How to Conduct a Results Driven Government Efficiency Program.

How to Conduct a Results DrivenGovernment Efficiency Program

Copyright © 2004 Deloitte Development LLC. All rights reserved. 2

Topics for Today’s Discussion

– Introductions

– Context Setting

– Formulating Your Efficiency Program Approach

– Lessons Learned/Critical Success Factors

– Getting Started


Introductions

• Bill Eggers

– Global Director, Deloitte Research – Public Sector

– Author of two upcoming books: Governing by Network: The New Shape of Government (Brookings, 2004) and Government 2.0: Using Technology to Improve Education, Cut Red Tape, Reduce Gridlock, and Enhance Democracy (Rowman and Littlefield, 2005).

– Managed performance reviews for the State of Texas and city of Los Angeles and advised several others. Numerous leadership positions related to government reform and performance

• Christina Dorfhuber

– Principal in Deloitte’s Public Sector Practice

– National Leader Public Sector Strategy and Operations Practice

– Lead Principal on several State efficiency and transformation efforts

A Little Bit of Context….


State GovernmentState GovernmentFinancesFinances

Declining federalDollars, increased federal mandates

Increased spending demands

Exploding Medicaid Costs

Aging population

Opposition to higher taxes

In this environment, permanent cost reduction in the machinery of government is necessary …

Pension Crisis


Efficiency Programs can provide a mechanism for identifying permanent cost reduction

• Over the past five years at least 20 states have initiated some form of enterprise level efficiency effort recognizing that longer term solutions are required for sustainable control over budgets while maintaining constituent service levels and addressing other pressures.

• A well structured cost reduction program produces Value to Constituents– Taxpayers see effort being made to reduce the cost of

government while maintaining or improving service levels. – Efficiency programs can improve service delivery by

streamlining activities and reducing steps


But not all Efficiency Programs are created equal and not all produce the projected or desired results

State Project Name Method of ReviewCost Savings

Identified Time Period Leadership Results

TX e-Texas/Texas Performance Review

•Public/private partnership of Texas Performance Review staff and citizen volunteers•14 task forces reviewed functional and financial processes

$17B plus over 10 years

1991-2004 •Texas Comptroller

65% of recommendations enacted into law

VA Governor's Commission on Efficiency and Effectiveness

•Research conducted by the Commission and external consultants and private sector volunteers•Bench-marking with the Federal Government and private sector organizations

• $500M as a result of consolidation, outsourcing, and streamlining• $750M as a result of process reengineering

February 2002 thru December 2002

•Established by Governor Mark Warner•Chaired by former Governor,Douglas Wilder

Has fallen well short of projected opportunities

WI EASI •Pro Bono Assessment then Separate Projects. No Centralization. Internally managed

$268-$511Million over 4 years

August 2003-Present

Dept. of Administration

Slow start, none communicated to date

NM NM Performance Review

•Loaned state employees

$65M (5 yrs) Governor Bill Richardson


Selected State Performance Initiatives (cont)

State Project NameMethod of

ReviewCost Savings

Identified Time Period Leadership Results

CA California Performance Review

275 state employees

• Original- $32B (5yrs)• Revised- $15B (LAO)

• Analysis :Feb.-Aug 2004• Public Review: Aug-Sep 2004• Governor Review: Oct 2004- forward

Created by Governor Schwarzenegger

Currently wrapping up public commentphase

FL Office of Program Policy and Government Accountability

Formal and informal research reports

• Cumulative value not available

• Created in 1994• On-going appropriations

Created by Florida Legislature

Florida Government Accountability Report

GA Commission for a New Georgia

Blue Ribbon Commission with state employees, consultants, and task forces

Estimated total to date $700M-$1B

Analysis ongoing through 2005

Created by Governor Perdue

Analysis ongoing

KY Empower Kentucky

500 state employees and consultants

$700M 3 year program spending9.1 Million on EMPOWER program. $32M on Admin. System

Created by Gov. Patton

$700M cumulative savings over 7 years$300M to Education

Formulating Your Efficiency Program

Approach


There are several models that States have adopted to run their efficiency programs

• There are various models and combinations of models being used by states– Public/private commission– Internal efficiency review– Efficiency review with external assistance

• Each model has its own set of strengths and weaknesses

• The structure these states have adopted is the result of specific choices…– Who is on the team?– What factors are influencing the Review?


