Delivering efficient public services through better performance management frameworks Performance management is now firmly established on the agenda of public sector managers and there is extensive experience of implementing performance management frameworks. Managers are ready to move to a more ambitious programme to take advantage of the recent advances in performance measurement techniques and methodologies that offer increased financial and operational efficiency, accountability and productivity. In this report we focus on how appropriate technology can help managers to achieve their objectives. A report prepared by Kable in association with:
Transcript
Delivering efficient public services throughbetter performance management frameworks
Performance management is now firmly
established on the agenda of public sector
managers and there is extensive experience of
implementing performance management
frameworks. Managers are ready to move to a more
ambitious programme to take advantage of the
recent advances in performance measurement
techniques and methodologies that offer increased
financial and operational efficiency, accountability
This paper focuses on the implementation of performance management frameworks in UK government.We examine current thinking on best practice, and explore the extent to which performance managementsoftware can help public sector managers to address their challenging agenda.
The core of the research is based on interviews held with 80 senior managers across central and local governmentin England. In addition we draw on the experience of Geac, Capgemini and Microsoft in helping public sector andcommercial clients to implement world-class performance management systems in Europe and North America.
We conclude that performance management is now well established on the agenda of public sector managers,there is extensive practical experience of implementing performance management frameworks, and that managersare ready to move to a more ambitious programme. We therefore focus our attention on how appropriatetechnology can help managers to address the five factors that the government has identified as representing bestpractice in performance management:
• Bold aspirations which stretch and motivate the organisation
• Translating aspirations into a coherent set of performance measures which link financial and non financial measures
• Giving ownership and accountability to the individuals who ensure delivery
• Ensuring that continuous improvement is delivered, and expectations met
• Motivating individuals to deliver the targeted performance.
IntroductionWhy you should read this report
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More recently, interest in performance management hasintensified. The efficiency programme plans for relocationof public services outside London and the South-East,and the merger of the Inland Revenue and Customs andExcise, have together been described as the mostsignificant restructuring of public services for ageneration. In the next spending round budgets willtighten, and achieving ongoing efficiency improvementsof 2.5% per annum will put a premium on making bestuse of available resources.
More than half of the survey respondents expect theGershon review to have a significant effect on theirdepartment, with the perceived impact being slightlygreater in Central Government. However, this is not theonly pressure that managers are facing. Alongside thepressure for efficiency are the twin drives to raise thestandard of public services, and to reform public servicedelivery. These are typically reforms that aim to empowerthe public service to deliver better services that are morepersonalised to individual users’ needs.
There are obvious tensions between the drive forincreased efficiency, improved service, and greater choice.Achieving these ambitious improvements in publicservice delivery depends on a wide range of factors:developing a clear vision; alignment between goals andoperational management; capacity building across publicservice management and staff; and increased attentionto developing and maintaining the commitment of staff.
This is demonstrated by the high level of importancewhich survey respondents give to the need foremployees to understand strategic objectives, with two-thirds of managers rating this as either important orvery important.
BackgroundThe importance of performance management is well recognised
“How much will the ‘efficiency drive’ set out by theGershon review affect your department?”
Not at all3%
Little8%
Significantly57%
“How important is it for all staff to have a detailed understanding of the Public Service Agreement?”
Very important20%Unimportant
21%
Neither14%
Important45%
What are your department’s strategic objectives?Sample responses: “accident reduction”; “betterhealth”; “boost economy”; “better care to theelderly”; “cleaner environment”; “communityregeneration”; “high standard of criminaljustice”; “economic development”; “educationalachievement”; “employment for disabled”;“focus on health and social well being”; “helpingold people live independently”; “improveenvironment”; “improve services to vulnerablechildren and adults”; “increase compliance”;“raise standards of literacy & numeracy”;“reduce congestion”
Modestly21%
Don’t know11%
Performance management has become an integral part of modern government. “There is a continual demand todeliver more, and better, for less” – resulting in growing emphasis on measuring outcomes as well as inputs; and agrowing focus on understanding and addressing the needs of clients.
