SHARED SERVICES STRATEGIC FRAMEWORK

Annual Performance Review SessionChristian Centre. East London

13 June 2008

0800 0323 64 Call Centre Customer Care Line: 24 hours

Presentation by Mrs N MavusoGeneral Manager: Corporate Services

Shared Services Strategic Framework

This document is a consolidated view of various key stakeholders to the process of defining and refining the Shared Services

Model as a way of strengthening broad corporate service delivery to both external

and internal customers.

BACKGROUND

• The department has taken a strategic and policy decision to establish Corporate Service Centre (CSCs) as vehicles to improve service delivery.

• The new service delivery model was approved by the Provincial Cabinet.

• A Blueprint developed by Pytron is the guiding document that is currently being used by the Eastern Cape Department of Health to establish CSCs.

• Since the establishment of the CSCs there have been numerous challenges in getting them to function fully.

• A decision was taken by the Executive Management to review the model of the CSC’s and make adjustments which will ensure proper and effective functioning of such units.

• The concept has been broadened to be more representative and inclusive of other services not of corporate services by definition

• The Executive Management Committee tasked the Chief Financial Officer (CFO) and the Chief Operations Officer (COO) to give leadership and guidance on the finance and corporate functions to be delegated outside of Head Office.

What is an organisation?

Shared Services

Directorate

Strategy and Business

Development

Home Office IT

General Property

Shared Business Services

Programme

Information & Records

Mgt

Moving to a Shared Service means change in all these elements

People Processes

SystemsStructure

Finance and Procurement Processes

1. Procure to Pay 2. Order to Cash 3. Record to Report

ADVANTAGES OF SHARED SERVICES

1. Cost reduction

2. Better service quality

3. Standardisation of business support

4. Leverage specialist skills

5. Optimisation of working capital

Shared Service Centre implementation and optimization can lead to operational costs savings up to 20-40% per year on people, assets and IT

SHARED SERVICES HIGH LEVEL PROJECT APPROACH

Conceptual Design

Operational Design

Implementation & Rollout Plan Coordination

Stabilisation & Continuous Improvement

Communication

Project Management

Capacity Devl’nt

Change Management

Key Activities

Key Deliverables

Shared Services Conceptual Design

Sign off on Shared Services Model for department

Project charter

Define functional split across all affected business process

Project team mobilisation

Stakeholder communication plan

Shared Services Conceptual Design

Project Charter

Stakeholder Communication Plan

Policies, processes and systems alignment

Role maps

Organisation & residual structure design

Cost model

Review and refine delegations

Governance Structure Site selection plan

Conduct site readiness assessments

implementation plan

Approved organisation structures

Site readiness assessment results report

Implementation plan

Management reports

Risk management matrix

Business process improvement

Conduct post-implementation review

Individual goals

Reward systems

Extensive coaching

Individual and organisational learning

Continuous improvement

Post-implementation review report

Benefits realisation

Design & Development SustainPlanning Implementation

Training

Co-ordinate implementation of rollout plans

Assume new roles

Extensive coaching

Build culture

Compensation / people issues

Measures

Jul-SeptJun Oct - Mar Jan -

We

are

here

OUR GOALS

EFFICIENCY SIMPLICITY QUALITY

Savings of at least

20%

Clear roles and responsibilities

Quality of the services and of the transactions

SHARED SERVICES VISION & OBJECTIVES

• Support the overall departmental mission by streamlining administrative support processes. Focused primarily on combining the best processes and the best people and leveraging on existing and new technology across the province to achieve world class processing efficiency.

Strategic Objectives:

– Improve processes, data integrity, controls

– Leverage and enhance our technology

– Reduce data manipulation, reconciliation and information flow

– Improve business analysis & decision support

– Increase speed of reporting

– Implement cost reduction opportunities

– Enable growth and optimisation

Achieved by:

– Standardizing processes and technology

– Consolidating functions and processes

– Adopting leading practices

– Automating processes and maximizing utilization of existing ICT functionality

– Reducing time spent on data reconciliation and handling

– Developing, hiring and retaining appropriately skilled personnel

SCOPE

• The Shared Services scope encompasses the following departmental business / functional areas:

– Human Resources Management

– Supply Chain Management

– Financial Management

– Information Communication Technology Management

– Facilities Management

– Security Services Management

– Risk Management

– Legal Services Management

– Administration

– Document Management

– Communication

SHORTCOMINGS OF THE CURRENT CSC MODEL

• The limitations and challenges of the current CSC Model have been documented and are a cause for great concern with regards to effective and efficient delivery of services to the public and to internal stakeholders. The lessons learnt per component have been captured at the CSCs and are as follows (though not exhaustive):

GENERAL

• The existing model for the CSC has diminished the roles and responsibilities of institutional heads and line managers.