States First Identify Who to Have As Part of the Efficiency Team

Executive Sponsor?

PrivateInvolvement?

• Legislative

• Governor

• Budget Office

• Independent

Party

• Paid

Consultants

• Volunteers

• Loaned

Executives

• Commission

EmployeeRole?

• Dedicated Unit

• Loaned

EmployeesOne timeRevolving

PublicInvolvement?

• Hearings

• Web Site

• Surveys

• Focus Groups

=EfficiencyProgram Team

• Blue Ribbon

Commission

• Internal Review

• Consultant

Review

• Hybrid

+ + +


While Ideally Considering the Following Factors….

Review InvolvementInside Outside

Willingness for Public Scrutiny

Political Alignment HighLow

HighLow

Internal Capabilities HighLow

Time Available HighLow


It is not only who does the work, and what influences the work, but how it is done.

• There are many methods used in identifying cost savings, cost avoidance and revenue maximization opportunities – Business Process Reengineering

– Desk Audits

– Activity Based Costing

– Budget analysis

– Management by Objective

– Performance Reviews

– Balanced Scorecards

– Benchmarking and Functional Area Diagnostics

And focusing on the multiple outputs that can result….


Review Approaches

• Functional Education, health and human services, public safety, transportation, employee benefits, strategic sourcing

• Organizational Review by individual departments

• Program Focuses on specific programs within the organization, often those with large client populations that may cut across agencies

• Business process Look at entire enterprise from a business process perspective; review processes such as HR,

licensing etc.


A Diagnostic To Understand Where to Focus

Target newgeographies

Expand outreachchannels

Develop new serviceofferings

Increase focus onconstituency needs

Increase focus onmost beneficialservices

Increase focus onmost effectiveoutreach methods

Improve brandstrength and good will

Improve access toinformation andanalytical tools

Improve outreachskills of staff

Tailor outreachmethods to targetpopulations

Tailor services to newconstituent segments

Evolve servicefeatures, functionalityand value

Improve totalconstituencyexperience


Improveresponsiveness toconstituent feedback

Improveunderstanding ofconstituent needs

Proactively managetransition points(life events, ends ofcontracts and leases, etc.)

Tailor service deliverymanagementapproaches toconstituent segments

Maintain effectivecompetitivefunctionality and value

Offer value-addingservice bundles

Improve effectivenessof outreach processes

Implement proactiveand reactive outreachcampaigns


Increase focus onmost effectiveservices

Increase focus onmost effectiveoutreach methods

Improve retention andwin-back processes


Improvecompetitiveness ofservice offerings

Shorten time todeliver services

Improve brandawareness / elevatebrand image

Improve developmentand protection ofintellectual capital

Improve servicefeatures

Improveservice quality andreliability

Improve servicelifecycle management

Improvecommunication/coordination withservice deliverycenters

Rationalize and/orrefocus outreachstrategies

Rationalize and/orrefocus services

Rationalize and/orrefocus targetedconstituent segments

Improve campaigndesign andmanagementprocesses and tools

Improve skills ofmarketing/outreachstaff

Provide staff withbetter market andconstituentinformation

Improve servicespecificationprocesses

Improve servicelaunch processes

Improve tailoring ofoutreach approachesto constituentsegments

Improve terms withservice providers(researchers, informationservices, outreach channels,etc.)

Improve emphasis onservice quality andease of service

Design services forease-of-use / self-service

Increase use of lower-cost service andinformation channels(contact centers, automatedvoice response, web etc.)

Improve workforceplanning and dispatchprocesses and tools

Improve capacity/demand planningprocesses, skills andtools

Improve service andsupport processes

Improve skills ofservice staff

Provide staff withbetter constituentinformation(profiles, transactionhistories, etc.)

Improve terms withservice providers(network services,outsourced functions, etc.)

Improve terms onleased service assets(computers, vehicles, etc.)

Improve forecasting,planning andprioritization skills andtools

Improve creditanalysisprocesses

Improve skills ofservice delivery staff

Improve invoicing/collection processes

Improve terms withservice providers(delivery services,outsourced functions, etc.)

Consolidate and/orre-architect datastores

Increase utilization ofIT, telecom andnetwork resources(servers, routers, networkcapacity, etc.)

