity, provision of chargeable information services and production of enterprise demography statistics. As a basic register, the Business Register maintains a unit identification system, defines classifications, co-ordinates data collection, acts as a survey frame, is a source of supplementary data to other statistics and records enterprise structures (establishments within legal units). By virtue of its services the Business Register is also important as a mediator of address data for advertising and marketing, as a sampling frame for research institutes, and as a keeper of sub-registers, for example, for public administration and organisations. The Business Register has been maintained since 1968.
The Business Register department which, until 30.4.1997, fell under Statistics Finland's Information Services unit, now comes under the agency's Business Trends unit. The number of people working in the department is approximately 30, of whom six are responsible for chargeable information services and the rest for production. A special group within Statistics Finland's Information Technology Services provides IT services. Apart from the area covered by this project, Business Register department's systems also include a register of public corporations, a business group register and an organisation number database.
Project description
Background. Redesigning of the Business Register became necessary for several reasons: when Finland became a member of the EU, several EU acts became binding laws in Finland (Statistics Finland's Business Register is regulated direct by the Regulation on Business Registers and, through it, several other regulations), introduction of the value added tax increased the number of units within traditional production considerably, customer's information needs were changing, the amount of work involved was growing, the system solution was getting outdated and information technology was developing fast.
Setting up. The Director General of Statistics Finland set up the Business Register Redesign Project on 23.2.1995. The objectives of the project were to design, implement and introduce a new information system to replace the existing operational systems and the service database. The project commenced at the beginning on 1995 and was concluded on 30 June 1998.
Progress. Definition phase was completed in June 1995, general planning phase in February 1996, detail planning phase in August 1996, phase 1 of implementation in August 1997 and phase 2 of implementation in June 1998. Excluding statistics on enterprise openings and closures in Finland, the new system has been used in all production since February 1997. The input of human resources into the project amounted to 25 person years and its costs amounted to approximately FIM 10 million.
Results. The new system is built into an open environment on the basis of client/server architecture. The data are distributed into 70 relational database tables (25 for the observation units, 10 for the statistical units, plus 35 parameter and other auxiliary tables). Data from the old production systems were converted to the new system in February 1997. Data processing programs were renewed and implemented using the new tools. Other significant changes included: *Contents: changes in coverage, expansion of types of units and some new characteristics data. *Processes: outsourcing of mailing and reception of questionnaires to an outside operator, exploitation of data storing associated with optical reading and processing of questionnaires in electronic image format. *Quality: basic data for all units are updated four times per year (previously done less frequently for of some data), all possible data checking at the entry stage, availability of historical data online and easier time series production.
Sub-project for the development of a service database
The head of the unit set up a sub-project for the development of service database in February 1997. The sub-project is covered by a separate final report.
2. Resources and costs
The input of resources into the project amounted to 22.4 man years (my), averaging 6.4 persons/year. The input was fairly evenly distributed between statistical and IT staff, with the statistical staff's input being 11.8 and the IT staff's 10.6 my. Human resources input was lowest in 1995 (2.2 my) and highest in 1997 (10.7 my). Wages and salaries and general expenditure formed a vast majority of the costs. IT services accounted for nearly FIM 5 million of the overall costs. The distribution of costs was as follows: direct and indirect costs of business register department 26%, IT-application services 62% and other IT services 12%.
The total input of resources into the Business Register Redesign Project, inclusive of the sub-project, was 24.7 man years and the total costs amounted to FIM 9.8 million.
3. Project's progress
The project underwent the following phases
Preliminary preparations
Definition stage (20.2.1995-15.6.1995)
General planning stage (16.61995-29.2.1996)
Detail planning stage (1.3.1996-31.7.1996)
Implementation stage 1 (5.8.1996-30.6.1998)
Implementation stage 2 (31.1.1997-30.6.1998)
4. Project's management and working methods
Project control and management
Management team. A project management team was set up. Apart from representatives of the commissioning unit (unit director, head of Business Register, head of services subject to charge and a staff representative), the management team also included representatives of internal customers and a representative of the main data supplier (National Board of Taxation). The management team was chaired by the unit director - until 31.5.1997, Kaija Hovi and thereafter Ilkka Hyppönen. The management team met 25 times during the project.
Phasing. The Business Register Redesign Project was set up to cover the entire lifespan of the redesign work, from definition to implementation. A special project progress model of Statistics Finland was followed within the project. After each phase a report was compiled and, at the same time, detailed working plans were drawn up for the next phase. The plans were approved at management team meetings.
Progress monitoring. At the beginning of 1996, the management team decided that the project manager should produce a fortnightly progress report (short, one-page summary). In the early autumn of 1997, the management team approved a new contents structure for the progress reports. All new reports should cover eight main points and have an appendix showing hours planned and worked and stage of completion by task. The purpose of the reporting was to keep the management team informed of progress between meetings so that the next management team meeting could be brought forward if the situation so demanded.
Project Manager and ADP Project Manager. A project manager was appointed to carry the overall responsibility for the project. A separate ADP project manager was appointed within the project as of the beginning of 1996.
Support groups. Three support groups were established for the project in the letter of appointment. Some consultation took place with the groups.
Project Group's management and working methods
Project Group meetings. Up to the implementation phase, project group meetings were attended by project members plus the head of business register and a staff representative. From the beginning of the phase, the other production supervisor also participated regularly in the meetings (the other was a project member).
During the project, the project group met approximately 140 times, in varying compositions. Meetings held in the first 18 months of the project were almost solely ones attended to by the statistical and IT members of the project. However, about half way through the project the meetings began to get so drawn out, that the statistical and IT members started to meet as separate groups. Some joint meetings continued to be held during this period, although increasingly infrequently towards the end of the project. On the statistics side, the contents of the meetings consisted mainly of going through the data processing rules.
Working groups. In October 1996, two working groups were set up: one for on-line planning and the other for questionnaire planning. Each working group was guided by a named project member and a member of production staff. As members of the working groups were members of the Business Register staff. The working groups organised themselves independently.
Internal project monitoring. Project members reported weekly their hours worked and the stage of completion of tasks in accordance with the working plan of the applicable project phase. The monitoring was recorded using a self made application.
5. Objectives and results
Objectives
The main objects of the redesign project were as follows:
Compliance with the EU Regulations on business registers and statistical units
Improvement of service capacity
Improvement of productivity and development of data collection systems
Minimising/evening out enterprises' response burden
Renewal of technology
Reduction of the number of processing rules (tasks)
Central solutions and results
Target population
The new system contains legal units which are registered as employers, liable to pay value added tax or included in the advance tax register.
Unit types
The old system included two units: a legal unit (called enterprises) and an establishment. The basic units in the new system are a legal unit, its local unit and an establishment, which is a local kind of activity unit. An enterprise group has also been added to the new system. This was done under a separate project.
Enterprise will be introduced later. The kind of activity unit (KAU) is formed by summarizing the local KAUs.
Identification system
Each unit type has its own identification number in the system. A legal unit's code is its organisation number or personal identification number. Other units' identification codes are defined inside the system.
Reference period
Accounting period or calendar year data were used in the old system. Turnover data, for example, related to accounting period whereas estimations of wage earners were based on the calendar year. These two sets of data were not always comparable within one unit. For a majority of the units, the calendar year is the accounting period. Selection to the statistics was also done on calendar year basis.
The intention is that in the new system all size data relate to the accounting period. Selection to the statistics and annual level classification data will also be based on the accounting period to be described (1.4.year(t) - 31.3.year(t+1)).