Posted on January 20, 2016 by Alec Steel
The spending review is done, the commitments have been made for the next five years. Now the hard work begins. Not only are there are some big change projects in the pipeline, but around £600 billion is likely to be spent each year on ‘business-as-usual’ operations. These include the central and local government services that most directly affect individuals. With government still facing tight budgets it remains crucial that operations are efficient, and are what citizens need, to ensure good value for money.
Government is facing a range of challenges in addition to the ongoing austerity. Demographics are increasing the demand for many public services, and customers now expect service levels comparable with private sectors. As my colleagues have detailed in other posts, achieving digital transformation is highly complex and there are some common pitfalls to avoid, including managing conflicting priorities and the challenges of devolution. Increasingly complex commercial relationship and skills shortages add further to the growing challenges of managing government business.
Strong operations and process management is, therefore, more essential than ever. It supports a longer-term perspective to improving services and removing costs, as well as addressing daily problems such as poor customer service and continuity between organisations, backlogs and delays.
Many UK government organisations have invested in approaches to improving operations management such as those outlined in our report on HMRC’s Pacesetter programme. There are many examples of the benefits it’s bringing for a diverse range of organisations. For instance, new ways of working in RAF bases meant an extra 11 aircraft were available to the front line, and the BBC’s Spark programme helped to remove duplication and free up staff time to work on news stories. For more details, see Transforming logistics support for fast jets and Reducing costs through delivering quality first.
In view of the importance and high profile of government operations, last September we published an interactive guide to good practice – Managing business operations – what government needs to get right – based on our systematic assessment of 32 government organisations and 86 operational services. It sets out the five components of good operations and process management (strategy, information, people, processes and improvement) and highlights the need for organisations to integrate these components as part of one system, across corporate and operational areas of the business, to achieve operational excellence.
Our guide details the four areas to focus on to improve performance. Our review showed that organisations that performed well in these areas were more capable in managing and improving their business. It also showed that having the knowledge and agility to change in response to variation in customer demand was the best indicator of an organisation’s progress to having world class operations and process management. They were able to make informed decisions based on an understanding of the operational consequences of their response.
We examined the impact of different approaches to implementing change. Our evidence shows that sustainable change is only achieved through a holistic approach. Top down change rarely impacts on how services are delivered, and a tactical, function- or process-based approach struggles to sustain any improvement in the long term or beyond structural boundaries. Rather, there needs to be an integrated approach.
So how does your organisation stack up?
- How is it performing in the four critical areas and is the organisation operating as an integrated system?
- Where are your strengths and where are your performance gaps?
- What areas do you need to focus on first and why?
I hope our Managing Business Operations guide helps you identify the questions to ask of your organisation, and to answer them. Please also feel free to contact me to discuss this in more detail.
The spending review and accompanying policies are setting the direction. But it’s customers’ service experiences and their responses to public services that make it so important to get business operations right. Getting things right first time will help with meeting the financial challenge. Indeed, this is why we are currently reviewing the quality of service to personal taxpayers.
Doing the things that matter and doing them well isn’t easy. But knowing where to start will help.
About the author: Alec Steel has led the NAO’s operations and process management work since 2008, heading up the Operations and Process Management Community of Practice since its creation in 2012. The Practice is responsible for generating cross-government insight on operations and process management and developing and deploying approaches to assessing government capability. Alec joined the NAO in 2005 having previously been responsible for operational improvement in the public sector. He is a regular speaker at international conferences, supporting government thinking in Australia, USA and Europe. He is a guest lecturer for Buckingham University.
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