by: mr. s. kumaran under secretary financial strategic management division ministry of finance
DESCRIPTION
PRUDENT FINANCIAL MANAGEMENT IN THE CONTEXT OF ORGANIZATIONAL EFFICIENCY AND GROWTH THROUGH A CORPORATE CULTURE BASED ON A SENSE OF BELONGING. By: Mr. S. Kumaran Under Secretary Financial Strategic Management Division Ministry of Finance. OUTLINE OF PRESENTATION. KANDUNGAN TAKLIMAT. - PowerPoint PPT PresentationTRANSCRIPT
KANDUNGAN TAKLIMAT
1. Strategic Effectiveness
2. Operational Efficiency
3. Best Practices
4. Organizational Growth
5. Way Forward
OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATION
STRATEGIC EFFECTIVENESS
KANDUNGAN TAKLIMAT1.1 STRATEGIC FOCUS1.1 STRATEGIC FOCUS
• Corporate Strategy (VBM)
• SBU Strategy (VBM)
• Functional Strategy (VM) Financial
Human Resource
Technology (ILT)
KANDUNGAN TAKLIMATFEATURES CORPORATE STRATEGYFEATURES CORPORATE STRATEGY
Allocation Techniques
Scope Of Public Finance Management & Role Of Ministries Of Finance
General Government & Rest of Public Sector
Crisis … Political economy
Budget Preparation & Execution
Structural & Regulatory
Real exchange rates Real wages Interest rates Price Levels
Macroeconomy
Deficit
Budget constraint & absorptive capacity
Decentralization Laws & regulations relating to
finance
Regulations of financial
sector
Other lawsBudget Law
Audit Law
Allocation formulae
Tax Expenditures
‘Non-budget’ Expenditures
Extra-budgetary
expenditures
Quasi Fiscal Activities
Costing
Budget Formats
Expenditure Planning
Expenditure Control
RevenueFinancing
Borrowing Grants
Natural Resources
Accounts Systems
Expenditure Control
Treasury System
Cash management
Financial Reporting
Revenue Structure
Debt management
Non-taxTaxation & tax structure
User ChargesInvestment Income
Accrual Double Entry
Output Program PerformanceIndicators & Targets
Budget Structure Charts of Accounts
Everything is related to everything else
Appropriation
Rest of the world
Integration Harmonization Capital flows
Rights & other treaties
LegislatureExternal
Audit
Contingent liabilities
Insurance
Banking
Capital markets/ supervision/
securities regulation
Multi-year plans
Performance Structure
Allocation
Revenue & expenditure
determinants: fiscal architecture
KANDUNGAN TAKLIMATSTAKEHOLDER MANAGEMENTSTAKEHOLDER MANAGEMENT
Identify and Develop Stakeholder Portfolio in
the Context of the Organization
External Stakeholders comprise of Intermediate Beneficiaries and Direct
Clients
Internal Stakeholders comprise of the Leaders
and the Employees entrusted to achieve the
Organizational Goals
KANDUNGAN TAKLIMATSTAKEHOLDER MANAGEMENTSTAKEHOLDER MANAGEMENT
Relationship with the
Stakeholdersneed to be identified
Establish the Relationship
Structure and the Mechanism for two-way communication
Ensure Quality Feedback on Agency
Performance is obtained from the
Stakeholders
StakeholderEngagement
in the Management
of the Oganization
KANDUNGAN TAKLIMATBALANCE SCORECARDBALANCE SCORECARD
Financial Business Process
Customer Focus
Learning Organization
KANDUNGAN TAKLIMATSTRATEGIC KPI (PDRM)STRATEGIC KPI (PDRM)
Improve public perception of safety,
especially through volunteerism
KPIs
1.2 Percentage reduction in reported snatch theft and robberies
2.1 Percentage of people who fear becoming a victim of crime
3.1 Total violent crime offenders successfully brought to justice (i.e., convicted and sentenced)
3.2 Public satisfaction on police "customer service" elements (e.g waiting time, response time)
