Module 3.0 Restructuring Your Agency’s Administrative Services Organization

1. Module 3.0Restructuring Your Agency’s Administrative Services Organization 1

2. The objective of this module is to ... • Introduce concepts and tools that can assist with designing an effective structure for administrative services regardless of the size of your agency • Provide agencies with information to understand strengths and weaknesses of different structures for Simplified Administrative Services • Discuss the timeline and transition issues related with changing the structure 2

3. Our Agenda for the day…. 8:30 Overview 8:45 Assessing your current organization’s infrastructure 9:15 Developing your “to-be” infrastructure 10:15 Break 10:30 Implementing your new Administrative Services infrastructure 11:00 Lessons Learned and Next Steps 3

4. OVERVIEW 4

5. We are now at the agency Organizational Infrastructure process for Simplified Administrative Services • Conceptual Design Framework • Develop organization vision themes • to support overall vision • Define key relationships between processes • Identify areas for integration • Redesign Processes • Identify target process areas • Define processes and organizational • responsibility • Identify initial skills needed • Directional Design • Align processes with current org. activities • Identify leadership responsibilities • Identify organization attributes • Assess alternative organization models • Select model and develop high-level • organization chart for central • admin services operations We are here • Detailed Organizational Design • Finance and Administration • Develop job design, management, and • accountability structures • Develop competency requirements • Map employees to roles • Develop next layer of org. chart • Organizational Infrastructure • for Agencies’ Administrative Services • Processes • Share with agency organizational teams • Identify organization attributes • Assess alternative organization models • Select model and develop high-level • organization chart • Process Refinement • Align processes with system vendor • Detail redesigns to organizational and human resource levels • Integrate overlapping processes 5

6. Specifically for the agencies we will... We are here • Organizational Infrastructure • for Agencies’ Administrative Services • Processes • Share with agency organizational teams • Identify organization design criteria • Assess alternative organization choices • Propose models and help develop • high-level organization charts • and plans 6

7. As part of our preparation for today, we met with many of you regarding your current structures • We asked specific questions related to your structure, approval path, and processes for doing material and financial management activities • We developed model as-is structures to identify common strengths and weaknesses of the structures across the Commonwealth 7

8. However, organizational infrastructure is comprised of a number of building blocks Structure alone will not support the success you need... Organization Structure Leadership Rewards/ Incentives Staff Development Recruitment/ Deployment 8

9. Today, we will discuss the important factors related to these characteristics of organizational design • How involved does leadership need to be? • What are potential hazards of changing the structure? • Where are the critical points for decision making? 9

10. Today’s session will be supported by a number of tools, templates, and examples • Hard copies of tools and templates are located in your handouts • Each participant will receive an electronic folder with the tools and templates • They will be sent to your email address on Monday and Tuesday of next week • Examples are imbedded within today’s module. Primary example will be the Finance and Administration Cabinet and organizations within 10

11. Tools that you will receive: File NameDescription asis_assess.doc handouts.doc orgdoc_out.doc How to assess your organizational infrastructure A case example of the Finance and Administration Cabinet that includes a number of templates and documents that you can modify to meet your agency’s needs Outline for creating an integrated organizational briefing document to support desired organizational changes 11

12. To improve your agency’s Administrative Services approach, ask the following questions: • Does your agency lack a clearly defined set of vision and design criteria for your administrative services organization? • Does your agency currently have a Central data entry organization • that enters data from field or program areas? • Does your agency have more than three approval paths? • Does your agency currently store copies of forms, invoices and bills • in more than one location for your agency’s transactions? • Does your agency have redundant activities occurring in your • administrative services area (e.g. duplicative data entry)? • Does your agency receive complaints regarding the amount of time it takes to process documents, receive payments, get things approved? • Does your agency strive to be recognized as having “Best Practices” 12

13. If the answer was YES to ONE or more questions, consider the following process: • Assess current organizational processes & characteristics • Create design criteria • Create to-be organizational processes & characteristics • Develop a new organizational infrastructure • IMPLEMENT! 13

14. Assessing Your Current Organization's Infrastructure 14

15. Assessing your agency’s current organizational infrastructure requires: STEP 1 • Understanding the current administrative services activities that employees in your agency do • A current organizational structure diagram with an understanding of reporting relationships and approvals • Evaluating your administrative services organizations’ current approach to other Organizational Characteristics • Description • Strengths and weaknesses STEP 2 STEP 3 15

16. STEP 1 The first two steps are complete... STEP 2 • In the fall of last year, many of you completed the as-is analysis. This data provides a good baseline for beginning the assessment process • In January and February, a number of you worked with us to define as-is organizational structures 16

