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The Journey to World-Class Defining and Enabling World-Class Performance in Public Sector V2.0.

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Presentation on theme: "The Journey to World-Class Defining and Enabling World-Class Performance in Public Sector V2.0."— Presentation transcript:

1 The Journey to World-Class Defining and Enabling World-Class Performance in Public Sector V2.0

2 Page 2 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The Hackett Group Defines and Enables World-Class Performance The use of our intellectual capital enables our clients to implement change to affect their ability to attain and sustain world-class performance –We provide strategic advice and implementation assistance based on 4,000 benchmarks with leading global companies –Our implementation tools allow our clients to achieve results from proven best practices of world-class companies Our recommendations address both efficiency and effectiveness of world-class performance Our efforts have delivered over $90 billion in sustainable cost savings and $25 billion of improved cash flow improvement through REL, our working capital group for clients across the globe Operating in the Americas, Europe and Asia, we have served clients in 66 countries Our unique intellectual capital is unparalleled in driving successful performance improvement

3 Page 3 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Insights Leverage Our Work with Over 2,700 of the Worlds Leading Organizations and ….. 97% of the Dow Jones Industrials 73% of the Fortune 100 88% of the Dow Jones Global Titans 73% of the DAX 30 45% of the FTSE 100

4 Page 4 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Texas Utah Montana California Arizona Idaho Nevada Oregon Iowa Colorado Kansas Wyoming New Mexico Missouri Minnesota Nebraska Oklahoma South Dakota Washington Arkansas North Dakota Louisiana Illinois Ohio Florida Georgia Alabama Wisconsin Virginia Indiana Michigan Mississippi Kentucky Tennessee Pennsylvania North Carolina South Carolina West Virginia New Jersey Maine New York Vermont Maryland New Hampshire Connecticut Delaware Massachusetts Rhode Island Alaska Hawaii …..Leading Government/Public Sector and Higher Ed Institutions through the Benchmarking Program Government/Public Sector H Higher Ed Institutions H H H H H

5 Page 5 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The List of Participating Public Sector Organizations are Growing OrganizationFunction and Status C=complete, IP=in progress, P=pending FinanceHRProcurementIT State of TNCCCC State of AZC State of DelawareCC State of COC Commonwealth of MACIP State of MSCCCC State of AK C State of GAC C State of ALCCC State of NJCCC State of OKC State of OHCCCC State of WVCCC State of MIIP UNC Chapel HillC UVAC Ohio University*CCCC Yale UniversityCCC Georgia Board of RegentsC Nassau County, NYCCC Miami-Dade County, FLC King County, WACCC

6 Page 6 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. There are Many, and Different, Reasons for Public Sector to Benchmark 1. Compare Performance for Continuous Improvement - use of standard definitions, data collection and metrics to learn from other public sector organizations as well as World-Class organizations 2. Baseline Measurement - Provides a baseline, supporting a before and after comparisons when undertaking an improvement project (such as a new ERP) 3. Foundation for Business Case - Provides insight and data into areas that are performing well and into areas for improvement that will yield the highest ROI, and to prioritize best practices initiatives

7 Page 7 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Value Grid The Foundation for How Hackett Defines World-Class Performance Hackett Value Grid (Finance example) EFFECTIVENESS Days sales outstanding Days payables outstanding Accounts payable rework rate Customer billing rework rate Accuracy of forecasts and analysis Functional role in strategic decision making Percent of time analytic focus in on proactive decision making Percent of time spent collecting and compiling data for analysis Percent of analysts with acumen to function as business partners EFFICIENCY Overall function cost as a % of revenue Process cost as a % of revenue Technology cost per function FTE Staffing levels by process Cycle times and iterations Unit cost of transactions Utilization of self-service for inquiry Application complexity Automation of transactions Reliance on spreadsheets Percent of business reports distributed electronically

