Transcript Performance Improvement Process

Seventh Annual Global
Shared Services
Conference
Deploying Shared Services in
Government Operations
Steve Hodgson, Head of Shared Services
Her Majesty’s Prison Service (HMPS)
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Contents
1. HMPS Overview
2. HMPS Rationale for Shared Services
3. HMPS Approach to Support Function Modernization
4. HMPS Lessons Learned
5. Key Challenges of Implementing Central Government Shared
Services
6. The Future – Sector Strategies and Plans
7. Summary
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1. HMPS Overview
HMPS Overview
•
Mission
– Protect the public
– Reduce re-offending
•
130 public sector prisons in
England and Wales
•
48,000 employees
•
77,000 inmates
•
c. £2 billion per annum cost base
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2. HMPS Rationale for Shared Services
Why do Shared Services?
•
Cost of service down
– Justifies investment in existing value management systems
•
Service standards up
– What most people in the enterprise want
– Those who care about cost down soon won’t if deterioration in
service impacts operations
•
Enabler for “core business” performance improvement
– What the stakeholders want and the real reason for Shared Services
•
Start as “Cost Reduction Programs” but are really about “Service”
and “Change”
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2. HMPS Rationale for Shared Services
HMPS Goal
The Radical Improvement of HMPS Support Functions delivering the
Value committed to in the Business Case.
We will know we have succeeded when the NPV has been delivered and
our benchmarking shows us to be established on an improvement “flight
path” towards in the Upper Quartile on Cost, Customer Satisfaction
and Shared Service Employee Satisfaction.
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2. HMPS Rationale for Shared Services
HMPS Benefits
•
Cost of service (NPV £102 million)
– Reduced employment costs in support
functions
– Reduction in Procurement unit costs
•
Improved service (not quantified)
– Employee experience
– Management information
•
New services (“Business Partners”)
– Improved business performance through
improvement in performance management
of assets, resources, information
and people
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3. HMPS Approach to Support Function Modernization
Phoenix Program History
•
Started as three separate programs
– HR Shared Services
– Finance System Replacement
– New Procurement Operating Model
•
Started at different times with different
sponsors
•
Brought together into:
– One Shared Service Center
– One IT Platform
– One Set of Implementation and
Operating Costs
– One Sponsor
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3. HMPS Approach to Support Function Modernization
Phoenix Program Work Streams –
Service Solution Design
•
Finance
– AR Services
– Banking Services
– Record to Report Services
– Expense Services
•
Procurement
– Purchase to Pay
•
HR
– Employee Record Administration
– Resourcing
– Performance Management
– Training
– Pay
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•
Customer Contact Services
– Query Resolution
– Document Handling
– Knowledge Management
•
Systems Administration
– User Administration
– Key Data Administration
– Systems Development
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3. HMPS Approach to Support Function Modernization
Phoenix Program Work Streams –
Others
•
Technology
– ERP
– Workflow, Telephony, Document Management
•
Building
•
People
•
Business Continuity Management
•
Process Improvement and Quality Management
•
Business Performance Management Systems
•
Customer Service Management and Business Change Management
•
Project Management and Benefits Tracking
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3. HMPS Approach to Support Function Modernization
IT System
Services
Procurement
Services (AP)
HR
Services
Finance
Services
Customer Contact
Services
Shared Services Blueprint Architecture
Business Performance Management System
Customer Service Management System
Facilities
Business Continuity Management System
Information Technology
Process Improvement and Quality Management System
Service Delivery Lines
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Service Delivery Enablers
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3. HMPS Approach to Support Function Modernization
HMPS Shared Services Implementation
– Key Milestones
Milestone
Date
Oracle Finance Implemented
Apr 2005
I-Procurement Implemented
Jan 2006
Finance and Procurement Shared Services Implemented
Apr 2006
HR Shared Services
• Personnel Administration
• Professional Services
Oct 2006
Q3/Q4 2007
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4. HMPS Lessons Learned
Lessons Learned
•
Functional Silos vs. “End-to-End” Service Solution Design
– Duplication
– Not “joined up” for the customer
•
Technology Led vs. Service and Process Led
– Existing poor processes on IT
– Little service and cost performance improvement
•
Technology Big-Bang vs. Incremental at Pace
– “Hardwire” unproven solutions in
– High cost, poor quality, re-work and delay
•
Inexperienced Resources vs. Proven Track Record
– Poor specification of requirement
– Learn all lessons the hard way
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5. Key Challenges of Implementing Central Government Shared Services
Cultural Challenges to Overcome
Value
Seems To Be
Needs To Be
Performance
Secure more budget than you need and “save”
some to be rewarded a bit.