Improve design,development andtesting processes

Improve operationsmaintenance andchange managementprocesses

Improve end usersupport andadministrationprocesses

Improve selection,acquisition andcontractingprocesses

Improve installation/deploymentprocesses

Improve skills of staff(technical and projectmanagement)

Improve dispatch,diagnostic, resolutionand replacementprocesses

Improve terms withservice providers(contractors, networkservices, consultants, etc.)

Improve terms onpurchased and leasedassets (PCs, servers,network equipment, leasedlines, etc.)

Improve terms onpurchased and leasedreal estate, furnitureand fixtures

Increase utilization ofreal estate

Improve capacity/demand planningprocesses and tools

Improve RE designand developmentprocesses

Improve operationalprocesses(administration, security,energy, and maintenance)

Improve RE selection,acquisition andcontracting processes

Improve REimprovement anddeploymentprocesses

Improve terms withservice providers(security, energy, etc.)

Improve terms withthird party serviceproviders (payroll,benefits, training, etc)

Reduce salary andbenefits costs

Improve capacity/demand planningprocesses and tools

Implement/improvecompany-wide staffperformanceassessmentprocesses and tools

Improverecruitment andorientation processes

Improve skills of HRstaff

Provide staff withbetter HR informationand tools

Improve trainingprocesses

Improvesalary and benefitsadministrationprocesses

Improve payrollprocesses

Improve performanceassessmentprocesses

Rationalize/consolidate vendorportfolio

Increase focus onhigher value vendorpartnerships

Increase use of lower-cost channels(self-service, etc.)

Improve assignmentof procurementtransactions toappropriate staff

Improve demandplanning processesand tools

Improve productprocurementprocesses(equipment, supplies etc.)

Improve serviceprocurementprocesses(travel, contract labor, etc.)

Improve contractingand negotiation skillsof procurement staff

Provide staff withbetter servicedescriptioninformation

Improve terms onequipment andsupplies

Improve terms withservice providers(equipment maintenance,delivery, warehousing, etc.)

Improve terms withservice providers(information services,consultants, etc.)

Improvestrategic planningprocesses

Improve skills ofbusinessmanagement staff

Provide staff withbetter managerialinformation and tools

Improveprogram planningprocesses

Improve budgetingprocesses

Improve programmanagementprocesses

Improveaccounting andmeasurementprocesses

Improve terms withfinancial servicesproviders

Improvecash/treasurymanagementpractices

Improve skills offinancial managementstaff

Improve tax efficiency

Improve incentivesaround financialmanagementefficiency

Improve debt andequity managementprocesses

Improveresponsiveness toconstituent requestsand inquiries

Improve tracking ofconstituentinteractions(service requests, questions,support etc.)

Improve identificationof valuableconstituentrelationships

Refocus and/or refineretention priorities andstrategies

Solicit and respond toconstituent feedback

Implement affinityprograms

Increase emphasison differentiatedservices

Improve demandforecasting

Consolidate oroutsource service andsupport operations

Differentiate servicetreatment ofconstituents/segments

Provide staff withbetter serviceinformation

Improve financial riskmanagementprocesses

Increase use of lower-cost delivery channels(self-service, partners, etc.)

Increase use of lower-cost collectionchannels(automated, self-serviceetc.)

Differentiate treatmentof constituents/segments

Consolidate oroutsource collectionoperations

Consolidate oroutsource design,development anddeployment services

Consolidate oroutsource operationsand maintenanceservices

Consolidate oroutsource end usersupport

Consolidategovernment realestate/facilities

Consolidate oroutsource design anddevelopmentfunctions

Rationalize ITapplication portfolio

Consolidate oroutsourceimprovement anddeployment

Consolidate oroutsource propertymanagementfunctions

Increase use of lower-cost real estate andfacilities

Consolidate oroutsource benefitsadministrationfunctions

Consolidate oroutsource payrollfunctions

Consolidate oroutsource recruitmentfunctions

Refine and/or refocusvendor strategies

Standardize productcatalogs(equipment, office supplies,promotional materials, etc.)

