FIS Benefits Report and Strategy Paper using Benefits Realization
Archived information is provided for reference, research or recordkeeping purposes. It is not subject à to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Report to Treasury Board Secretariat
Financial Information Strategy
FIS BENEFITS REPORT
and Strategy Paper
using Benefits Realization
July 4, 2000
Table of Contents
2.0 THE FIS BENEFITS RESULTS CHAIN - MANAGER'S VIEW
3.0 THE BENEFITS REGISTER
4.0 PROJECT ISSUES / LESSONS LEARNED
5.0 STRATEGY AND NEXT STEPS
1.1 FIS PROJECT AND ASSIGNMENT OVERVIEW
FIS is a government-wide initiative to implement accrual accounting and other strategic changes across the Canadian federal government, as part of the Comptrollership Modernization initiative. All departments and agencies have until April 1, 2001 to become FIS compliant.
The vision for FIS is to enhance the government's decision-making and improve organizational performance through the strategic use of financial information. The mission is to better support program review, business planning, budgeting, expenditure management and other management and decision-making processes, as well as facilitate accountability for program and financial results by enabling improved estimates and performance reporting to Parliament.
Treasury Board Secretariat (TBS) requested that DMR Consulting conduct this Benefits Realization assignment in order to help guide departments and TBS in using a benefits-focused approach to achieving the vision. The objective of the assignment was to conduct a broad exploration of FIS using the Benefits Realization method to determine the business outcomes and benefits of investing in FIS. It was also intended to help build consensus among key stakeholders in departments and TBS on the relative importance of these benefits, and the extent to which they can be achieved and measured. This ultimately increases the probability of true success of the overall FIS initiative in the eyes of departments and TBS senior management.
1.2 THE BENEFITS REALIZATION PROCESS
DMR Consulting's Benefits Realization is a systematic approach that helps ensure the successful realization of the benefits expected from important investment decisions. It is designed to deal with identifying and evaluating the benefits of a program / initiative up front as well as the dynamics of achieving, tracking and harvesting those benefits. In short, it helps optimize the value of investments by clearly linking them to the expected outcomes.
It helps to determine what needs to be done by those involved to achieve the expected benefits. It is this aspect of DMR Consulting's Benefits Realization that was put to the greatest use within the scope of this FIS assignment, through the facilitation of a number of workshops with a cross-section of government departments and central agencies. A particular strength of the approach was to stay organizationally independent and work across all types of organizations and responsibility structures.
The Results Chain is a highly effective benefits realization technique. Not only has it been designed specifically to help realize benefits, but it is also an excellent visual technique for simplifying the presentation of the complex and inter-related outcomes, initiatives and risks associated with a program or project. This feature makes it particularly useful in achieving consensus and cooperation, by easily presenting goals, objectives and benefits that cross organizational lines.
Another key feature of the Results Chain is its ability to foster ownership of, and responsibility for achieving the benefits associated with investments. By using the Results Chain to continually track the initiatives, assumptions and risks, early corrective action can be taken when deviations from the plan are detected. Through on-going use of the Results Chain, ownership of the monitoring task is clarified and thus ownership reinforced. It is expected that the Results Chain that was developed during this assignment will continue to serve as a useful communications vehicle throughout the FIS Project life.
The Results Chain model is used to highlight and manage the following:
Initiatives/investments required in order to achieve the benefits. These included actions that have already been started, as well as other initiatives that have been identified from the Results Chain;
Benefits expected from the FIS project. These include the original benefits anticipated and any emerging benefits identified later on;
Assumptions / risks associated with specific initiatives and outcomes; and
Accountability and authority for initiatives, outcomes and assumptions.
1.3 THE FIS BENEFITS REALIZATION ASSIGNMENT
In April and May 2000, DMR Consulting researched the current FIS situation and conducted interviews with selected stakeholders within the FIS Project.
Following the research and interviews, a first cut Results Chain was developed to reflect the findings at that time. A first workshop was held on May 1st, to further develop the Results Chain and build a greater understanding and consensus around the benefits to be achieved through FIS. Following the workshop, DMR Consulting updated the Results Chain to capture the new information and changes.