Performance indicators set and
measured against the market or
benchmarks drive significant reward.
Partnerships
Use force and an adversarial relationship to get
what you want from your supplier or customer.
Risk/Reward imbalance.
Mutual dependency and Trust. All in the
same boat each helping deliver the other
partners goals. Proper balance of risk
and reward.
People
Treat People as if they are all the same in the
name of fairness and diversity and use elaborate
processes to do it.
Differentiate on the grounds of
performance. Use simple processes.
Innovation
Avoid resistance and blame by getting everyone
to agree to a change to the point where there is
no risk and little gain. Value of innovation
proportional to complexity.
Calculated “risk takers” are recognized
and rewarded. Value of the innovation
based on the impact on performance.
Customer
Service
Support Functions are here to manage the line
managers and employees because there is a
belief they need it. This breeds a dependant
“adult child relationship” with little empowerment.
Support Functions purpose is to enable
line managers and employees to extract
ever more value for the stakeholders
from the core business.
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5. Key Challenges of Implementing Central Government Shared Services
Another Big Issue
•
For what seems to them very good reasons, a bunch of very bright
people:
– Are building many Shared Services at great expense to do
fundamentally the same thing when many fewer would do the job
•
When:
– They know the capacity to build the numbers that are being
planned to the standards required for them to be effective does
not exist
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5. Key Challenges of Implementing Central Government Shared Services
What Can Be Done?
•
Reduce demand:
– Fewer bigger programs
– Implemented faster
•
Increase supply:
– Shared Services leadership fast
track program
– Manage the scarce talent pool
– Global sourcing
– Proven “Tool Kit”
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6. The Future – Sector Strategies and Plans
What Are the Sector Strategies
and Plans?
•
Fewer bigger programs:
– Better ROI
– Less risk from skilled resource
•
Multiple:
– Business unit
– Service
•
Assumptions:
– Coherent clusters (e.g. Home Office)
– Traditional governance (another layer)
– “Convergence”
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6. The Future – Sector Strategies and Plans
Where is the Home Office?
•
Two business cases approved:
– HMPS
– Core Home Office
•
Governance in place
•
Proposed convergence plan in place
•
Likely end game (personal view):
– Three (existing and Police)
– Employee base of c. 200,000
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6. The Future – Sector Strategies and Plans
The Challenges
•
Operational framework:
– Transition
– “To Be” Operating Model
•
Commercial framework
– Investment case
– Service price
•
Governance:
– Board of Directors
– Service Management
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7. Summary
Summary
•
Shared Services in Central Government can deliver:
– Modest (when compared to cost base) direct cost reductions
– Huge but difficult to attribute indirect benefits in “Core Operations”
•
The culture is currently not ideal for Shared Services:
– Lack of innovation
– Dependency
•
Experience of “getting the job done” in the public sector suggests:
– The “Know-How” exists and can be sourced if you are an “intelligent
customer”
– Currently there is not enough of it around
•
Multiple Business Unit and Service Line Shared Services are next:
– Opportunity to “leapfrog” private sector
– Need a better approach to Operations Management, Commercial Framework
and Governance
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