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It is therefore no surprise that the need to develop moresophisticated systems that allow employees to fullyengage in the measures of public service productivity andperformance is receiving growing attention from policy
makers, from front-line managers, from stakeholders,and supporting NGO’s. The range of different initiativescan be judged from the examples in the following table:
`Performance management initiative
The joint Treasury and Cabinet Office review of Devolved Decision Making identified that reducing the number of national targets depended on confidence in localperformance management
In calling for halving of current spend on inspectinglocal government, the Local GovernmentAssociation recognises that this implies that localcouncils must develop stronger performancemanagement arrangements
The 2004 Spending review encourages publicbodies to invest in performance managementframeworks, including IT support
A strategic collaboration between TheImprovement and Development Agency (IDeA) and the Audit Commission has created aperformance management resource for Local Government
HM Treasury, the Cabinet Office, National AuditOffice, Audit Commission and Office for NationalStatistics have developed a joint framework forPerformance Information
The Office of the Deputy Prime minister hasstated that all Local Strategic Partnerships areexpected to have effective performancemanagement, and the Neighbourhood RenewalUnit has issued guidelines
The Employers Organisation for Local Governmenthas published guidance on the human resourceimplications of performance management
Reference document
“Devolving decision making: Delivering betterpublic services: refining targets and performancemanagement” a 2004 budget supportingdocument (www.hm-treasury.gov.uk)
“Inspection – how does it perform?” a discussiondocument published by the Local Governmentassociation (www.lga.gov.uk)
“Stability, security and opportunity for all:investing for Britain's long-term future” outliningpublic spending plans for 2005-2008.(www.hm-treasury.gov.uk)
The PMMI project is a collaborative effort of theAudit Commission and the IDeA to research anddisseminate good practice in the development ofperformance management in local authorities (http://www.idea-knowledge.gov.uk)
“Choosing the right FABRIC:a Framework for Performance Information”
“Performance Management” – under Strategic People Management(http://www.lg-employers.gov.uk)
It is clear that the importance of performancemanagement is recognised at every level ofgovernment. The concepts are straightforward, and well understood, and support is in place to help withimplementation. However, government service iscomplex and different organisations are at differentstages of development. Some are still struggling toachieve effective implementation of performancemanagement, but most are ready to broadenimplementation, and adopt a more ambitious and demanding approach.
It would be foolish to imagine that every public sectororganisation has the same level of maturity in theimplementation of a performance managementframework. We will therefore examine four differenttypes of organisation, using the well-establishedpattern of innovation in the public sector – a patternthat can be observed across numerous innovations,and all industries:
Leaders:Around 1 in 6 leading organisations are prepared to takeon the risks of adopting an innovation early, testing itsviability and developing early experience of bestpractice. These are normally organisations with theresources and skills to take on risk and handleuncertainty. They may be driven by particularly criticalproblems, and will normally be proud to be recognisedas innovators and opinion formers by their peers.
Early adopters:Around 1 in 3 organisations move relatively quickly tofollow opinion formers, and to capitalise on theirexperience. These organisations are unwilling to movewithout a clear business case, but once the case is proven,they are prepared to move quickly and reap the benefits.
Late adopters:Around 1 in 3 organisations are more cautious inadopting innovation, and wait until experience of the innovation is widespread. They will not regardthemselves as innovative, or be regarded by their peersas opinion formers, but they take pride in tracking,and following best practice among their peers.
Laggards:Around 1 in 6 organisations adopt innovationreluctantly. They may be satisfied with establishedprocesses and techniques, or they may have otherpriorities. While they see themselves as approachinginnovation prudently in the face of uncertainty and risk,most of their peers view them as old-fashioned, andslow to react.
Characterising organisations in this way helps todistinguish the issues faced by organisations atdifferent stages of development, and can helpindividual organisations to assess their progress inrelation to peers.
Although it is difficult to formally measure and quantifythe state of the market, the available data is stronglyindicative. For example, the chart below is based onAudit Commission data for performance managementin local government.
The Audit Commission has been publishingperformance indicators for local authorities since 1992.The indicators suggest that roughly 1 in 6 authoritieshave achieved excellence, slightly more than 1 in 3 have sufficient experience to be rated as “good” atperformance management, while around 1 in 3 are ratedas fair, and the 1 in 6 that have moved more slowly canbe characterised as “weak” or “poor”.
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The state of play
Status of performance management in local government
Weak9%Poor
2%
Fair32%
Good41%
Excellent16%
Source: Kable based Audit Commission Data
With such a range of experience in the market, it is no surprise to find that the quality of performancemanagement affects the overall performance of anorganisation. The Audit Commission rates performancemanagement in district councils on a scale of 1-4,and higher ratings are associated with higher levels of corporate performance. This suggests a clear linkbetween the quality of a performance managementframework, and overall corporate performance. Some75% of “Excellent” ratings are associated with strengthsin performance management, while over 50% of “Weak”or “Poor” ratings are associated with weaknesses inperformance management.
Our survey shows a strong link between strategicobjectives and departmental plans, with 90% ofrespondents stating that they measured performanceagainst objectives; 78% describing plans and objectivesas well integrated; and most describing a strong linkbetween strategic and personal objectives – more than70% of staff, in more than 70% of departments havingpersonal objectives linked to performance plans. All ofthe managers interviewed in the survey had personalobjectives linked to performance plans.
Our survey indicates that most performance monitoringis carried out on a cyclical basis. Although 5-10% oforganisations carry out performance monitoring asneeded, surprisingly few organisations have moved tocontinuous monitoring, and most are still monitoring ona monthly or quarterly basis.
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“How well connected are your departmental plansto meeting your strategic objectives?”
Performance Management Score
Loosely connected1%
Moderately connected21%
Well integrated78%
District Council Corporate Performance Assessment
Audit Commission CPA data
1 2 3 4
60
50
40
30
20
10
0Aver
age
CPA
wei
ghte
d sc
ore %
“We are very close to achieving our vision of anenterprise-wide Business Performance Managementsystem that fully integrates the corporate planningand budget processes. Our recently approved budgetis on our Website and shows how each strategic goalwill be reflected in the budget. Using managementreporting and analysis we will be able to compareactuals against budget and monitor change.”
