Dartmouth: June 7, 2017

The Role of

Integrated Planning and Performance

in a “Results and Delivery” World

Mike Haley

Opportunities for Modern Techniques, Tools and Technology

Government of Canada (GC) Performance Drivers

Q & A

Technology Implementation Challenges and Benefits

Linking Strategic, Operational and Financial Planning

Introduction

The Role and Value of Technology Enablement

GC Technology Illustrations

This Morning’s Agenda

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Mike Haley . . .

• President and Founder of Landmark Decisions Inc.

• Seasoned management consultant with over 30 years of business management expertise

• Diverse experience with various private sector industries such as telecom and utilities, manufacturing, financial services, pharmaceuticals, distribution, and education

• Recognized thought leader in results-based management for the public sector with client experience in Canada, New Zealand, UK and USA

• Extensive partnerships with other business and technology enablement consulting firms and vendors (i.e. SAP, IBM-Cognos, Oracle)

• Frequent speaker on the topics of performance and cost management and the use of technology for sustaining an organizational performance culture

• Board member – Performance and Planning Exchange (PPX) and Financial Management Institute (FMI)

About Me

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Men occasionally stumble over the truth, but most of them

pick themselves up and hurry off as if nothing had happened.

Insightful Quotes on Performance

— Sir Winston Churchill (1874-1965)

However beautiful the strategy, you should

occasionally look at the results.

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Public Sector Benefits for Implementing Modern Techniques, Tools, and Technology Source: Delivering Public Service for the Future: Navigating the Shifts,

Accenture study (2012)

Presented at the Canadian Government Executive (CGE) Leadership Summit (2013)

Integrated Business PlanningPolicy on Results and Resource Alignment

= “Value for Money”

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MAF RENEWAL

CORE

DEPARTMENT SPECIFIC

People Mgmt.

Financial Mgmt.

IM/IT Mgmt.

Risk, Planning and Performance

Assets and Acquired Services

Security Mgmt.

Service Mgmt.

Recent Driving Forces for Enhanced Performance in the GCTBS POLICY RENEWAL• Policy on Results

• Core Responsibilities

• Departmental Results

• Program Inventory

• Performance Information Profiles

• Evaluation Plans

• Policy on Service

• Service Inventory

• Service Management Strategy

• GC Metrics Agenda for Internal Services

DELIVEROLOGY

Results and

Delivery

ReformStrategy

Targets and

Trajectories

Delivery Chains

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Results and Delivery Agenda

Policy on Results – One Cog in a Bigger Wheel

Source: TBS Launch of the Policy on Results (June 2016)

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Policy on ResultsHIGHLIGHTS

Initial Departmental Results Framework approved by Treasury Board, changes to outcomes and indicators approved by Secretary

Departments have a series of responsibilities that stem from their mandate. Responsibilities

should be relatively consistent over time

Core Responsibility Core Responsibility Core Responsibility{Departmental Results Framework

Results and their indicators are established based on priorities and longer-term

departmental mandates

Results and indicators Results and indicators Results and indicators

{Program Inventory

P = Program

P PP P PP P PPPrograms represent the programs, services, activities or a combination thereof that form distinct groupings within a department's responsibilities

Initial Program Inventory approved by Secretary, subsequent changes made by Deputy Head in consultation with Minister and notification to the Secretary

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Source: Sir Michael Barber CSPS Presentation (February 2016)

Boldness of

Reform

Quality of Execution

STATUS QUO

CONTROVERSY WITHOUT IMPACT

IMPROVED OUTCOMES

TRANSFORMATION

Successful Delivery

Policy

Implementation

90%

10%

F

10%

90%

A+

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GC Approach for Delivering on Mandate Commitments

Key Elements of “Deliverology”

GC Approach for Delivering on Mandate Commitments

Key Elements of “Deliverology”

Source: GCpedia (March 2016)

• Strategy – Develop strong strategy and policy by: being clear on what the government wants to achieve; being clear on the government’s role; using the latest expert thinking; exploring the most creative ideas available; and being confident that the preferred approach can actually be delivered.