Consolidate oroutsourceprocurement functions

Consolidate and/oralign businessplanning,management andreporting functions

Improve alignment oforganizational struc-tures and governancemodels with businessstrategies

Consolidate and/oralign financialplanning,management andreporting functions

Consolidate and/oralign financialaccounting andanalysis functions


Increase use ofemployee self-service channels

Improve quality/valueof benefits

Improve utilization ofservice staff

Implement integratedapplications acrossorganizationalboundaries

Consolidate IT,telecom and networkequipment andfacilities

© 2002 Deloitte Consulting. All rights reserved. Confidential. 1202

Improve services /decrease taxes orfees

Improve focus oncost-sensitiveconstituent segments

Increase emphasis ondifferentiated ratesand fees acrossconstituent segments

Improveunderstanding ofconstituent ratesensitivity

Align outreach withcosting strategies

Improve tailoring ofofferings toconstituent needs

Increase use ofdifferential ratemechanisms (based onconstituent value, risk, etc.)

Increase focus onservice innovation

Improveunderstanding ofservice value toconstituents

Increase focus on rateeffectiveness andoptimization

Broaden serviceofferings

Adapt currentservices to newconstituent segments

Improve serviceinnovation skills ofstaff

Convert free servicesto fee-based services

Align service costswith value toconstituents

Improve investmentreturns on cash/treasury funds



Seek new fundingsources such asgrants

Increase emphasis ongenerating revenuefrom current fundingsources

Increase focus ondeveloping andprotecting intellectualcapital

Improveunderstanding ofconstituent needs

Increase focus onexpansion ofconstituentrelationships

Improve servicewithdrawal andretirement processes

Improveestablishment of andadherence to servicelevel targets

Increase use ofdistance/on-linelearning

Improve outreachapproaches/models

Improve allocation ofshared/overheadcosts

Consolidate oroutsource learningand developmentfunctions

Improve serviceavailability

Increasecustomizability ofservices

Accelerate servicedelivery

Recognize andleverage successfactors

Increase utilization ofmodular, reusableservice deliveryapproach

Improve collaborationwith partner agencies

Improve reuse ofservice components

Improve managementof service deliverylifecycles (launch throughretirement)

Increase emphasis onconstituent/relationshipdevelopment

Improve constituentservice managementstrategies

Shorten creation-to-delivery cycle time /Improve serviceavailability

Improve totalconstituentexperience (servicedelivery, support, etc.)

Improve structuringand pricing


Improve due-datereliability

Manage procurementon a local/state/national basis

Improve leveraging oflocal/state/nationalpurchasing power

Increase emphasis onretaining currentservice recipients

Proactively managetransition points(life events, ends ofcontracts and leases, etc.)

Offer value-addingservice bundles

Improve focus onemployee retention

Establish/improveemployee retentionprograms

Increase emphasis onconstituentsatisfaction

Improve qualityassurance programs

Sell/lease excesscapacity to otherenterprises(production capacity, servicecapacity, etc.)

Coordinate costs ofcomplementaryservices

Rationalize portfolio offinancial servicesproviders

Improve cash/treasuryinvestmentmanagementprocesses

Improve capitalinvestment analysisprocesses

Improve breadth,depth and quality offinancial information(asset, budget, price/cost,treasury, performance, tax,risk, etc.)

Improve budgetingand forecastingcapabilities

Improve financialreporting efficiency

Improve assetmanagementprocesses(fixed and variable assets)

Improve contractmanagementprocesses(negotiation, execution andcompliance)

Improveunderstanding ofcurrent constituentsatisfaction

Improve constituentrelationships andinteractions across allchannels

Increase focus onhigh-impact services

Improve focus onhigher value outreachchannels/media

Improve analyticalprocesses and tools

Improve channelmanagementprocesses and tools

Relocate governmentfacilities

Improve businessperformance reportingprocesses

Integrate delivery ofshared services

Improve outreachperformancemanagementmethods and tools

Improve serviceinnovationperformancemanagementmethods and tools

Increase focus ongenerating revenuefrom new fundingsources

Outsource non-performing and non-strategic agencies/departments

Improve managerialmethods and tools

Improve demand/supply performancemanagementmethods and tools

Improve ratedetermination/costingperformancemanagementmethods and tools

Improve outreachperformancemanagementmethods and tools

Improve service andsupport performancemanagementmethods and tools

Improve procurementperformancemanagementmethods and tools

Improve real estateperformancemanagementmethods and tools

Improve HRperformancemanagementmethods and tools

Improve/consolidateIT performancemanagementmethods and tools(utilization, performance,capacity planning, etc.)