Subsequent workshops on May 12 and 16 fleshed out the initial Results Chain, which was rescoped to be the Manager's View. A final workshop was added on June 2 in order to take a first cut at the Results Chain – DM / ADM View of FIS Benefits.
The Benefits Register was also discussed throughout the workshop process. It focused on meaningful measurement of expected results and benefits, which ultimately allows for ongoing benefits management by the FIS Project.
The workshops also gave rise to a number of issues and considerations that must be addressed within the overall FIS Project. These have been captured in Section 4.0 of this report.
Finally, presentations were made to the FIS Forum on at least three occasions to inform them of the progress of the assignment, and to show them the Results Chain and Benefits Register deliverables. The audiences were extremely interested in the benefits approach, and were able to take away sample deliverables and the key messages back to their departments.
The project team is very grateful to the excellent participation by all members of the workshops. Their points-of-view and enthusiasm led to very interesting and meaningful discussions, which ultimately improves the effectiveness of the FIS project. The following table is the list of workshop participants:
|Departmental Manager –
|Dr. John Carey|
|Departmental Finance Manager – DFAIT||Adam Blackwell|
|Departmental FIS Project
Team Leader – RCMP
|Departmental FIS Project
Team Leader Correctional Services
|Departmental Corporate Program Planning Manager – NRCAN||Peter McClure|
|Departmental Real Property Manager – Fisheries and Oceans||Glen Condran|
|Departmental Asset Manager – Canadian Coast Guard||Sylvain Lachance|
|TBS Comptrollership Modernization Office||Judy Watling|
|TBS FISPO||Jim Libbey|
|TBS Program Branch - Foreign and Defence Programs||Doug Shaw|
|TBS Results Measurement & Accountability||Peter Green|
|TBS Chief Information Office||Valerie Kowalchuk|
|PWGSC - Government Operations Sector||Allen Rule|
Real Property Services
|TBS Financial Management Policy and Analysis Sector||Rod Monette|
2.0 THE FIS BENEFITS RESULTS CHAIN – MANAGER'S VIEW
DMR developed the initial Results Chain based on the initial discussions and available FIS documentation and descriptions. It was added to and refined during the facilitated workshops. The Benefits Register was then derived from the key outcomes of the Results Chain. A brief description of the standard Results Chain components and the FIS Benefits – Manager's View Results Chain are provided in this section.
2.1 RESULTS CHAIN COMPONENTS
A Results Chain represents the reasoning used to associate outcomes with one or many initiatives and what is required for their realization. Four components are used in creating a Results Chain as follows:
Table 2: Results Chain Components
2.2 FIS BENEFITS – MANAGER'S VIEW RESULTS CHAIN
The FIS Benefits – Manager's View Results Chain is found below:
This Results Chain shows how FIS helps to support a Manager's overall objectives in their department. The overall framework for the Results Chain shows how FIS provides Managers and departments with certain capabilities, which enables more informed decisions and better reporting. This takes into account the new Treasury Board publication Results for Canadians – a Management Framework for the Government of Canada, which includes: Managing for Results; keeping a Citizen Focus; promoting Public Service Values; and maintaining Responsible Spending. The following are brief descriptions of the Results Chain elements as they were described throughout the workshops.