• Priorities – Define priorities using the "map of delivery" to assess the degree of ambition on priorities. Not all priorities need to be radically bold, but the quality of execution will be the differentiating factor between successful and unsuccessful reform.

• Targets – Use consistent, measurable targets in order to be clear on what success looks like, and to assess progress by examining the trajectory towards the goal.

• Delivery unit – Set up a small group outside of policy and strategy that focuses relentlessly on keeping delivery on track for the leadership’s priority areas.

• Planning – Map the delivery chain from decision-maker to end-user and assess the capacity of the different elements in the chain.

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— Benjamin Franklin (1706-1790)— Dwight D. Eisenhower (1890-1969)

Insightful Quotes on Planning

Plans are nothing, planning is everything.He who fails to plan is planning to fail

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Strategic Planning

Conventional Strategic, Operational and Financial Planning

3-5 Yr. Strategic PlanMission/Vision/Values

Strategic Objectives

Operational Planning

Business PlanningWorkplans

Projects/Initiatives

Environmental ScanSWOT AnalysisCorporate Risks

Annual PrioritiesDivisional or Business Unit

Operational Goals

Operational RisksProduct/Service Risks

Project Risks

Corporate PlanningSupport Groups (i.e. HR, IT, Finance, Marketing, Legal)

Financial PlanningResource Requirements

(HR and Expenses)Investment Planning

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Performance Monitoring and ReportingMeasuring Results against Expectations (aka Performance Targets and Budget)

Strategic Planning

Adaptable Strategic, Operational and Financial Planning

3-5 Yr. Strategic PlanMission/Vision/Values

Strategic Objectives

Operational Planning

Business PlanningWorkplans

Projects/Initiatives

Environmental ScanSWOT AnalysisCorporate Risks

Annual PrioritiesDivisional or Business Unit

Operational Goals

Operational RisksProduct/Service Risks

Project Risks

Corporate PlanningSupport Groups (i.e. HR, IT, Finance, Marketing, Legal)

Financial PlanningResource Requirements

(HR and Expenses)Investment Planning

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Performance Monitoring and ReportingMeasuring Results against Expectations (aka Performance Targets and Budget)

SCPM solutions support the office of finance's budgeting, planning and forecasting efforts. They also provide profitability modeling and strategy management capabilities. Ultimately, these solutions help CFOs and other business leaders orchestrate organizational performance and manage strategy in a more controlled and transparent manner.

Five key components of a SCPM suite include :

▪ Strategy Management

▪ Integrated Financial Planning

▪ Financial Budgeting and Planning

▪ Profitability/Cost Modeling

▪ Performance Reporting

Strategic Corporate Performance Management (SCPM)

NOTE: SCPM is also defined as Enterprise Performance Management (EPM), Dynamic Performance Management (DPM) or simply Performance Management (PM) by some vendors

Slide 14

Gartner’s “Magic Quadrant” for SCPM (2016)

Major Players in GC

Slide 15

Way Forward with TBS-OCG work on GC Finance and

Materiel (GCFM) Solution

Government of Canada (GC) Application of SAP EPM

Currently most Departments are utilizing some SAP EPM tools for their financial, operational planning and/or performance reporting. Predominant ones include:

✓DND✓CBSA✓Agriculture and Agri-foods Canada (Cluster Group)✓CMHC✓Health Canada (Cluster Group)✓ Treasury Board

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Information Presentation LayerPerformance Reporting

SAP Business Planning &

Consolidation (BPC)

• Multi-Dimensional Planning & Budgeting (i.e. Objectives, Cost Centres, Work Plans)

• Salary/Headcount Planning

• Qualitative Operational Intake Management (Deliverables, milestones)

• Traceability of Funding Sources

• Workflow, Version Control, Document Management, Attestation

Planning Application LayerMultidimensional Data Cubes

and Integrated Planning

SAP NetWeaver

Business Warehouse

• Data Models

• Data Integration

• Data Mining & Predictive Analytics

• Linkages to all data sources

Data Management LayerMulti-Source Data

Consolidation & Linkage

• Alignment Visualizations (i.e. Strategy Maps, Process Maps)

