Management Approaches to Resource Allocation
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7. Leading Practices
The following are highlights of some of the leading practices observed during the interviews.
7.1. Processes / Plan
Organization J described an approach to funding that involved proactive efforts to develop revenue by creating an arms-length organization to maximize real estate transaction revenue. Because this revenue is not allocated according to political or legislative requirements, it can be used to address demographic and program-related needs identified in Organization J’s priority-setting process.
Organization H uses a revenue-driven activity cost model for its entire budget. Every revenue dollar is allocated among the 17 faculties. Since 90% of the revenue comes from tuition and provincial operating grants, the allocation to each faculty is simply based on the revenue they generate through tuition minus a corporate services charge for IT, finance, facilities services, etc. This has resulted in reduced bureaucracy and a standard methodology that has translated into increased transparency and an improved decision making process.
In terms of priority setting, the PBMA framework used in the healthcare sector could be applied to other sectors. The “core of the PBMA approach is an advisory panel charged with making recommendations for resource re-allocation. The process can be supported by a range of ‘hard’ and soft evidence and requires that decision making criteria are defined and weighted in an explicit manner” (Mitton, 2004).
7.2. Roles & Responsibilities
Organization D described the inclusion of their Chief Risk Officer on their Resource Investment Management Committee thus elevating the consideration or risk in the investment plan. Organization C noted the importance of their Senior Policy Investment Committee that is active in reviewing process.
7.3. Information Systems & Performance Measurement
Organization D was the only one to describe a Benefit Realization assessment. As part of their project gating process, every investment project must document and eventually measure the benefits it will bring to their internal organization. Whether or not it is a Return on Investment (ROI), increased efficiency or addressing a risk– these benefits must be identified in their problem definition stage. As the project matures the project champions have to develop a benefit measurement plan that demonstrates any benefits achieved. Sometimes there is a delay in assessing those benefits. They noted that it is not uncommon for a project to finish in 2012 and return in 2014 with a Benefit Realization Report.
7.4. Risk Management Approach
The federal government’s Project Complexity and Risk Assessment (PCRA) tool assesses the complexity and risk of individual projects. It includes 64 assessment criteria organized into 7 categories (project characteristics, strategic management, procurement, human resources, business, project management integration and project requirements). There is on-line access to the tool through “Callipers” and it is supported by a guide and an excel workbook.
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