Improveunderstanding ofagency/departmentperformance andmarket values

Consolidate devicemanagementinformation and tools

Improve alignment ofbudgets and programplans with businesspriorities

Improve alignment ofbusiness unitstrategies withenterprise strategies

Improve alignment offinancial strategieswith service deliverystrategies

Strengthenenterprise-widefinancial reportingstandards

Increase focus onproviding businessinsight and forward-looking information

Version: February 12, 2003

How Value is Created(Value Drivers)

What You Can Do(Improvement Levers: Business Processes,Assets and Organizational Capabilities)

Other Shared / Cross-Agency Services(Real Estate, Procurement and Other)

Human Resource Strategy and Management(Recruitment, Development, Administration andPerformance Management)

IT Strategy and Management(Design, Development, Deployment, Operations andPerformance Management)

Strategy and Business Management(Business and Financial Strategy, Program Management andPerformance Management)

Constituent Strategy, Relationships and Interactions(Outreach, Delivery, Collections, and Service)

Service Development and Delivery(Innovation, Supply Chain Management, and Program Logistics)

BUSINESS PROCESS GROUPINGS

All Process Groupings(Action may apply to all processes)

Change What You Do

What you provide Whom you target and serve Where you deploy resources Which operations you outsource

Do What You Do Better

Improve processes Collaborate more effectively Satisfy constituents, employees and

other stakeholders Align resources with strategies Hone strategic capabilities

Note: Many actions could logically be associated withother or multiple process groupings. In particular,many constituent and service actions are likely to haveheavy IT and HR components.

AlignRates

ImproveManagerial Effectiveness

RelationshipManagement

Supply &Demand

Management

ServiceOutreach

InquiryManagement

ServiceDeliveryReal Estate Human

ResourcesBusinessPlanning

ProgramDelivery

BusinessPerformanceManagement

OperationalExcellence

SharedServices

RelationshipStrength

Agility &Flexibility

StrategicAssets

EconomicDevelopment Rate Realization External Factors

C O N ST I T U E N T V A L UE

ProgramDevelopment

Develop strongconstituent andcommunityrelationships

Develop and utilizeunique physicalresources(facilities, land, etc.)

Develop and utilizeunique humanresources(thought leaders, managers,subject matter experts, etc.)

Increase focus onstrategic assets

Improve assetdevelopment skills ofmanagement andstaff

Establishdevelopment ofstrategic assets askey competency

Increase emphasis onleveraging strategicassets

Develop and utilizeunique IT resources(applications, networks, etc.)

Develop and cultivategood will

Improve agility andflexibility oforganizationalstructures

Improve agility andflexibility ofgovernance models

Improve flexibilityof businessprocesses

Improve versatility ofmanagers and staff

Improve flexibilityand versatility of ITsystems andplatforms

Increase focus onbusiness agility andflexibility

Establish agility andflexibility as keycompetencies

Establish service andprocess innovation asa key competencies

Improve serviceinnovation processes

Improve service andprocess innovationskills of staff

Improvecommunication andknowledge transferacross organizationalboundaries

Improve agility andflexibility of partnerorganizations andnetworks

Improve valuedelivered toconstituents

Improve valuedelivered to partners(vendors, channel partners,etc.)

Improve valuedelivered toemployees

Improve identificationof opportunities toincrease value tostakeholders

Improveunderstanding ofstakeholder interests(constituents, employees,partners, etc.)

