Embedding VFM

If VFM is now really about business

effectiveness, what are the kind of behaviours, processes & practices

you need to embed it in your organisation?

Achieving VFM: a model

Let’s start with a model* of how you might achieve VFM….

*HouseMark work in progress

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Effectiveness

Eco

nom

y

Achieving VFM

and busines

s objectiv

es

Business strategy

& use of resourcesEvalu

ate

succ

ess

&

revie

w bus

ines

s

stra

tegy

Efficiency

strategic analysis & choices

implementation

stra

tegi

c ev

alua

tion

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Purpose – basis for an organisational definition of VFM

The board should define VFM based on: • clear understanding of what they are in business

for – purpose & objectives - commercial head, social heart

• reconciliation of the value perspective of different stakeholders, including customers

• reconciliation of competing priorities across activities

• context such as PEST, client group, geography

The provider’s VFM definition is likely to amount to the achievement of its objectives in the most cost effective way possible

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Right activities

Engage in the right things - business activities - to achieve objectives.

The board’s strategic direction drives:

• the right mix of activities or products, eg social rents, affordable, supported, care, regeneration, tenant services

• the right allocation of resources between these activities - reconciled across development, stock improvement, front-line services, etc

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Right assets

Invest in inputs – housing assets & delivery model - to achieve objectives. This about economy:

• invest in the right physical assets of the right standard in the right places for the right cost

• coherent asset management - understand return on assets and the financial, social, environmental benefit of any investment

• invest in the right delivery model for the right cost

• about service delivery and back office functions • about investment in people, offices and equipment….• … and the procurement of goods/ services from

others ….• …including consideration of alternative delivery

models…• ..but you might have services to sell too….

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Right delivery

The right delivery practices to achieve objectives - adopting efficient and effective operational practices - doing things right:

• efficient operations:• smart business processes• people (workforce management) – right

skills, staffing levels, HR practices, sickness management, etc

• effective business practices:• performance management• risk management• financial management & cost control• income management• ability to join things up internally & externally (teamwork & partnerships)

1.Purpose

2.Right activities

3.Right assets

4.Right delivery

5.Right outcome

Right outcome

• if previous steps undertaken correctly the desired outcomes should be achieved… not by magic, by management

• evaluate effectiveness - have the financial, social, environmental and service quality returns been achieved? … including efficiencies/surpluses

…. the model assumes a wider

‘take’ on VFM than previously. What are

the behaviours, processes & practices that together embed

‘total’ VFM? To help marshal your thinking, a cultural

web….