Client: A probation organisation
Problem: The organisation, along with the rest of the National Probation Service, was preparing itself for the new business challenges that competition will bring. A key part of this was the need to develop an understanding of the true costs of delivering services to customers. With new targets to involve voluntary and charity sector partners in service delivery, an accurate view of the processes and resources consumed was even more important if these relationships were to be managed effectively. The organisation had previous experience of doing process improvement projects but had never gone to the level of detail of costing activities, based on process analysis. The Chief Officer and Treasurer were keen to involve staff as much as possible in doing this, to ensure both accuracy and ownership.
Ian Seath was asked to help with this work and three objectives were set for the project:
- To produce a documented set of process maps, agreed by the staff who operate them, available in a format that can be shared (using Nimbus Control software)
- To complete an activity cost analysis of one of these processes, and an understanding of potential cost improvement opportunities
- To transfer skills to carry out further activity cost analysis, using the approach piloted
Benefits: When compared to the budget, the process model costs were within 4% of the budget figures. The process modelling has enabled the organisation to:
- Identify the direct process cost of Offender Programme starts and completions
- Quantify the overheads associated with delivering the organisation
- Identify opportunities for streamlining and standardising the process, based on staff inputs on how their processes actually operate
The approach provided an accurate, bottom-up, process view of the costs of delivering a service. Costs were based on actual activity times, not “we have 5 people to deliver this service, so the cost must be their salaries and overheads, divided by the number of offenders”. It provided an ability to challenge the true value-add of each step in the process; something that is simply not possible when doing a more conventional costing and overheads allocation exercise.
Client comment: "This project has provided the basis for a lot more work to accurately plot and evaluate the organisations we provide.
The process and skills acquired have been valuable and I expect the organisation to be better placed to meet the challenges of the future as a result." Treasurer
Contact: Ian Seath