Improvecommunication withstakeholder groups

Increase focus onstakeholderrelationships

Establishmanagement of keystakeholderrelationships asorganizational priority

Improve relationshipmanagementstrategies for keystakeholder groups

Improve identificationof stakeholder groupsand establishment ofpriorities

Improve valuedelivered to otherstakeholders

Improve qualityand speed ofcommunicationacross organization

Improve ability toidentify and assessshared serviceopportunities

Improve integration ofbusiness processesacross organization

Increase focus onshared servicesopportunities

Improvepartnership andcollaboration skills ofstaff

Improve sharing ofknowledge acrossorganization

Increase proactivepursuit of sharedservices

Improve integration ofIT systems acrossorganization

Increase emphasis onoperational integrationwithin organization

Establishcross-organizationcollaboration as a keycompetency

Improve effectivenessof organizationalstructures andgovernance models

Increase emphasis onquality managementand benchmarking

Improveprocess innovationskills of staff

Improve depthand breadth technicalskills of staff

Establish a culturecentered onoperationalexcellence

Establish processimprovement andinnovation as keycompetencies

Increase integration ofbusiness processesacross organizationalboundaries

Improve assessmentand benchmarking ofbusiness processperformance

Improve sharing ofknowledge acrossorganizationalboundaries

Improve businesscontinuity planningand disaster recoverycapabilities

Improve security ofapplications, systemsand data

Improve recruitingeffectiveness

Improve physicalsecurity of people

Increase emphasis oncross-business-unitand cross-organizationcollaboration

Improve performanceand reliability of ITsystems/platforms(applications, equipment,networks, etc.)

Improve breadth,depth, quality andtimeliness of businessinformation

Improve access toand distribution ofbusiness information

Increase focus onbusiness continuityplanning

Improvemeasurement andreporting ofoperational andfinancial performance

Improve analysis ofmanagerialinformation

Improve focus onmost importantmanagerialinformation

Improvecommunicationaround improvementpriorities

Improve quality andconsistency ofperformanceassessment methods

Improvecareer options andpaths

Align managementand staff incentiveswith companyperformance

Improve monetaryand non-monetaryrecognition of staffcontributions

Improve breadth,depth, quality andtimeliness ofperformanceinformation

Increase emphasison continuous,proactiveperformancemanagement

Improvedetermination of keyperformance metricsand targets

Strengthen andcommunicate mission,vision and values

Increase focus onmanagerial, forward-looking information

Improve assignmentof accountability andauthority

Improve effectivenessof organizationalstructures andgovernance models

Increase emphasis onpeople/talentdevelopment

Improve talentmanagement modelsand programs

Increase focus on keyperformance metrics

Improve access toand distribution ofperformanceinformation

Improve structuringand launch ofcohesive programportfolios

Improve coordinationand communicationacross programs andprojects

Improve program/project managementmethods and tools

Improve alignment ofprojects with programand businessobjectives

Increase emphasis onenterprise-wideprogram planning andcollaborative programdelivery

Dynamically cancel orredirect ineffective/obsolete programsand projects

Improve tracking andcommunication ofprogram/projectprogress

Improve assignmentof resources toprojects

Improve program/project managementskills of staff

Improve managementof vendors/serviceproviders

Establish program/project delivery as akey competency

Increase emphasis oncontinuous, proactivemanagement ofservice portfolios

Improve vendormanagement skills ofstaff

Improve involvementof operational staff inproject delivery

Improveaccountability/authority of programand project resources

Improve effectivenessof program/projectgovernance models

Increase focus onproject quality andrisk management

Increase focus onrealization of targetedservice deliverybenefits

Improve identificationand management ofprogram/project risks

Continuously trackand manage therealization of projectbenefits

Structure programs/projects to deliverbenefits progressively

Improve identificationand prediction ofindustry and markettrends

Improve identificationof opportunities andthreats

Improve strategydevelopment capa-bilities at enterpriseand agency/department levels

Improve alignment ofbudgets and capitalprograms withstrategic priorities

Improve executivedevelopment/recruiting andsuccession planning

Improvecommunication ofstrategic directionsand priorities

Improve integration ofenterprise, agency/department,investment, andfinancial strategies