“Our responsibility is to enhance the lifestyle ofresidents through innovations in communitydevelopment and facilities. To achieve this we wantto better execute our strategic plan and reflect this inour operational plans: this requires considerableeffort, coordination and management. Geac’s MPCPerformance Management software has added greatvalue by making this process easier and moreeffective, helping us to meet our responsibility.”
Greg Ponych, Principal Finance Officer,Brisbane City Council
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The challenge is demonstrating that this is so in anefficient manner. Best practice is to have a singleperformance management system that defines theobjectives and plans in an unambiguous way, devolvesresponsibility and makes it easy for all affectedemployees to see how they are performing against theirtargets and how this impacts the overall performance.
Based on the results of our survey, on publishedgovernment data and on our work with this market wecharacterise the current state of play in the sector in thetable featured on pages 8 and 9 of this report.
Frequency of performance monitoring
Cont
inuo
usly
Daily
Wee
kly
Mon
thly
Quar
terly
Annu
ally
As n
eede
d
How often do you measure this performance against Public Service Agreements?How often are performance measures checked against targets?
How often is spending against the plan measured and controlled?
6050403020100
%
•••
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`Category
Leaders –estimated as 1/6 ofdepartments
Next steps
• Extend implementation to a widerrange of services
• Broaden engagement with partnersand stakeholders, including links toservice providers
• Measure and incorporate moredetailed perspectives of clients andexternal stakeholders
• Integrate performance managementmore closely with staff development
• A robust and mature performancemanagement framework is in place,and drives decisions
• Performance management culture isstrong, and improving
• Systematic use of performancemanagement in several service areas
• Priorities developed in partnership bysenior management team
• Clear standards which cascade fromcorporate priorities to individual targets
• Performance management is used todrive improvement, with effectivemonitoring at all levels, and a focus onpriorities
• Targets and standards available torelevant stakeholders, including publicand their representatives
• Local / internal indicators have beendeveloped
• Clear link between performancemanagement and corporateperformance
Early adopters –estimated as 1/3 ofdepartments
• Extend external monitoring of clientsatisfaction beyond complaints system– including measurement of priorityoutcomes
• Further development of the cascadefrom corporate priorities to individualperformance targets
• Consistent application of staffappraisal and development system
• Embed performance managementprinciples and practice
• Performance framework in place forsome services
• Links between planning andperformance management
• Senior management team havetranslated priorities into consistentservice standards, corporate plans andtargets
• Mix of internal and national indicatorsidentified
• Good financial management – with regular monitoring of budget& resources
• Staff are clear about what is expected,and have access to service standards.Performance of external providers ismonitored
• Approach to under-performance isrobust
• Some examples of performancesystems driving service improvement
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`Category
Late adopters –estimated as 1/3 ofdepartments
Next steps
• Develop links between planning andperformance management
• Senior management team to translatepriorities into consistent servicestandards, corporate plans and targets
• Provide staff with access toinformation on service standards
• Improve consistency of performanceinformation collection
Performance Management – Level of Maturity
Achievements
• Embryonic performance managementframework is now being developed
• There is a commitment to continuousimprovement
• Performance information is collected
• Effective budget management andsound financial control
• Poor performance is scrutinised andtargeted for action – there are someexamples of corrective action
• Managers receive limited performanceinformation: performance is on teamagendas
• Emphasis on operational planning
Laggards – estimated as 1/6 ofdepartments
• Introduce performance managementframework
• Improve coverage of performanceinformation collection
• Sound financial control systems inplace
• Emphasis on external / nationalstandards
• Managers have access to some of theinformation they need to monitorperformance
This represents a maturing of the way thatperformance management frameworks are used across government. There are a few organisations that have not yet embraced the principles ofperformance management, and several whereimplementation is embryonic.
On the other hand, few, if any, organisations wouldclaim to have fully realised the benefits of aperformance management framework. There is a broad base of experience across a large number oforganisations. These are now well positioned to adopt a more ambitious and widespreadimplementation of performance managementframeworks, and reap a wider range of benefits.
Performance management frameworks have beensuccessfully deployed across both public and privateorganisations, and the key drivers for their adoption ingovernment mirror those that are driving adoption incommercial sectors:
• Increasingly challenging scrutiny of performance bystakeholders, which in the case of the public sectorinclude the general public, regulatory bodies, andelected representatives.
• The need for management to demonstrate theirability to deliver on a range of different strategicperformance objectives.
• An overriding need for greater operationaleffectiveness.
• The need for effective and responsive managementprocesses in an increasingly complex and fast-movingenvironment.