• Scorecarding of Results/Initiatives/Deliverables

• Performance Commentaries/Notations

• Exception Reporting, Alerts and Notifications

SAP Strategy Management (SSM)

• Custom Dashboards

• Self-Serve Ad-hoc Interactive Analysis

• Exception & Customized Reporting

SAP BusinessObjects

BI Suite

Data LayerCore Enterprise Data

SAP - ERP

▪ Fund Management & Tracking ▪ Cost Centre Accounting

▪ Budget Mgmt & Control ▪ Transactional Processing

Operational Data Systems• Business Process Information

• Transactional Operational Data

• Project Management

• HR

High-Level SAP EPM Planning and Performance Solution Data Flow

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Resource Planning

Delivery Performance

Workplans Db

• Milestone Variance• Perf. Indicators• WP Risks• WP Resources

Risks Db• Risk Assessments• Risk Indicators• Risk Responses• Risk Resources

Projects Db• Milestone Variance• Schedule Variance• Project Risks• Project Resources

Results Dashboards (Dbs)

SAP BPC

• GC/Mandate Priorities• Dept. Core Responsibilities• Corporate Risk Profile• eScans & Gap Analysis

Strategic Planning

Results Frameworks SAP BI

DRF Structure

• DR Priorities Status• DR Performance Status• DR Risk Status• DR HR Status• DR Financial Status

PMA Db

Mandate Commitments (MC)

• MC Initiatives Performance Status• MC Initiatives Workplans Status• MC Initiatives Risk Status• MC Initiatives HR Status• MC Initiatives Financial Status

Organizational Structure

• Dept. Priorities Status• Dept. Project Status• Dept. Risk Status• Dept. HR Status• Dept. Financial Status

SAP BI

Program Db• Program Priorities• Program Logic• Indicators• Prg. Risk Analysis• Prg. Resourcing

PMA Db

Directorate to CC Dbs

Branch Db• Branch Priorities• Branch Projects• Branch Risks• Branch HR• Branch Financials

Coding Block• GL• Cost Centre• DRF/PI (FA Code)• Workplan via IO code• Fund Type• Funding Source

• Workplans (WP) = Activities, Projects, Initiatives, Investments

• Risk Response Strategies• Milestones/Performance Indicators• Resource Requirements (HR and $)• Corporate Service Requirements• Accountabilities

Operational Planning

• Notional Budget Allocation• Monthly/Quarterly Variances• Budget Transfer Management• Approvals and Attestations

Financial BudgetingWorkplan Attributes• DRF/PI (FA Code)• Priority/Commitment• Risks (CRP/Operational)• PMA Commitment• Accountable Owner• Cost Centre• Fund Type• Funding Source

HR Db• FTE Allocations• Key HR Statistics• HR Skills Gaps• Staffing Actions

Financial Db• Budget Variances• Forecasting• Funding Source• Multi-Year Planning

Resource Dashboards (Dbs)

SAP EPM Supports the GC Results and Delivery “Universe”

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Integrated Business Planning (IBP) Components and SAP EPM Enablement

Operational Work Planning (OWP)

“Bottom Up” Process Steps

Financial Budget Allocation (FBA)

“Top Down” Process Steps

Step FBA1: Department Level Allocations

Departmental allocation of ARLU to Branches

Step FBA2: Branch Level Allocations

Branch level allocation of ARLU to Directorates

Step FBA3: Directorate Level Allocations

Directorate level allocations of ARLU to Cost Centres

FBA1 & FBA2 & FBA3 = Notional Budget

Build up of Notional Budget -ARLU plus anticipated inflows

Step OWP3: Operating Budgets

Approved OWPs become the Approved

Operating Budgets (aka Approved

Planned Spending)Step OWP1: Cost Centre Level

Operational Work Plans are prepared with resourcing (FTE and budget) estimates at Cost Centre level

1

Decision Points

SAP BPC

SAP BI

Performance Variance

Analysis (PVA) and

Forecasting

2

Corporate

Alignment

Planning

(CAP)