1.1 Percentage reduction in overall reported index crime
Sub-KRA 2010 target
▪ 5% reduction
▪ 20% reduction
▪ Work in progress
▪ Additional 1,000 convictions
▪ Work in progress
Reduce overall reported index crime
with a focus on street crime
Improve performance of enforcement
agencies
KANDUNGAN TAKLIMATFUNCTIONAL STRATEGY : HRMFUNCTIONAL STRATEGY : HRM
Prof. Ulrich
KPPA KPPA (CEO)(CEO)
Director of Admin Director of Admin Services Services
Director of Admin Director of Admin ServicesServices
Prudent ExpenditurePrudent Expenditure
Obtimum Resource Obtimum Resource UtilizationUtilization
KPI 1 : Performance of Operating BudgetKPI 2 : Performance of Development Budget KPI 3 : Reduction of Overtime ClaimsKPI 4 : Reduction in Travelling Claim
KPI 5 : Reduction in Utilities Expenditure KPI 6 : Reduction in Maintenance Cost KPI 7 : Performnce of 1 % Emolment for Staff Training PR 8 : Reduction in the quantum of OE Virement
Enhance Quality Enhance Quality of Work of Work
ProcessesProcesses
KPI 9 : Reduction in Payment Voucher Preparation (9 days) KPI 10 : Reduction in Bill Payment (14 days)
KANDUNGAN TAKLIMATFUNCTIONAL STRATEGY: FINANCIAL FUNCTIONAL STRATEGY: FINANCIAL ENTERPRISE RESOURCE PLANNINGENTERPRISE RESOURCE PLANNING
KANDUNGAN TAKLIMATFUNCTIONAL STRATEGY: TECHNOLOGY (ICT) (e-ENHANCEMENT OF FINANCIAL PROCESS)
ROI of ICT Investments
Reduce Manpower
Increased Efficiency (cost and time)
e-Government
eServices (JPJ)
e-Payment
e-Bidding
e-Procurement
e-Applications
Telemedicine
KANDUNGAN TAKLIMATTHE JAPANESE CORPORATE STRATEGYTHE JAPANESE CORPORATE STRATEGY
Robotic
Electronic Automobile
Electric National Level
Long term welfare of employees
Employee
AppraisalRecruitment –
Aptitude
Low RoI
Company Level
Business
network
OPERATIONAL EFFICIENCY
KANDUNGAN TAKLIMAT2.1 BUDGET (IRBM)2.1 BUDGET (IRBM)
KANDUNGAN TAKLIMAT2.2 OBA CHART2.2 OBA CHART
IRBMIRBM
Management Management Information Information
SystemSystem
Provides critical information to support informed decision making for program improvement and
adjustments to strategies & policies55
Integrated Integrated Development Development
PlanningPlanning11
Systematic & structured approach to dev’t planning with full vertical-horizontal integration &
focus on program outcomes & impact
Result Based Result Based
BudgetingBudgeting 22Provides an integrated Outcome-Based Program Budgeting system for planning & management
of financial resources to turn policies into reality
Monitoring & Monitoring & EvaluationEvaluation
44Mandates structured monitoring and evaluation to
support systematic program performance management
Personnel Personnel PerformancePerformance
Ensures personnel performance at every level is linked systematically with substantive program
performance33
KANDUNGAN TAKLIMAT2.3 VALUE DRIVERS2.3 VALUE DRIVERS
KANDUNGAN TAKLIMAT2.4 VALUE MANAGEMENT
VALUE MANAGEMENT
Program Appropriateness
Program Efficiency
Program economy
Program Effectiveness
KANDUNGAN TAKLIMAT2.4.1 PROGRAM APPROPRIATENESS (Do It the 2.4.1 PROGRAM APPROPRIATENESS (Do It the Right Way)Right Way)
Reflect the Client Groups need/problem?
Are program objectives still relevant?
How is the exhibiting program meeting the objectives?
Example : Doble Cropping Program (Infrastructure/Mechanisation)
KANDUNGAN TAKLIMAT2.4.2 PROGRAM EFFICIENCY (Doing the Thing 2.4.2 PROGRAM EFFICIENCY (Doing the Thing Right)Right)
What is the cost of an output unit?
