End-to-End Efficiency: Public Services redesigned with Business ...

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End-to-End Efficiency:
Public Services
redesigned with Business Process Management
"It is precisely because the public sector has invested £6 billion in new
technology,modernising its ability to provide back office and transactional
services,that I can announce,with the detailed plans departments are
publishing for the years to 2008,a gross reduction in civil service
posts of 84,150 - to release resources from administration to invest
in the front line." Gordon Brown,July 2004
02
End-to-End Efficiency: Public Services redesigned with BPM
The purpose of this document, published by TIBCO Software, is to introduce to leaders in the public sector the advantages of
using modern Business Process Management (BPM) technology to meet UK policy goals. It aims to explain what Business
Process Management is, its relevance to the public sector and to draw on lessons from organisations, both public and private,
that have implemented it.
Although the document is primarily written for central government, managers in devolved administrations, large local authorities,
health and criminal justice agencies may also find it of interest.
03
Executive Summary
End-to-End Efficiency: Public Services redesigned with BPM
Public administration is going through a time of change, the most dramatic in a generation. Competence in managing
public services efficiently is now a key battleground in domestic politics.
Since 1997, the present government has tried to close the gap between public and private service standards through
its modernisation agenda.
Government now realises that the next phase of modernisation must focus on extracting real efficiency savings from
existing investments in infrastructure. This quest for efficiency will permeate every aspect of public administration for
the foreseeable future.
Public agencies are rarely set up as process-centred delivery machines. Paradoxically IT can be part of the problem.
Lack of integration between systems means that many organisations lack real-time information about their processes.
This is no longer acceptable for managers or service users.
One way to leverage the benefits of existing systems, and to ensure that new IT generates value, is to concentrate on
automating business processes rather than silos of data. This is the case for Business Process Management.
Government processes are complex. Public agencies cannot make their own rules: they are at the mercy of
legislation and regulations. Government business processes are also dynamic. It is impossible to design for every
contingency.
Luckily, the private sector has already undergone analogous reforms.
One solution is to take an enterprise/end-to-end view, with the help of an independent process layer, and to define an
optimum process based on using data across existing silo systems. This is the functionality offered by BPM systems,
such as the TIBCO Staffware Process Suite.
BPM promotes a "process centric" view of IT, where the management of end-to-end processes is separated from
underlying applications, their connections and data. The TIBCO Staffware Process Suite’s unique independent
process layer contains a complete view of all activities needed to execute a particular business process. It manages
the flow of these activities across different applications and data standards.
Many UK public sector organisations have already proven this approach.
Although it is important to get the technology right, it is only part of the solution. Cultural change is more difficult -
stakeholders must be sure that change will produce real benefits. Business Process Management is one way to show
that benefits are possible - and to deliver on the promise.
04
1: Preamble
End-to-End Efficiency: Public Services redesigned with BPM
Public administration is going through a time of change, the most dramatic in a
generation. Factors as diverse as our ageing society, increasing public
expectations of good service, globalisation, disruptive new technologies - and
security threats - all create new challenges for public servants across the
developed world.
Every one of these challenges requires government to do more with limited
resources.
In the UK, these challenges have special relevance. Competence in managing public services efficiently is now a key
battleground in domestic politics. The issue crosses party political lines: with a broad consensus on the size of the state, political
debates tend to focus on the most efficient way of running services, not on whether they should exist at all. All elected politicians
have a stake in ensuring that the state is trusted, as an institution, by its citizens.
Since 1997, the present government has tried to close the gap between public and private service standards through its
modernisation agenda. One high profile example is the NHS's "Choose and Book" service, which is explicitly designed to give
NHS patients the same degree of choice that they would get from the private sector.
Another related initiative, which cuts across the whole public sector, is the e-government programme. This has opened new
channels of communication with the State and begun to enable services to be organised around the citizen rather than
government institution.
Several billion pounds have been invested in e-government since 2000. Too often, however, these IT investments have
automated existing ways of running services without grasping opportunities to simplify structures and processes. Government
now realises that the next phase of modernisation must focus on extracting real efficiency savings from existing investments in
infrastructure. This quest for efficiency will permeate every aspect of public administration for the foreseeable future. It will not
be painless. It will require government agencies to put in place structures that will enable them to streamline their businesses
processes so they can run a better service at the same, or lower, cost.
Fortunately,the technologies capable of underpinning Business Process Management are available, and have been widely
proven in both the private and public sectors.