|Develop Accrual Accounting Policies||Develop new policies to support accrual accounting and GAAP.|
|Upgrade the Chart of Accounts||Specify a standard Chart of Accounts that accommodates an accrual accounting environment and GAAP.|
|Implement Accrual Accounting in departments||Put in place all the policies, procedures and systems required to actually start using the accrual accounting approach in all departments.|
|Implement Costing Systems||Put in place any costing systems that will permit more accurate costing of assets, people or any other resources that are consumed by departments in their operations.|
|Identify Assets & Liabilities and their historical costs||List all assets above the threshold value, and put them into an asset inventory along with their historic cost. Include any liabilities that either pertain to those assets or are independent. For example, value the asset of a base (land and building), but also include the cost of the environmental cleanup as a liability, in case the property was to be sold.|
|Modernize Departmental Management Systems||This can refer to new implementations / releases of financial systems software (such as the shared systems SAP, Oracle Financials or Free Balance), or HR systems (such as PeopleSoft) or other applications that help run the departmental programs.|
|Modernize Receiver General Systems||Develop and/or upgrade the interface from Departmental Systems to the RG's systems. Modify the interface from the RG to the Department of Finance systems for Financial Reporting. Upgrade the appropriate RG systems (such as Pay) to support current data and reporting needs. This includes eliminating the detailed transactions that used to be duplicated between departments and the RG.|
|Train the Functional Communities||Provide the proper level of training for the various functional communities such as Finance, Real Property or Material Management, in order for them to become more competent in using both financial and non-financial information.|
|Deliver Integrated Change Strategies and Communications||In addition to training, Managers need to be provided with an understanding of the goals and outcomes of the FIS change program. This initiative seeks to inform these managers that the change is coming, what's in it for them, and keeps a regular communication channel open.|
|Launch Learning Strategies for Managers||Develop the high-level learning approaches targeted at managers.|
|Implement Learning Strategies for Managers||Implement the specific learning approaches for managers so they develop a deep understanding of FIS and Modern Comptrollership and what it means for them and their department.|
|Examine ways to benefit from FIS||Examine if there are additional benefits to be gleaned from FIS, once managers and staff have been trained on the basis use and applicability of FIS.|
|Establish baseline for non-financial information||Determine what current non-financial information (such as service levels, or program mandate) needs to be considered for the comparability analysis.|
|Identify Program Performance criteria||Determine what relevant program performance criteria needs to be considered for the comparability analysis and as input for decision making.|
|Performance Agreement Criteria Established||Determine the criteria by which managers will be evaluated, in terms of accountability for program performance.|
|Define Managers' roles & responsibilities, timelines||This initiative was only briefly discussed during the workshops, and was not linked in to the Results Chain.
The idea was to establish what roles and responsibilities Managers would have in order to implement FIS in their departments, and over what expected time period.
|Provide practical, tangible toolkit||This initiative was only briefly discussed during the workshops, and was not linked in to the Results Chain.
The idea was to provide managers with a set of tools and techniques that would help them implement all the various aspects of FIS in their departments.
|Show Best Practices / examples of success||This initiative was only briefly discussed during the workshops, and was not linked in to the Results Chain.
The idea was to identify and share the Best Practices approaches to implementing FIS in the public sector, and to use an "early win" to demonstrate a success story for others to hear.
Bolded Outcomes in this table are those key outcomes that are included in the Benefits Register.
|Basis to implement accrual accounting||Created the capability and favourable conditions under which it would be possible to implement accrual accounting policies, systems, tools and techniques.|
|Assets & Liabilities are valued||Created the inventory of all assets and liabilities of the department, having identified them and followed the policies to evaluate them. They then show up on the balance sheet.|
|Basis for asset management||Created the capability to manage assets in a meaningful way, through establishing their value, depreciating them over time, and preparing to manage them actively over their useful life.|
|Integrated reporting capability||Created the capability for integrated reports using new information systems (financial and non-financial), that pull together data from various sources in a meaningful way.|
|Timely reports of relevant information||Given the above capability for integrated reporting, increase the timeliness (relevant speed) of the reporting, such that the management of assets is facilitated.|
|Efficient Controlled Transaction Processing||Increased level of efficiency of the majority of transactions through the department's information systems, thereby decreasing turnaround time and increasing accuracy. It should also eliminate PAYEs (Payables Adjustments at Year-End).|
|Efficient Receiver General Interfaces||Increased level of efficiency of the transactions and summaries that go from the department's information systems to the Receiver General's systems. This can also be accomplished by eliminating unneeded transactions.|
