How to streamline an entire country?...GeRALL – Lessons Learned [2/2] •The importance of a win-win partnership - SAP - Microsoft - PNMsoft •The importance to focus on the relationship

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José Cordeiro Gomes

How to streamline an entire country?

AGENDA:

PROBLEM CONTEXT AND SOLUTION DRIVERS

GERALL PROGRAM PRESENTATION

GERFIP EXAMPLE – BPM COMPONENTS

GERALL PROGRAM CONCLUSIONS AND

FURTHER STEPS

PROBLEM CONTEXT

AND

SOLUTION DRIVERS

GeRAP Mission and Milestones

• Startup date: May, 2007

• Mission statement: To implement Financial and

Human Resources Management shared services

solutions for the central Public Administration (PA)

- 450 Public Entities / 550.000 workers

• Calendar:

- Phase I: 3 years (2010)

- Phase II: 5 years (2012)

Vision and Scope

MF = Ministry of Finances; PA = Public Administration

Challenges

• Streamline and standardize processes and

interfaces

• Integrate data and solutions

• Rationalize costs

• Deliver reliable management information

• Build a customer driven SLA based relationship

• Overcome negative perception of former

experiences in providing Public Administration

common services and solutions

Requirements

• Build an integrated solution able to deploy quality financial and human resources management services in both modes

- Shared Services

- Shared Platform

• The solution must be

- Business user focused / Agile (ability to quickly adjust to business

requirements) / Efficient (continuous process improvement;

capability of implementing monitoring features) / Open and

interoperable / Vendor independent, based on components /

Cost effective (low TCO) / Consistent with private cloud

computing principles

Solution

• GeRALL Program:

- Financial Resources Management

- Human Resources Management

- Other solutions:

• Intelligent Business Process Management

• Interfaces and Integrators

• Master Data Management

• Analysis Services (Decision Support System)

• Customer Relationship Management

PRESENTATION

GeRALL PROGRAM

GeRALL Global Picture

GeRALL Technologies

BPM Components

GeRFIP EXAMPLE

GeRFiP Solution – “Visible” Components

ERP – Enterprise Resource Planning

• Accounting Rules

• Budgetary accounting

• Cost accounting

• Logistics and Inventory management

• Payments

• Management of materials

BPM – Business Process Management

• Users orchestration

• Business processes automation

• Processes planning, management and

optimization

Collaborative Portal

• Training

• Knowledge

management

• Business processes

execution

Business Intelligence Centre

• Tables, reports and queries

• Graphics

• Indicators

Relationship

• CRM

• Public Entities

relationship

management

GeRFiP – BPM Implementation Paradigm

Supports the execution of processes integrating complementary activities

Administrative Flow

Internal

Procedures

Accounting

Legal Requirements

GeRFiP – BPM Implementation Challenges

• Main Functional Challenges

- Orchestration of multiple systems, people and applications (one

field, one input, several systems)

- Users’ involvement in all the phases of the process (tasks or

notifications)

- Propagation of data through the process (to avoid input duplication)

- Dematerialization, transparency and monitoring of ongoing

processes

- Standardization of procedures and rules

- Normalization of procedures and functions regardless the specific

requirements of public entities

- Targets all types of Public Entities (S,M,L)

GeRFiP – BPM Expense Acquisition Cycle: Example

COMM

Budget Expense

Authorization Process

ID

Billing

Purchase

Order

Acquisition

Proposal

Create

Expense

Process

ID

Acquisition

Approval

Register

Pre-

Commitment

Launch

Acquisition

Procedure

Register

Adjudication

Expense

Authorisation Register

Commitment

Administrative activity Mgmt. activity Financial activity

B

P

M

B

A

C

K

-

O

F

F

I

C

E

Documents Back-office transactions

Legend:

GeRFiP – BPM Expense Acquisition Cycle: Results

• Effectiveness

- Alignment and

consolidation between

logistical and financial

flows:

• Compulsory

- Reduction of chargeback

process due to BPM:

• 52%

- Data Quality provided to

subsequent processes:

• Invoicing, payment, …

• Efficiency

- Cancellation of an operation:

• Became automatic, consistent and

integrated

(Concerned Objects: Expense Process ID,

Purchase Order, Pre-Commitment;

Expense Authorization; Commitment)

- Mean time between an ‘Acquisition

Proposal’ and the effective ‘Launch

of an Acquisition Procedure’:

• Reduced from 1 to 2 days to 10 to 35

minutes (variation is due to the waiting

time concerning the ‘Acquisition Approval”)