Increase emphasis onscenario-basedplanning

Improve alignment ofservice, outreach,support, andfulfillment strategies

Improve developmentand analysis ofbusiness cases

Improve focus ofresources on high-priority initiatives

Improve integration ofshort- and long-termbusiness planning

Improve leadershipand managementskills of managers/executives

Improve focus onhigher-needconstituent segmentsand higher-benefitservices

Rationalize and/orrealign programdevelopmentefforts

Increase use of lower-cost programdevelopmentstrategies

Improve programconception/initiationprocesses

Improve identification/discontinuation ofunsuccessfulefforts

Consolidate oroutsource programdevelopmentfunctions

Increase emphasis onextensible and re-usable programs andservices

Rationalize and/orrefocus agencies andservice portfolios

Improve collaborationwith partners andconstituents

Improve program andservice introduction/launch processes

Improve servicedelivery performancemanagementmethods and tools

Improve collectionsenforcement

Improve servicedelivery performancemanagementmethods and tools

Rationalize and/orrefocus agencies andservice portfolios

Increase emphasis onservice deliveryefficiency

Increase quality/consistency ofservices

Consolidate oroutsource programdevelopmentfunctions

Improve qualitycontrol of services

Improve demandforecastingprocesses, skills, andtools

Improve coordinationwith businesspartners

Improve skills ofservice delivery staff

Improve terms withservice deliveryproviders

Cost of Services Strengths

Revenue Performance

BRAX TO N ENTERPRI SE VALUE MAPPUBLI C SECTO R

(Practical paths to increase constituent value)It’s easy to say constituent value is important.Not so easy to make it influence the decisionsthat are made every day: where to spend timeand resources, how best to get things done, and,ultimately, how to improve the lives of yourconstituency

This Map is designed to accelerate theconnection between actions you can take andconstituent value. It is not rocket science and itis not complete, but it can jump-start theprocess of focusing on the things that mattermost and then choosing practical ways to getthem done.

Here are two simple ways to use it:

Start at the top. Working your way down,at each step ask yourself, How will weimprove this? This will help ensure that yourtactics support your objectives.

Start at the bottom. Working your way up,at each step ask yourself, Why are we doingthis? This will help ensure that every tacticleads to constituent value.

PublicRelationsOutreach

ServiceInnovation

Alternate FundingSources

Retain and AdvanceConstituency

Grow Constituent

Base

ServiceExpansion Retention

ExploreFundingOptions

RateOptimization

Real Estate &Infrastructure

Equipment &Systems

Accounts,Notes &Interest

Receivable

Accounts,Notes &InterestPayable

Coordinatemanagement ofpayables acrossagencies

Leverage credit ratingto lengthen paymentcycles and reduceinterest rates

Leverage breadth ofvendor relationshipsto lengthen paymentcycles

Leverage value-added vendorprograms to lengthenpayment cycles andreduce interest rates

Improve managementof debt portfolio

Increase focus onvendors withfavorable paymentterms

Rationalize/consolidate vendorportfolio

Improve coordinationof payments acrossbusiness units

Improve assessmentand benchmarking ofA/P performance

Refine days-outstanding strategy

Improve alignment ofA/P systems andprocesses with days-outstanding strategy

Coordinatemanagement ofcredit/receivablesacross agencies/departments

Improve assessmentand benchmarking ofcredit/receivablesperformance

Improve collectionsprocesses

Refine credit/days-receivable strategy

Improve managementof credit risk acrossagencies/departments

Improve managementof credit/debt portfolio

Improve constituentincentives foraccelerated/on-timepayment

Rationalize and/orrefocus business unitsand service portfolios

Outsource businessfunctions

Increaseuse of leasedequipment

Improve terms on ITsystems

Increase use offlexible/expandableservice deliveryequipment

ConsolidateIT systems andservice mechanisms

Increase emphasison preventativemaintenance

Defer/change timingof capital investments

Utilize more efficientIT systems

Utilize moreflexible/expandable ITsystems

Improve maintenanceof IT systems

Increase utilization ofIT systems

Divest low-utilizationIT systems

Improve terms onequipment

Develop low realestate businessmodels

Reduce number ofdata centers, offices,service deliverycenters, etc.

Outsource businessfunctions

Increase use ofleased real estate

Improve termson property andfacilities

Reconfigure facilities /increase utilization offacilities

Increase use offlexible facilities

Divest low utilizationreal estate

Improve termson infrastructure

Divest low-utilizationinfrastructure

Increaseuse of flexible/expandableinfrastructure

Increase use ofleased infrastructure

Rationalize and/orrefocus business unitsand service portfolios

Rationalizeservice deliveryfacilities

Procurement

ImproveInternal

Efficiency

ImproveReceivables & Payables

Efficiency

ImproveProperty & Equipment

Efficiency

General &Administrative

Costs

FinancialManagement

BusinessManagement

IT, Telecom &Networking

ImproveService Delivery

Efficiency

ImproveConstituency Interaction

Efficiency

ProgramMaintenance

Asset Efficiency

Operations

ImproveExecution Capabilities


Budget/cost driver analysis


Food Supplies

$55 8%

IT

$192

30%

Medical$44 7%

Office Equip

$45 7%

ProfessionalServices

$118 18%

Print$23 3%

Travel$70 11%

Telecom$52 8%

Facilities$14 2%

$3,201+

$445 est.