|Timely Government-wide reports (Statistics,RG,Finance)||Increased timeliness in feeding the financial and performance reporting to central agencies, to allow them to prepare the Consolidated Monthly Statement of Financial Operations, as well as the Annual Financial Statements for Public Accounts.|
|Competence to use the new information||Increased level of ability to use the new financial and management information, once training has been done in the functional communities.|
|Managers show leadership in FIS||Created a level of commitment and leadership towards the success of FIS and Modern Comptrollership on the part of managers.|
|Staff are engaged in FIS||As a result of Managers showing leadership, the staff will increase their interest and commitment to the use and success of FIS.|
|Increased competence in using management information||Increased skill and comfort level in using and interpreting the new and existing management information that is available. Likely gained through various training methods as well as samples from other organizations.|
|Increased understanding of TCO||Increased understanding of the Total Cost of Ownership of an asset over its useful life. This includes not just the acquisition price, but any maintenance, repairs, upgrading, retrofitting and eventually disposal (salvage) value of the asset. This gives the complete picture.|
|Facilitate maintain, retrofit, sell analysis||Increased quality of analysis as to asset options, whether to keep investing in the asset or to dispose of it. This improvement will be visible in Treasury Board submissions as well as internal analyses and justifications.|
|Increased understanding & evaluation of all costs||Increased level of comprehensiveness in examining and evaluating the various cost options for capital and non-capital assets, that will consider the full-up costs of deploying that asset, not just the direct cost. This will lead to and increased ability to compare costs against other alternatives.|
|Increased comparability of costs||Given the full-up costs established in the above outcome, the manager will have an increased ability to compare similar cost types to other comparators, such as elsewhere in the department, in other departments, or to a similar operation in the private sector. For example, the annual cost of running a standard configuration of a vehicle can be compared.|
|Increased visibility of Assets and Liabilities||Now that a trial balance must be prepared on a monthly basis and gets rolled up and consolidated, the number and value of both assets and liabilities is greatly increased. This will lead to public accounting, queries from MPs and the public and a need to be aware of and monitor asset and liability levels.|
|Better case to maintain / replace assets||An increased quality of business case to either reinvest or dispose of the asset will be the result of the increased visibility of the asset, as well as the overall asset information that will become available.|
|Optimized asset use||The increased quality of business case and understanding of the life of an asset in support of program initiatives leads to an increase in the optimization of the use of that asset. This is fundamental to the Better Stewardship of Assets that is a key benefit of FIS.|
|Better information for planning and decision making||Created a integrated framework of financial and non-financial information that is timely, relevant, accurate and complete, and assists the manager in more informed decision making.|
|Created capability to compare program results||Integrating financial and non-financial information combined with the overall program performance criteria leads to an increased capability to compare program results.|
|Clarified accountability for performance achieved||Increased quality of information to link Manager's performance agreement to program outcomes / results. This will show up in the annual performance evaluation.|
|Key Results achieved / improved||Increased ability to achieve or improve upon the department's key program results / mandate. These program outcomes are specified in the DPR and reported upon in the RPP.|
|Better Performance Assessment||For the Manager, if the key program results are achieved or improved, and accountabilities have been clarified, this will reflect well on the manager's annual performance assessment.|
|Increased return on Pay-at-risk||Following the above outcome, a better performance assessment will lead directly to successfully achieving the criteria for pay-at-risk.|
|Better negotiation with third parties||With better information for planning and decision making, the opportunity for better negotiations with third parties exists. These could be suppliers, partners or joint deliverers of programs / services to clients, and the negotiation could be on price, service level, type of service, etc.|
|More informed decision making||The key result of FIS, this combines better information for planning and decision making with Manager's increased competence in using the management information. This should lead to better justified and defendable decisions, and in some cases may increase the quality of the decisions being taken. Specifically, it will support the government's new management philosophy of disclosing all resources managed and consumed in achieving program objectives.|
|Better relations with clients||The modernization of the various systems will lead to better relations with clients, through improved reports and statements, as well as more timely and accurate information. This will reduce disputes and smooth the relationship with clients in any capacity.|
|Increased Client Satisfaction||This increase in efficiency of reporting, timeliness and accuracy, leading to better relations with clients will ultimately result in increased client satisfaction. The client is any end-user of a program.|