2: The Current Agenda
Public servants today have to work with a barrage of overlapping political initiatives, whose targets cut across the horizontal and
vertical structures of government. Current priorities include:
Enhanced e-government. Now that the Prime Minister's "100% e-enablement" target date of 31 December 2005 is
nearly upon us, a new e-government agenda is emerging. It will no longer be concerned with making all services
available electronically - indeed some services may revert to traditional channels if this proves more appropriate. From
2006, the emphasis will be on driving up usage of key e-services, both by citizens and government. This is likely to
involve intermediaries, such as voluntary organisations and private firms playing a role in e-government. Another part
of this process is the integration of e-channels with back-office systems. Progress will be encouraged by the use of
output-based targets along the lines of the priority service outcomes already adopted for local government.
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End-to-End Efficiency: Public Services redesigned with BPM
Efficiency review. Sir Peter Gershon's proposals for more efficient public administration, published in summer 2004, will
permeate every part of the current spending round, and beyond. Reductions in operating costs and numbers of back-
office staff will be underpinned by the e-government agenda and the introduction of shared services such as human
resources and payroll. Everywhere, the processes of public administration will be under scrutiny, with agencies judged
by their outcomes.
Institutional reform. The merger of Inland Revenue and HM Customs & Excise is a sign of government beginning to
think in terms of processes rather than bureaucracies. Although there is little scope and enthusiasm for further major
changes to Whitehall (though the future of the Department of Trade and Industry was very much under discussion when
this paper went to press) local government, however, is another matter. Whatever the future of the embryonic English
regions, the government seems likely to replace the current two-tier norm with unitary authorities if elected for a third
term. Many of the innovations envisaged by the Gershon review have already been pioneered by local authorities, which
have begun to join forces to run services across borders. The next wave of reform will go further down this road: in most
parts of the public service, multi-agency working will become the norm.
Data sharing. A succession of high-profile public inquiries, including those into the death of Victoria Climbié and the
circumstances leading up to the Soham murders, have shown that it is unacceptable for agencies dealing with
vulnerable people not to have access to comprehensive information about those individuals. Professionals involved in
criminal justice, education, health and social welfare will increasingly work together as virtual teams, sharing highly
sensitive personal data about their clients. Systems that enable these processes must be highly secure and leave
robust audit trails showing who has had access to which pieces of data.
Freedom of information. The cultural change in accountability from January 2005 should not be underestimated.
Changes in business processes demanded by freedom of information will go hand in hand with those required to protect
privacy while allowing important data to be shared.
Although every public body will be affected by these five trends, they will be most obvious in the roll-out of a number of major
IT-based business change projects which cut across current administrative boundaries. These projects include:
NHS National Programme for IT.This involves creating shared electronic health records accessible anywhere they are
needed for care, and by patients themselves. The programme will cross boundaries not only within the NHS but with
private healthcare organisations (including some based outside the UK) and with local authority-provided social care.
Criminal Justice IT. The aim is to transform the effectiveness of the criminal justice system by handling information in
the form of virtual unified electronic case files. These will be used by police, courts and prison/probation services,
reducing delays and errors. As with the electronic health record, data will be entered once and used many times, subject
to stringent controls on access.
Defence Information Infrastructure Futures (DIIF). An ambitious project to replace current service-centric information
systems with a combined infrastructure in keeping with today's operational needs. The DIIF will ensure that the armed
forces can continue to cope with unexpected and novel logistical demands on a limited budget. It is a significant step
towards the future of "network-centric warfare". IT-based process management systems have already proved
themselves in the complex supply chain involved in refitting warships (see box: Warship Support Agency).
National Identity Card. A long-term programme of work that will involve the creation of a new secure database of UK
residents, together with processes for enrolling card-holders, managing their biometric data and issuing and
authenticating cards. Although many other jurisdictions are issuing sophisticated identity cards (see box: Hong Kong
Immigration) the UK programme will be unusual both in its size and complexity. The programme will also have to
operate under intense political and media scrutiny.
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End-to-End Efficiency: Public Services redesigned with BPM
3: Process Challenges
Despite the proliferation of new agencies since the Next Steps reforms, most of the institutions of British government are older than
most of their present responsibilities. The Department for Transport, for example, was founded in 1919 and its duties have ebbed and
flowed with political fashions and administrative reform. Local government bodies are often much older - shire counties date back to
Saxon times.
This weight of history and accumulated statutory responsibilities means that public agencies are rarely set up as process-centred
delivery machines. Even new agencies with apparently focused responsibilities, such as the Passport Agency, have non-core
responsibilities, such as accountability to the public and Parliament and working with law enforcement and intelligence services. The
idea of a government institution doing only what it says on the tin is a myth.