Cost – Benefit Ratio Status
How efficient is the program delivery? Any complaints? Why? What?
Example : Online Renewal of Road Tax
Are there better and cheaper way of doing things?
KANDUNGAN TAKLIMAT2.4.3 PROGRAM EFFECTIVENESS (achievement 2.4.3 PROGRAM EFFECTIVENESS (achievement of Objectives)of Objectives)
Did program achieving stated objectives and desired results?
What are the programs unintended consequences?
Example : University education and Employability of Graduates
KANDUNGAN TAKLIMAT2.4.4 PROGRAM ECONOMY (Value For Money)2.4.4 PROGRAM ECONOMY (Value For Money)
Does the wastage have any effect on the activity results?
Example : The Case of Building Prison (Value Engineering)
Is there any wastage of resource?
Where is the wastage?
Are the resources optimized?
How can the wastage be minimized?
BEST PRACTICES IN FINANCIAL MANAGEMENT
KANDUNGAN TAKLIMATBEST PRACTICESBEST PRACTICES
KANDUNGAN TAKLIMATINTERNAL AUDITINTERNAL AUDIT
KANDUNGAN TAKLIMATINTERNAL CONTROLINTERNAL CONTROL
OBJECTIVES
OBJECTIVES
PROCESSES
Appropriateness, Effectiveness, Efficiency & Economy of Operations
Compliance with Laws,
Regulations & Policies
Reliability of Internal & External
Reporting
GOOD GOVERNANCE
KANDUNGAN TAKLIMATRISK MANAGEMENTRISK MANAGEMENT
Risks identified & assessed
Transfer
Pass on the risk to another party
Avoid
Withdraw from the activity
Reduce
Mitigate the impact of risk
Accept
Accept the consequence of risk
Take up insurance Share (JV, partnership) Contract out Diversify/spread
Insure/share
Cease activity Divest Change or recalibrate
objectives Do it another way
Terminate
Heighten controls Increase supervision Enhance work
processes Impose limitation
Control
Finance the loss Build in contingencies Develop recovery plans Fall-back arrangements Charge premium price
Take
What you can do with each risk?
How to do that?
Risks identified & assessed
Transfer
Pass on the risk to another party
Avoid
Withdraw from the activity
Reduce
Mitigate the impact of risk
Accept
Accept the consequence of risk
Transfer
Pass on the risk to another party
Avoid
Withdraw from the activity
Reduce
Mitigate the impact of risk
Accept
Accept the consequence of risk
Take up insurance Share (JV, partnership) Contract out Diversify/spread
Insure/share
Cease activity Divest Change or recalibrate
objectives Do it another way
Terminate
Heighten controls Increase supervision Enhance work
processes Impose limitation
Control
Finance the loss Build in contingencies Develop recovery plans Fall-back arrangements Charge premium price
Take
Take up insurance Share (JV, partnership) Contract out Diversify/spread
Insure/share
Cease activity Divest Change or recalibrate
objectives Do it another way
Terminate
Heighten controls Increase supervision Enhance work
processes Impose limitation
Control
Finance the loss Build in contingencies Develop recovery plans Fall-back arrangements Charge premium price
Take
What you can do with each risk?
How to do that?
ORGANISATIONAL GROWTH
KANDUNGAN TAKLIMATORGANISATIONAL GROWTHORGANISATIONAL GROWTH
10 – 30% new blood
30% unrelated activity
Tacit K-Management
Employer of Choice
Creating Employability
Voluntary Separation Scheme
Context Management (Jack Welch)
2010 Government Mantra - Year of Creativity and Innovation
- Speed of Decision Making and Execution
Engage the Young Workforce
KANDUNGAN TAKLIMATHR PERFORMANCE APPRAISAL HR PERFORMANCE APPRAISAL
• Fair and equitable evaluation• Linking evaluation to program performance• Reward and Punishment System
<95% 93% – 94% 90% – 92% 87% – 89% 84% – 85% 80% - 83%
KANDUNGAN TAKLIMATCONCLUSIONCONCLUSION
KANDUNGAN TAKLIMAT