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2012 Diamond Client Summit

October 22
-

24


Banff Park Lodge


Banff, AB.

M
UNICIPAL

B
EST

P
RACTICES

Overview


What is a Best Practice?


Best Practices


Leveraging your Solution to
eliminate duplication


Municipal Best Practices


Financial
Sustainability


Demonstrate


Questions

What is a Best Practice?


A best practice is a method or technique that
has consistently shown results
superior

to
those achieved with other means, and that is
used as a benchmark.


Best practices are used to maintain quality as
an alternative to mandatory legislated
standards


Best
practice is a feature of accredited
management standards such as
ISO, Six Sigma
and LEAN Six Sigma

Some Important Points about

Best Practices


A"best
" practice can evolve to become better
as improvements are discovered.


Best
practice should always be pushed,
questioned, tested, expanded, shared.


Customers define best practice


Teams/organizations not individuals develop
best practice


Eugene
Bardach's

Best Practice Theory


1.
Develop Realistic
Expectations


be wary of "internal validity
problems

2.
Analyze
SMART Practices

3.
Observe the
Practice

4.
Describe Generic
Vulnerabilities


Two
types
1
)
management capacity and
2) weaknesses inherent to
the practice itself
.

5.
But Will It Work Here
?


Be careful not to immediately reject or adopt


Look at Risks, Support Structures, Weakest Links

6.
Back to the Eightfold Path


Review, Reflect, Research

Is 99.99% Best Practice? If it is…then

12 newborns will be given to the wrong
parents daily.


114,500 mismatched pairs of shoes will
be shipped/year.


18,322 pieces of mail will be
mishandled/hour.


2.5
million books will be shipped with
the wrong covers.


Two planes landing at Chicago's O'Hare
airport will be unsafe every day.


315 entries in Webster's dictionary will
be misspelled.


20,000 incorrect drug prescriptions will
be written this year.


880,000 credit cards in circulation will
turn out to have incorrect

cardholder information on their
magnetic strips.


103,260 income tax returns will be
processed incorrectly during the year.


5.5 million cases of soft drinks produced
will be flat.


291 pacemaker operations will be
performed incorrectly.


3,056 copies of tomorrow's Wall Street
Journal will be missing one of the

three sections.




FOUR QUESTIONS


1.
What percentage of your day is spent re
-
working
something, someone else started?

2.
What percentage of your day is spent doing something
someone else has to re
-
do?

3.
What percentage of your day is spent on non
-
value added
activities?


Value Added Activities are Defined as :


Customer willing to pay for it


Physical transformation of the service or product


Done Right the First Time

4.
How
would your customers (internal and external) rate you
in terms of how well you meet their needs and
requirements?

Best Practice


Focus on Value Add

Category

Definition

Best Practice in Process

Customer
Value Added


Physical Transformation of the
Service




Customer is willing to pay for the
transformation




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or defects)


Improve the efficiency and
effectiveness of the task by
eliminating waste



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cust潭or



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m敥瑩t朠cust潭o爠rv潬癩湧v
r敱u楲敭敮瑳t


continuous
improvements





Business
Value Added


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R敤uc敳e晩n慮c楡氠物rk



Critical to avoiding process breakdown




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r敱u楲敤




Reduction and/or elimination of
requirements





Non
-
Value
Added


Everything else that is not customer value added or
business value added


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w慳te

Best Practice


Eliminate Waste

Best Practice #1



Eliminate Defects & Duplication


Enter information one time, in one place


Eliminate Spreadsheets where possible


Attach documents to GP


Use GP ,
S
martlists

to error proof and audit


Add Policies to GP windows describing what is
expected for each screen


Use Checklists in GP to avoid missing steps


Best Practice #2



Reduce Over/Extra production


Set up Recurring Batches, Quick Journals


Use Fixed and Variable Allocations


Use “refreshable” Excel Reporting and Pivots


Use “mass modify” to create/modify accounts


Redesign “key fields” to allow for ranges and
reports


Review Reporting requirements/print to files




Best Practice #3



Reduce Waiting Time and
Transport


Eliminate “looking for” information
(document management in GP)


Reduce time to batches (
eg
. cheque runs)


Use EFTs for payables


Use online data entry for purchasing, payroll


Implement Workflow, eliminate paper


Integrate software




Best Practice #4



Increase Staff utilization, Reduce
Inventory of Work


Create reports based upon requirements


Undertake business process review


identify
risks and “bottlenecks”


Review security roles and tasks


Go Paperless





So What is a Municipal Best
Practice?