Every organisation that implements a performancemanagement framework is leveraging best practice todrive execution of strategy on an ongoing basis. All facechallenges in driving and embedding change acrosstheir organisation. However, there are some specificcharacteristics of management in the public sectorwhich present a unique challenge:
• Managers in all sectors are subject to externalscrutiny – from shareholders, trustees, etc. However,government is open to a degree of public scrutinythat is unknown to commercial organisations.Managers are accountable to politicians, to othertiers of government, and to independentinspectorates. The performance of their organisation
is subject to intense scrutiny by the public and thepress. An open approach to performance informationcan encourage informed public involvement andunderstanding, but it is not easy to capture thesubtleties of different public expectations –particularly when these differ from group to group,and change over time.
• Public sector managers often feel that they are beingpulled in several different directions. Faced withconflicting demands from different stakeholders, it canbe particularly difficult in the public sector to determinepriorities and set a coherent change agenda.
• The relationship with politicians is critical. Politiciansset the framework in which public service managersoperate; but they are also accountable to theelectorate for public service delivery. In principle,elected representatives set direction and priorities,while managers translate these into effective action.In practice, one of the key factors for success is toachieve the right balance between involving electedrepresentatives and offering managers the space toachieve outstanding performance.
• Public servants at all levels face a unique set ofchallenges over the coming years, and successdepends on more than just reskilling andreorganisation. For many staff, commitment toprofessional standards and to the public serviceethos is a key factor in their motivation. Translatingplans into action depends on engaging thecommitment and enthusiasm of front-line staff andensuring that performance management becomespart of everyone’s day job.
No innovation achieves widespread adoption unless it is compatible with the way that organisations operate.It must be capable of being grasped by the key stakeholders, and it helps if organisations can approachimplementation by progressively refining their approach. Above all, successful innovations offer real advantages,that are clearly demonstrable.
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Government needs world-class performancemanagement
“It’s vital that we can fully understand all our financial and non-financial information in order to make effectivedecisions in the best interests of our general public. But this requires simultaneous access to multiple specialistsystems as no one system can provide all the answers. Geac MPC, with its Strategy Management application,is the ideal mechanism to consolidate this information in a meaningful format for our users.”
Paul Dale, Director of Resources, The London Borough of Bromley
It is well understood, but not always acknowledged,that technology can never provide the completesolution to a business problem, but experiencedsuppliers of performance management software havedeveloped a range of tools and techniques that canhelp managers overcome the challenges that they face.Specialised solutions provide a platform that will helpto accelerate implementation and create a soundfoundation for future development.
• Public sector organisations often describeperformance management in terms of a “goldenthread” linking individual responsibility to actionsand performance indicators, determined by the needsof their clients. By integrating planning, budgeting,forecasting and reporting, and other processes into acontinuous loop, world-class performancemanagement can help executives to align theoperational response to strategic intent.
• By automating data collection, by filtering andformatting data, and by highlighting exceptions,world-class performance management technologycan help managers to present large and complex datavolumes in an easily understood form. By monitoringvital signals, and presenting summary information indifferent ways, it can help to reveal hidden andunrecognised issues and trigger timely action.
• World-class performance management tools providestrong analytical tools such as trend analysis, sorting,and charting to transform data into insight. Theysupport comparisons over time, and benchmarkingagainst peers. Collaboration tools help leaders toinvolve a range of different stakeholders at differentlevels of the organisation, with different skills –ensuring that aspirations are translated into acoherent set of performance measures which linkboth financial and non financial measures.
• World-class performance management tools extendacross the organisation, allowing teams in differentlocations to work together, ensuring that updatedinformation is available to every authorised user assoon as it becomes available – giving ownership andaccountability to the individuals who ensure delivery.
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Spreadsheets are the most widely used technology,reported by over 90% of respondents. More than 50% ofrespondents still rely on manual systems, and 50% usesystems designed primarily for use only by managers.All of these approaches lack the sophistication neededto achieve best practice in performance management.None of them has the inbuilt functionality that helpsmanagers to develop a coherent set of performancemeasures, to share ownership and accountability withfront-line staff, to support continuous improvement ormotivate individuals to deliver. Around one in sixrespondents are using another approach – mostlybespoke in-house systems.
One of the most important reasons which has beenidentified for the success of performance managementis that it helps to engage participation across theorganisation. As we have seen, internal communicationis particularly important in public service organisationswith a strong ethos, and dependence on professionalstandards. Because of the number of external
stakeholders, and the importance of political and publicscrutiny, external communication is equally important.In our survey of public sector managers we enquiredabout the type of mechanism used for communicatingwith staff and the general public.
We discovered a wide variety of different techniques usedfor communication with staff. Central government relied alittle more heavily on formal plans and reports, but thepattern was broadly similar across both local and centralgovernment. There was a strong emphasis on face-to-facebriefings, either at departmental level, or more commonlyat team level. Apart from face-to-face meetings, theIntranet is the most widely used mechanism, althoughthe number of references to the Intranet were surprisinglylow at only 25% of responses in central government and30% in local government.
It is clear that performance management frameworks are widely used, well understood, and have achieved a level ofmaturity in government. However, when it comes to the use of performance management tools to support theseframeworks, the picture is less consistent.
