 by Banner Software Harris Herman Jan Peterson Banner Software April 2004 California Performance Review Transforming California State Government Knowledge neXus ® Improving Organizational Performance

 by Banner Software Problem - Massive Budget Shortfall Solutions: –Consolidate Agencies Streamline Operations –Eliminate Unnecessary Agencies, Processes and Services –Manage Resources Based on Performance –Outsource Processes to Commercial Providers –Reposition Processes and Services to Local Governments –Improve Operational Performance –Develop performance driven governance systems –Improve Governor’s ability to manage …

 by Banner Software Highlights of the California Performance Review (CPR) Charter Executive Order Move to Performance Based Budgeting Re-organize and consolidate Final Report due to Governor on 30 June 2004 CPR Components Executive Branch Reorganization Consolidate, simplify, eliminate, rationalize Program Performance Assessment and Budgeting Top to bottom operational analysis; business process analysis; performance based budgeting; “costing out” of programs; Improved Services and Productivity Improve services with new and rationalized technologies Acquisition Reform

 by Banner Software What does Government Do and what does it Cost? Foundation Knowledge for Rational Change What can California Afford? Are there redundancies? How can services be improved? Which are to be kept? Which are to be eliminated? Knowledge neXus Encyclopedia Spec’s Budgets Analyses

 by Banner Software Steps in the Transformation Analysis Step 1 - Reorganize Government Agencies and their Budgets –Produce Traditional Budgets Step 2 - Identify Products, Services and Outcomes produced and delivered by Government Step 3 - Break Down Programs into Processes providing Products, Services, and Outcomes Step 4 - Figure out what Assets are Required to carry out Processes –Positions (PYs, Human Capital) –Facilities (Parks and Recreation …) –Equipment (DOT vehicles …) –Technology (DMV …) –In other words develop “Full Costing” data Step 5 - Define Department, Program, Element, and Service Performance Metrics –Use Mercer style decomposition of Measures –Produce Performance Budgets Step 6 - Specify Agency Changes to drive Implementation

 by Banner Software Executive Branch Reorganization Step 1 – Consolidation Scenario

 by Banner Software Copy and Paste Re-Organization Delete Agencies and Create others Move Agencies, Programs, and Elements Consolidate Agencies

 by Banner Software Program Performance Assessment and Budgeting Budget Reports Before and After Consolidation “before” “after” $732,000 Savings “before”“after” “before” $1,374,000 Savings $376,000 Additional $732,000 $1,374,000 $376,000 $1,730,000 Total Savings Due to Consolidation B A C

 by Banner Software Linking PYs into the Budget Select PYs in the Organization Copy to Budget Location PY Budget Calculations as needed … Budget Organization and PYs

 by Banner Software Fiscal Impact of Re-Organization After copy and paste Re-Organization, Recalculation of an Agency results in: –an Excel Spreadsheet, and –updates to the online subtotals and totals

 by Banner Software Building the Budget Document Optional Enhancements –Load Descriptive Material and Authorities (and others) if desired –Extend the Governor’s Budget script to: Copy Budget Summary and Details for all Agencies into a Single Word Document Include descriptive materials and other information as desired. Complete Re-Organization Analyses –Use the neXus to Produce Budget Summary and Details –Review the fiscal impact of changes periodically during analysis Run the Governor’s Budget Report –Produces a document with, at least, the “guts” of the Governor’s Budget –Produces a section for each agency Ship it to the Governor and Finance

 by Banner Software Step 2 – Identify Products and Services Produced and Delivered by Government Key to understanding program performance The public face of Government Produced by Activities and Processes

 by Banner Software Step 3 – Defining Program Activities Management Accounting Approach to High Level Process Modeling Detailed sequences analyzed usually during implementation Bridging the Gap between Resources employed and Services provided

 by Banner Software Step 4 – Identifying Resources and Assets Identify: Human Capital Information Technology Facilities Equipment Required to perform Processes

 by Banner Software Step 5 – Products, Services, Outcomes & Metrics and Performance Budgets Services Objectives Metrics Performance Budgets

 by Banner Software Step 6 - Produce Specifications for Change Operational Blueprint Comprehensive Architecture Document See Product Presentation

 by Banner Software Improved Services and Productivity Driving Information Systems Reengineering Aligns and connects “Business Analysis” to Information Technology Rationalization Starting point for IT Development Architectural Framework (after Zachman) Business Technology

 by Banner Software The neXus Encyclopedia Organizational Objectives Organization and Positions (PYs) Regulatory Requirements Assets (People, IT, Facilities and Equipment) Processes and Activities Authorities Hierarchic Performance Measures

 by Banner Software Other neXus Capabilities Model Processes –To the depth required to answer questions –Define and associate required assets (IT, People, etc.) Define Metrics –Hierarchic breakdown of Department, Program, Element, and Service Measures Develop Performance Budgets –Perform Performance Budget calculations –Produce Performance Budget documents Specify Agency Changes –How does CPR convey the intended changes? –The Budget does not tell an Agency what Products and Services to deliver and which to eliminate. –Taking away a Program’s Budget does not tell the agency how to re-organize What Positions are eliminated? What Facilities, IT, and Equipment can be eliminated? What is the new Organization? Develop Reports –Rapidly Produce complex new analytical Reports –For instance, Graph the Whole Budget –Assemble a Budget Book with all Organizations

 by Banner Software Other neXus Capabilities (cont’d) Consistency – Capture and Store Knowledge in Predictable Forms and Locations Process – Enable standard processes for basic knowledge capture Complexity – Manage Complexity and Quantity of Knowledge Required for Transformation Process Improvement – Analyzing and evaluating proposed changes Decision Support – Support Change Decision Making with “what if” analyses Translate Strategy into Implementation

 by Banner Software Conclusion and Recommendations The neXus is a Re-Organization Tool –It is not a full featured budgeting tool for a Finance Department –But, the neXus does the calculations and produces the reports necessary to: evaluate alternative Government Organizations construct a budget for a new State Government. –The neXus carries on where Budgeting software leaves off. Use the neXus to Translate Policy into Implementation –Bridge the Gap between “policy” and “on the ground” operational change. –Manage Knowledge of Re-organization –Analyze Fiscal and Operational changes –Re-structure the budget so that it funds Performance not Agency Functions –Specify Changes for each Agency Leverage Banner Experience and Expertise –Acquiring large quantities of operational knowledge –Integrate methods and tools into a workable process for Re-Organization and Re-Engineering