Programme:

Corporate Services Transformation

Aim:

Transformation of procurement, finance and performance management.

Programme cycle:

10 years

Financial benefits:

£860m (£518m cashable) for an investment of £144.5m

Corporate Services Transformation

ch_ept1

Corporate Services Transformation at Birmingham City Council aimed to save money and invest in areas that would enable the Council to provide better services to customers.

The work of Birmingham City Council (BCC), affects the daily lives and pockets of over a million Birmingham citizens. These people have a right to expect the most cost-effective use of council resources, targeted at their highest priorities. We provide over 290 services across 1,000 locations in the city with an annual budget of £3bn.

Due to the size and complexity of BCC's services, it became increasingly difficult to manage financial processes and provide the necessary information to ensure the delivery of high standard, efficient and value for money public services.

Corporate Services   Transformation

BCC's Corporate Services Transformation (CST) is a ten year programme that began in 2006, to radically improve services to the city's citizens whilst reducing their tax burden.

The programme has changed the way budgets, projects, plans and corporate performance are managed and how goods and services are sourced. CST is on track to deliver £860m of benefits (£518m cashable and £342m non cashable) over ten years, from an investment of £144.5m.

A key part of the CST programme has been the development of Voyager, a SAP system that integrated the Council's financial and operational performance management processes into a single tool, to deliver a step change in performance and more effective decision making. The Voyager ICT system went live in October 2007 and there are now over 6,000 live users.

Outcomes for the Corporate Services Transformation programme include

Big savings mean less cost to the taxpayer Birmingham citizens and businesses have gained a direct benefit from the CST implementation. The programme has exceeded expectations for financial savings.
Better, more targeted council services We can now access more accurate financial and performance information. This allows us to allocate resources more efficiently, make earlier, better decisions on where and how to spend our money and ensure the balancing of our budgets.
A slicker, more streamlined operation BCC is now far more operationally efficient, again helping reduce the time and cost of providing our services. We have also been able to cut the number of suppliers from over 9,000 to around 4,500, helping us manage procurement more effectively, improve payment times and reduce cost.
Employee development opportunities More than 100 staff have played a role in the programme, developing a core of experienced change mangers to lead future transformation. We also up-skilled our procurement professionals to manage the new process and our project managers are benefiting from a new standard of training and accreditations, including CHAMPS2.
Suppliers get paid more quickly As invoice processing is now largely automated, rather than paper-based, we have improved our payment terms. More invoices are paid on time and in average time from receipt of invoice to payment has decreased by five days.
Improved monitoring of corporate social responsibility Improved visibility of the Procure to Pay process and related supplier information means more effective monitoring of our suppliers' records on equal opportunities and sustainability, as well as our commitment to the SME sector.

Using CHAMPS2 for Corporate Services Transformation

The public sector is under constant scrutiny to ensure any investment, particularly on this scale, delivers demonstrable returns to our taxpayers. For these reasons we adopted an approach that blended part of the CHAMPS 2 project methodology together with HCL AXON's experience from previous SAP implementations. The CHAMPS2 methodology ensured that the benefits remained a key focus throughout delivery and provided many additional advantages, including:

Clear Vision and Future Operating Model

Manually intensive processes and duplication of effort across the organisation being replaced with more automated and centralised processes, with more self service by managers.

Holistic change – Process, organisation and technology

Although the SAP ‘Voyager’ system was essential to facilitate the programme, using CHAMPS2 ensured that the processes were redesigned and the organisation structure changed to support the new processes in tandem with the technological aspects of transformation.

Benefits to Customers, employees and financial benefits

Although the corporate services transformation was focused mainly on financial gains, the CHAMPS2 approach to delivering benefits holistically across organisation, technology and processes ensured that the needs of both customers and employees were met.

Benefits for employees included access to more accurate and timely management information, more empowerment (for example social workers having purchasing cards for small expenses), better tracking of financial information and a culture which rewards good performance and penalises non-compliance with policy.

Customers benefit from reduced invoicing and payment periods, more accurate information and better management of the council’s budget – helping to ensure that there are no council tax surprises for citizens!

As at 2011, the programme had delivered £355 million in savings. It also gained greater visibility of how taxpayers' money is spent and how services is delivered, with a more streamlined and cost-efficient service for Birmingham citizens and businesses.

Design

CHAMPS2 ensured that the solution was designed in logical steps, the first one being Logical Design, which identified five key processes:

  • Procure to Pay (Procurement & Accounts Payable)
  • Service to Cash (Accounts Receivable)
  • Record to Report (General Ledger & Accounting Services)
  • Projects & Programmes
  • Business Management
This helped to structure the programme so that work on the detailed design and delivery could run in parallel with other streams of work.

Managing change impact

Because of its scale and complexity, the corporate services transformation was a significant challenge. It had a direct impact on 430 roles at the council and indirectly affected more than 5,000 people. Furthermore, the fast pace of the programme required tremendous change management effort and skill. CHAMPS2 enabled the team to develop a training strategy and large scale training programme with 11,000 sessions, based on detailed training needs analysis at the appropriate points in the transformation.

Benefits management - using Benefit Cards

The most significant challenge was to justify the scale of investment by demonstrating quantifiable and achievable benefits. Some accountability needed to be devolved away from the change implementers, to the organisational areas that would directly benefit from the transformation. This was addressed extremely effectively by adopting the CHAMPS2’s Benefit Cards approach.

The use of signed-off benefits card for each area has meant that every benefit is understood, agreed and its potential barriers addressed by those who have most to gain from the transformation. This approach also ensured we maintained buy-in from our sponsors and the organisation throughout a demanding period of change. As a result, the programme has surpassed its original objectives and planned outcomes.

 

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