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The role of performance managementtechnology
“We use Oracle for our core financial ledgers, but although it is a sound system it does require specialist usertraining and knowledge of the underlying system. Instead, we feel our users would prefer Geac’s MPC provenweb-based capabilities as it is such an acceptable way to present information. After all, even the best qualityinformation loses its effectiveness if it isn’t easily accessible to non-finance users.”
Neil Graham, Financial Systems Manager at The London Borough of Bromley
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“What mechanisms does your department use to communicate the objectives to the internal staff?”
“What tool or tools do you currently use to measure,manage and report on performance?”
Communication with the general public relies on anequally wide variety of different mechanisms. There issome reporting of face-to-face activity, although this is alittle defensive- “just word of mouth: this is something weneed to improve on”. The Internet is widely used – in morethan 50% of cases overall, with particular importance forcentral government. Central government also makeswidespread use of the press. Printed material appears tobe preferred in Local Government with annual and otherreports, reports, and newsletters receiving relatively largenumbers of mentions.
There are a number of features that any performancemanagement technology needs to provide in order to fulfil its role:
Database content:• Facilities to handle different levels of geographic detail• The ability to hold contextual information, in a variety
of different textual and graphic formats• The ability to hold, and analyse historical data,
and trends• The ability to introduce and integrate new metrics• The ability to carry out comparisons against
equivalent data for different peer organisations• The ability to support a variety of different
performance management models• The ability to create links between measures of public
service, strategy and performance indicators
User features:• The ability to drill down from summary information
to more detailed information in order to identifyunderlying causes
• Standard and custom reporting to meet the needs ofdifferent types of user
• The flexibility to change the metrics used for differentcircumstances
• The ability to integrate a variety of applicationsoftware and compatibility with the associated data
• Ease of use• Appropriate levels of security, performance, and
reliability• Compatibility with the existing technology
infrastructure• Accessible across the network
We asked respondents “If you were able to develop aperformance management tool what are the keyfeatures that you would include?”
Some were forthright – “exactly what we have – it meets all our needs”, “cheap” and “to be honestI wouldn’t develop it myself”. Most were driving for“something that does more than we do now”.Their vision goes beyond the basic requirements of a performance management system. They aredemanding systems that help them to stretch andmotivate their organisation, translate publicexpectations into action plans, give ownership andaccountability to individual members of staff anddeliver continuous improvement. There were severalkey themes:
Accessible to all:“can be sold into the organisation as something theybelieve in”; “ease of use”; “if it’s complicated no one willuse it”; “accessibility, simplicity and presentation of dataand information”; “make it visually attractive”;“performance measures which could be accuratelydefined by all users”; “relevant information to eachofficer”; “able to update own information and use thesystem to self monitor”
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Inte
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“What mechanisms does your department use to communicate your performance externally to yourgeneral public?”
80706050403020100
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Linking corporate vision to specific detail:“linking from personal to community strategy”;“to gather performance information for one team in oneplace”; “put all relevant information onto one page”;“service-specific score card”; “performance informationfrom corporate strategy right down to the teams”;“monitoring outcomes as well as inputs”; “a breakdownof costs and outputs going down to team levels”
Driving improvement:“it will have a chase facility via emails/ excellentreporting facility”; “not require programming hence not needing IT specialists”; “alert systems”;“escalation”; “compare to the previous figures”;“able to see historical trends”
Integration:“the people who are responsible for input should nothave to duplicate any information or undertake thecalculation”; “integration is most important so allsystems can work together”; “able to link betweendatabases / systems”
Value for money:“some large organisations might need a large array oftools – what we need as a small organisation is onlyhave those facilities that are useful for the organisation”
Bold aspirationsIt is clearly understood that excellent implementationof performance management is founded on strongframeworks, centrally driven, with leadership from thetop. World-class performance management tools willhelp to speed the planning processes, improve thequality of planning and broaden the range ofstakeholders who can become involved.
Multidimensional modelling can help organisations totest the impact of new initiatives, partnerships, andinvestments prepare realistic plans for the future. Theuse of graphical interfaces can simplify comprehensionand analysis. Analytical tools help to transform datainto insight. Trend analysis and benchmarking can helpmanagers to develop a realistic view of how theorganisation is performing in comparison to its targetsand its peers.
By linking strategic plans to operational plans, budgetsand performance measures, organisations can visualise,
report and analyse how the actions of operating unitsand individuals contribute to overall strategic goals.Scenario planning facilitates better decision-making,and helps management to identify and test thesensitivity of the plan to specific indicators.
Coherent performance measuresInsight into different facets of corporate performancehelps to establish strategic direction. Managers aredemanding a performance system that connects top-down goals to more detailed budgets andoperational plans.
A world-class performance management system helpsusers to focus on analyses rather than gathering andcleaning data. It uses a coherent database to avoid theneed to link spreadsheets, verify data integrity, and searchthrough lengthy reports.The quality and detail ofperformance indicators is enhanced by extracting datadirectly from operational systems, and automating keyfunctions such as the loading, validation and consolidationof data.This often involves using different ledgers, ERPsystems and charts of accounts. In some cases thesoftware must be able to handle conversions, andadjustments, leaving full audit trails to satisfy auditors.