8 Page 8 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett uses Actual Data to Identify World-Class Performers in Human Resources Hackett Value Grid (HR example) EFFECTIVENESS HR linkage to business strategy Sourcing utilization Workforce management alignment Quality metrics (HR transactions) Linkages between employee development and business strategy Percent internal promotions HR partnering on organizational issues HR Generalist allocation of time Use of organizational metrics in HR- managed projects Retention plans for key employees Termination rates Ratio of strategic workforce planning process costs to Total HR process costs Skills & education of HR staff EFFICIENCY Total HR cost per employee Total HR staffing Staffing levels by process Technology allocation Degree of application integration Process automation Automation of reports HR self-service utilization Resource allocation Integration of HR systems Productivity per FTE Days to fill positions Ratio of technology cost to transaction process labor cost Overall HR span of control Where would you place yourself?

9 Page 9 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett uses Actual Data to Identify World-Class Performers in Procurement Hackett Value Grid (Procurement example) EFFECTIVENESS Economic return Supply base leverage & performance Role of procurement Process quality Information & analysis Examples: Spend cost reduction and avoidance savings as a percent of spend Percent of suppliers comprising the top 80% of spend On-time supplier delivery percentage Internal customer satisfaction ratings Percent of spend formally influenced by procurement Percent of transactions requiring post- issuance activity Ability to view detailed spend data on an enterprise-wide basis EFFICIENCY Process costs Productivity Cycle times Technology leverage Costs per transaction Staffing Levels Examples: Procurement process costs as a percent of spend Number of POs processed per FTE Receipt processing cycle time Percent of RFxs submitted electronically Ratio of labor to technology cost Cost per PO FTEs per $1B of spend Where would you place yourself?

10 Page 10 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Our Benchmark Capability uses Actual Data to Identify World-Class Performers in Information Technology Hackett Value Grid (IT example) EFFECTIVENESS Member of Executive Committee Reporting relationship Percentage of budget control Planning and strategy resource commitment Business transactions automated Projects meeting requirements Percent SLA being met (internally and externally) Standard adherence Vendor & supplier rationalization Simplification of information access Usage of self-service Degree of turnover Advanced business degrees EFFICIENCY IT cost per end-user Process costs per end user Technology Investments Number of FTEs FTEs per processing groups Spans of control Number of Help Desk Calls Projects meeting budget FTE productivity - Applications Projects delivered on time Help Desk 1st call resolution Number of data centers Number of applications Where would you place yourself?

11 Page 11 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. The Impact of World-Class Performance on Terms of Cost Savings is Significant…. Hackett 2007 Functional Performance Data - Select SG&A Functions Overall IT cost per end user Median WC 5% World-class are investing more in IT $8,701 $9,198 Overall Finance cost as a % of revenue /budget Median WC 51% $6.3 million in savings per $1 billion of revenue / budget 1.24% 0.61% Overall HR cost per employee Median WC 9% $1.7 million in savings per 10,000 employees 1,995 1,822 Overall Procurement cost as a % of spend Median WC 23% $1.9 million in cost savings per $1 billion of spend 0.63% 0.82% What are your performance improvement opportunities?

12 Page 12 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Enterprise Performance Management (EPM) Working CapitalTalent Management …..and We Believe that the Effectiveness Opportunity is a Significant Multiple Cost Opportunity World-class EPM organizations deliver 2.4 times the equity market returns of industry-peer companies A strong correlation of $462 million in additional EBITDA for companies with top-performing talent management programs versus their industry peers Top performing organizations are able to free up $2.9 billion more in working capital than the typical Global 1000 organization Receivables $1,329 Inventory $798 Million of EBITDA 1.0 2.40 $3,102 $3,564 Peer GroupWorld-ClassPeer GroupWorld-Class

13 Page 13 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Quartile 1 Quartile 2 Quartile 3 Quartile 4 Our Data Shows that Public Sector Can Attain World-Class Performance Levels Cross Functional Peer Finance Cost as a % of Operating BudgetQuartile Breakdown as a % of Operating Budget World-Class 1.9% 0.3% Public Sector Peer

