Finance Service Delivery Model Approved Approach

Presented by: Peter Enlund

November 2006

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Agenda• Meeting Purpose

• Status Update

• Overview of the Approved Finance Service Delivery Model Approach

• What this means?

• Next steps

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Meeting Purpose• Meeting participants - Identified staff who

are involved in performing finance tasks across the University.

• To provide an overview of the endorsed Finance Service Delivery Model and next steps.

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Status Update The Finance Service Delivery Model

proposed for implementation commencing January 2007 was presented to and endorsed by:

• Major Projects Committee on 17 October 2006 (Forwarded to VCE on 26 October 2006).

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Finance Service Delivery Model: Objectives

• to define the RMIT Finance Service Delivery Framework for implementation in 2007

• to improve service delivery

• reduce costs through more effective deployment of staff

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Criteria• eliminate duplication and overlap of

services

• strengthen of key functional capability

• standardise processes and practices

• concentration of services and processes – deliver improved service and efficiencies– it does not detract from the delivery of the

business of the University

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Information Gathering

• Portfolios and Service Centres in August 2006 to identify who currently performs finance tasks

• Accounts Payable and Purchasing Project• Processes identified through earlier work

completed by the Major Change Group

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Some observations: • Low level of “trust”• untimely entry of information • unnecessary and inefficient offline processes prior to the

point of data entry. • Data in the General Ledger has absolute integrity and is

subject to sound internal controls.• Little use of standard GL based reports resulting in

– duplication of finance activities– ad hoc report construction– incorrect data being used for decision making – high level of manual tasks.

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Some observations:

• an unwarranted degree of control or data over every aspect of the business,

• control activities in too much detail • a legacy of a low level of trust in the responsiveness of

central finance, from historical experiences and/or perceptions.

• Data entry into Accounts Payable is prompt– processing within 2 days after it is received

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Some observations: Current RMIT Finance Operations • normal business practice for routine tasks • current structure is a legacy • we continually have to train people in tasks. • must be sustainable and delivered with robust quality

controls.

• a lack of standardisation in processes due to local and

historical ways of working.

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New Ways of Working • build and maintain trust and confidence in the services

delivered from all areas of the university • stop time and effort expended on unnecessary activities

based on compliance to policy rather than for genuine business benefit.

• build and maintain appropriately skilled finance staff base

• clarity in functional alignment and reporting lines • collaborative environment encouraged and strengthened. • develop and document clear processes and procedures.

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Staff Summary

In August 2006: • 209 staff were identified as performing some

finance-related activity. • Only about 20% are located in Financial Services

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Business Size Summary

RMIT DEAKIN

Total Revenue

$591 million $436 million

Total Number of FTEs

3226 2609

Total Assets $1476 million $880 million

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Transaction VolumesMEASURE RMIT

(per annum)DEAKIN

(per annum)

Number of invoices processed 52,000 93,701

Number of suppliers paid by due date

Approximately 33%

Approximately 90%

Number of cheques processed 7360 12,514

Number of electronic payments processed

20140 15,390

Number of Full Time Equivalent (‘FTE’) staff processing transactions

Impossible to determine

due to current

structure

5 EFT (each staff member

processes both cheque and electronic payments)

Number of disbursements – Electronic Payments or Cheque

27,500 27,904

Number of payments processed per FTE

Impossible to determine

due to current

structure

5580

Number of invoices per FTE 18740

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Development of the Model• Service Delivery levels correspond with

what is required to complete the task– level of skill– local vs central knowledge / input / ownership.

• Each level dedicated to delivering efficient services directly to its customers, whether internal or external

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Service Delivery LevelsLevel 3: Strategi

c

Level 2a & 2b:

Consultative

Level 1a & 1b:

Operational

Level 0: Self

Service

Finance operates as a strategic partner with business units. People issues and Finance practices are integrated into business planning and operations management.

Range of value

Finance is focused on providing standard services using systematic and consistent procedures.Finance provides routine and ad hoc transaction processing.

Finance provides a range of specialist Finance services and products to employees and managers.Finance provides solutions for complex Finance issues.

Employees initiate Finance action.Employees provide preliminary information and data to Finance.

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Service Delivery Levels cont…• clear definition of delivery points for all Finance

processes and process steps• identification of process / task accountability • service levels efficiently tracked and managed• identification of subject matter experts. • greater focus on value-adding activities

– by eliminating unnecessary steps, – duplication and overlap.

