finance service delivery model approved approach presented by: peter enlund november 2006
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RMIT University Slide 2
Agenda• Meeting Purpose
• Status Update
• Overview of the Approved Finance Service Delivery Model Approach
• What this means?
• Next steps
RMIT University Slide 3
Meeting Purpose• Meeting participants - Identified staff who
are involved in performing finance tasks across the University.
• To provide an overview of the endorsed Finance Service Delivery Model and next steps.
RMIT University Slide 4
Status Update The Finance Service Delivery Model
proposed for implementation commencing January 2007 was presented to and endorsed by:
• Major Projects Committee on 17 October 2006 (Forwarded to VCE on 26 October 2006).
RMIT University Slide 5
Finance Service Delivery Model: Objectives
• to define the RMIT Finance Service Delivery Framework for implementation in 2007
• to improve service delivery
• reduce costs through more effective deployment of staff
RMIT University Slide 6
Criteria• eliminate duplication and overlap of
services
• strengthen of key functional capability
• standardise processes and practices
• concentration of services and processes – deliver improved service and efficiencies– it does not detract from the delivery of the
business of the University
RMIT University Slide 7
Information Gathering
• Portfolios and Service Centres in August 2006 to identify who currently performs finance tasks
• Accounts Payable and Purchasing Project• Processes identified through earlier work
completed by the Major Change Group
RMIT University Slide 8
Some observations: • Low level of “trust”• untimely entry of information • unnecessary and inefficient offline processes prior to the
point of data entry. • Data in the General Ledger has absolute integrity and is
subject to sound internal controls.• Little use of standard GL based reports resulting in
– duplication of finance activities– ad hoc report construction– incorrect data being used for decision making – high level of manual tasks.
RMIT University Slide 9
Some observations:
• an unwarranted degree of control or data over every aspect of the business,
• control activities in too much detail • a legacy of a low level of trust in the responsiveness of
central finance, from historical experiences and/or perceptions.
• Data entry into Accounts Payable is prompt– processing within 2 days after it is received
RMIT University Slide 10
Some observations: Current RMIT Finance Operations • normal business practice for routine tasks • current structure is a legacy • we continually have to train people in tasks. • must be sustainable and delivered with robust quality
controls.
• a lack of standardisation in processes due to local and
historical ways of working.
RMIT University Slide 11
New Ways of Working • build and maintain trust and confidence in the services
delivered from all areas of the university • stop time and effort expended on unnecessary activities
based on compliance to policy rather than for genuine business benefit.
• build and maintain appropriately skilled finance staff base
• clarity in functional alignment and reporting lines • collaborative environment encouraged and strengthened. • develop and document clear processes and procedures.
RMIT University Slide 12
Staff Summary
In August 2006: • 209 staff were identified as performing some
finance-related activity. • Only about 20% are located in Financial Services
RMIT University Slide 13
Business Size Summary
RMIT DEAKIN
Total Revenue
$591 million $436 million
Total Number of FTEs
3226 2609
Total Assets $1476 million $880 million
RMIT University Slide 14
Transaction VolumesMEASURE RMIT
(per annum)DEAKIN
(per annum)
Number of invoices processed 52,000 93,701
Number of suppliers paid by due date
Approximately 33%
Approximately 90%
Number of cheques processed 7360 12,514
Number of electronic payments processed
20140 15,390
Number of Full Time Equivalent (‘FTE’) staff processing transactions
Impossible to determine
due to current
structure
5 EFT (each staff member
processes both cheque and electronic payments)
Number of disbursements – Electronic Payments or Cheque
27,500 27,904
Number of payments processed per FTE
Impossible to determine
due to current
structure
5580
Number of invoices per FTE 18740
RMIT University Slide 15
Development of the Model• Service Delivery levels correspond with
what is required to complete the task– level of skill– local vs central knowledge / input / ownership.
• Each level dedicated to delivering efficient services directly to its customers, whether internal or external
RMIT University Slide 16
Service Delivery LevelsLevel 3: Strategi
c
Level 2a & 2b:
Consultative
Level 1a & 1b:
Operational
Level 0: Self
Service
Finance operates as a strategic partner with business units. People issues and Finance practices are integrated into business planning and operations management.
Range of value
Finance is focused on providing standard services using systematic and consistent procedures.Finance provides routine and ad hoc transaction processing.
Finance provides a range of specialist Finance services and products to employees and managers.Finance provides solutions for complex Finance issues.
Employees initiate Finance action.Employees provide preliminary information and data to Finance.
RMIT University Slide 17
Service Delivery Levels cont…• clear definition of delivery points for all Finance
processes and process steps• identification of process / task accountability • service levels efficiently tracked and managed• identification of subject matter experts. • greater focus on value-adding activities
– by eliminating unnecessary steps, – duplication and overlap.
