agenda item no. 023ca19 - harrogate

Agenda Item No. 023CA19

REPORT TO: Management Board

Cabinet

11th November 2019 16th December 2019 SERVICE AREA: Organisational Development and Improvement

REPORTING OFFICER: Commercial & Transformation Manager Stephanie Moore SUBJECT: Integrated Workplace Management System (IWMS) WARD/S AFFECTED: ALL DISTRICT FORWARD PLAN REF: N/A

1.0

PURPOSE OF REPORT

1.1 This covering report seeks endorsement of the attached business case for an

‘invest to save’ project for the commissioning and implementation of an

Integrated Workplace Management System (IWMS).

2.0 RECOMMENDATION/S 2.1 2.2

Cabinet approve the commissioning and procurement of an Integrated

Workplace Management System (IWMS) for the purpose of managing the

HBC Property Portfolio.

The approval of a Programme Manager post to lead the implementation including engagement with Service areas to identify and ensure cost savings, efficiency gains and opportunities are captured.

3.0

RECOMMENDED REASON/S FOR DECISION/S

3.1 3.2

Introducing an IWMS will provide a single platform from which all Estates and Facilities Management functions and business will operate ensuring a cohesive ‘One Council’ approach to property management. In particular, the implementation will strengthen strategic planning and decision making providing ‘real time’ information that is essential to the effective management of an £136m estate and a portfolio of over 450 property assets, in addition to the Housing portfolio currently in excess of 4000 properties.

Integrated Workplace Management System Date: 16/12/2019

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3.3

More specifically, the implementation of a FM system will enable the Council to:

1. Reduce the risk of exposure through non-compliance by providing accessible real-time information, and so becoming less reliant on key personnel to prove compliance and demonstrate operational performance

2. Empower professionalism and reveal commercial benefits and revenue opportunities by increasing the effectiveness of HBC’s Estates and Property management functions’ performance.

3. Promote autonomy and capability throughout departmental operatives (IHMT) by reducing management function burden and supporting the Council’s mobile working initiative

4. Improve asset longevity, efficiency and effectiveness by aiding the development of a deliverable planned preventative maintenance (PPM) strategy increasing asset uptime and informing the capital replacement programme.

5. Stabilise and improve SLA and KPI performance with the benefit of clear, accessible real-time information

6. Enable and advance a collaborative workforce culture through the collaborative commitment to deliver a single source of information, supporting a ‘One Council’ approach to FM

4.0 ALTERNATIVE OPTION/S CONSIDERED AND RECOMMENDED FOR

REJECTION (Must be used for reports to Cabinet & Cabinet Members) None at this time. 5.0 THE REPORT 5.1 5.2 5.3

In 2018 a consultant’s report was commissioned to provide a professional

independent analysis of the current administrative situation. The high level

appraisal identified a number of issues

HBC Estates and Property provide the following district council services (of specific relevance to this business case):

1. Management and maintenance of 3,800 Council homes and strategic asset and day to day operational estate management of approximately 450 assets;

2. Oversight of 391 hectares of parkland and open space and 58 playgrounds, including management and maintenance of the Stray;

3. Operation of six leisure facilities, including swimming pools and gyms;

4. Operation of the following commercial entities: the Harrogate Convention Centre, Royal Hall, Harrogate Turkish Baths and Health Spa, and a museum;

5. Operation of two children’s nurseries and a homeless hostel; The provision of Council services relies on effective management of the domestic dwellings, operational and public buildings and their associated assets throughout their operational lifecycle:


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5.4 5.5 5.3 5.4

1. Legislative and regulatory compliance

2. The health, safety and wellbeing of stakeholders

3. Services delivered to an expected quality

4. Cost-effective and efficient service delivery The vision for 2024 is to achieve a digital, commercial and sustainable Harrogate. Citing the Council’s LGA peer challenge positioning statement (September 2018, p.7): “In 2024 the district will be a ‘progressive and vibrant place to live, work and visit’ … In 2024 the organisation will be one Council that is customer focused, commercially driven and fit for the future” In order to achieve this, the Council will need to foreground a range of corporate priorities including “excellent public services” which are (amongst other things):