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Proposed Service Delivery Model Approach Overview

1. Level 0 preparations by Financial services to enable self service at local level. Level 1 Main Stream Finance tasks are performed by Financial Services

2. Financial Services start fulfilling Level 0 and Level 1 Main Stream Finance tasks required with less resources.

• Savings accrued and reported

3. Finance service delivery will meet and change expectations of key stakeholders e.g. HOS / unit heads etc. This will help build trust in the new ways of working.

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For Finance-Titled staff:Executive Director Financial Services reviews the current resource allocations and the remaining work for finance positions described in Point 1 above within their respective work areas.

i. work undertaken elsewhere

ii. remaining work

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For Non-Finance titled staff:Local area managers / executive review current resource allocations and remaining work for bundled positions within their respective work areas

i. work undertaken elsewhere

ii. remaining work • Decisions on an individual basis may be required for

non-finance titled roles if they are currently predominantly performing finance tasks.

• Current position titles not necessarily accurate reflection of position.

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Single Processing Mode Level 0 and Level 1 processes will include:

• Six staff• cross trained and able to deliver consistent

services in a sustainable, timely and accurate manner.

• provides clear accountability• single point of reference for staff and vendors. • central point of feedback enabling learning from

what’s working and areas needing improvement.• City and Bundoora.

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Some Supporting Initiatives• Per diems should decrease credit card and staff

reimbursements• Single processing mode for research billing • Reduce the number of cab charge accounts • Create an interface between Library and SAP

– eliminate current duplicate data entry

• Casual Pay and Contractor process• Travel

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Underpinning mechanisms• agreed turn around times• clear process documentation and understanding

of roles and responsibilities• system tracking options • clear finance functional reporting lines • regular, relevant finance communication groups

(academic and service centres) as appropriate. • Finance Newsletter

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Proposed Performance Measures

• Payment by due date – long term target of 90%

• Number of telegraphic transfers and electronic payments

• Number of exception payments

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Key Changes: Processes• Level 0 enabled for self-service and Level

1 performed at a single processing mode – including data entry and data processing. – part of Financial Services and will be

physically located at City and Bundoora

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Key Changes: Reporting Lines / Budget

• Change to Finance functional reporting lines – all staff with Finance titles (bundled roles and pure

finance roles) will now report within FS– Decisions on an individual basis may be required for

non-finance titled roles if they are currently predominantly performing finance tasks.

• No change for those in ‘bundled roles’ who perform some finance tasks e.g. administrative officers– these will be reviewed at a later stage.

• Budget for all finance-titled roles (bundled and pure) will shift to FS

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Key Changes: Finance Titled Roles

• Pure finance roles will initially continue in their current positions, with changes to tasks because of the changes in main stream finance processes.

• Bundled finance-titled roles will initially continue in their current positions, with changes to tasks resulting from the change in processing for main stream finance processes and will no longer undertake non-finance work.

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Key Changes: Non-Finance Titled Roles

• non-finance titled roles will initially continue in their current positions – no longer undertake finance tasks.

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Key Changes: All Roles

• All roles mentioned will be reviewed to ensure that capacity is best utilised. – may involve some changes in role descriptions

where the new work does not match current PD

– there will be consideration of consolidating work where it is of benefit to the University.

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New Job Opportunities4 or 5 new finance positions

1) Finance Officer, Purchasing (Bundoora)2) Finance Officers, Accounts Payable (City)3) Research Contracts - Coordinator (City)4) Portfolio Finance Manager – non academic

• General staff transition guidelines will be applied

• Positions aimed to be filled by December 2006.

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Next StepsDetailed Planning is currently underway.

Budget to transfer for Finance - titled staff

For 2007

System changes to support changes to reporting lines – Consequences of PFM non academic recruitment

December 2006

Recruitment of new positions December 2006

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Next StepsMainstream Level 0 and Level 1 processes documented in detail with all supporting system requirements etc being prepared for January 2007 implementation. Including training requirements.

End November 2006

Implement training requirements (where applicable)

Dec 2006

Change to main stream processing January 2007

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Next StepsReview of roles Jan 2007

Fully implemented Feb 2007

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Further updates

• RMIT Updates• Finance Newsletter• www.rmit.edu.au/fs/service• Specific communication as applicable

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Feedback / Queries