GeRFiP – Warehouse Goods Requisition Process: Savings example [1/3]

• Principles:

- Accountability: Costs must be imputed to a cost centre

- Transparency: All requisitions remain visible for the Entity

• Estimated savings for the whole central Public Administration : > 5.500.000 €

• Next improvement: Build a Decision Support System

Annual Actual Values Number of Public Entities: 65

Entities without

BPM (15)

Entities with BPM (50)

Savings due to

BPM (50)

Rate of consumption reduction 30% 51% 21%

Value of the reduced amount Out of this

Scope 1.569.000 € 646.059 €


Achieved reductions in Human Resources:

Currently Savings

% €

47,06% 320.000 €

0

50

100

150

200

250

300

350

# FTE without theProcess

# FTE with theProcess

Warehouse Goods Requisition Process

34 18

Current actual values


Estimated reductions in Human Resources considering

the whole central Public Administration:

Currently Savings

% €

47,06% 320.000 €

Estimated Savings

% €

41,09% 2.260.000 €

Total estimated savings due to this process: > 7.760.000

0

50

100

150

200

250

300

350

# FTE without theProcess

# FTE with theProcess

Warehouse Goods Requisition Process

34 18

275

162

Estimated values forcentral PublicAdministration

Current actual values

GeRFiP – BPM Suppliers Management process outcomes: Current values

Benefits Before

Process

100%

Manual

Process

85%

Automated

Savings

Time spent on the

business process No metric 6 minutes 2,6 minutes 57%

% of rectifications

required No metric 40,55% 20,30% 50%

Cost of each process No metric 3,10 € 1,40 € 55%

Total annual costs

estimation for the

central PA (€)

No metric 205.700 € 93.500 € 112.200 €

GeRFiP – BPM Suppliers Management process outcomes: Estimated values

Benefits Before

Process

100%

Manual

Process

100%

Automated

(estimation)

Savings

(estimation)

Time spent on the

business process No metric 6 minutes

< 1,8

minutes > 70%

% of rectifications

required No metric 40,55% < 15% > 63%

Cost of each process No metric 3,10 € < 1,00 € > 67%

Total annual costs

estimation for the

central PA (€)

No metric 205.700 € < 72.000 € > 133.700 €

CONCLUSIONS

AND FURTHER STEPS

GeRALL PROGRAM

GeRALL Challenges & Results [1/2]

• Challenges:

- Managerial

• Keep internal and external stakeholders focused

- Organizational

• Suitable management processes and tools are needed in order to properly handle the requirements and software development

• Improve the ability to build reusable components and processes as a key to keep a low TCO

- Technical

• Ensure all SOA constituent backend solutions adopt decoupled service oriented approach

GeRALL Challenges & Results [2/2]

• Results:

- More agile administration through streamlined processes

- Rationalized processes More efficiency, less costs

- Increase of business productivity, transparency and

accountability

- Better quality of management information

- Best practices replication

- Major saving results come from process rationalization and

automation which represent 70% of the overall cost

GeRALL – Lessons Learned [1/2]

• Apply a Unified Methodology

- Business Processes Engineering

- Business Processes Implementation

• Build a team with complementary competences

- Clear understanding of the defined architecture

- Abstraction capacity

- Business knowledge

- Selected tools capabilities

• Design to reuse Forms and Sub-processes

• Use best practices approach (documents, methodology, …)

Strategic Vision Detail Design Quality Control

Quality and Continuous Improvement

Implementation

GeRALL – Lessons Learned [2/2]

• The importance of a win-win partnership

- SAP

- Microsoft

- PNMsoft

• The importance to focus on the relationship with the main stakeholders

- Government

- Regulators

- Public Entities (customers)

GeRALL – Recommendations

• Elaborate an open approach to process design and

implementation, allowing for multi functional scope such

as Acquisition ,FM, HRM (including payroll)

• Internally control process design and development

structures, regardless external influence

• Strategically invest in technology that will create the

conditions for a modern and cost effective solution

• Focus on Governance

• Define and implement SLA from the beginning

GeRALL – Future Enhancements

• Automate tests and quality control

- Processes Quality and Continuous Improvement

- Technological Upgrades

• Automate detailed design process

- Design Forms and updating Field rules

- Automatic interaction between Forms and Business Rules

• Automate infrastructure mgmt. and deployment (Cloud)

• Develop benefits identification procedures

- KPI identification & Measurement procedure identification

• Business Activity Monitoring (BAM)

- Creating automatic monitoring procedures

Q & A

Questions?

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2010 Gartner, Inc. and/or its affiliates. All rights reserved.