Paradoxically, IT can be part of the problem. Systems tend to reflect the organisational boundaries in existence when they were
procured rather than today's. Examples include the Benefits Agency and HM Customs & Excise. Both agencies’ IT systems predate
amalgamation with the Inland Revenue. In the NHS, most GPs rely on desktop systems designed for the era of fund-holding practices
rather than today's primary care trusts. There is usually a significant time-lag between the amalgamation of agencies and joined up
IT. Where systems have been ready from day one, for JobCentre Plus, for example, the cost is high. (The commercial sector faces
similar problems - there are many examples of mergers and acquisitions failing to generate expected benefits because of IT
incompatabilities.)
Where administrations have geographical boundaries, IT tends to as well. Local authorities, police forces and NHS trusts tend to have
different IT portfolios to their neighbours, even when they have almost identical functional responsibilities. The NHS National
Programme for IT is aggressively driving common standards, but the new systems will take several years to become embedded.
Police forces have just begun to standardise, though at each force's own pace. Local authorities have barely started talking about it.
Even within organisations, the bulk of legacy IT in use tends to be centred on departments rather than processes. The e-government
programme has tended to involve web front ends and CRM systems being added on top of existing systems with little thought or
enthusiasm for integrating across data silos. Workflow,however,is beginning to make an impact, as in authorities such as Harlow
District Council (see box: Harlow District Council).
Lack of integration between systems means that many organisations lack real-time
information about their processes. This is no longer acceptable for managers or service users.
The cost of these disjointed legacy systems is not just lower operational efficiency - resources
not deployed where they should be - but frustration for citizens. People who move house, for
example, find it hard to understand why a simple process such as "change of address" is so
difficult for government as a whole to handle. This has a cash cost - the state has to pay for
unnecessary transactions and to resend documents that have gone astray. There is also a
social cost: citizens confronted with daily evidence that one part of government does not know
what's going on in another are more likely to be tempted to into opportunistic benefits frauds.
Government's inability to view processes as a whole has a grimmer toll - the long list of
children who suffered at the hands of their carers because agencies that should have
intervened could see only part of the picture.
Although we are now seeing welcome attempts to simplify the design of public sector IT systems to make best use of commercial
off-the-shelf software rather than bespoke systems - a frequent factor in project failures - this is still a long way from normal practice.
With ICT already accounting for some 16% of central government procurement expenditure, options for wholesale replacement of
legacy systems are limited. Sir Peter Gershon's efficiency review sets out a stark challenge: government must leverage benefits from
the £6bn invested in IT in the last two spending rounds before it spends more. Future investments must be made against a business
case of efficiency savings, and these savings must be realised.
07
End-to-End Efficiency: Public Services redesigned with BPM
One way to leverage the benefits of existing systems, and to ensure that new IT generates value, is to concentrate on automating
business processes rather than silos of data. This is the case for Business Process Management.
It is not a trivial task. Government processes are complex. Public agencies cannot make their own rules: they are at the mercy
of legislation and regulations. Government business processes are also dynamic. It is impossible to design for every contingency.
Luckily, the private sector has already undergone analogous reforms. In general companies found that once they had done the
"easy" cost reductions, such as rationalising their property portfolios, they began looking at their entire business process. All too
often, they found that no one had a view of the complete end-to-end process. An insurance company's claims system for example
may have evolved over years, as managers graft on routines to deal with new types of cases as they come up. Taking an overall
view enables the company to identify unnecessary barriers and inefficiencies and to build a process that serves the customer
better at lower cost.
Public agencies, although coming from a different heritage and with different stakeholder responsibilities, are beginning to carry
out similar exercises. One example is the Driver and Vehicle Licensing Agency (see box: DVLA).
4: Managing Business Processes
Public sector managers should be cautious about uncritical adoption of lessons from the private sector. After all, firms such as
banks can choose not to take on uneconomic customers or exceptional cases that the State has to deal with. However lessons
can be drawn from the way that the private sector has tackled the "productivity paradox" which, as late as the mid 1990s, seemed
to cast doubt on the value of IT investment. The paradox was that sectors of the economy which had invested most in IT showed
the lowest apparent growths in productivity.This was largely resolved by re-engineering business processes.
One of the most crucial process changes was encouraging customers to serve themselves on the web, buying airline tickets for
example. This has exact parallels with self-service e-government, one of the main mechanisms of change on the Gershon
agenda.
Although the products and outputs may differ between private and public sector, and between public agencies, many business
processes can be duplicated. Obvious examples
include:
Administration of licenses/permits: essential
for self-service e-government and efficiency
savings.
