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How savings dashboards confirm and catalyze results

Mar. 25, 2014 - 01:05PM   |  
By Scott Quehl   |   Comments
Scott Quehl leads Accenture Federal Services Strategic Government Efficiency offering. He formerly served as Chief Financial Officer and Assistant Secretary for Administration at the U.S. Department of Commerce.

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Savings in acquisitions, facilities, human resources and information technology can add hundreds of millions of dollars to a department’s ability to invest in mission delivery and find alternatives to program cuts to reduce the deficit. Just as the IT Dashboard, supported by PortfolioStat, has represented an important advancement in federal management, departments should consider using a dashboard tuned to savings, supported by tools and communications within the mission support community that delivers it. Enterprise-wide dashboards can help departments set concrete targets for savings and improved mission support performance, and know whether or not the collective efforts of thousands of employees scattered across their agencies and functions are on track. Dashboards also can illustrate cost savings expectations and how the work of individual employees supports the entire program.

As a first step, departments must define what “savings” means. This sounds straightforward, but requires some work. One measure is simply spending less this year than last through better purchasing practices, such as lower pricing and consolidated purchasing on commonly purchased goods and services. There is also “avoided cost,” defined as spending less than what would have occurred if a savings initiative was not put in place. Finally, there is spending less by doing without. Departments simply have not waited to be told the perfect answer. They have built consensus, consulted with those judging validity, decided, then acted.

The definition of savings then accompanies guidance and training for front line staff and supervisors on savings targets, how to document savings, how the dashboard will track progress in meeting targets, and how savings reported will be validated. In parallel, the dashboard is designed and tools to support savings generation are deployed.

One agency has used a dashboard to track the impact of a continuous improvement program on delivering services more efficiently. It set up a coordinating office and brought in expertise to assist with establishing the governance and conducting Lean Six Sigma training. Teams then developed business cases for projects vetted by agency and program leadership that specified expected benefits, building momentum through “low-hanging fruit” initiatives. These projects identified $80 million in savings, and have saved $5 million in the first year. The agency cut its facility footprint by over 20,000 square feet and has moved to pilot and fully deploy a more cost effective way to deliver desktop services. In contract management, teams have worked to standardize the rates it pays and reduce contracting complexity, consolidating requirements of five support contracts to two. The agency identified eight areas to reduce cycle time in regulatory compliance by 45 days, and opportunities to improve talent management and automate budget and obligation processes.

The agency set up a system to track what was spent and saved through the program, analyzing realized benefits compared to those planned. A three- to six-month period followed project implementation in which the agency captured impact data, isolating the results of actions related to the project and accounting for external trends. For example, when a team applied the Lean Six Sigma methodology to cut contracting spending, they needed to determine if the savings attributable to the team, or did the costs fall because of a drop in the agency’s procurement needs? The number of different systems and process owners made this step a challenge, but it was important to understand and communicate results.

Once the agency captured and analyzed data, the system could calculate savings and make forecasts, while still attributing the savings to the funding sources, offices and projects from which they resulted. Validation by project sponsors and budget staff bolstered confidence in communications on the program’s savings and success.

Another department defined over $150 million in top-line mission support savings targets for its bureaus, and asked bureaus for plans to meet their respective shares of this target. For some functions, the bureaus and department worked together to put tools in place to deliver efficiencies at a scale one single bureau could not achieve alone. For others, the bureaus took the initiative, with department management applying the same rigor in cost cutting that it asked of its bureaus. In human capital, net savings came through targeted approaches to reduce head count through early retirements and attrition while limiting backfill – while preserving or increasing staff levels and speeding time to hire in areas most aligned with priority programs and skill sets. Other savings came through strategic sourcing, reverse auction, management of telecommunication and print demand, facility consolidation, and travel management. The department and bureaus reconciled progress on savings monthly and reported it in an enterprise-wide dashboard, which also incorporated budget execution and indicators of mission support performance for department and bureaus to see. The department exceeded its targets.

A dashboard can track more in mission support services than savings. Knowing and managing risk, progress toward clean audit opinions, delivering construction and acquisition programs on time and on budget, eliminating backlogs, meeting environmental and small and disadvantaged business utilization goals can extend reach into efficiency and effectiveness.

Whatever its emphasis, a dashboard’s fullest potential resides in what departments do to foster connection among the people whose results it tracks. This suggests giving practitioners at all levels access to the dashboard and one another. One department has made the dashboard a part of a broader intranet resource for mission support staff across functions. This can mean linking hundreds, even thousands, of staff -- from contracting officers in a regional office to a human resource specialist or leadership in Washington -- to training, tools, and communications. It calls for acknowledging and communicating broadly team and individual successes. And it suggests executives should encourage innovative ideas from employees and follow through with even modest resources to put in place the best of them. By broadly presenting expectations and execution, the dashboard can catalyze coordinated effort.

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