1999-2004 by Banner Software
Harris HermanJan PetersonBanner Software800.336.996917 April 2004
California Performance Review Transforming California State Government
Knowledge neXus®
Improving Organizational Performance
1999-2004 by Banner Software
Problem - Massive Budget Shortfall
Solutions:– Consolidate Agencies Streamline Operations
– Eliminate Unnecessary Agencies, Processes and Services
– Manage Resources Based on Performance
– Outsource Processes to Commercial Providers
– Reposition Processes and Services to Local Governments
– Improve Operational Performance
– Develop performance driven governance systems
– Improve Governor’s ability to manage …
1999-2004 by Banner Software
Highlights of the California Performance Review (CPR) Charter
Executive Order
• Move to Performance Based Budgeting
• Re-organize and consolidate
• Final Report due to Governor on 30 June 2004
CPR Components
• Executive Branch Reorganization
Consolidate, simplify, eliminate, rationalize
• Program Performance Assessment and Budgeting
Top to bottom operational analysis; business process analysis; performance based budgeting; “costing out” of programs;
• Improved Services and Productivity
Improve services with new and rationalized technologies
• Acquisition Reform
1999-2004 by Banner Software
What does Government Do and what does it Cost?
Foundation Knowledge
for Rational Change
What can California Afford?• Are there redundancies?• How can services be improved?• Which are to be kept?• Which are to be eliminated?
Knowledge neXusEncyclopedia
Spec’s
Budgets
Analyses
6
1999-2004 by Banner Software
Steps in the Transformation Analysis
• Step 1 - Reorganize Government Agencies and their Budgets– Produce Traditional Budgets
• Step 2 - Identify Products, Services and Outcomes produced and delivered by Government
• Step 3 - Break Down Programs into Processes providing Products, Services, and Outcomes
• Step 4 - Figure out what Assets are Required to carry out Processes
– Positions (PYs, Human Capital)
– Facilities (Parks and Recreation …)
– Equipment (DOT vehicles …)
– Technology (DMV …)
– In other words develop “Full Costing” data
• Step 5 - Define Department, Program, Element, and Service Performance Metrics– Use Mercer style decomposition of Measures
– Produce Performance Budgets
• Step 6 - Specify Agency Changes to drive Implementation
1999-2004 by Banner Software
Executive Branch Reorganization Step 1 – Consolidation Scenario
1999-2004 by Banner Software
Copy and Paste Re-Organization• Delete Agencies and Create others• Move Agencies, Programs, and Elements• Consolidate Agencies
1999-2004 by Banner Software
Program Performance Assessment and Budgeting Budget Reports Before and After Consolidation
“before”
“after”
“after”$732,000 Savings
“before” “after”“before”
$1,374,000 Savings
$376,000 Additional
$732,000$1,374,000
$376,000$1,730,000
Total SavingsDue to Consolidation
B
A
C
1999-2004 by Banner Software
Linking PYs into the Budget
• Select PYs in the Organization
• Copy to Budget Location
• PY Budget Calculations as needed …
Budget
Organization and PYs
1999-2004 by Banner Software
Fiscal Impact of Re-Organization
After copy and paste Re-Organization, Recalculation of an Agency results in:
– an Excel Spreadsheet, and– updates to the online subtotals and totals
1999-2004 by Banner Software
Building the Budget Document
• Optional Enhancements– Load Descriptive Material and Authorities (and others) if desired– Extend the Governor’s Budget script to:
• Copy Budget Summary and Details for all Agencies into a Single Word Document• Include descriptive materials and other information as desired.
• Complete Re-Organization Analyses– Use the neXus to Produce Budget Summary and Details– Review the fiscal impact of changes periodically during analysis
• Run the Governor’s Budget Report– Produces a document with, at least, the “guts” of the Governor’s Budget– Produces a section for each agency
• Ship it to the Governor and Finance
1999-2004 by Banner Software
Step 2 – Identify Products and Services Produced and Delivered by Government
• Key to understanding program performance• The public face of Government• Produced by Activities and Processes
1999-2004 by Banner Software
Step 3 – Defining Program Activities
• Management Accounting Approach to High Level Process Modeling
• Detailed sequences analyzed usually during implementation
• Bridging the Gap between Resources employed and Services provided
1999-2004 by Banner Software
Step 4 – Identifying Resources and Assets
Identify:
• Human Capital• Information Technology• Facilities• Equipment
Required to perform Processes
1999-2004 by Banner Software
Step 5 – Products, Services, Outcomes & Metrics and Performance Budgets
• Services• Objectives• Metrics• Performance Budgets
1999-2004 by Banner Software
Step 6 - Produce Specifications for Change
• Operational Blueprint
• Comprehensive Architecture Document
See Product Presentation
1999-2004 by Banner Software
Improved Services and Productivity Driving Information Systems Reengineering
• Aligns and connects “Business Analysis” to Information Technology Rationalization
• Starting point for IT Development
• Architectural Framework (after Zachman)
Bu
sinessT
echnology
1999-2004 by Banner Software
The neXus Encyclopedia
• Organizational Objectives• Organization and Positions (PYs)• Regulatory Requirements• Assets (People, IT, Facilities and Equipment)• Processes and Activities• Authorities• Hierarchic Performance Measures
1999-2004 by Banner Software
Other neXus Capabilities
• Model Processes– To the depth required to answer questions
– Define and associate required assets (IT, People, etc.)
• Define Metrics– Hierarchic breakdown of Department, Program, Element, and Service Measures
• Develop Performance Budgets– Perform Performance Budget calculations
– Produce Performance Budget documents
• Specify Agency Changes– How does CPR convey the intended changes?
– The Budget does not tell an Agency what Products and Services to deliver and which to eliminate.
– Taking away a Program’s Budget does not tell the agency how to re-organize• What Positions are eliminated?• What Facilities, IT, and Equipment can be eliminated?• What is the new Organization?
• Develop Reports– Rapidly Produce complex new analytical Reports
– For instance, Graph the Whole Budget
– Assemble a Budget Book with all Organizations
1999-2004 by Banner Software
Other neXus Capabilities (cont’d)
• Consistency– Capture and Store Knowledge in Predictable Forms and Locations
• Process – Enable standard processes for basic knowledge capture
• Complexity– Manage Complexity and Quantity of Knowledge Required for Transformation
• Process Improvement
– Analyzing and evaluating proposed changes
• Decision Support
– Support Change Decision Making with “what if” analyses
Translate Strategy into Implementation
1999-2004 by Banner Software
Conclusion and Recommendations
• The neXus is a Re-Organization Tool– It is not a full featured budgeting tool for a Finance Department
– But, the neXus does the calculations and produces the reports necessary to:• evaluate alternative Government Organizations
• construct a budget for a new State Government.
– The neXus carries on where Budgeting software leaves off.
• Use the neXus to Translate Policy into Implementation– Bridge the Gap between “policy” and “on the ground” operational change.
– Manage Knowledge of Re-organization
– Analyze Fiscal and Operational changes
– Re-structure the budget so that it funds Performance not Agency Functions
– Specify Changes for each Agency
• Leverage Banner Experience and Expertise– Acquiring large quantities of operational knowledge
– Integrate methods and tools into a workable process for Re-Organization and Re-Engineering