RMIT University Slide 18
Proposed Service Delivery Model Approach Overview
1. Level 0 preparations by Financial services to enable self service at local level. Level 1 Main Stream Finance tasks are performed by Financial Services
2. Financial Services start fulfilling Level 0 and Level 1 Main Stream Finance tasks required with less resources.
• Savings accrued and reported
3. Finance service delivery will meet and change expectations of key stakeholders e.g. HOS / unit heads etc. This will help build trust in the new ways of working.
RMIT University Slide 19
For Finance-Titled staff:Executive Director Financial Services reviews the current resource allocations and the remaining work for finance positions described in Point 1 above within their respective work areas.
i. work undertaken elsewhere
ii. remaining work
RMIT University Slide 20
For Non-Finance titled staff:Local area managers / executive review current resource allocations and remaining work for bundled positions within their respective work areas
i. work undertaken elsewhere
ii. remaining work • Decisions on an individual basis may be required for
non-finance titled roles if they are currently predominantly performing finance tasks.
• Current position titles not necessarily accurate reflection of position.
RMIT University Slide 21
Single Processing Mode Level 0 and Level 1 processes will include:
• Six staff• cross trained and able to deliver consistent
services in a sustainable, timely and accurate manner.
• provides clear accountability• single point of reference for staff and vendors. • central point of feedback enabling learning from
what’s working and areas needing improvement.• City and Bundoora.
RMIT University Slide 22
Some Supporting Initiatives• Per diems should decrease credit card and staff
reimbursements• Single processing mode for research billing • Reduce the number of cab charge accounts • Create an interface between Library and SAP
– eliminate current duplicate data entry
• Casual Pay and Contractor process• Travel
RMIT University Slide 23
Underpinning mechanisms• agreed turn around times• clear process documentation and understanding
of roles and responsibilities• system tracking options • clear finance functional reporting lines • regular, relevant finance communication groups
(academic and service centres) as appropriate. • Finance Newsletter
RMIT University Slide 24
Proposed Performance Measures
• Payment by due date – long term target of 90%
• Number of telegraphic transfers and electronic payments
• Number of exception payments
RMIT University Slide 25
Key Changes: Processes• Level 0 enabled for self-service and Level
1 performed at a single processing mode – including data entry and data processing. – part of Financial Services and will be
physically located at City and Bundoora
RMIT University Slide 26
Key Changes: Reporting Lines / Budget
• Change to Finance functional reporting lines – all staff with Finance titles (bundled roles and pure
finance roles) will now report within FS– Decisions on an individual basis may be required for
non-finance titled roles if they are currently predominantly performing finance tasks.
• No change for those in ‘bundled roles’ who perform some finance tasks e.g. administrative officers– these will be reviewed at a later stage.
• Budget for all finance-titled roles (bundled and pure) will shift to FS
RMIT University Slide 27
Key Changes: Finance Titled Roles
• Pure finance roles will initially continue in their current positions, with changes to tasks because of the changes in main stream finance processes.
• Bundled finance-titled roles will initially continue in their current positions, with changes to tasks resulting from the change in processing for main stream finance processes and will no longer undertake non-finance work.
RMIT University Slide 28
Key Changes: Non-Finance Titled Roles
• non-finance titled roles will initially continue in their current positions – no longer undertake finance tasks.
RMIT University Slide 29
Key Changes: All Roles
• All roles mentioned will be reviewed to ensure that capacity is best utilised. – may involve some changes in role descriptions
where the new work does not match current PD
– there will be consideration of consolidating work where it is of benefit to the University.
RMIT University Slide 30
New Job Opportunities4 or 5 new finance positions
1) Finance Officer, Purchasing (Bundoora)2) Finance Officers, Accounts Payable (City)3) Research Contracts - Coordinator (City)4) Portfolio Finance Manager – non academic
• General staff transition guidelines will be applied
• Positions aimed to be filled by December 2006.
RMIT University Slide 31
Next StepsDetailed Planning is currently underway.
Budget to transfer for Finance - titled staff
For 2007
System changes to support changes to reporting lines – Consequences of PFM non academic recruitment
December 2006
Recruitment of new positions December 2006
RMIT University Slide 32
Next StepsMainstream Level 0 and Level 1 processes documented in detail with all supporting system requirements etc being prepared for January 2007 implementation. Including training requirements.
End November 2006
Implement training requirements (where applicable)
Dec 2006
Change to main stream processing January 2007
RMIT University Slide 34
Further updates
• RMIT Updates• Finance Newsletter• www.rmit.edu.au/fs/service• Specific communication as applicable