17. Organization Structure Our initial analysis of current structures and approval approaches identified several findings…. STEP 2 • Size of agency was not a key determining factor for structure or number of approvals • Differences in centralized and decentralized structures were fairly significant • Agencies that had the same structure on paper, did not necessarily identify the same strengths and weaknesses • As-is models are located in Appendix A by size of agency 17

18. Organization Structure Small Agency Models STEP 2 • Small Agencies included: • Agriculture • Economic Development • Military Affairs • Arts & Humanities • Small Agencies generally had 2 models: • Centralized • Decentralized 18

19. Medium agencies included: Natural Resources and Environmental Protection Cabinet Public Protection and Regulation Cabinet Medium sized agencies generally had 3 models: Central approval and processing Central approval Decentralized Organization Structure Medium Agency Models STEP 2 19

20. Large agencies included: Cabinet for Families and Children Transportation Workforce Development Cabinet for Health Services Justice Cabinet Finance and Administration Cabinet Large agencies generally had 3 models: Central approval and processing Central approval Decentralized Organization Structure STEP 2 Large Agency Models 20

21. Organization Structure STEP 2 Sample of Financial Management (Centralized/functional) Finance & Administration Cabinet Agency Department Department Department Department or Office or Office or Office or Office Approval 3 & 5 Approval 2 Division Division Division Branch Approval 1 Administrative Branch Origin of Transaction Approval 4 Financial Branch 21

22. Assessing the Organizational Infrastructure STEP 3 • How do leadership actions support the development and direction setting for Administrative Services? • How are they promoted and used? Is there an opportunity to use them better? Develop new ones? • How is training viewed and communicated? Are staff proactive in identifying appropriate training? Are staff encouraged to develop a career plan? Is performance measured and managed effectively? • How does your agency address recruitment and deployment of employees? Do you have a career path? Leadership Rewards/ Incentives Staff Development Recruitment/ Deployment 22

23. Beginning the assessment process STEP 3 • Use the assessment in your handouts • Work with your agency team members to review and begin the assessment • We will reconvene in ten minutes to discuss 23

24. Administrative Services for the Future 24

25. This section will address how to... STEP 1 Create agency-specific organizational design criteria and performance objectives Identify influences and constraints Conduct preliminary analysis Create to-be organizational characteristics Determine new model structures Develop a briefing document for the new organization STEP 2 STEP 3 STEP 4 STEP 5 STEP 6 25

26. Create design criteria and performance objectives STEP 1 • Design criteria define what the new organization should ideally be able to provide. • Design criteria may conflict with one another • Performance objectives define what high level outcomes you want to achieve as an organization and will help drive the design. Example 26

27. Identify influences and constraints STEP 2 • This step is the reality check and identifier of potential roadblocks • Important to complete after establishing the design criteria and performance objectives • Examples of influences and constraints include: Geographic Dispersion Employee Skills Legislation/ Statutes Readiness for Change Political Influences 27

28. Beginning the process STEP 2 • With your agency team members, draft some design criteria and performance objectives • Draft some influences and constraints • In ten minutes we will reconvene 28

29. Conduct Preliminary Analyses:prioritize and assess gaps STEP 3 • With leadership, identify which criteria and objectives are a priority. Use a rating scale of 1-5 with 1 being a priority • Assess the current priority of that criteria within the organization today Design Criteria Priority Future Priority Today Gap Improve processing times 1 3 2 Reduce duplicative 2 5 3 activities 29

30. Conduct Preliminary Analyses: assess the effort to change and associated costs STEP 3 • The gap analysis and the influences and constraints provide the data to assess the effort it will take to change • Associated costs relate to areas where there may be funding or staffing required Design Criteria Effort to Change Costs Issues Associated Improve Hardware Kentucky Processing Times Medium Derby set-up Reconfigured may change Office Space timing Reduce duplicative High Training Old activities efforts continue until 12/99 30

31. Develop to-be organizational characteristics STEP 4 Organization Structure Leadership Rewards/ Incentives Staff Development Recruitment/ Deployment 31

32. Leadership STEP 4 Develop criteria and leadership skill and competency needs • Public sector environment makes this an important activity • Guides executive leadership in making political decisions • Create leadership action plans that detail necessary communications and actions 32

33. Rewards/ Incentives STEP 4 Identify and define the rewards and incentives that you can use • Existing statutes and resource constraints somewhat limit ability to provide rewards and incentives • With leadership support there are still many opportunities to recognize employees • Well-defined performance measures will make assessment of who deserves rewards and recognition easier and fair • Well-defined career path can also contribute 33