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“The resources put into collecting performanceinformation should be proportionate to the benefitwhich the information brings.” 1
The London Borough of Bromley is using performancemanagement technology to provide financialmanagement and performance information relatedto special education needs. The plan calls for 300users across the authority, including 60 electedmembers with internet access to critical performancedata. The project is expected to enhance financialcontrol and provide cohesive reporting to boostdecision-making across the authority.
In the initial phase, performance management willbe linked to the council’s existing Oracle Financialsand Education Management System to provide aconsolidated single view of finance and non-financeperformance management information, enablingdecision makers to understand the ‘cause andeffect’ of financial and operational decisions.
1 Choosing the right Fabric – a Framework for Performance Information
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Individual ownership andaccountabilityManagers are demanding a framework for thecommunication and deployment of strategic plansthroughout the organisation.
Continuous improvementWorld-class performance management sharesinformation throughout the organisation to provideongoing feedback and promote collaborative decision-making. Using existing data sources avoids placing anadditional burden on front line staff, and helps to ensurethat decisions are based on common information. Itensures that performance management is integratedwith the budget process, and helps to ensure thatreporting is transparent and honest.
The typical budget cycle ties up too many resources, takestoo long to complete, and is therefore soon out-of-date.World-class performance management reduces the time,effort and errors associated with traditional spreadsheet-based budgeting by providing online collection of data, asingle database to ensure only one version of the figures,and automated calculations. It allows organisations toplan for different programs and initiatives acrossdifferent management structures. A continuous flow ofaccurate financial and other performance data fromoperational systems supports the creation of rollingbudgets and forecasts; and continuous monitoring.
Few of the organisations we surveyed have achievedcontinuous monitoring of performance – most stillreview on a monthly or quarterly basis.
Motivating individuals to deliverIt is clearly understood that effective implementationdepends on a system that is accessible to all. Themanagers we surveyed emphasise the need for a systemwhich is easy to use, and which provides the ability forusers to create unique, personalised data views. Theyrecognise the importance of being able to monitorperformance, not only at organisation or departmentlevel, but also down to team and individual levels.
“It’s great to see all the performance informationfor each service at the click of a button. Widespreadeasy access to this data can only encourageeveryone to help push the Council towardsdelivering excellence.”
Luton Borough Council is using Geac MPCperformance management to help its drive towardsexcellence. Initially, the solution will be used to:streamline budget planning, simplifying calculationof the budget estimates and central recharges;provide a single, continuously updated source ofperformance information to everyone at the Councilwho has a computer, with at-a-glance diagrams tohighlight important facts; check and validate rawdata before these are added to budget forecasts orthe performance information database, thuspreventing problems caused by inaccurate data andallowing exception-based reporting.
Cllr Martin Pantling, executive member for financeand performance, said:“It’s great to see all theperformance information for each service at theclick of a button. Widespread easy access to thisdata can only encourage everyone to help push theCouncil towards delivering excellence.”
Will performance management draw resourcesaway from front-line delivery?
The Learning and Skills Council (LSC) is responsiblefor funding and planning education and training forover 16-year-olds in England. As a result ofimplementing an integrated performancemanagement system, LSC has accelerated thebudgeting and forecasting process across its 50offices in the UK. Geac’s MPC solution replaced acomplex spreadsheet system that was not meetingthe organisation’s reporting and forecasting needs.
Bob Boswell, budgetary control manager at LSC,comments:
“Previously, we spent a great deal of our timemanipulating spreadsheets, which proved to beinefficient. Geac Performance Management hassped up the entire process, providing more detailedand accurate reports. We’re hoping to roll it out toall budget holders which will embrace 800 users.”
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The OGC guidelines demonstrate both the relevance of performance management to any project, and asummary of the areas where a performancemanagement project will deliver benefits.
The guidelines ask:
Is the business case still valid?
Anticipated response: The decision to implement aperformance management system represents a majorcommitment for any organisation, and the issues andoptions will have been considered in depth at the mostsenior levels of the organisation.
It would be distressing for everyone involved to discoverissues with strategic fit at the time of benefitevaluation. Of more immediate concern to our clients at this stage is whether the implementation project androll-out have proceeded on plan, and within budget.
Our solution is designed to offer high levels of technicalcompatibility with existing infrastructures, and to beaccessible to users. Our partnership shares considerableexperience of implementation and rollout in bothcommercial and public sectors. No substantial changeproject is without problems, but we take pride in thefact that our clients have been pleasantly surprised by the ease and speed with which our solutions can be implemented.
Are the business benefits being realised as set out in the business case? Did the organisation achieve more?
Anticipated response: The business case for aperformance management framework is welldeveloped, but broad in scope. In contrast, the initial business case for adoption of performancemanagement software often relies heavily on thepredictable savings that can be achieved from more efficient use of skilled resources, and the reduced cost of maintaining and developing existingad-hoc solutions.