1. “Financially stable and managing our assets well 2. Engaging and communicating well with customers 3. Operating high quality services that are commercial in their approach 4. Utilising technology – [with] more reliance on technology and providing

online 24/7 access 5. Intelligently using data to inform service delivery and make decisions 6. Environmentally friendly 7. Delivering different services in different ways”

For the Council’s Estates and Property Management functions to be in a position to support the 2024 vision and beyond, they must continue to seek performance improvements, including those that require commercially sound investment for their success. HBC’s Commercial Strategy and Medium Term Financial Strategy is heavily

reliant upon strategic property management and investment. A corporate

IWMS is required to facilitate the management and maintenance capabilities

of the Council’s property functions and to support project delivery to achieve

the objectives and future vision of a sustainable Council.

The business case provides information on the options explored, the

proposed implementation, required investment and funding.

A cost:benefit analysis has been undertaken that has identified significant

return on investment. A more detailed piece of work will be undertaken to

ensure all benefits have been profiled and captured following the introduction

of technology and implementation of automation.


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6.0 REQUIRED ASSESSMENTS AND IMPLICATIONS 6.1 The following were considered: Financial Implications; Human Resources

Implications; Legal Implications; ICT Implications; Strategic Property/Asset Management Considerations; Risk Assessment; Equality and Diversity (the Public Sector Equality Duty and impact upon people with protected characteristics). If applicable, the outcomes of any consultations, assessments, considerations and implications considered necessary during preparation of this report are detailed below.

6.2 The IWMS business case has been presented and approved by the following:

Management Board. Financial Services have validated the financial profiling. 7.0 CONCLUSIONS A robust governance is in operation through the 2024 Programme to provide

assurance to Cabinet for final approval. This will ensure a progressive and proactive approach to the successful delivery and implementation of a corporate system that will facilitate strategic decision making and inform the day to day management of our assets, delivering significant benefits to the Council. During consultation it has been evidenced that failure to adopt an IWMS system would leave the council vulnerable to an increased risk of both exaggerated expenditure and capital loss.

That recruitment of key project delivery posts is completed by quarter 4,

2019/20 situated within the ODI Commercial & Transformation Team reporting bi monthly to the 2024 Programme on project progress and delivery.

OFFICER CONTACT: Please contact Stephanie Moore, Commercial & Transformation Manager, if you require any further information on the contents of this report. The officer can be contacted at (Organisational Development & Improvement, PO Bo 787, Harrogate, HG1 9RW or the relevant office address) 01423-500600 Ext 58272 or by e-mail – [email protected]


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Business case

Programme name: 2024 Commercial & Transformation Project name: Integrated Workplace Management System Author: Lorraine Larini/Steph Moore Revision history:

Document Location

This document is only valid on the day it was printed. Latest version of the document will be found in the Project folder at:

Revision date

Version number

Summary of changes Changes marked Y/N

29.7.2019 Draft 0.1 Initial draft - SM Yes

7.8.2019 Draft 0.2 Revised draft following minor review - SM Yes

27.8.2019 Draft 0.3 Insert visual diagram - LL Yes

2.9.2019 Issue 1.0 Following approval by Management Board Workshop – SM Yes

30.10.2019 Issue 2.0 Financial revisions with inclusion of benefits profiling – SM Yes

01.11.2019 Issue 2.1 Additional financial revisions following Finance Validation - SM Yes

11.11.2019 Issue 2.2 Amendments advised following Mgt Bd - SM Yes

28.11.2019 Final Amends and validation from Finance/ICT Yes

Approvals This document requires the following approvals.

Signed approval forms are filed in the project files.