$850 est.

$638/75%

$212/25%

$554 est.

$687/51%

$665/49%

In Current Opportunity

Scope (Engineering

Services

>7 major categories of

spend

11 major categories of

spend

Out of CurrentOpportunity Scope

In Current Opportunity Scope

Total ExternalSpend Baseline1

FacilitiesConstruction2

HighwayConstruction2

UnclassifiedSpend(Potentially Sourceable)

RemainingSourceableExpense Base

$ millions

Key Points• Out of total estimated sourceable spend baseline of $3.2 billion, we targeted $877 million to focus our assessment• This represents 12 major categories of spend• The baseline estimates above do not include “Grant” exempted spending and interagency transfers

Commodity spend from an enterprise level


Price

Department DNR-1 DFI DNR-2 Commerce DOT DHFS DOC DWD DOJ

Price Paid per Desktop $1,143 $868 $1,390 $853 $800 $954 $827 $968 $928

Potential Savings per Unit $443 $168 $690 $153 $100 $254 $127 $268 $228

Benchmark PC: • Pentium 4• 2.4 ghz• 40 x CD ROM• 40 gb Hard Drive• 512 mb SDRAM• 15 inch Flat Panel Monitor

Average Potential Savings per Unit = $200.00 Total Potential Biennial Savings = $800,000

$1,143

$954

$868

$1,390

$853$800 $827

$968$928

0

200

400

600

800

1,000

1,200

1,400

Detailed Benchmarking


• Procurement– Strategic Sourcing– Procurement Reform

• Real Estate– Facilities consolidation– Sell and Lease Back– Warehouse Optimization

• Legal Services• Technology

– IT Server Consolidation– IT Outsourcing

• Human Resources– Outsourcing– Employee Self Service

• Budget and Finance• Fleet Management• Revenue

– Data warehousing– Statewide Collections– Limited Liability Corporation Taxes

• Human Services– Integrated Human Services– Social Security– Food Stamps Error Reduction

• Medicaid Reform– Cost Reduction– Revenue Maximization

• Integrated Licensing• Integrated Justice

Administrative/Back Office Client Facing/Programmatic

Current State efficiency reviews are identifying cost savings and efficiencies in the following areas:

Lessons Learned and Critical Success

Factors


Critical Success Factors

Before you Begin:• Choose a model understanding its strengths and weaknesses • Engage the best and brightest people from state government – make the

investment early on• Obtain strong legislative support• Plan the Review and initial success to occur quickly and accurately• Understand your available resource pool both financial and human • Determine if your state is willing to spend money to save money

Getting Started:• Establish baselines and targets so that you can celebrate progress and manage

contractors• Conduct a quick diagnostic to assess where the highest value can be obtained

from the review and implementation• Be willing to measure and communicate progress—this means investing in a

process and “system” for data collection and reporting.• Launch a parallel “quick wins” process• Establish “Common Ground” or shared expectations with stakeholders


Reporting the Results:• Courage (i.e., don’t overly censure what you propose beforehand because you’re

too caught up in the politics)• Phase the review and implementation: focus on the low impact/high recurring

returns first and then move to higher impact efforts • Have better numbers than your opponents

– Challenge your data quality, don’t immediately trust the numbers

• Assign accountability and follow through – the Governor/Executive Sponsor must be an active participant in the process

Achieving the Results:• Centralize management and performance measurement of the efficiency

program within the State• Develop a sophisticated legislative strategy• Keep staff engaged and fresh• Engage in creative procurement that makes vendors accountable and willing to

share risk• Think through the post-report implementation early

Critical Success Factors (Cont.)


“People are very open minded about new things.As long as they are exactly like the old ones.”

Charles Kettering


For Further Information…

Bill EggersGlobal DirectorDeloitte Research-Public SectorDeloitte(202) [email protected]

Christina DorfhuberPrincipalPublic Sector Strategy and OperationsDeloitte(717) [email protected]

Date post:	25-Dec-2015
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How to Conduct a Results Driven Government Efficiency Program.

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