Build Operations Management Capability

CENTRAL GOVERNMENT

A shared services operation that provided support to a large Central Government body. This support included a large Finance & Accounting business, of which Procure to Pay (P2P) is the largest function, with about 300 full time equivalent (FTE) staff split between multiple sites.

The P2P function managed eProcurement activity and every subsequent step of invoice processing until payment, including post-payment exception resolution.

The client had embarked on an organisation-wide transformation programme, with the aim of improving service levels and creating capacity to allow lower cost growth, whilst concurrently driving performance through increased staff capability. Reinvigoration was engaged to support this programme, leading a programme of transformation work in P2P function.

One core element of the work was to overhaul the established management practices by focussing on the design and implementation of a purposeful measurement system. With the key objectives to:

• Review the established management practices, identify improvement potential, design and implement the required changes
• Design and implement balanced operational metrics that drive performance and continuous improvement
• Coach and mentor all managers in the disciplines associated with driving performance through data
• Embed key metrics throughout the whole function
• Make using the new metrics to drive continuous improvement the norm, or ‘BAU’

Guided by key sections of its Operations Capability Assessment tool, Reinvigoration analysed the effectiveness of existing business metrics and supporting management practices which identified a number of key deficiencies:

• KPIs were not balanced, with excessive focus placed on individual productivity
• Quality measures did not consider input quality or within process quality
• Cost metrics focussed only on individual productivity, rather than focussing on end-to-end cost. This led to costs of certain support and temporary staff being hidden
• KPIs were not aligned throughout the organisational layers, leading to disjointed activities
• Performance management was non-existent with managers not setting clear expectations

The design and implementation phase started with the development of top down KPI trees, to create balanced metrics at all levels within the function

• Whilst these metrics were balanced, emphasis was placed on creating relevant cost control and mitigation KPIs at all levels within the organisation
• Significant effort was made to develop end-to-end cost metrics to capture the true cost of processing an invoice, with the aim of driving this down
• Crucially, this end-to-end cost to process an invoice metric included all previously hidden costs such as temporary support staff and internal recharges
• Team performance metrics were developed and individuals made accountable for their own contribution towards the overall cost objectives
• Given the heavy focus on cost, a tiered financial dashboard was created to allow close monitoring and management of costs throughout the P2P function
• The dashboard considered both end-to-end cost per invoice at the top level and functional costs per transaction at lower levels. This ensured that every team at every level were challenged with managing their financial performance and costs
• With the help of the Finance team, this data was backdated over 12 months so that an accurate baseline could be developed

• A top to bottom performance hub structure was developed to drive consistency, but also focus on key operational objectives throughout the whole organisation
• Daily huddles were designed for all teams, to place focus on performance dialogue, allowing Managers to have meaningful conversations based on fact and to drive people towards overall goals
• Guided by the performance hub structure, operational issues were captured and entered into the problem solving process for resolution
• Daily discussions on key metrics ensured continual focus on the overall business goals – every team member knew how they played a part and were accountable
• The focus on building core management capability around driving effective performance management resulted in productivity improvements of over 15%

Get in touch to discuss how we can help you transform your service operations.