Name Signature Title Date of issue

Version

Management Bd IWMS Business Case 11/11/2019 2.1

Distribution This document has been distributed to:

Name Title Date of issue

Version

IWMS Project Team IWMS Business Case 27/8/2019 1.0

Management Bd Workshop IWMS Business Case 02/09/2019 1.0

Management Bd IWMS Business Case & Financial Profiling 11/11/2019 2.1

Head of Finance IWMS Business Case & Financial Profiling 30/10/2019 2.0

Head of ICT/Head of Finance IWMS Business Case & Financial Profiling 12/11/2019 2.2


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Purpose

To present the Business Case for investing in an Integrated Workplace Management System (IWMS) that will provide a single platform for HBC’s assets and facilities. Reasons In developing the business case a working group was formed consisting of

representatives from across HBC who were identified as managing assets. Definition of assets: any tangible or intangible asset that is expected to be utilized in the business operation for an extended period of time.

Assets to include computer hardware, office equipment, furniture, buildings, vehicles, artwork etc.

Introducing an IWMS will provide the basis from which to address and improve the current property functions at the Council, whilst also being demonstrably in service of the Council’s declared 2024 strategic aims. In particular, the implementation will:

Reduce cost and/or release resources for other activities

Provide a platform for improved customer engagement

Improve the commercial approach of the department

Utilise technology to promote operational performance improvement

Intelligently use data to inform decisions

Provide the opportunity to re-evaluate the current service delivery approach, in order to inspire delivering the service in different ways


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Options Four options were explored:

1. Do nothing : Considered to be a risky strategy for the issues and risks identified.

Do nothing – compounds existing issues as identified in the risk analysis at Appendix B i.e. overspending on repairs will escalate, labour intensive tasks will become unmanageable, risk to reputation and loss of revenue will increase.

2. Operational process improvement : should be considered a fall-back strategy only.

We do not presently hold sufficient information to inform a process review. The generally accepted understanding of the benefits of ICT technological solutions is that the resource required to collate the information for a review would produce greater benefits if focused towards implementing the system.

3. IWMS implementation : Considered to be the best solution for the issues identified.

4. Corporate ERP system implementation : The Council does not appear to be at the stage where an ERP system is possible

Corporate Enterprise Resource Planning (ERP) system implementation – this option is currently out of scope due to resource, cost and ongoing ICT commitments.

Appendix C provides full details of business options analysis.

Option 3 is the preferred option – IWMS Implementation

Benefits expected

Reduce the risk of exposure through non-compliance by providing accessible real-time information, and so becoming less reliant on key personnel to prove compliance and demonstrate operational performance Empower professionalism and reveal commercial benefits and revenue opportunities by increasing the effectiveness of Services and asset/property management functions’ performance Promote autonomy and capability throughout departmental operatives by reducing management function burden and supporting the Council’s mobile working initiative Improve asset longevity, efficiency and effectiveness by aiding the development of a deliverable planned preventative maintenance (PPM) strategy that increases asset uptime and informs the capital replacement programme


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Stabilise and improve SLA and KPI performance with the benefit of clear, accessible real-time information Enable and advance a collaborative workforce culture through the collaborative commitment to deliver a single source of information, supporting a ‘One Council’ approach to Property management. The above high level benefits have been taken from the commissioned 3 edges report which demonstrates in more detail the benefits to the Council from introduction of a system.

It is envisaged that this project will include the provision of mobile working for the areas of business within scope. These areas will be subsequently de-scoped from the corporate mobile working project and to avoid duplication and/or conflict the two projects will be aligned to ensure transparency and strengthen collaboration.

Asset Management – with a focus on estate management and all property e.g. fixed and portable assets in terms of compliance, planned and reactive maintenance, condition surveys and capital projects. To include the fixed and portable assets relating to ICT, Corporate Facilities room and pool car booking, and Transport from Year 3 onward, resource permitting.

Estate Management – including capital valuations, sales, disposals and leases. Investment management.