Step CAP1: Cost Centre LevelOperational Work Plans are

linked to Branch and/or Departmental priorities and risks

Performance

Monitoring and

Reporting Planning and Performance Alignment DashboardsFor Management and Senior Leadership monitoring, analysis, reporting, and decision-making

Financial PVAFinancial plans are monitored and updated at the Cost Centre level

(aka Financial Forecasting)

Step CAP2: Cost Centre LevelCorporate support “asks” are

completed based on Operational Work Plan requirements

Operational PVAOWPs are monitored and updated at the

Cost Centre level(aka Operational Forecasting)

Step OWP2: “Rollup Level”Cost Centre Operational Work Plans

are consolidated to Directorate/Branch levels

Step FBA4: In-Year Resource Re-allocations

Budget allocation are adjusted as required during

the year

3

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Dashboard Design Considerations

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Source: Information Dashboard Design - Stephen Few (2006)

Visual display

Human eyes can take it in quickly and

human brains can easily extract

meaning

Most important information needed

to achieve objectives(s)

A collection of facts that are not

otherwise related; often from diverse

sources

Single Computer Screen

Entirely available within the viewers eye span at once

Monitored at a Glance

It provides an overview to determine if

something deserves attention

SAP EPM – Business Planning and Consolidation (BPC) and BI Demofor Integrated Planning and Performance Reporting

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Dashboards vs. Scorecarding

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Dashboards Scorecarding

Purpose •Reporting and Analysis on Available Data (i.e. Graphs, Comparisons, Drill Downs, Links)

•Coordinate Strategic and Business Planning , Performance Reporting & Analysis of Cause and Effect

Focus •Reactive: Current/Historical Results •Predictive: Potential Results

Type of Data •Mainly Structured

(Quantitative)

•Structured & Unstructured

(Quantitative & Qualitative)

Advantages •Customized Reporting

•Ad-hoc Data Analysis

•Historical Differences (Trends)

•Exception Reporting (i.e. Traffic Lighting)

• Little or no training required

•Understanding Causal Relationships & Interdependencies

•Risk Analysis / Relationships

• Initiative/Project Management

•Anecdotal Evidence

•Commentaries

Challenges •Causal Relationships

•Focus on Today’s Results

•Ad-hoc Analysis

•Custom Reporting

Primary Use •Reporting & Data Analysis •Planning & Alignment

“The Dials” “Moving the Dials”

SAP Strategy Management (SSM)A Rapid “Get Started” Approach to Performance Management

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The Performance Alignment Value Chain

The Role and Value of Technology

Performance Content Design and Deployment Cycle

Performance Awareness

and Decision Cycle

Performance Enablers(systems and processes)

Performance Practices(application and benefits)

Integrated Performance Planning and Analysis

• Project>Program>Corp Alignment• Risk Management• Resource Management

4

Organizational Performance

Engagement andLearning

• Strong Performance Messaging• Broad Employee Participation• Performance Based Decision

Making

5

Performance Modeling and Reporting

Technology

• Planning and Collaboration Platforms• Knowledge Management and Analysis• Performance Dashboards/Scorecarding

3

Consistent and Reliable Performance

Data

• Performance Data Alignment

• Data Architecture, Models, and Systems

• Data Governance

2

OrganizationalPerformance

Capacity • Lexicon and Training• Guides and Templates• Policies, Governance and

Support Systems

1

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Planning and Performance Technology Implementation Challenges

• Business change – Change of internal business processes: current state vs future state. From a change management perspective this is typically one of the largest challenges

• Understanding needs – Scoping of the requirement can only be successfully accomplished if the business understands their current needs and processes and are able to communicate this so that the scoping of the project is completed with the full picture in mind.

• Internal stakeholder agreement and support – Business transformations do not come easy, it takes a willingness from executive management to believe in what is being done and effectively communicate it to their teams.

• Management consulting / effective communication to entire organization – Change can be difficult enough but proactively planning for it through proper communication and proactive training can ease the transition and gain full support from the get go.

“Success of a business transformation through technology enablement is not measured on delivery of the tools, it is judged on how the most important part of your organization,

your people, adapt to the changes”

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QUESTIONS ?

Mike Haleymhaley@landmark.ca

+1.902.499.5425