Many Theories and Attempts to Define over the Years:


Value for Money


GFOA, OMBI, GAO, PSAB


Ontario Municipal Knowledge Network, FCM etc.


Focus on various elements: environment/ waste,
social services, infrastructure, governance….but all
about sustainability….

financial sustainability is key…



Municipal Financial Sustainability

It’s All about Balance




Build and Maintain
a
sound long
-
term fiscal
position

Becoming more
financially sustainable
while meeting citizen
requirements

Increasing
revenues
while balancing
community fiscal reality

Fostering economic
development with an
appropriate fiscal
environment

Essential programs and
services are properly
funded and managed

Achieving the most

from
expenditures


“These are the voyages of the modern municipal
manager (Jean Luc Picard): The continuing mission: to
explore strange new worlds, to seek out new life and
new civilizations, to boldly go where no one has gone
before.”




The
quest for financially sustainability is much like Star
Trek


it is a
continuing
mission to
better manage
municipal business, to
seek

out best practices and to
expand

the capacity to
go beyond
what has been done
before to what is
possible
.

Financially Sustainable Municipalities



The Next Generation….

Municipal Financial Sustainability…

Is it the Next Generation?



That’s for the big guys...we are too small to do complicated long
term planning”


“We don’t have enough assets to worry too much about financial
sustainability”


“We only use pay
-
as
-
you
-
go policies so we will always be
financially sustainable”


“We don’t have time to do our day
-
to
-
day jobs let alone concern
ourselves with long term plans.”


“No one would listen to me about long term planning


all people
care about is what is happening today”


The Roadmap to Financial Sustainability



Understand the
Financial Framework:


Municipal Act Budget
Changes


Public Sector
Accounting Board
(PSAB) requirements


Financial Information
Return (FIR) changes


Understand what
financial statements say
(and don’t say)


Develop
and analyze new
financial
statements



Perform historical trend
and ratio analysis


Compare with similar
municipalities

Understand Municipal
Budgets:


Difference between
Cash and Accrual
Basis


Requirements for
PSAB budgets


Financial Sustainability
-

The Foundation

Overall assessment of financial condition


Assessment of whether the elements of financial condition
have improved or worsened over time



Government’s ability to achieve planned results



The assessment supplemented by a discussion of:


(a)

the reasons for changes over time;


(b)

an analysis of significant events within economic
environment and their impact on financial condition; and,


(c)

other information useful for understanding financial
condition.


Business plans for each key
strategic issue


Strategic planning process


B
asic
asset management
plans



Basic internal
controls,
accountabilities



K
ey
performance indicators
that are tracked in line with
budgets.



Strategic/Business Planning
Process in place


Long Term Financial Plan with 5
year horizon (minimum)


Performance reporting includes
both financial and non
-
financial
indicators


Corporate Asset Management
Plan and process in place

Roadmap to Financial Sustainability Creating the Vision



Enterprise Strategic/ Business
Planning /Risk management
framework


Long Term Financial Plan with
20 year horizon


Outcome based performance
measurement framework


Advanced asset management
cycle and plan

How Does Your ERP Solution Support

Financial Sustainability?

Strategic Plan
Best Practice
#5


Build Metrics into
GP to support the Strategic Plan


Long Term
Financial Plan
Long Term
Financial Plan has
been developed
that exceeds a 5
year planning
horizon. Decision
making tools are
utilized in budget
process to identify
priorities and life
cycle costs.

Best Practice
#6


Build Metrics into GP
to support the
Long Term Financial
Plan


Capital Plan
Capital projects are
evaluated based upon
objective criteria.
Capital plan extends
more than one year and
informs decision making.
Capital plans span 10
-
20
years and are reviewed
and monitored regularly.

Best Practice
#7


Corporate
Asset
Management
Framework is in
place with clearly
defined
accountabilities and
responsibilities and
informs decision
making based upon
a prioritization
formula
.




Best Practice
#8


Asset Management
Plan



Best Practice
#9


Performance
Reporting
Performance
measures are
outcome based
and are key
drivers of
strategic and
business
planning and
assessment of
results.

Controls are built
into, not onto
processes. Controls
are working as
intended.



Risks have been
assessed and
systems support
risk management
plan




Best Practice
#10


Risk
Management
Plan
Internal Control
Framework