14 Page 14 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Performance Management Linked departmental & operational goals to objectives Develop performance measurement scorecards Financial performance Operational performance Customer satisfaction Measure according to established and shared metrics Reward the behavior you desire Business Intelligence The right data at the right level High degree of automation allows for drill down to sub ledger data Data Warehouse to provide analytics and feed standard reporting Control and Risk Management Optimized Cycle Times Integrated transaction system feeding data warehouse to provide full visibility for decision support Information from core transaction system and date warehouse provided via Portal Shared Services Transaction Processing performed in centralized Service Organization Performance efficiency and customer service driven Perform standardized transaction processing Transaction Processing Cost efficient and effective fully leveraging integrated systems for speed and accuracy Processing though out the business cycle Streamlined processes - automated transactions, maintaining data in the core transaction system, touching things once Integrated sub systems Do it right the first time approach Whether Public or Private, World-Class Organizations Have Common Opportunities

15 Page 15 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Methodology

16 Page 16 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Unique Process Taxonomy Spans SG&A 8 functions across 59 process groups Finance Cash disbursements Revenue cycle Accounting and external reporting Tax management Treasury management Compliance Management Planning & Performance Management Business Analysis Function Management Hacketts taxonomy ensures an apples-to-apples comparison Information Technology Infrastructure Management End User Support Infrastructure Development Application Maintenance Application Development & Implementation Quality Assurance Risk Management IT Business Planning Enterprise Architecture Planning Emerging Technologies Function Management Human Resources Total Rewards Administration Payroll Services Data Management, Reporting & Compliance Staffing Services Workforce Development Services Organizational Effectiveness Total Rewards Planning Strategic Workforce Planning Function Management Procurement Supply Data Management Requisition & PO Processing Supplier Scheduling Receipt Processing Compliance Management Customer Management Sourcing Execution Supplier Management & Development Function Strategy & Performance Management Sourcing & Supply Base Strategy Function Management Executive and Corporate Services General Administration Mgt Travel & Transportation Services Real Estate & Facilities Mgt Government Affairs Legal Quality Management Risk & Security Management Corporate Communications Planning & Strategy Executive Office Service Order & Contract Management Service Execution Service Operations Planning & Strategy Function Management Marketing Marketing Communication & Program Management Brand & Product Management Planning & Strategy Market Research & Analytics Function Management Sales Sales Execution Sales Operations Planning & Strategy Function Management

17 Page 17 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hacketts Process Taxonomy Ensures Apples-to-Apples comparisons Accounts payable Travel and expense Supplier set-up Pre-processing Verification / approval Processing Discrepancy resolution Payments Inquiry response File / store / retrieve Reconciliation/ accrual/compliance Processing and routing of incoming mail specific to cash disbursements process, including handling of invoices, bills of lading & receiving documents and expense reports Matching of supplier invoice, purchase order, receipt acknowledgement and other required documents or information to validate and verify payment can be made to suppliers (More) Activities Sub-Processes Processes Process Groups Cash disbursements Data collected based on work performed, not on reporting structures or functions

18 Page 18 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Entity (University-wide) Central DepartmentsFinanceHuman ResourcesProcurement Information Technology Office of Finance Office of Technology Purchasing Department Provost Office College A College B College C College D College A College B College C College D College A College B College C College D College A College B College C College D Locations can be set up in parent / child structures to allow function and department/college coordinators to see progress of locations for which they are responsible Hacketts Toolset has been Tested in Thousands of Engagements and Facilitates Rapid, Accurate Data Collection

19 Page 19 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Overall program features Standardized approach and taxonomy – aligned for public sector Results are based on objective facts and documented in a report to include: –Evaluation of efficiency and effectiveness –Understanding on use of best practices –Quantify opportunities for improvement Comparisons included: –Public Sector (after 7 states, counties and/or higher eds complete their data submission for each function – now available in the finance function) The first 7 states will get an updated report that includes the State peer group when available –Hackett World-class and peer group organizations An organization may decide to participate in one or more benchmark studies at any time An organization may complete a first benchmark, with contract allowing for another benchmark in 2-3 years