Contract Management – To include internal and external repair and maintenance contractors, and lease management etc. Functionality incorporates triggers relating to best practice and our Contract Procedure Rules. For example; insurance renewal dates, notice periods for termination, key performance indicators and service levels.

Budget and Capital Project Management – Ability to create an intelligent, condition based maintenance and replacement programme for critical assets through application of different scenarios to demonstrate the impact of different courses of action. See life cycle optimisation diagram at Appendix D.

Data Management – Allows dynamic reporting, resource forecasting and improved decision making. Proactive control of our data rather than being reliant on contractor’s customer portals. Consolidation of information currently generated from a variety of internal systems including but not limited to Excel, SharePoint, W drive, Iclipse, Service Desk, Agresso, Northgate and Business Objects.

Document Management – A centralised source for the storage and retrieval of schematics, operation and maintenance manuals, service records, compliance certificates, warranties and guarantees potentially accessed via asset tag using an App on a smart phone/tablet or via desk/laptop (mobile working). Further potential to incorporate dynamic risk assessments and the resulting action plan workflows.


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Improved Customer Experience – For both internal and external customers through fit for purpose self-service reporting and tracking of repairs, planned maintenance and planned improvements.

Realise and measure success of commercial opportunities – such as managing improvement plans for HBCs property portfolio to ensure maximum utilisation, occupancy and rents are achieved. Provides the technical ability to deliver a repairs service on a commercial level.

In addition to the above direct benefits the IWM system will support and assist a number of projects in the 2024 transformation programme incorporating mobile working etc.

Risks A risk workshop has been undertaken please refer to Appendix B. Risks will be managed and reported through the 2024 governance bi-monthly.

Timescales The programme for delivery is phased over a 5 year period and will be monitored and reported through the 2024 governance bi-monthly.

Investment appraisal

To align with the Council’s 2024 programme timescale and to enable validation and phased implementation of the scoped elements, the financial model runs over five years. The modelling process takes a conservative stance to the capital and operational savings that providers claim can be realised from IWM system implementation. It also draws upon annual Council costs available from the desktop data, and includes indicative internal and external staffing costs.

The above cost model shows the potential for the Council to deliver a project which will break even early in year three. This is the best case scenario. The table below demonstrates the worst case scenario with the project breakeven point in year 5. With a possible return on investment being seen in year 6, calculated using the worst case scenario i.e. only 20% of the market claimed savings reached within 5 years.


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In reality the return on investment is likely to be somewhere in between these 2 scenarios and with successful appointments to the project team posts and continuity of the team there is no reason why the best case scenario cannot be achieved. Therefore, quantitative financial appraisal clearly supports the case for an IWM System implementation. In 2018 the consultant’s scope was for the Facilities Management functions and operations only. The outcome of the findings were so positive, that it is proposed a corporate system be introduced to HBC with the system scope being broadened to include all property services and functions within HBC (as demonstrated in the visual on page 1 of this report) to maximise the benefits and return. A desktop exercise has been undertaken by the Project Team using the same methodology and profiling applied by the Consultant to include and cost the additional scope to provide a corporate integrated system. The table below Appendix H, Fig 2, shows the anticipated potential increase in cost and benefits of a corporate system. It should be noted that these figures are intended to provide for the worst case scenario. The profiling includes costs for additional resources on the assumption that there is no capacity to support implementation from in house delivery and in some areas there may be duplication due to interpretation of the Consultant report. The pay back period is Year 5.

The cost:benefit analysis below shows the pay back period at Year 7 with the inclusion of Direct benefits only. Appendix H, Fig 5.

A full benefits realisation is still to be undertaken with all Service areas. The benefits identified to date have been validated by Finance. To summarise, the financial profiling undertaken is ‘worst’ case scenario, in all respects, with numbers loaded to intentionally increase the projected cost of the system. It is anticipated from market research that the actual cost may be less than that profiled. Recent discussions with the Consultant verified this thinking, whereby recent profiling for a similar sized organisation for a corporate IWMS estimated a comparative figure. Irrespective, based upon the findings this project provides a good return on investment and would be instrumental in enhancing the management of HBC property portfolio, providing significant cashable and non cashable benefits to the organisation and HBC staff.