However, it would be disappointing if implementationresulted only in achievement of predictable benefits.A functionally rich solution offers considerable scope forusers to grow in their ability to leverage its capabilities.An open architecture facilitates expansion of scope toadditional parts of the organisation, and to new metrics.Continuous improvement should ensure that furtherbenefits are realised over time. We would therefore bedisappointed to see no improvement over the originalfinancial case: a key aim of performance management isto enable senior managers to identify more widespreadopportunities for performance improvement.
Have the needs of the business and/or end-users changed?
Anticipated response: The most persuasive argumentfor implementation of a world-class performancemanagement solution is the ability to cascadeincreasingly powerful performance indicatorsthroughout the organisation.
There would be little point in a performancemanagement project that achieved no change inworking practices. With more detailed understanding ofkey performance indicators, senior managers should bewell positioned to refine the priorities, and operationalstaff better positioned to address critical issues, as theperformance management solution should provide thelink between cause and effect. As this process gatherspace, it is the changing needs of the business, ofmanagers, and of operational staff that confirms thewisdom of an initial decision in favour of a world-classperformance management solution, capable ofhandling changing needs.
Acquisition programmes and procurement projects in civil central government are subject to OGC Gateway Reviews.Gateway-5 is concerned with evaluation of benefits, and normally takes place some 6-12 months after implementation –at the stage when there should be sufficient evidence available of the benefits that can be achieved.
Evaluation of benefits
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Have all the stakeholder issues been addressed?
Anticipated response: Performance management is a toolto help senior managers transform their organisation.However, it is not only a tool for senior managers. It is wellestablished in this report that successful performancemanagement builds on engaging commitmentthroughout the organisation. Uniquely in the public sector,the ultimate intent may not only be to transform theorganisation, but to transform the lives of the community.Performance of the organisations is scrutinised by thepublic, its political representatives, and other stakeholders.
In this context, to address all potential stakeholder issuesis, at best, a long-term goal. Nevertheless, we would bedisappointed by a project that affected only internalmanagement processes, with no visibility or relevance tothe wider stakeholder community. Our experience is thatstaff welcome the opportunity for greater involvement,take pride in the performance of their organisation, andlike to see this performance communicated effectively toexternal stakeholders. Performance managementsoftware can play a vital role in this process.
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Ten questions to ask of the currentbusiness performance managementframework1. Does your organisation have major high-level
goals that must be achieved over the next fewyears, and which are agreed between keystakeholders?
2. Has your organisation identified and agreed thekey strategic themes on how these goals will beachieved?
3. For each strategic theme, has your organisationdefined the measure of success that will denotefulfilment of the strategy?
4. Have operational managers created activity planson how each strategic theme will beimplemented?
5. For each activity, has your organisation definedmeasures that will inform on howimplementation is progressing?
6. Have budgets been developed which focus onthe resourcing of activities?
7. Does your organisation assign clear responsibilityfor implementation?
8. Does your organisation clearly communicate planand performance to internal stakeholders?
9. Does your organisation clearly communicate theplan and performance to external stakeholders?
10. When reviewing performance, does yourorganisation correlate the implementation ofactivities with the success of the strategy?
Number of YES answers9-10 Among the global leaders in best practice. Such
performance will rarely be achieved without thesupport of world-class technology.
7-8 A high standard, setting the benchmark forothers. Organisations in this group will have theconfidence to share both good, and badexperience with others. Performancemanagement technology may help suchorganisations to stretch their ambitions.
4-6 Room for improvement. Depending on theinhibitors to further improvement, there may bea role for supporting technology to helpmanagers to implement performancemanagement more widely.
2-3 Below average performance. It is unlikely thatsupporting technology has a role to play until the business issues have been more thoroughly addressed.
0-1 Low performance. A focus on supportingtechnology at this stage would be totally counter-productive.
A performance management framework is not appropriate for every organisation. In the wrong context, performancemanagement software can be counter-productive. For managers who are either considering the introduction of aframework for performance management, or considering the acquisition of performance management software we offertwo checklists that can help to provide a quick assessment of whether this is an appropriate time to invest resources.
The first checklist concentrates on whether theorganisation is ready to embrace the principles of world-class performance management. In the right environmenttechnology can help to stretch and accelerateimplementation of a performance management
framework. The second checklist concentrates on thecharacteristics of world-class performance managementsolutions. We encourage consideration of an architecturethat addresses the key issues for successful adoption of aperformance management framework.
Best Practice
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Ten questions to ask beforepurchasing business performance management software
1. Does it offer complete integration?
A performance management system shouldencompass planning, budgeting, forecasting,financial consolidation, reporting, and analysis –making it possible to align strategic initiativeswith tactical plans and budgets. The technologyshould be based on standards that allowintegration with existing systems.
2. Does it extend across the organisation?
The technology should provide an infrastructurethat allows teams to work together onprocesses, from anywhere at any time, withoutthe need for IT to annually load software oneach machine. This consistency of technologyreduces training levels required and helpsensure high user adoption given the familiaritywith the interface.
3. Does it focus on exceptions?
An effective performance management systemwill highlight exceptions, focussing userattention where it is most needed. Once anexception is identified, the user should be ableto drill down into the detail.