|Better management of relations with Partners||Similar to better relations with clients, the integrated reporting capability will provide more information to deal with Partners. These can be co-providers of services, other government agencies, outsourcing suppliers, etc.|
|Other opportunities with Partners||Better management of relations with Partners will lead to other potential opportunities, such as co-sourcing, single window access to services, etc.|
|Decreased costs of goods and services||Better management of relations with Partners will also likely result in lower costs to provide the program results required.|
|Eliminated multiple sets of books||Modernizing departmental and RG systems is intended to require only one unique set of financial books and statements. This will eliminate the multiple sets of books that have been kept by departments, and in turn the reconciliation between systems|
|Opportunity to reengineer business processes||Modernizing departmental and RG systems will provide departments with the opportunity to reexamine and reengineer business processes around the systems.|
|Decreased non-value-added activities||Reexamining business processes as described in the above outcome will allow departments to decrease or eliminate non-value-added activities in the overall business process.|
|Better management of resources||The various management decisions and outcomes will permit managers to better deploy and manage all resources, including fixed assets and people.|
|Increased service / program delivery efficiency||Ultimately, More Informed Decision-Making will result in lower costs of resources as input to program delivery, or "Doing the same with less". It can also mean providing new or increased services with no increase in costs, or "Doing more with the same".|
|Increased service / program operational effectiveness||Ultimately, More Informed Decision-Making will result in increased operational effectiveness for the department, as measured by the program's DPR and RPP. This will lead to the four key objectives stated in Results for Canadians.|
During the course of the workshops, none of the contributions were explicitly stated or captured during the workshops. To ensure that the FIS Project receives the full value of the Results Chain technique, a follow-on exercise should complete and describe all contributions. This exercise helps to clarify how the outcomes link to achieving the success of the initiative.
The following eight assumptions were explicitly documented during the course of the workshops. They need to be recognized and actioned to mitigate the effect of the risk to the desired outcome.
|Parliament will agree to Accrual appropriations||As FIS moves towards accrual accounting of costs, the Parliamentary appropriations process must change to reflect the new accrual approach, in order to match expenses with inflows of money. Multi-year funding of capital assets (e.g. buildings, ships, etc.) must be provided for, in order to prevent "rust-out" of assets.||TBS is actively pursuing this issue with the Public Accounts committee.|
|Assets & Liabilities can be valued||There will be difficulties encountered in first finding all assets and liabilities, and then attaching a value to them. Assets such as vehicles are straightforward, but establishing the value of historic buildings or artistic materials are difficult to determine.||TBS FISPO has a working group dedicated to asset valuation.|
|Policy on low value assets (in systems)||A policy must be established for components that are themselves below the threshold value of materiality, but are combined in systems or networks to function as one unit. Do these get valued, and how, is the issue.||TBS FISPO has a working group dedicated to asset valuation.|
|Relevant information provided to managers||Establishing what information a particular manager requires is a key component of providing timely and relevant information. Requirements will likely differ by manager, and standard reports from shared systems may not be sufficient.||Departmental functional groups must work with managers to determine requirements and modify reports.|
|Learning must match needs of managers||The change strategies and learning techniques must be tailored to meet the unique needs of managers in order to be most effective and obtain buy-in and leadership from the managers.||TBS FISPO with FIS Change Management and Learning Advisory Working Groups.
Departmental Change Management teams.
|Includes all identified costs and revenues||The Total Cost of Ownership of assets must include all costs (including salary and benefits or any revenues, as appropriate.) This may include costing allocations from other areas, such as Real Property.||Departmental Managers|
|Information is factual, relevant and integrated||The information provided to managers must be reliable, appropriate, accurate, and presented in a manner that is meaningful to the manager.||Departmental functional groups|
|Other factors are considered (legal, environmental, political)||Managers must consider other factors in either making a decision or recommending a course of action to senior management. In some cases, the Financial and Programs Performance Measurements are not sufficient to reflect the total view of the decision.||Departmental managers|
3.0 THE BENEFITS REGISTER
3.1 BENEFITS REGISTER OVERVIEW
The purpose of the Benefits Register is to capture measurable outcomes that will serve as major indicators of the FIS project's progress. Such measurement allows for progress reports based on benefits achieved as well as mid-course corrections at key points. The Benefits Register is a key technique for establishing/identifying tangible measurement criteria, establishing accountability and to indicate expected benefits flow over time.
The Benefits Register is found on the next page. The following are the key outcomes that have been selected for measurement as part of the Benefits Register.