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The profiling has identified that the system will contribute to the strategic management and day to day operational efficiencies of the whole estate. It demonstrates that 50% of the Housing work in some teams is directly attributable to the Housing Revenue Account, it is therefore anticipated that 50% of the cost will be recharged to the HRA, figs are shown below. Appendix H, Fig 4.

Below shows the total cost of implementation and identified funding sources. Appendix H, Fig 6.

The Commercial Strategy for HBC is focussed on four key business areas that are property focussed (shown in the table below). The IWMS purchase will be a critical business tool for Services across the organisation in providing ‘real’ time intelligence to better inform the commercial performance and improvement activity of the key business areas within the commercial strategy Below is the schedule of planned investments and returns within the commercial strategy that are currently aligned with the MTFS.

It is intended that the project be added to this schedule as the key projects will be dependent upon the system. Note the projected surplus.

It is considered that a concentrated resource should be funded to drive the IWMS project, located independently within the 2024 Programme team (part of the Improvement & Development Team) to ensure full implementation and

http://thehub.harrogate.local/team/ImprovementDevelopment/CommercialAndTransformation/Strategy/Commercial%20Strategy%20Final%20July%202019.docx?web=1


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realisation of the benefits profiled. The estimated cost of the resource has been profiled for the first 2 years of the programme. 2024 Programme Governance

The structure above proposes that the Programme Manager post will be directly responsible to the Commercial and Transformation Manager reporting to the Director of the 2024 Programme, Transformation Board bi-monthly and working directly with Heads of Services and their teams to drive successful delivery within the programmed timescales.

Funding There is currently £500k approval for mobile working included within the IT 5 Year Development Plan. £250k 2019/20 and £250k 2022/23. There is no spend to date against this figure. The mobile working project scope has been revised to mitigate risk of duplication as the IWMS will provide a mobile solution. Based upon the ratio of staff / budget, it is proposed that 20%, £100k be retained for the mobile project and 80%, £400k be attributed to the IWM System project. The funding sources for the project, will include contributions from the ICT Development Fund (mobile working project), the direct savings currently profiled and HRA (Housing Revenue Account).

Stakeholder Governance

A working group is currently operational and consultations have taken place with representatives from ICT, Finance, Audit and Services.

Human Resources

Potential fixed-term recruitment of project staff. Funding for training of employees that will use the system is included within the costs.

2024 Commercial & Transformation

Director

Commercial & Transformation

Manager

Programme Manager IWMS (2 Year Temp)

Change Manager Parks

Commercial & Transformation

Officers x 3


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Legal Implications

Procurement process has been considered, corporate procurement are aware, possible use of a framework to engage with suitable supplier. Contractual agreements will be referred to legal at all stages.

GDPR Implications

These have been assessed as low risk due to nature of information held on system. (Data Protection Impact Assessment pending). Legal will be consulted to validate.

Conclusion An IWMS system will deliver significant benefits to the Council in proactively managing its assets. This system will be as much a part of our working day as Outlook, Agresso and Trent. During consultation it has been evidenced that failure to adopt an IWMS system would leave the council vulnerable to an increased risk of both exaggerated expenditure and capital loss. To have the requirement for an IWM system recognised as a project under the 2024 transformation programme would ensure a progressive and proactive approach to the successful delivery and implementation of a corporate system that will facilitate strategic decision making and inform maintaining our assets. To capitalise on engagement work to date, the working group will be transformed into a project team to develop a detailed specification and implementation plan, with a view to procuring a suitable system by Q4, 2020. Recruitment for key project delivery posts to be completed by quarter 4, 2019/20 and roll out to commence quarter 4 2020/21.

agenda item no. 023ca19 - harrogate

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