• There is little buy in for the current model, both at locally & provincially and this lead to serious disintegration between Directorates

• Non availability of budget to implement the CSC Model

• Partial delegation of powers and functions from Provincial Office to CSC which results in unclear roles and responsibilities between the two spheres of governance and disempowerment of the CSC

• Poor planning at Provincial Office has hampered proper functioning of the CSC.

• Support and commitment from high-level management is minimal at all levels of governance through provisioning of necessary resources, bottom up inputs from specialist staff in order to understand the impact of decisions being made.

INFORMATION COMMUNICATION TECHNOLOGY

• Change in the technology arena is rapid and continuous. The challenge that results is that the available technology is often implemented without the necessary support structures being in place – that is, the appropriate staffing, skills and budget for the technology to be effectively utilised.

• Institutions have high expectations of ICT, but do not appear to be committed in terms of committing funding and making an effort to understand what is involved in implementation.

• Some equipment is repaired remotely using advanced technology. This means that IT staff responsible for this maintenance requires a much specialised skills.

• In the districts, there have not been Project Managers who can effectively manage projects on the ground. This specifically refers to the ICT outreach support services/

• Information technology has been about laying out the backbone whilst client and management expectations have become sophisticated.

FINANCIAL MANAGEMENT

• Constant centralisation of financial powers and functions by the Provincial Office which has disempowered the functioning of the CSC e.g. loading of the budget, journals for misallocation, shifting of funds the list is not exhaustive

• Non implementations of Cost Centre Accounting Systems which affected budget planning & allocation and Clinical activities in most instances are not linked to the available budget.

• Non involvement of Clinicians on the budgeting process

• Transversal Systems that are not user friendly e.g. reflection of commitments

SUPPLY CHAIN MANAGEMENT

• Poor Planning leads to deviations & constant application for condonement.

• Partial involvement of Clinicians\ end users on compilation of specifications both at local, Provincial & National level

• Poor turnaround times on the Provincial Office in finalisation of tenders

• Lack of contract documents with which to develop SLA with service providers

• Lack of guidance on maintenance negotiations and contracts

GENERAL AND PATIENT ADMINISTRATION

• It has created confusion regarding reporting lines

• Accountability and responsibility issues impacting on managing performance

• The existing model has entrenched the silo approach

• Manual processing of patient files – major negative client experience arena

HUMAN RESOURCES

• HR is currently very paper based function and documents have been lost in transit between the sites

• Local change management interventions have been initiated before and during the implementation and were not sustained after the implementation.

• Officials require sufficient delegations in order to carry out their responsibilities effectively.

• Managers have been spending too much time in operational issues, because of a lack of capacity and/or motivation among operational staff attending to soft issues.

FACILITIES

• Centralisation of budget and implementation disempowering institutions

• Poor implementation of technology policy by officials who don’t possess the necessary technical expertise which leads to the purchasing of inappropriate technology

• Non availability of maintenance systems in place to ensure compliance with legislation (OHAS Act), in order to avoid medico legal litigation

• There is no dynamic equipment replacement plan in the province.

• The adherence / compliance to National policy guidelines needs to be managed and implemented e.g. The NHTMPF – National Health Technology Management Policy Framework

THE PROPOSED SHARED SERVICES MODEL

• It is a feature of the proposed Shared Services Model that candidate processes for Shared Services range from high-volume low value added to high-value expert services. This will enable the department to accommodate the varying levels of skill and competence whilst ensuring the retention of deep skills and institutional knowledge.

• The proposal relies heavily on our experience in the current situation, customer feedback, AIP feedback, our understanding of the future needs of the Department, industry requirements and best practices.

• The diagram below illustrates the envisaged services, i.e. Facilities Management to be offered through Shared Services classified broadly by type of service, i.e. Advisory Services, across various geographical spaces, i.e. in the Eastern Stream.

High Level Shared Services Model

HIGH LEVEL SHARED SERVICES MODEL

Governance is a “Residual Function” and must still be reviewed, i.e. what remains at Head Office and within the responsible Cluster and Directorate.

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tCCC:• Located inside the facility• Accountable to Hospital Manager/CEO• Reporting to Hospital Manager/CEO• Managed by CCC Manager, Level• Financial delegations up to• Procurement up to

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Community Health Centre – Corporate Customer Centre

Corporate Customer Centre

Community Health Centre

Clinical Management

Operational Management

CCC:• Located inside the facility• Accountable to Hospital Manager/CEO• Reporting to Hospital Manager/CEO• Managed by CCC Manager, Level• Financial delegations up to• Procurement up to

• L• xxx Finance

• xxx

• ID Application• Password reset• Network access

FACILITY

ICTFIHR ADMSCM

RISK LEGAL SECURITY DOC MAN

SHARED SERVICES CLIENTS

• Tertiary Hospitals

• Regional Hospitals

• District Hospitals

• Community Health Centres

• Clinics

• Psychiatric Hospitals

• TB Hospitals

A critical success factor of the shared services model is the close customer relationship that must be clearly defined, managed and regularly evaluated.