1. Timely Government-wide reports (to Statistics, Receiver General, Finance)
2. Increased competence in using Management Information
3. Facilitate maintain, retrofit, sell analysis
4. Better information for planning and decision making
5. More Informed Decision Making
6. Increased Client Satisfaction
7. Key Results achieved / improved
8. Clarified Accountability for performance achieved
9. Increased service / program delivery efficiency
10. Increased service / program delivery effectiveness.
There are some outstanding aspects to the Benefits Register that should be completed going forward. Wherever a 'TBD' appears in the Benefits Register, the appropriate values should be added.
3.2 FIS BENEFITS - MANAGER'S VIEW BENEFITS REGISTER
4.0 PROJECT ISSUES / LESSONS LEARNED
The following issues surfaced during the workshops. They were either out of the current scope of the Benefits Realization project, or they were documented for follow-up during a future phase of the FIS Project.
It became clear that many managers and senior executives view FIS as simply an accounting change that they believe the Finance people can deal with themselves. This misconception needs to be dealt with as part of the Communications and Change Management plans.
Similarly, many departments perceive the FIS initiative as completing on April 1, 2001, as basic FIS compliancy is achieved. The real timeframe for realizing FIS benefits is multi-year, and this must be planned for and communicated, in order to manage expectations and sustain commitment.
The need to have Accrual Appropriations in order to match Accrual Accounting for asset depreciation has become more pressing. Many of the intended benefits of FIS will not be realized without this happening.
The need to get the FIS Benefits message out to DMs / ADMs became more evident during this project. This will help them understand the benefits to them and their department. This will in turn help gain their commitment to support FIS and ensure success of the overall program.
As a result of the above point, it became clear that a second Results Chain was needed, targeted toward the DM / ADM level. A draft was created in the fourth workshop, but needs to be validated with members of the target community before being published.
There is a lack of consistency in terminology, both financial and non-financial, that will need to be addressed in order to ensure smooth communication and common understanding, as well as achievement of the desired target benefits.
Some of the specific measures in the Benefits Register will require the cooperation of other line departments and central agencies (e.g. CCMD, Public Service Commission). These groups must be engaged as soon as possible to ensure that they are on board to achieving the benefits.
5.0 STRATEGY AND NEXT STEPS
The strategy of following a benefits-focused approach to implementing FIS was demonstrated to have a great deal of value during the course of this assignment. The participants in the workshops learned a great deal about FIS and its objectives, as well as "What's in it for me" through the workshops. At the same time, the FIS Project Team learned a great deal in terms of how managers and others perceive the FIS Project, and some of the challenges that still lie ahead. Many assumptions surfaced in the workshops, as well as the key point of segmenting the target audience in order to demonstrate the benefits to be obtained and the communications required. This was also demonstrated in the presentations to the FIS Forum, where the interest level was high to see the benefits of FIS.
The recommended strategy is therefore to continue to take a benefits-focused approach to the FIS Project, in order to achieve the desired outcomes and results of FIS and Modern Comptrollership. This is complementary to the overall Project Management of the FIS, which manages the inputs and the costs, as well as in parallel with the other program initiatives in the 17 FIS Working Groups and the FIS Forum.
The following specific steps are recommended that the FIS Project undertake to fulfil this strategy:
1. The Results Chain with the DM / ADM view should be validated with representatives at that level, then modified, finalized and incorporated into the FIS Project.
2. The Benefits Register should be completed. There are several 'TBDs' to be determined as well as clarification of the accountabilities to achieve the stated benefits.
3. The FIS Project Office should monitor the critical assumptions highlighted in the Results Chain from a risk mitigation standpoint. It is important to develop both action plans and contingency plans for each of these assumptions / risks.
4. The FIS Project Office should put in place a process to monitor the harvesting of benefits to ensure that the promised benefits are being achieved and if not, the corrective action to be taken.
5. Several issues documented in this report need to be integrated into the various working groups (such as Engaging Managers, Capital Assets and Communications), in order to ensure a coordinated and complete effort and final result.
6. Continue to work with the various Working Groups, provide further presentations and updates to the FIS Forum and assist in the simplifying and packaging of the FIS Benefits messages to the various target audiences.
- Date modified: