how to conduct a results driven government efficiency program
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How to Conduct a Results Driven Government Efficiency Program. Topics for Today’s Discussion. Introductions Context Setting Formulating Your Efficiency Program Approach Lessons Learned/Critical Success Factors Getting Started. Introductions. Bill Eggers - PowerPoint PPT PresentationTRANSCRIPT
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 3
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….
Copyright © 2004 Deloitte Development LLC. All rights reserved. 5
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 6
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 7
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 8
Selected State Performance Initiatives (cont)
State Project NameMethod of
ReviewCost Savings
Identified Time Period Leadership ResultsCA 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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 10
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?
Copyright © 2004 Deloitte Development LLC. All rights reserved. 11
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
+ + +
Copyright © 2004 Deloitte Development LLC. All rights reserved. 12
While Ideally Considering the Following Factors….
Review InvolvementInside Outside
Willingness for Public Scrutiny
Political Alignment HighLow
HighLow
Internal Capabilities HighLow
Time Available HighLow
Copyright © 2004 Deloitte Development LLC. All rights reserved. 13
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….
Copyright © 2004 Deloitte Development LLC. All rights reserved. 14
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.
Copyright © 2004 Deloitte Development LLC. All rights reserved. 15
A Diagnostic To Understand Where to Focus
Target newgeographies
Expand outreachchannels
Develop new serviceoffer ings
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
Increase focus onconstituency needs
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 onconstituency needs
Increase focus onmost effectiveservices
Increase focus onmost effectiveoutreach methods
Improve retention andwin-back processes
Increase focus onconstituency needs
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(profi les, 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, router s, networkcapacity, etc.)
Improve design,development andtesting processes
Improve operationsmaintenance andchange managementprocesses
Improve end usersupport andadministrationprocesses
Improve selection,acquisit ion andcontractingprocesses
Improve installation/deploymentprocesses
Improve skills of staff(technical and projectmanagement)
Improve dispatch,diagnostic, resolutionand replacementprocesses
Improve terms withservice providers(contractor s, 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, tra ining, 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(t ravel, contract labor, etc.)
Improve contractingand negotiation skillsof procurement staff
Provide staff withbetter servicedescr iptioninformation
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-servi ceetc.)
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 materi als, 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
Rationalize and/orrefocus services
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 onconsti tuent value, risk, etc.)
Increase focus onservice innovation
Improveunderstanding ofservice value toconstituents
Increase focus on rateeffectiveness andoptimization
Broaden serviceoffer ings
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
Improve brandstrength and good will
Improve brandstrength and good will
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 throughret irement)
Increase emphasis onconstituent/relationshipdevelopment
Improve constituentservice managementstrategies
Shorten creation-to-delivery cycle time /Improve serviceavailability
Improve totalconstituentexperience (servicedeliver y, support , etc.)
Improve structur ingand pr icing
Rationalize and/orrefocus services
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,tr easury, performance, tax,risk, etc.)
Improve budgetingand forecastingcapabilities
Improve financialreporting efficiency
Improve assetmanagementprocesses(f ixed and variable assets)
Improve contractmanagementprocesses(negotiat ion, 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(utilizat ion, 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
ManagementService
OutreachInquiry
ManagementService
DeliveryReal Estate HumanResources
BusinessPlanning
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(applicat ions, 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(const ituents, 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
Improvemeasureme nt andreporting ofoperational andfinancial performance
Improve analysis ofmanagerialinformation
Improve focus onmost importantmanagerialinformation
Improvecommunicationaround improvementpriorities
Improve quality andconsistency ofperformanceassessment methods
Improvecareer options andpaths
Align man agementand staff incentiveswith companyperformance
Improve monetaryand non-monetaryrecognition of staffcontributions
Improve breadth,depth, quality andtimeliness ofperformanceinformation
Increase emphasison continuous,proactiveperformancemanagement
Improvedetermination of keyperformance metr icsand 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/author ity 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
BRA X TON ENTERPRISE V A LUE 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 yourconstituencyThis 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 andfacilit ies
Reconfigure facilities /increase utilization offacilit ies
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 deliveryfacilit ies
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 16
Budget/cost driver analysis
Copyright © 2004 Deloitte Development LLC. All rights reserved. 17
Food Supplies$55 8%
IT$19230%
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
spend11 major
categories of spend
Out of CurrentOpportunity ScopeIn 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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 18
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 19
• 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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 21
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
Copyright © 2004 Deloitte Development LLC. All rights reserved. 22
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.)
Copyright © 2004 Deloitte Development LLC. All rights reserved. 23
“People are very open minded about new things.As long as they are exactly like the old ones.”
Charles Kettering
Copyright © 2004 Deloitte Development LLC. All rights reserved. 24
For Further Information…
Bill EggersGlobal DirectorDeloitte Research-Public SectorDeloitte(202) [email protected]
Christina DorfhuberPrincipalPublic Sector Strategy and OperationsDeloitte(717) [email protected]