Wednesday Jan 22, 2014

Scorecards in the Wild West?

Oscar Pardo, a Solutions Consultant for Oracle, works with Federal, State and Local governments helping them to herd their wild KPIs and establish scorecards to meet US requirements from the President. I had the pleasure of interviewing Oscar during a podcast and he gave some sage advice on what to expect when building scorecards.  He described how Oracle Scorecard and Strategy Management is just the Sheriff you need to help tame your runaway KPIs, and manage your performance.

Oscar began the interview by defining what public sector organizations are trying to accomplish with their business scorecards. Agencies like the Department of Homeland Security, the Veterans Administration, and Health and Human Services are enormous (the size of some of the largest companies in the world!) and need tools to help them understand where they are performing well, and where they are underperforming. Basically, they are trying to accomplish the same things that private sector companies are striving for. Things like:

Transparency to their public
Insight into how well they are running and where they can take actions to improve
Accountability for their funding. With the close scrutiny of funds and cost cutting in budgets, agencies are more accountable than ever for their funding
A better grip or control of what is occurring and what actions they can act on  
A way to monitor those actions and make sure they are working

Oscar also mentioned the most challenging aspects of creating scorecards were:

Developing the right KPIs, and getting consensus. This is like walking around in the Wild West. Everyone wants KPIs for themselves – there is often little organization and few rules around choosing them or deciding how to use them.
Defining the Key Performance Indicators. This takes a lot of time and effort
Locating where the information resides. This takes the longest amount of time. Federal Agencies have a harder time of it, because they have a greater volume of data because they are larger organizations. Information resides in many different systems and is measured at different levels.

Interestingly enough, the most challenging aspects were not software related!



So what part does software play in scorecards? According to Oscar, scorecard software acts like a Sheriff would in the Wild West, upholding the laws. Without the Sheriff enforcing the laws, in this case guidelines, executives will ask for more and more KPIs – then the data collection activity, reporting, and subsequent activities will get out of hand. Here is some advice Oscar shared to help:

Have a single champion, group, or department that is in charge of determining what makes sense to capture and what will have the greatest impact to the organization, because there is a big cost in collecting and maintaining this information. – The champion is like the town Mayor; setting the rules that the Sheriff enforces.
Develop an Office of Strategic Management (or other performance management governing department) or appoint individuals to appropriately define KPIs and objectives. They can then help the Mayor so KPIs can be implemented quickly and uniformly across the organization.
Don’t wait. Too many times I hear customers say, “Let’s wait until next year” or “After the next reorganization or administration”.  With a strong governing agency that is responsible for scorecards, those excuses are no longer valid.  The job of an incoming administration would actually be easier because they have visibility into the organization on Day One.

So what benefits are public sector agencies experiencing with scorecards? Is it worth their while? Oscar told us YES, it is worth their while and here’s why:

Monitoring performance is so much simpler. The Oracle Scorecard and Strategy Management product gets you up and running quickly.   You don’t have to build it, and it comes with the Oracle Business Intelligence Foundation Suite.
Scorecards and Business Intelligence naturally go together. Scorecard initiatives work well with a formal Business Intelligence / Data Warehouse in place.  
Mobile scorecard capabilities.  Having scorecard information available on your mobile device enables you to take this information with you and act upon it without being tied to your desk or office.
Build it with market prevalent Scorecard methodologies like Balanced Scorecard or Six Sigma.  It has an easy to use interface to help agencies define goals and objectives, then facilitate the building of KPIs to track and meet these goals and objectives – all within the same tool the organization uses to do its BI reporting.
Informative visualizations like Contribution Wheels, Strategy Trees, Watch lists, Cause and Effect Maps, and Strategy Maps are available automatically.  

Oscar told us that Oracle made a great decision in making Oracle Scorecard and Strategy Management part of the BI Foundation which marries technology with the scorecard methodology (the Sheriff).  Add the Mayor and other constituents to work with Oracle Scorecard and Strategy Management, and you too can tame YOUR Wild West.

To listen to the entire podcast, click here.
To learn more about Oracle Scorecard and Strategy Management, click here.

Wednesday Nov 20, 2013

Alignment of Ever Shrinking Budgets in Federal, State and Local Government

According to Josh Kahn, the Federal, State and Local government agencies are facing austerity, uncertainty and the need for accountability and transparency now more than ever. Josh Kahn, a Solution Specialist  Director at Oracle, and James Antisdel, Manager with Deloitte Consulting, joined me for a podcast to discuss using Oracle Hyperion Profitability and Cost Management to align the ever shrinking budgets in government. Both James and Josh have a deep knowledge of and practical experience with the US Public Sector, particularly in government agencies.

We started off talking about the issues that government agencies are currently facing. Josh indicated that the agencies are facing many similar issues as the private sector in that transparency and efficiency are needed to help combat uncertainty and austerity. He felt that creating and using shared service centers enables organizations to provide a common product or service to a number of other organizations, thus increases efficiency and reducing effort. But without robust cost models to capture, analyze, and report on costs, it is difficult to measure and account for the new efficiencies, and equally difficult to explain the shared service charges.

So, I asked Josh what the barriers or limitations were to accomplishing this challenge. Josh explained that there are really three categories of limitations:

1) Legacy cost models are generally spreadsheet based. They rely on highly manual processes, lack transparency, lack a robust reporting solution and generally make analysis very difficult.
2) Data governance and quality. Many solutions rely on data that is sourced from disparate systems and commonly rely on data requests that require labor intensive processes and error prone manual transformation.
3) Cost models are generally kept simple.  Simple models limit analysis such as transaction level costing and commonly require a delay in producing results -- reducing the usefulness of data because it is likely old and irrelevant due to the delay

According to Josh, a good enterprise-level costing system like Hyperion Profitability and Cost Management can address all three of these limitations.

Next, James and I discussed how he had seen Hyperion Profitability and Cost Management used by his Federal, State and Local government customers. He told our listeners that he had seen it used for:

+ Cost allocations
+ Customer bill calculation/generation
+ Service center performance management
+ Assisting with planning and budgeting
+ Financial and operational analysis
+ Decision making

I was very impressed with the versatility of this application.

Digging deeper into a costing model for government, I asked James to tell us what an agency could hope to gain from implementing a costing system. James told our audience  that “development and management of the cost model can provide greater insight into the full cost of services provided to an agency’s customers, and can enable more informed decisions aimed at optimizing resources, increasing value, improving performance, gaining efficiencies, and reducing costs."  Furthermore he explained that Deloitte’s customers, armed with this new information, can begin taking next steps to improve business processes and work to refine their model to gain more insight into particular areas that offer opportunities for savings and improvements.  As a result, an agency will have the capability to accurately identify current and projected costs, formulate and justify budgets, and support operational process improvement and managerial decision making.

James emphasized that an enterprise costing solution can enable an agency to more readily pinpoint cost variances at a detailed-level and be far more responsive to requests for information from customers and other stakeholders.  It is a powerful analytical tool that can be used to support an agency in becoming transparent, efficient, and a Shared Services Center of Excellence.

So it seems that a powerful, versatile,  enterprise-level costing system can go a long way in helping to align the ever shrinking budgets in Federal, State and Local Government.

To listen to the entire podcast, click here
To learn more about Hyperion Profitability and Cost Management solution, click here

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