Administration of grants and benefits:
common processes can be shared even if
different organisations or tiers of government
remain in charge of different benefits.
Customer service: Government will interact
with citizens and other clients (predominantly
business) through multiple channels. These
must handle contacts and transactions
consistently and interoperate fully with back-
office systems across agencies to realise
efficiency savings.
HR and payroll: basic administrative functions
can be shared between different agencies.
Aprocess map:The TIBCO Staffware Process Definer allows non-
IT staff and business specialists to map all business processes.
08
5: Where Does Technology Fit in?
End-to-End Efficiency: Public Services redesigned with BPM
Information technology can be an important enabler of change. However it is important to avoid installing a quick fix for a quick
win. Government has many examples of services "e-enabled" to meet targets which then required substantial reworking to
integrate with core IT systems. In the very early days of e-government this approach may have been justified as a way of testing
ideas about online services. Too often, however, the new channels tended to duplicate existing services without achieving savings.
The solution is to take an enterprise/end-to-end view, with the help of an independent process layer, and to define an optimum
process based on using data across existing silo systems. This is the functionality offered by BPM systems, such as the
TIBCO Staffware Process Suite.
Business Process Management is a convergence of a number of existing technologies and approaches, for example workflow
tools. It also includes capabilities deriving from process modelling, application integration and rapid application development
tools. BPM technology brings these elements together to create a single package which manages the lifecycle of a process
from definition, through deployment, execution, measurement, change and re-deployment.
BPM promotes a "process centric" view of IT, where the management of end-to-end processes is separated from underlying
applications, their connections and data. The TIBCO Staffware Process Suite’s unique independent process layer contains a
complete view of all activities needed to execute a particular business process. It manages the flow of these activities across
different applications and data standards.
With TIBCO software, managers can design a business process from scratch, dragging and dropping icons for different functions.
The concept resembles project management software - except that the icons don't just model processes, they also execute them,
by allocating work to legacy systems. The planner is creating an application in its own right. "What you're drawing, executes," says
Kieran Kilmartin, Product Marketing Manager,TIBCO, "There is no discontinuity with the IT.What you draw is what you get."
By separating the management of processes into an independent layer, BPM allows an organisation to improve the degree to
which processes are automated and to fill the gaps between systems that had previously been difficult to manage. BPM
technology also allows a more disciplined approach to process management: processes can be clearly defined, be actively
controlled and executed by the BPM layer and measured at every step.
As a result, best practice processes, and the knowledge that underpins them, can be deployed across the whole organisation,
not just where the most skilled staff happen to be.
Atypical example:The TIBCO Staffware Process Monitor determines and analyses business performance data across
organisations and across systems.
The Process Monitor provides key performance metrics and detailed status reports on
entire business processes (e.g. The time taken to process a claim)
6: The Big Leap
End-to-End Efficiency: Public Services redesigned with BPM
Over the past few years, it has become a cliché to say that only a small part of the difficulty of implementing an IT project lies
with the technology. The cliché however is true. In every successful programme of IT-enabled change, the major part of the effort
has gone into cultural change, ensuring that staff and other stakeholders are ready for new ways of working.
Of course this pre-supposes that the technology was right to begin with.
Britain's public sector is already reforming much more quickly than critics and satirists sometimes suggest. A targets driven
culture has focused attention on outputs. Many organisations, especially in local government, have been re-engineered around
customers rather than departmental silos. Almost everyone agrees, however, that this process has much further to run.
The Gershon efficiency agenda, coming on top of the other policy initiatives summarised at the beginning of this paper, is a
formidable challenge. It will require change at all levels and specialisations in the public sector. The good news, however, is that
public servants have consistently shown that they will embrace change so long as it is to improve services, for the benefit of
their customers.
This is why any public service revolution seeking to cope with the multiple challenges of twenty-first century society must start
by putting the tools in place to manage flexibly the business process. Once that is in place, regardless of hierarchies,
organisational boundaries and IT legacies, better public service can begin to flow. After all, that's what all stakeholders want.
Next Steps: Where To Go From Here
Thanks to the high profile of public service reform, there is no shortage of advice about leadership, delivery focus and change
management. Senior public servants will already be aware of the institutional obstacles to reform. Although the philosophy of
BPM may be replicable across the public sector, each agency or sector must draw up its own strategy for implementation, taking
into account the range of services it must deliver.
We can, however, offer some general steps for further action. These might include:
Start thinking about your organisation from the point of view of a customer interested in
a particular service, not in who runs it.
Be sceptical about the need to rip and replace departmental IT systems;
concentrate rather on ways in which data locked up in them could be applied to
real process change.