• Head Office

• District Offices

• Sub-District Offices

• Local Service Areas

• Forensic Pathology Services

• Emergency Medical Services

• Lilitha Colleges

• Pharm Depots

• O&P Centres

The Clients of Shared Services are grouped as follows:

KEY CONSIDERATIONS MADE IN THE DEVELOPMENT OF THE STRUCTURE

• Economies of Scale

– Reduced cost and improved effectiveness through reduced fragmentation of tasks and improved work scheduling.

• Economies of Skill

– Effectiveness enhanced and costs reduced through the development and application of specialised works designs and specialised skills.

• Economies of Scope

– Reduced cost and increased effectiveness by delivering associated processes as a bundled service.

KEY CONSIDERATIONS MADE IN THE DEVELOPMENT OF THE STRUCTURE (Cont.)

• Roles and Responsibilities

– Depending on the size of the CSC, the different Functional Streams, i.e. Human Resources, Supply Chain Management, Finance and Administration inclusive of Document Management will be headed by Directors with the necessary qualifications, experience and skills.

• Geographical Distance

– The number of CCCs will be determined based on the size of the geographic area supported as well as the distance. The distance between the CCC and the facilities should be between 50 – 70kms. This is necessary to improve the turnaround times and accessibility to support services resulting in improved service delivery and customer relations.

• Delegations of Authority– Depending on the size of institutions, larger hospitals such as Regional Hospitals

should have a fully capacitated Human Resources & Finance structures in order to comply with the PFMA, Public Service Act, and DPSA requirements, i.e. appointment up to Level 12.

HIGH LEVEL SHARED SERVICES STRUCTURE

• There shall be a Shared Services Chief Directorate created headed by the Chief Executive Officer: Shared Services at Chief Director level and reporting to the Chief Operations Officer (COO).

• The Shared Services Chief Directorate shall be made up of the following units:

– Shared Services Centre (SSC) at Stream Level Three SSCs are envisaged aligned to the Eastern, Western and Central Streams. The SSC will offer

Specialised and Advisory Services.

– Corporate Service Centres (CSC) in the Districts The current District CSCs and Head Office CSC will continue, albeit with redefined roles and

responsibilities. The CSC will offer Professional Services.

– Corporate Customer Centres (CCC) in the Sub-Districts The CCC is a new organisational unit that will be established at all Hospitals and Local Service Areas, i.e.

cost centre level. The CCC will offer Transactional Services. (be guided by the organograms recently revised)

– Front Line Service Units The FLSU as a term exists however it will be redefined to speak to corporate support services from the

Clinic level to the Community Health Centre level. The FLSU will offer Limited Transactional Services based on delegations.

PROPOSED FUNCTIONAL SPLIT

• Proposed HR Functional Split.doc

• Proposed ICT Functional Split.doc

• Proposed Facilities Functional Split.doc

RECOMMENDED WAY FORWARD

Project Governance

• It is our view that there must be a fully-fledged Shared Services Project established, using the current departmental resources to drive it and ensure implementation as this will strengthen ownership and involvement

• This is based on the fact that only within the past three years the department invested in the creation of the Corporate Services Centres, which amongst other things delivered the organisation structures and process designs.

• A Shared Services Steering Committee shall be established will govern the project at a strategic level.

• The role of the Committee will be to: – Make decisions on behalf of the project;

– Approve resources for the project;

– Approve project deliverables;

– Resolve issues and risks which can’t be resolved at project level;

– Support the Executive Sponsor in providing direction and vision to the overall project; and

– Visibly sponsor the project across the Province.

PROJECT GOVERNANCE

• Below the Committee, a Shared Services Project Management Office (SSPMO) will be established and a Shared Services Project Team will manage its day-to-day operations.

• One of the key elements within SMO is the Quality Plan. The Quality Plan, a key deliverable for the planning phase of the project achieves a number of objectives:

– Defines what to deliver;

– Describes expectations to meet;

– Details process by which this will be achieved;

– Outlines decision making process;

– Outlines work practices (approach, tools, skills, standards, methods, etc);

– Defines the metrics used to determine success;

– Defines monitoring improvement mechanisms.

PROJECT TEAM STRUCTURE AND ROLES

Our philosophy in managing a project of this nature is integration. Integration implies that no function in an organisation functions in isolation from other

functions. And if we truly want to achieve efficient service delivery underscored by best practice business processes, we need to reflect it in

the way the project is organised and the way we will work as a team. In addition, there will be significant interdependencies between the clusters

and functional streams from a stakeholder management perspective.

Q & A - DISCUSION

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