A process for identifying, analyzing, and communicating opportunities to share services

Introduction

The US Courts, in its mission to deliver Justice to our citizenry, is compelled to provide the best service possible with ever dwindling resources.  Tightening budgets across the Unites States Government has forced agencies to do more with less and in some cases less with less.  Unfortunately, the US courts does not have the luxury of doing the latter.  Therefore smart operational steps are required to ensure that resources are not wasted through redundancy or inefficiency.

Figure 1, High Level Process

Figure 1, High Level Process

In this paper we introduce a process that could help the US Courts focus their analysis of potential shared services and foster two way communication with courts at all levels of the federal judiciary.  The paper is laid out in three broad sections shown in Figure 1 below.  We begin tackling the shared services problem by: (1) researching lessons learned; then (2) analyzing information both currently on-hand and within reach at the courts; and finish the process (3) by communicating these findings and encouraging collaboration with and between court units. 

 

Lessons Learned Research

The goal of our suggested research is to gain a deep understanding of the service sharing information that currently exists and take specific lessons from them.  By exploring the processes that individual Court units, or districts, have developed, the Administrative Office (AO) will be able to implement proven ideas while also avoiding pitfalls.  The AO should create business cases around this information and pointedly communicate both the benefits and risks experienced by Court units who have already consolidated services.

Our preliminary information survey has uncovered a great deal of information on the subject of service consolidation – to include the US Courts.  Therefore, our recommended first step would be to aggregate service consolidation documents from within the US Courts then proceed to collect Federal Government, and non-profit sector information.  These documents can be obtained from multiple sources such as US Courts data repositories, US courts data calls, GAO reports, industry publications, and agency websites.  Logapps also maintains an extensive library of past projects with some being service consolidation business cases.

Analysis Approach

Our approach to analyzing opportunities for shared services at US courts begins with the identification of candidates through data analysis and continues with cost benefit and business case analysis.   

Cost Accounting Database.  The AO will need a flexible cost analysis system that enables them to understand Shared Service usage, quantify overhead implications of Shared Services, identify high efficiency courts, and determine centers of excellence.  However, the amount of data produced by the large number of court units and cost service categories produces the challenge of having a tremendous amount of financial records that are difficult to handle using basic spreadsheets.  Our proposed tool for dealing with this large record set is a cost accounting database that can analyze service costs across the US Courts.  The current database tool developed for the Accounting and Financial Systems Division (AFSD) is a solid platform for cost and statistical analysis.[1]  The database should include a court Work Breakdown Structure (WBS) that defines each generic service or process that a court employs in its operations.  A general example of such a WBS tree is shown in Figure 2 below.  The WBS is vital in that it provides the Courts with a common understanding of each service’s sub-activities and scope.  As a tool, it further allows the analysts to identify and eliminate early on those service elements that are off the table and those that are best candidates.

 “The initiative needs to be based on a clearly presented business-case or cost-benefit analysis and grounded in accurate and reliable data, both of which can show stakeholders why a particular initiative is being considered and the range of alternatives considered.” - GAO, Streamlining Government, May 2012

Financial output ratios such as dollar per employee Full time Equivalent or dollar per square foot would be produced.  These measures, as such, will allow the AO to identify opportunities between federal courts by identifying which courts are performing exceptionally well and which are faring poorly.   Other outputs may include:

Figure 2, WBS Tree

Figure 2, WBS Tree

  • Administrative costs as a percentage of total court unit expenditures
  • Cost benchmarking that allows comparison of court units to an aggregate of like-size courts - overhead and administrative costs, direct, indirect
  • Detailed cost summaries by district with a drill down capability to court unit costs
  • Cost-Benefit Analysis (CBA). 

A cost benefit analysis can help the US Courts ensure that they are making a true resource-saving commitment when considering shared services.  Individual cost-benefit analyses should be pursued to determine not only the cost but also the benefit and risk of a change in process.  As with most process change initiatives some investment in time, money, or both must be made before the change can be implemented.  A CBA allows you to see if it’s truly worth it. 

Following a structured approach, the analysts would analyze data collected through the existing financial system, interviews of stakeholders, and data calls.  The analysis should begin with the definition of the scope of service and list the basic operational assumptions.  From there it would assess the cost of the upfront investment and the resulting change in recurring   operational costs.  Risk must also be considered from all conceivable areas: implementation, operational, organizational, and political to name a few.  Finally, cost savings would be calculated as well as the proper metrics of interest such as Return on Investment (ROI), payback period, and Net Present Value (NPV).

Taken as a whole, the combination of data analysis and the more qualitative cost benefit analysis can offer a balanced look at the opportunities afforded by consolidation.  As we have found on past projects, service cost data is oftentimes inconclusive or missing altogether.  Therefore, a qualitative and cost accounting approach becomes necessary.  As the GAO noted in a recent report:

“A lack of accurate data should not, however, necessarily preclude agencies from considering the costs and benefits of consolidation. Agencies can work to analyze the information they have at hand on likely costs and benefits, as an analysis of this information can reasonably indicate the likelihood that a consolidation will offer more benefits than costs.”[2]

Collaboration and Communication

A Shared Services Portal, or Gateway, would allow two-way communication between the AO and key court unit stakeholders, and between court units themselves.  The goal of the site is to provide stakeholders with a centralized access point to Shared Services information and tools.  The entry point would be available to all stakeholders over the US Courts intranet.

The site would be designed around the needs of key stakeholders with the goal of helping them understand the objectives of shared services and the potential benefits that can be realized.  Information collected through the Lessons Learned Research and Cost-Benefit Analysis steps would be made available here. 

While the details would need time and collective effort to develop, some potential elements of the site may include the following:

-          An on-line cost model that would allow court users to visualize their savings potential.

-          Provide a venue for Courts’ feedback and build a dialogue based on the feedback.

-          Create an environment for collaborative discussion through social media outlets.

-          Strategic Sourcing Groups.  A portal that allows Court stakeholders to form and organize buying groups for the same contracted services or products.

-          Communicate Lessons Learned and Case Studies from the community on shared services. 

-          Share latest news on shared services from government and industry (both good & bad).

-          Solicit feedback through other mechanisms such as surveys and interviews.

-          Provide expert opinions from the community (industry, government, academia, & non-profit).

The AO should be the ultimate facilitator who gives freedom to individual courts to post material in opposition or cooperation.

 


[1] Currently has the capability to categorize data by court size, court unit type, district, and other categories. 

[2] United States Government Accountability Office (GAO), Questions to Consider When Evaluating Proposals to Consolidate Physical Infrastructure and Management Functions.  May 2012