Think laterally, across organisations and departments. Cross border liaison should
be the norm, not the exception.
Learn from others: from the private sector,from overseas and - sometimes the most
difficult - from your immediate neighbour.
Disseminate the lessons of successes and failures.
09
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8: Case Studies
End-to-End Efficiency: Public Services redesigned with BPM
DVLA
While most of the 91 million forms and 50 million transactions processed each year by the DVLA can be handled quickly,
exceptions do occur when something falls outside the normal process framework.
The exceptions relating to medical
conditions are passed to the Drivers Medical Group (DMG), which recently completed the rollout of its casework and
specialist processes (CASP) project. Using TIBCO's BPM software to help streamline the handling of medical cases, it
slashed days off response times, almost doubling the number of cases handled each day.
"With the new casework system,the job is made far more manageable with greater transparency,better sharing of
inf
ormation,and accelerated case processing to provide customers with a much higher level of service than ever before."
Anita Evans, Project and Programme Support Assurance Manager, DVLA
Harlow District Council
Harlow District Council provides in excess of 35 different services to its citizens, covering areas such as council tax,
housing benefit, environmental health, planning and building control, and parking services.
Harlow began a programme to review the council’
s business processes to ensure they were being delivered efficiently,
economically and effectively, and identified the need for enabling technology to realise the new customer-focused vision.
“TIBCO has played a key role in our customer care project.If I look back at where we started and how far we’ve come in
deli
vering our customer care strategy against the backdrop of the modernisation agenda,the best accolade I can give is
that the strategic direction was perfect and given the choice again I wouldn’t change our approach.”
Asha Bhardwaj, Business Development Manager, Harlow District Council
Warship Support Agency
The Royal Navy and the Warships Support Agency (WSA) have found a way of cutting back on the time taken to refit the
UK’
s nuclear submarines. The WSA installed TIBCO’s Business Process Management software to manage its refit
schedules.
The early results have been impressive. The WSA has seen enquiry response times for refit specifications drop from an
average of fifteen to just seven days.
Hong Kong Immigration
TIBCO is providing BPM software as part of the system for a project to introduce almost 7 million new 'smart' identity cards
for the population of Hong Kong.
The
TIBCO Staffware Process Suite is used to process all the applications for the new cards, expected to be in the region
of around 8000 each day. Working closely with the Immigration Department of Hong Kong, TIBCO has designed a solution
that dramatically improves application processing efficiency.
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End-to-End Efficiency: Public Services redesigned with BPM
TIBCO
"At last,a process-focused technology solution that has the genuine
potential to support the real needs of both business and IT."
Andrew Kellett, Butler, ‘BPM - Where More is Best’ July 2004
“Before,we could action between 1,800 and 2,000 cases per day but
with the new BPM-dri
ven system in place we are actioning more than
3,000 cases each day,a vast improvement in productivity.
Customer service has been boosted dramatically.Now case
workers and call centre agents can access all details on a particular
case with a click of a button.”
Driver and Vehicle Licensing Agency, UK
TIBCO, a leading enabler of real-time business, acquired Staffware plc in June 2004. The acquisition of Staffware broadened
TIBCO's solution for automating and integrating business processes. Together,TIBCO's leading real-time business integration
platform and Staffware's Business Process Management (BPM) technology have the potential to provide an unparalleled
solution to today's marketplace. The acquisition has created a larger software technology leader that addresses the needs of
both IT and business users through the complementary mix of TIBCO's business integration technology and Staffware BPM
solutions.
The TIBCO Staffware Process Suite enables businesses to build, automate, refine and control their processes. It delivers
efficiency improvements to an organisation, including increased productivity, reduced costs, greater control and enhanced
customer services.
TIBCO Software,3 The Switchback,Gardner Road,Maidenhead,Berkshire SL6 7RJ
Web:www.tibco.com
Email:publicsector@tibco.com
Tel:+44 (0)1628 786800
www.tibco.com
TIBCO Software Inc. (NASDAQ:TIBX) is the leading independent business integration software company in the world, demonstrated by market share
and analyst reports. In addition, TIBCO is a leading enabler of Real-Time Business, helping companies become more cost-effective, more agile and more
efficient. TIBCO has delivered the value of Real-Time Business, what TIBCO calls The Power of Now®, to over 2,000 customers around the world and
in a wide variety of industries. For more information on TIBCO’s proven enterprise backbone, business integration, business process management and
business optimisation solutions, TIBCO can be reached at +1 650-846-1000 or on the web at www.tibco.com. TIBCO is headquartered in Palo Alto, CA.