Management Approaches to Resource Allocation
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1. Executive Summary
In 2007, under the Policy Framework for the Management of Assets and Acquired Services, the Treasury Board approved new policies on Investment Planning and on the Management of Projects as part of an effort to streamline long-term investment planning for both assets and acquired services. These policies are meant to improve the visibility of departmental decision-making and to enable Ministers to see departmental context beyond individual project submissions.
Having studied implementation challenges, lessons learned, and federal government experience in adopting the new policies, the Secretariat then sought to compare and contrast management approaches to resource allocation over a cross-section of public and private sector organizations to assess if and how corporate or departmental practices were impacted by an integrated investment planning and resource allocation approach.
TBS contracted the services of Tiree Facility Solutions to document the range of corporate practices currently in place over a sampling of organizations to identify which of those organizations have integrated resource allocation decision-making at an enterprise level, and to see which practices have been impacted by the implementation of an integrated investment planning approach. Organizations were selected based on sector, asset mix, and business delivery function. Academic experts in the fields of publicly-owned real estate and health care economics were also approached for input.
The study revealed commonalities between the selected organizations that recurred consistently throughout the survey:
- Almost every organization interviewed has adopted a formal capital investment planning process that uses priority setting.
- Most organizations that have adopted planning processes have done so recently—typically in the past 5 years.
- Most new planning processes have been more horizontally integrated and are significantly more transparent throughout their organizations.
- Almost all organizations have faced change management issues in terms of adopting new processes internally.
- Almost all organizations have experienced process, structural or behavioral changes.
The overall response with respect to formal investment planning was a positive one. Respondents claimed that decision-makers’ visibility of investment decisions improved in breadth—given that integrated investment plans convey departmental or corporate context—and in depth, given that a multi-year investment plan provides a capacity for adapting to spending spikes and valleys.
The federal government’s approach appears to be in step with the other organizations interviewed in that they are neither leading nor lagging the implementation of a formal resource allocation process.
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