Performance Measurement
February 25, 2013

A GPS for internal services performance

Today’s public sector environment is one in which many managers and executives are navigating their way through uncharted territory looking for new and innovative ways to provide programs and internal services, the result of a global economic crisis and subsequent federal budgets in 2011 and 2012.

Recent changes to the federal government’s Policy on Management, Resources and Results Structures (MRRS) will require departments and agencies to measure the performance of their internal services in a consistent manner for the first time.

Yet these changes are occurring for executives without the benefit of any equivalent “GPS system” to effectively navigate the road ahead. Furthermore, choosing the right path has arguably never been more important to a government organization’s bottom line given the “new normal” post-Deficit Reduction Action Plan (DRAP) period. This is why internal services are so critical to the overall performance of federal organizations.

Increasing the efficiency and effectiveness of internal services functions is top of mind for many senior managers who recognize that they are an essential component of the everyday workings of an organization. Internal services are focused on the corporate service functions of a department – Finance, Human Resources, Information Technology, Legal, etc. – essentially any function that provides a service to the organization as a whole.

To meet internal services objectives, a number of department-specific and horizontal initiatives within government are currently underway including: centralization and consolidation of operations, standardization of information technology solutions, outsourcing, and common business processes to name a few. All this activity could result in the “perfect storm” of well-intentioned initiatives in uncharted territory. The diagram provides an overview of the external drivers that are influencing organizations and the anticipated outcome.

As a senior manager or executive, setting clear performance measures and targets for internal services is essential to effectively navigating through this storm and ensuring your organization is on the right track and operating effectively and efficiently. How do you do this? Following the proven techniques below will enable you to guide your organization to success in achieving high-performing internal services functions:

1. Clearly define your internal services. Services provided by internal services functions have not always been clearly documented and/or communicated to internal stakeholders. This can be mitigated through developing an internal services Outcomes Map or Logic Model that clearly identifies the core functions, activities, immediate and final outcomes. A service catalogue may also be useful to define the set of services offered by a core function.
2. Use a risk-based approach to performance measurement. Conducting a risk assessment on the set of internal services and focusing on measuring those that pose the greatest probability and impact to the organization enables executives to focus on the right things.
3. Set expectations and make commitments. Commitments and expectations need to be defined and agreed to with internal clients to promote predictability and transparency throughout the service delivery process. This can be addressed through the development of Service Standards and Service Level Agreements.
4. Embed performance reporting requirements into new processes and systems. As processes and systems for internal services are standardized in response to the DRAP and direction from central agencies, this is the ideal time to incorporate key performance measures into the mix. For example, if a department is in the process of implementing SAP or PeopleSoft, it is the perfect time to embed performance measures into the development of the applications.
5. Standardize performance measures. There are many different drivers of performance information in government organizations – the Management Accountability Framework, Departmental Performance Report, DRAP reporting, Corporate Business Plans, Performance Management Accords, etc. Departments are at times overwhelmed with the volume of reporting required. To manage this, consider standardizing performance measures in a manner that meets multiple reporting requirements.

Setting direction and communicating a path forward for internal services is critical to the success of ongoing operations and to the success of achieving effectiveness and efficiency outcomes. Careful attention needs to be paid to corporate planning and performance processes. Organizations that clearly articulate target outcomes for internal services functions and measure their performance on an ongoing basis are then able to provide senior management with valuable information for decision-making. This will also help identify those areas in need of course correction and improvement.

These five techniques can help chart a clear course for internal services organizations, regardless of the challenges ahead, and demonstrate increased efficiency and effectiveness of their functions.

Kelly Campbell, PMP, MBA is the practice manager of the Planning and Performance Practice at Interis Consulting in Ottawa (Kelly.Campbell@interis.ca).

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