4. Does it automate data processing?
Performance management systems shouldautomate the processing of ratios, conversions,allocations, consolidation which in turn reducesresponse times.
5. Does it filter and format data?
The system should be capable of summarisinglarge volumes of data and presenting it in aneasily understood form such as Excel.Integration with software such as this shouldtherefore be considered.
6. Does it provide users with on-demand access toinformation?
The system should exploit the web to allowaccess to both financial and non-financialinformation in disparate systems, at differentlocations and in different formats. A centralportal should make access and navigation easyand intuitive. The system should supportcollaboration facilities such as e-mail, instantmessaging and bulletin boards.
7. How easy is the technology to deploy?
The system should be easy to deploy in aniterative fashion, allowing you to deploy quicklyand to start reaping the benefits of yourprojects faster. This will lead to faster ROI whilesaving on implementation and latency costs.This is the case with a Server-based solution.
8. Does it provide insight?
Performance management systems shouldprovide strong analytical tools, such as trendanalysis, sorting and charting to transform datainto insight in a timely manner. Response timesare an important consideration here.
9. Does it automatically monitor vital signs?
Performance management systems shouldcontinuously search underlying data andproactively warn users of exceptions that aretypically hidden and unrecognised insummarised reports. Information requiringaction should be delivered directly to the user.
10. Does the vendor demonstrate a provencommitment to performance management?
Be sure that the vendor has developed theirown solution, uses web protocols andmainstream database technologies, hasreceived positive reviews from industryanalysts and clients, and uses its own product.
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Capgemini, Geac and Microsoft have forged a partnership that integrates consulting experience with best-of-breedsoftware applications and world-class technology. Individually Capgemini, Geac and Microsoft have deliveredhundreds of projects for government entities worldwide. These skills have now been brought together to deliversuccessful public sector change programmes that combine innovative strategies and consulting services fromCapgemini with Geac's proven performance management solutions and Microsoft’s leadership in technology.
Ultimately, our approach can provide solutions that can increase financial and operational efficiency, accountabilityand productivity.
Supplier Profiles
Capgemini is one of the world's foremost providers ofconsulting, technology and outsourcing services. It is activeacross every area of UK government, with experience in athird of all executive agencies; many local and healthauthorities; and a wide range of other Government bodies.
In addition to leading the partnership which runs theInland Revenue's IT systems, Capgemini clients in centralgovernment include the Department for Education andSkills, Department for Work & Pensions, The HomeOffice, The Inland Revenue, Foreign & Commonwealth
Office, Department for Transport, National Assembly forWales, the Scottish Executive, the Scottish Parliamentand Office of the Deputy Prime Minister. Localgovernment clients include the City of Westminster,London Borough of Croydon and Kent County Council.
Capgemini (in consortium with Qi Consulting) havebeen selected as service providers across the majority of S-Cat and GTC categories.
Capgemini UK plc No. 1 Forge End, Woking, Surrey GU21 6DB UK Tel: + 44 (0)870 904 5617 www.capgemini.com
Geac is a global enterprise software companyspecialising in business performance managementsolutions. The company has over 30 years of experienceproviding core financial and operational solutions andservices to more than 18,000 customers worldwide.
Geac provides the first web-based application that offersmodules for budgeting, planning, forecasting, financialconsolidation, strategy management and reporting in asingle integrated solution, all residing on a centraldatabase. The solution enables you to effectively model,visualise and agree strategic plans and initiatives across
organisational boundaries and connect these top-downgoals to day-to-day operational plans. The outcome ofactivities can be monitored to provide a full cause andeffect analysis and cohesive reporting can dramaticallyboost decision making across departments.
Clients in UK government such as The Learning & SkillsCouncil, London Borough of Bromley and Luton BoroughCouncil use Geac solutions to underpin their drive forhigh quality of service delivery.
Geac 22 Chelsea Manor Street, London SW3 5RL UK Tel: +44(0)20 7 349 6000 www.performance.geac.com
Founded in 1975, Microsoft (Nasdaq "MSFT") is theworldwide leader in software, services and solutions thathelp people and businesses realise their full potential.
Microsoft Ltd. is a subsidiary company of MicrosoftCorporation – based in Redmond, Washington State –USA. The UK subsidiary was formed in 1982, currentlyemploys over 1,500 people, and is headquartered atThames Valley Park in Reading, Berkshire.
Microsoft serves all areas of the public sector, with depthof government experience, both globally and in the UK,and its products are key components in the technologyinfrastructure of government.
Microsoft Ltd. has been active in the development of UK e-government solutions, such as the governmentGateway.
Microsoft also has close relationships with technologycompanies that offer complementary products andservices. Examples include OEM agreements with themajor hardware manufacturers, partnerships withapplication solution providers, and collaboration withservice providers.
Microsoft LimitedMicrosoft Campus, Thames Valley Park, Reading,Berkshire RG6 1WG UKTel: +44(0)800 013 4555www.microsoft.com/uk/windowsserversystem/bi
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