20 Page 20 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hacketts Portfolio

21 Page 21 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Solution Portfolio Advisory, Benchmarking and Business Transformation Services DeliverablesBenefits Advisory Insight into World-Class Performance Best Practice Research Advisor Access Best Practice Intelligence Center Peer Interaction *World-Class Progress Report (*Executive Advisory only) Identify the strategies and practices employed by Leaders Validation of Current Initiatives Determining Whats Possible (World-Class Performance Metrics) Process Implementation Support Continuous Best Practice Adoption Benchmarking Assess World-Class Performance Peer & World-Class comparison Performance metrics Detailed analysis Stakeholder Survey Executive Presentation Objective comparison to peer group and world-class performers Quantify performance Gaps Uncover hidden costs Prioritization of improvement initiatives Business Transformation Transforms Performance into World-Class Strategic Direction Detailed Business Case Initiative Plans & Detailed Designs Implementation of Best Practices Reduced Cost Working Capital Optimization Enhanced Service Delivery Business Insight Sustainable Benefits Speed of Solution Delivery Risk Mitigation Working Capital Solutions Transforms Performance into World-Class Implementation of Best Practices Trained and Motivated Organization Key Metrics to Track Performance A Focus on Continuous Improvement Reduced Working Capital Reduced Costs Enhanced Service Delivery Sustainable Benefits Increased Flexibility Risk Mitigation

22 Page 22 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Advisory Program Portfolio Research-centric membership programs that support continuous improvement initiatives Executive Advisory Programs –Enterprise –Finance –Human Resources –Information Technology –Procurement Executive Executive Advisory Programs –Finance Operations Purchase-to-Pay Account-to-Report Finance Shared Services Payroll Invoice-to-Cash DeliverablesBenefits Advisory Insight into World-Class Performance Best Practice Research Advisor Access Best Practice Intelligence Center Peer Interaction *World-Class Progress Report (*Executive Advisory only) Identify the strategies and practices employed by Leaders Validation of Current Initiatives Determining Whats Possible (World-Class Performance Metrics) Process Implementation Support Continuous Best Practice Adoption Why do clients engage us for Advisory services?

23 Page 23 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Benchmark Solutions Portfolio Performance metrics that assess both efficiency and effectiveness Benchmark Programs –SG&A –G&A –Merger & Integration Analysis Benchmark Programs –Finance –Human Resources –Information Technology –Procurement –Marketing, Sales & Service DeliverablesBenefits Benchmarking Assess World-Class Performance Peer & World-Class comparison Performance metrics Detailed analysis Stakeholder Survey Executive Presentation Objective comparison to peer group and world-class performers Quantify performance Gaps Uncover hidden costs Prioritization of improvement initiatives Are you performing at a world-class level?

24 Page 24 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. Hackett Transformation Solutions Portfolio Initiative-based strategy, design and implementation services Functional Expertise –Finance –Human Resources –Procurement –Information Technology –Planning & Performance Management –Workforce Management –Working capital management Featured Solutions –Shared Services design and implementation –Transaction processing optimization –Planning, budgeting and forecasting –Business process sourcing –IT Strategy –Globalization impact analysis –Business performance management & reporting DeliverablesBenefits Business Transformation Transforms Performance into World-Class Strategic Direction Detailed Business Case Initiative Plans & Detailed Designs Implementation of Best Practices Reduced Cost Working Capital Optimization Enhanced Service Delivery Business Insight Sustainable Benefits Speed of Solution Delivery Risk Mitigation Why do clients engage The Hackett Group for transformation scopes of work?

25 Page 25 The Journey to World-Class © 2008 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. For further information please contact Paul Goodwin Hackett Account Director Raleigh, NC pgoodwin@thehackettgroup.com 919-866-1906 Statement of Confidentiality and Usage Restrictions This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group. Copyright © 2008 The Hackett Group, Inc. All rights reserved. World-Class Defined and Enabled.


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