Aiding Business Plan Implementation through Multi Level Measurement System By Dr Mohammed Al-Waqfi Technical Monitoring & Auditing Manager Program Management Unit/WAJ

Objective Presenting a proposed systematic approach to building a hierarchal PI measurement system that aids prudent monitoring of the implementation of business and strategic plans

Business plan: A business plan can be defined as a road map with a specific set of actions and interventions for achieving certain results (i.e., objectives). It involves process improvement An objective is what intended to be achieved. Utility objectives should be Within or fit in the sector’s strategic goals. Measureable (can be translated into a performance indicator). Attained through efforts or actions Lead to gains (outcomes) from its implementation. Short term

Business plan: Objectives evolve functional plans: Operational. Financial. Institutional. Customer Service HR, etc. Functional Objective Utility Objective Specific for an activity/department For the utility or organization. Measurable

Business plan:Prior to SWOT Potential Strengths Internal Potential Weaknesses Potential Opportunities External Potential Threats Utility Performance Improvement, Aqaba 21-22/2/2016

Strengths Internal External Opportunities Utility structure is flexible to serve work requirements. Good IT infrastructure that is expandable. IT systems are upgradable and integrable. PPP is viable. Governing laws can be amended if necessary. Institutional & financial independence Qualified personnel. Leadership takes a participatory approach in running its business, etc. Country is secure and stable. Government interested in attracting foreign and local private investments in the field of water and wastewater. A variety of aid programs (grants, technical assistance, etc.) is available. Availability of local funding sources i.e. (social security, local banks). Weaknesses Organization structure not linked to cost centers. Some responsibilities in WAJ law not clear. Revenues are insufficient. Operational and capital costs increasing. Financial deficit increasing. Cost recovery low and decreasing. Budget dependence on loans and grants. Key employees about to retire is high. Succession planning not employed. Incentives not sufficient to attract qualified personnel or to retain those present. Employee performance and appraisal system is not properly employed and is not linked to training and rewards. Utility is not entitled to amend water and wastewater tariffs without cabinet approval. Lack of stability in some neighboring countries . Unexpected immigrations from neighboring countries to Jordan. The economic growth in the country is slow. Inflation rates are relatively high. Cost of debt service is high. Inability to match the rapid pace of development in Information Technology and Communication. Threats

Business plan: Prior to Situational Analysis includes Institutional Organization structure. Training. Employees turnover. Plans . Financial. Revenues. Debts. Cost recovery. Subsidies by Government. Energy cost. Loans and grants. Operational Water production and supply. Wastewater treatment and reuse. Exports and imports of water. NRW. Collection. Complaints. Service coverage. Water quality. No action implications.

Implementation Monitoring: Performance measurement Business plan: It Evolves Implementation plans. Time framed activities. Targets Investments and resources Implementation Monitoring: Performance measurement

Monitoring of Implementation of Business plan To ensure compliance with business plan objectives and targets. To tell success from failure. To reward success rather than rewarding under performance. To learn, correct and rectify. Compile lessons learned (Lessons can be learned from both success and failure). It comprises Monitoring. Evaluation If you cannot measure it you cannot manage it?! Measure ten times, cut once!!!!

Development of Monitoring Framework: at the KPI level Developing a high level monitoring and evaluation framework aims at tracking the progress to achieving plan objectives via selected KPIs. Example NRW Objective Indicator Target Baseline value Outcomes Implement water loss program NRW 20% By end 2019 25% Decreased water loss, increased revenue, decreased operating costs

Development of Monitoring Framework: KPIs park at the top of the pyramid; a concept theorizes that tracking the implementation of process improvement plans requires a larger number of indicators than monitoring the overall performance using the KPIs. Therefore, a hierarchal cascading down monitoring system needs to be developed for each objective. A hierarchal cascading down of the objectives precedes the multi level monitoring system. Hierarchal establishes the connections between KPIs and lower level PIs even the indicators at the activity level, inputs and outputs. Lower level and activity indicators contribute in different magnitudes to KPI values.

Objective Cascading down Conceptual framework identifies activities, inputs and outputs associated to a certain objective and illustrates how they are related. This approach can be used at utility, departmental and sectional levels. It facilitates cascading down the KPI to functional PIs

Objective Cascading down Implement water loss program Reduce administrative losses Reduce physical losses Unauthorized consumption Meters inaccuracies Illegal use reduction Billing enhancement Meters replacement Repairs DMAs Active leak control Pressure manag. Checks routing update subscribers database HHUs Implement meters inspection and replacement program Network maintenance, renewal and replacement Establishment of DMAs plan and implement leak detection program Installation of pressure loggers, reduction valves, etc

Administrative loss PIs KPI Cascading down NRW Administrative loss PIs Physical loss PIs Illegal use volume Billing efficiency (%) % meters replaced Water loss per km of network, Water loss per service connection % Door step billing % Estimated billing Speed of repair No. of established DMAs Readers performance, Daily av. Productivity, (reading av time, total time in field, etc) Service connection repair rate Water network repair rate

Objective Cascading down The case below based on data pertaining to the Commercial Dept. YWC Management Contract (2012) Objective KPI Target (end of 2012) Baseline Value (2011) Outcome Increase cash flow Amount collected By 2.4 M JOD 16.3 M JOD Increased revenue, Decreased water loss Increased Cash flow Increase collection Increase billed volume Debts recovery Field collections P. Office collection disconnections Central collection Billing enhancement En. Reading accuracy Reduce Illegal use HHUs Update subs. base Routing Meters replacement Checks

Objective Cascading down This approach can also be utilized at the departmental level. The case below based on data pertaining to Commercial Dept. YWC Management Contract Objective KPI Target (end of 2012) Baseline Value (2011) Outcome Increase cash flow Amount collected 18.7 M JOD 16,271,350 Increased revenue, Decreased water loss (A 17,309,510 JOD) Amount collected (T 18,271,350 JOD) (A 81.2) % collection (T 85) (A 21,317,130) Amount billed (T 22,000,000) Accounts receivable at cycle end % central coll. (A 60%) %field coll. (A 30%) % P. office coll. (A 10) efficiency (A 95%) Billing % meters replaced (A 4.5) Illegal use volume (not reported) % doorstep billing (86.2) % estimated readings (8.8) (166 reading) Readers Daily av. Productivity

Conclusions Implementation of business plans requires a larger number of indicators than monitoring the overall performance using KPIs only. Multi level PIs system may serve to attain, at least, the following: Business process-based relationship among the different departments and sections of the utility. Enhancement and facilitation of cross analysis of results, hence, aiding the evaluation of performance as well as problems identifying and solving.

Conclusions Multi level PIs system may serve to attain, at least, the following (cont.): Facilitation target and milestones setting as well as planning performance improvement as to achieve targets and hence objectives. Guiding the situational analysis and baseline establishment, better resources allocation and formulation of demonstrably sustainable financing plan. In addition, shedding light on the potential most determining step in the progressing towards achieving objectives. Enhancement of commitment of everyone, departments and sections in the utility work towards achieving the same objectives with the same resources and same intentions in mind of performance improvement.