34. Staff Development STEP 4 Create staff development needs for the new organization • What skills or competencies will be needed? Do they need to become part of class specifications requirements? • Define agency approach to training in administrative services area and required trainings • Develop guidelines for management and staff • Promote development of “career plan” that includes training plans and significant career milestones • Define performance measures (e.g., reduce documentation preparation and approval time by one-third). 34

35. Recruitment/ Deployment STEP 4 Define future approach to recruiting and deploying new employees • Create list for future administrative services recruitment needs • Create agency specific selection guidelines that may include knowledge, skills, and abilities requirements • Develop a career path using existing class specifications and new class specifications provided by the Finance and Administration & Personnel Cabinets 35

36. Organization Structure Determine key organization model components STEP 5 • Use the design criteria, performance objectives, and list of influences and constraints • Review the common organizational design models • Assess criteria using Fit Model • Blank Fit Model is in your handouts and will be in the folder sent to you next week 36

37. Organization Structure There are some common organizational models that can help STEP 5 Customer Process- Centered Functional Hybrid Service Geographic 37

38. Organization Structure Example of Organizational Fit Charting STEP 5 Geographic Design Criteria Process Customer Service Functional Enhances Responsiveness Encourages Innovation Provides Streamlined Structure and Processes Provides Flexibility to accommodate environmental change Focuses on core competencies Improves Cost efficiency/effectiveness of service Enhances work environment High Medium Low 38

39. Organization Structure STEP 5 Develop Organization Alternatives -- Create and select models that will work for your agencies Process-Centered Hybrid Customer Focused Hybrid Agency Head Agency Head Functional COEs Func 1 Func 2 Func 3 Func 4 Func 5 Customer Owner 1 Customer Owner 2 Customer Owner 3 Process Owner 1 End to end process Process Owner 2 End to end process Function Owner 1 Function Owner 2 Function Owner 3 Process Owner 3 End to end process Centers of Expertise Agency Head Geographic Focused Hybrid Geography Owner 2 Geography Owner 3 Geography Owner 1 Function Owner 1 Function Owner 2 Function Owner 3 39

40. Organization Structure To-be models to consider STEP 5 • Models address the structure only • Two agencies could have the same structure, but not be equally effective or efficient due to differences in their other processes & characteristics • Goal is to reduce the number of approvals and the redundant activities 40

41. Organization Structure Create your model organization STEP 5 • Using the organizational fit model, the design criteria, and the sample models, develop a directional design for your administrative services organization • Hybrids of different types of models are common • Models need to support the business processes • Don’t need to get into the specific details of the design yet 41

42. Organization Structure STEP 5 Then apply to your agency To-Be Model “Centralized” and Geographic Primary/FunctionalSecondary Finance & Administration Cabinet Agency Department Department Department Department or Office or Office or Office or Office Approval 3 Approval 2 Division/Region Division Division Branch Administrative Branch Approval 1 Origin of Transaction Financial Branch 42

43. Organization Structure STEP 5 Begin to define the new structure • Each component of the new structure should have a purpose statement and a defined activities set • Policies and procedures for the new structure will need to be developed • Cross walk roles from the to-be roles for Administrative Services to the structure • Reassess associated costs to change…the new structure may have introduced new needs 43

44. STEP 6 Develop a briefing document for the new organization • Becomes a roadmap for leadership and employees • Outline provided in handouts and in the documents we will provide to you • Clarifies and integrates all of the Organizational Infrastructure Processes and Characteristics • Creates the justification and need for change 44

45. IMPLEMENT 45

46. Key implementation factors your agency should consider • Communications • Workforce Transition • Training Needs • Organizational Readiness • Number of Affected People • Degree of Impact • Geographic Dispersion • Timing • Executive Leadership Support 46

47. Timing of implementing the structural changes can be as critical as the structure itself... • Freeze on Executive Orders and Administrative Orders that will affect Chart of Accounts through August of 1999 • Capacity to change and achieve desired benefits given limited resources • Uncertainty about the exact impact the system will have on an agency’s operations. 47

48. Create an implementation plan that addresses each of these factors Implementation Plan Factor: Agency approach: Timing: Assigned responsibility: Status: 48

49. Ensure the effectiveness of the implementation • Measuring the agency’s ability to meet the design criteria and performance objectives after implementation is critical • Continuous improvement should become a part of the agency’s culture (maybe made formally) • True effectiveness will take time. Make sure to measure and acknowledge the small successes. 49

50. Questions???? 50