Transcript ppt - GFOAz
2012 GFOAz Winter Conference
February 16, 2012
What
is it?
What services can be ‘right-sourced’
Pros and Cons
When do you use it?
How do you do it?
Summary
One
tool in the financial management
toolbox:
A combination of providing services
through outsourcing, multi-sourcing,
shared services, in-house staffing, and
elimination to achieve the best
balance of cost savings and customer
service
All services
performed
with inhouse staff
Elimination
of services
Right sourcing
Accounts Payable
Accounts Receivable
Engineering
Custodial/Janitorial
Police
Park Maintenance
Water Operations
Refuse Disposal
IT
Payroll
Permitting
Animal Control
Fire
Recreation
Sewer Operations
Transit
These are just a few
The list is endless
Any combination of service
delivery that works for your
organization and your
community
Choosing to eliminate a
service is always an option
Outsourcing
– contracting with an unrelated
entity to provide a service
Multi-Sourcing – contracting with multiple
vendors to provide different elements of a
service
Shared services – aggregating service delivery
across different organizational units
In-House – services provided only by
employees of the organization
Lower labor cost because of increased economics of
scale
Tapping in to a knowledge base for better innovation
Frees management time, allowing more focus on core
competencies while not being as concerned about
outsourced routine activities
Increases speed and the quality of delivery of
outsourced activities
Reduces cash outflow and optimizes resource
utilization
Possible loss of control over a business process
Problems related to quality and turnaround time
Sluggish response times coupled with slow issue
resolutions
Shortcomings in performance vs. expectations
Lower than expected realization of benefits and results
An irate customer base
Lower
risk by having multiple contracts
Economies
of scale
Targeted
expertise - Selecting different
vendors for different components of the service
Usually
applied for IT services
More
management resources needed to
oversee multiple vendors and monitor
compliance
Blame
Large
game - finger pointing
vendors may be unable to provide
innovation or your ‘niche’ solution
Economies
of scale
Tapping
into a knowledge base for better
innovation
Reduced
capital investment
Turf
wars – clear lines of responsibility
need to be identified
Loss
of control
Possible
Lower
delay in service delivery
than expected realization of
benefits and results
Control
Faster
over business processes
issue resolution
Greater
influence over quality and
response times
Increased
labor costs
Management
time used to monitor
routine tasks
Possible
lack of innovation – ‘We’ve
always done it this way’
Whenever you need to do a
faster
cheaper
better
more efficient
job than what you are doing now!
*****ALL THE TIME*****
Evaluate
Plan
Implement
Measure
and Report
Feedback
Evaluate and Adjust
Organization’s
Departmental
What
Fiscal
Strategic Plan
Operational Plans
matters to citizens
Constraints
Everything
is on the table
Feasibility Study –
• Cost/Benefit Analysis – including intangibles
• Risks
• ROI
• Barriers
• Cause and Effect Maps
Choose
the best alternative for service
delivery
Decide on :
• Liability issues
• Governance structure
• Time periods
• Service levels
• Dispute Resolution
• Performance metrics
• Termination clauses
Develop
timeline for implementation
Negotiate
performance agreements to
include measures and timelines
Transition
Monitor
from current to new
performance
What
gets measured gets done
Report
on progress and compliance
Communicate
results to all stakeholders,
including the public
Surveys
Focus
groups
Town Hall
Interviews
Customer comment cards
Council
Other departments
Evaluate
Modify
based on feedback
service delivery if necessary –
Keep what is working and change what is
not
Outsourcing
Multi-Sourcing
Shared
Services
In-House
Any
service – nothing is off the table
Evaluate, plan
and implement
Measure, report, get
Evaluate
and adjust
feedback
Questions?
A Performance Management Framework for State and Local Government: From Measurement
and Reporting to Management and Improving, National Performance Management Advisory
Commission, 2010
“Budgeting for Outcomes: Delivering Results Citizens Value at a Price They Are Willing to
Pay” by David Osborne and Peter Hutchinson, Government Finance Review, GFOA, October
2004
Public Participation in Planning, Budgeting and Performance Management, GFOA Best
Practice, 2009
Alternative Service Delivery: Shared Services, GFOA Best Practice, 2007
Managed Competition as a Service Delivery Option, GFOA Best Practice, 2006
Performance Management: Using Performance Measurement for Decision Making, GFOA Best
Practice, 2002 and 2007
Building a Financially Resilient Government Through Long-Term Financial Planning, Shayne
Kavanagh, GFOA White Paper, 2011
“Opinion: It's all about 'right-sourcing‘”, Simon Briskman, Silicon.com, October, 2005
“RightSourcing – Buzzword or Reality Settling In?”, Nari Kannan, Toolbox.com, April, 2004