Performance management in action in Norway ”The way we became in charge of our destination" Kristin Ulvang, Financial Director 1

2 City of Bergen – status 2004  Lack of responsibility in divisions and departments  Different financial routines in all departments  4-5 management - levels  Different versions of ”the truth”  50 man-year on shadow accounting per annum  The City Government did not have sufficient control – lack of qualified forecasts… ”Large deficits”

3 The Accounting System:  The system was for accounting only – not for enterprice resource planning (ERP)  Managers had no direct access to Key Financial Information  All departments had their own versions of the system  Data duplication, double work and manual processes  A lot of manual work to get an overview.  Decentralized paper-based processes ”Big surprises”

4 Implementation of AGRESSO (May 2004)  Any manager (Financial & Non-financial experts): –Access to real time & online data –Accurate & Relevant: Financial Management Information presented in an easy to understand format for Non-Financial experts –Complete: the budget, the actuals AND the forecast –Presented via simple User Interface – Web Self service –Full drill-down from top level down to the individual transactions and individual payroll ”Distributed accountability”

5 Chief Commisioners’s departement CITY GOVERNMENT City of Bergen: Complex in structure Key requirement: One version of the system and one set of routines common for all departments Accomodating the diverse information & process needs of EACH division 300 divisions Departent of Finance, Cultural Affairs and Business development Departement of Education and Sports Department of Health Departement of Urban Development

6  Two management levels – department and division managers.  New reporting structure  All division managers had to sign a contract which focused on economic responisbility.  Top management increased their focus on realistic budget premises for all division managers.  All division managers had to make a monthly qualified economic forecast. City of Bergen: Living in Change ”Ongoing restructuring” Easily implemented thanks to Agresso! Key requirement: Flexibility AFTER implementation

7 Better Performance: Information, Information,..  MAIN GOAL: Reports must give the City of Bergen access to Financial Management Information at all levels.  They have to be: –Real time –Easily accesible (user friendly) –Accurate –Relevant –Suitable for the needs of the corporate level as well as of each division –AND.... Reflect our on-going change & growth instantly!

8 Meeting multi-level reporting requirements Division reports:  Access to data is limited  Acces to: –Transactions –Scanned images –Payroll individually accessable Corporate reports:  Covers all divisions and departments.  Benchmarking of divisions.  No access to transactions, scanned images and individual payroll.

9 Monthly financial report

10 From overview…

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13 Drill-down to details

14 Individual payroll

15 …or scanned image

16 Bergen’s System-generated forecast  Conditions: –Books are closed early – at day 5. –All budgets and accounts are entered with periodical keys according real-life variations throughout the year.  Result: –The system automatically forecasts all accounts based upon the result year to date and the periodical budget-keys.

17 How do the managers make their qualified forecast?  Look at the system-generated forecast. –Is this correct?  If not – why? 1.Errors or/and defects in accounts (periodic maintainance, missing expences etc) 2.Errors or/and defects in budget (periodical keys, missing budgets etc) 3.Changes of activity  If there is still not balance between budget and accounts; –Listed actions to run the division in accordance to budget premises.  Make their own qualified forecast based on the remarks above.

18 Forecast registration - Agresso

Reporting process Department Division Corporate The City Government: Tasks and deadlines The City Government: Tasks and deadlines Controlling unit: Distribution of monthly reports Controlling unit: Distribution of monthly reports Division manager: Analyzes, make their qualified forecast Controlling unit: Testing ang benchmarking Controlling unit: Testing ang benchmarking Departements Consolidate and suggest actions to gain control Departements Consolidate and suggest actions to gain control Controlling- unit: Consolidates proposisions from the departments Controlling- unit: Consolidates proposisions from the departments The City Government : Make decisions based on the proposisions The City Government : Make decisions based on the proposisions Division manager: Focus on actions togain control Division manager: Focus on actions togain control

Balanced Score Card 20

21 The transformation of Bergen  From: –Reporting=> Analyzing => Reporting => Analyzing  To: –Reporting=> Analyzing=> Focus => Action!!

22 Where are we now? Knowing where we ARE and where we are GOING !  All division managers know their responsibilities  Managers are highly satisfied with Agresso and the reporting process  One common set of routines for all departments  One version of ”the truth”  Qualified forecasts from all managers  Able to implement change when required – with our own staff  Efforts to gain control  No deficit last year… ”In charge of our destiny”

Performance management in action in Norway ”The way we became in charge of our destination” Thank you ! Kristin Ulvang, Finance Director 23