1999-2004 by Banner Software

Harris HermanJan PetersonBanner Software800.336.996917 April 2004

California Performance Review Transforming California State Government

Knowledge neXus®

Improving Organizational Performance

1999-2004 by Banner Software

Problem - Massive Budget Shortfall

Solutions:– Consolidate Agencies Streamline Operations

– Eliminate Unnecessary Agencies, Processes and Services

– Manage Resources Based on Performance

– Outsource Processes to Commercial Providers

– Reposition Processes and Services to Local Governments

– Improve Operational Performance

– Develop performance driven governance systems

– Improve Governor’s ability to manage …

1999-2004 by Banner Software

Highlights of the California Performance Review (CPR) Charter

Executive Order

• Move to Performance Based Budgeting

• Re-organize and consolidate

• Final Report due to Governor on 30 June 2004

CPR Components

• Executive Branch Reorganization

Consolidate, simplify, eliminate, rationalize

• Program Performance Assessment and Budgeting

Top to bottom operational analysis; business process analysis; performance based budgeting; “costing out” of programs;

• Improved Services and Productivity

Improve services with new and rationalized technologies

• Acquisition Reform

1999-2004 by Banner Software

What does Government Do and what does it Cost?

Foundation Knowledge

for Rational Change

What can California Afford?• Are there redundancies?• How can services be improved?• Which are to be kept?• Which are to be eliminated?

Knowledge neXusEncyclopedia

Spec’s

Budgets

Analyses

6

1999-2004 by Banner Software

Steps in the Transformation Analysis

• Step 1 - Reorganize Government Agencies and their Budgets– Produce Traditional Budgets

• Step 2 - Identify Products, Services and Outcomes produced and delivered by Government

• Step 3 - Break Down Programs into Processes providing Products, Services, and Outcomes

• Step 4 - Figure out what Assets are Required to carry out Processes

– Positions (PYs, Human Capital)

– Facilities (Parks and Recreation …)

– Equipment (DOT vehicles …)

– Technology (DMV …)

– In other words develop “Full Costing” data

• Step 5 - Define Department, Program, Element, and Service Performance Metrics– Use Mercer style decomposition of Measures

– Produce Performance Budgets

• Step 6 - Specify Agency Changes to drive Implementation

1999-2004 by Banner Software

Executive Branch Reorganization Step 1 – Consolidation Scenario

1999-2004 by Banner Software

Copy and Paste Re-Organization• Delete Agencies and Create others• Move Agencies, Programs, and Elements• Consolidate Agencies

1999-2004 by Banner Software

Program Performance Assessment and Budgeting Budget Reports Before and After Consolidation

“before”

“after”

“after”$732,000 Savings

“before” “after”“before”

$1,374,000 Savings

$376,000 Additional

$732,000$1,374,000

$376,000$1,730,000

Total SavingsDue to Consolidation

B

A

C

1999-2004 by Banner Software

Linking PYs into the Budget

• Select PYs in the Organization

• Copy to Budget Location

• PY Budget Calculations as needed …

Budget

Organization and PYs

1999-2004 by Banner Software

Fiscal Impact of Re-Organization

After copy and paste Re-Organization, Recalculation of an Agency results in:

– an Excel Spreadsheet, and– updates to the online subtotals and totals

1999-2004 by Banner Software

Building the Budget Document

• Optional Enhancements– Load Descriptive Material and Authorities (and others) if desired– Extend the Governor’s Budget script to:

• Copy Budget Summary and Details for all Agencies into a Single Word Document• Include descriptive materials and other information as desired.

• Complete Re-Organization Analyses– Use the neXus to Produce Budget Summary and Details– Review the fiscal impact of changes periodically during analysis

• Run the Governor’s Budget Report– Produces a document with, at least, the “guts” of the Governor’s Budget– Produces a section for each agency

• Ship it to the Governor and Finance

1999-2004 by Banner Software

Step 2 – Identify Products and Services Produced and Delivered by Government

• Key to understanding program performance• The public face of Government• Produced by Activities and Processes

1999-2004 by Banner Software

Step 3 – Defining Program Activities

• Management Accounting Approach to High Level Process Modeling

• Detailed sequences analyzed usually during implementation

• Bridging the Gap between Resources employed and Services provided

1999-2004 by Banner Software

Step 4 – Identifying Resources and Assets

Identify:

• Human Capital• Information Technology• Facilities• Equipment

Required to perform Processes

1999-2004 by Banner Software

Step 5 – Products, Services, Outcomes & Metrics and Performance Budgets

• Services• Objectives• Metrics• Performance Budgets

1999-2004 by Banner Software

Step 6 - Produce Specifications for Change

• Operational Blueprint

• Comprehensive Architecture Document

See Product Presentation

1999-2004 by Banner Software

Improved Services and Productivity Driving Information Systems Reengineering

• Aligns and connects “Business Analysis” to Information Technology Rationalization

• Starting point for IT Development

• Architectural Framework (after Zachman)

Bu

sinessT

echnology

1999-2004 by Banner Software

The neXus Encyclopedia

• Organizational Objectives• Organization and Positions (PYs)• Regulatory Requirements• Assets (People, IT, Facilities and Equipment)• Processes and Activities• Authorities• Hierarchic Performance Measures

1999-2004 by Banner Software

Other neXus Capabilities

• Model Processes– To the depth required to answer questions

– Define and associate required assets (IT, People, etc.)

• Define Metrics– Hierarchic breakdown of Department, Program, Element, and Service Measures

• Develop Performance Budgets– Perform Performance Budget calculations

– Produce Performance Budget documents

• Specify Agency Changes– How does CPR convey the intended changes?

– The Budget does not tell an Agency what Products and Services to deliver and which to eliminate.

– Taking away a Program’s Budget does not tell the agency how to re-organize• What Positions are eliminated?• What Facilities, IT, and Equipment can be eliminated?• What is the new Organization?

• Develop Reports– Rapidly Produce complex new analytical Reports

– For instance, Graph the Whole Budget

– Assemble a Budget Book with all Organizations

1999-2004 by Banner Software

Other neXus Capabilities (cont’d)

• Consistency– Capture and Store Knowledge in Predictable Forms and Locations

• Process – Enable standard processes for basic knowledge capture

• Complexity– Manage Complexity and Quantity of Knowledge Required for Transformation

• Process Improvement

– Analyzing and evaluating proposed changes

• Decision Support

– Support Change Decision Making with “what if” analyses

Translate Strategy into Implementation

1999-2004 by Banner Software

Conclusion and Recommendations

• The neXus is a Re-Organization Tool– It is not a full featured budgeting tool for a Finance Department

– But, the neXus does the calculations and produces the reports necessary to:• evaluate alternative Government Organizations

• construct a budget for a new State Government.

– The neXus carries on where Budgeting software leaves off.

• Use the neXus to Translate Policy into Implementation– Bridge the Gap between “policy” and “on the ground” operational change.

– Manage Knowledge of Re-organization

– Analyze Fiscal and Operational changes

– Re-structure the budget so that it funds Performance not Agency Functions

– Specify Changes for each Agency

• Leverage Banner Experience and Expertise– Acquiring large quantities of operational knowledge

– Integrate methods and tools into a workable process for Re-Organization and Re-Engineering