Embedding Strategic Plans into a Benefits Realisation Framework Proves key to Achieving Company-wide Goals.
TAFE SA is the largest provider of vocational education and training in South Australia, delivering more than 1000 courses to an average of 80,000 students per year at 44 campuses across the state.
TAFE SA’s Government funding is under pressure in the forward estimates, requiring the organisation to respond by creating a plan to manage the funding decline. The plan involved significantly increasing external revenue and reducing costs in a way that would not have a major impact on its ability to deliver services.
Traditionally, TAFE SA provisioned up to 6 months for forward budget planning purposes. This was considered to be an excessively long period of time, so was substantially condensed for the FY16 Budget. One of the major benefits being that key Financial Management resources could allocate more of their time to strategic level planning and monitoring the execution of those strategies.
TAFE SA’s Finance Centre of Excellence Director Allan Morichaud said having a defined strategy and embedding it in a benefit realisation framework was the key to achieving company-wide goals.
“We developed the overarching strategy but then we put our whole portfolio of six to eight strategies into the one framework to ensure they were working together to achieve planned outcomes,” Mr Morichaud said.
The strategies were approved by the board to allow time for the initiatives to be further developed ahead of the budget period. This allowed the strategic outcomes to determine the budget rather than the budget dictating the strategies.
Mr Morichaud said the issue of how to deliver the strategies came next.
“It’s one thing to create a strategy, that’s fairly simple, the key aspect is how to actually deliver the strategy and realise the benefits of it,” he said.
“We knew what numbers we had to achieve, we knew the strategies but it was the in-between: how are we going to do it and how can we make sure we realise the benefits?”
“It’s the ‘how to do it’ that is hard, but it is fundamental.”
“You can have the best strategy in the world but it’s all about implementation and that is where most companies fail – they do not implement well.”
The next step was to take a proactive approach by bringing all the stakeholders together at this early stage to ensure clarity and open communication between the business units (Education Faculties) and the support functions (Corporate Services).
“In the past there has never been a clear dialogue between the education side of the business and the support functions,” Mr Morichaud said. “The support functions went ahead with whatever projects they had on their agenda.”
“So when the education division wanted to achieve something, they went to ICT and said ‘we need this now’, but ICT was already busy with their own plans.
So ensuring the dialogue and coordination in the business planning process we can now move into the next financial year having those priorities fully aligned and clarified.”
“By involving stakeholders early in the project we were able to develop some really constructive dialogue between the education unit and the support function of the business.”
“People appreciate being involved - they don’t like being left out. And we actually avoid that now because they have no excuses, they know exactly what is being implemented and they actually like it.”
Workshops were set up with all the stakeholders together to work through the processes of building a benefit map. This activity identifies the actions required, the people responsible for them and how each deliverable contributes to the desired business outcomes. This then allowed KPIs and lead and lag indicators to be created so progress towards benefits could begin to be measured.
The process of building the benefit map proved to be as valuable as the map itself, Mr Morichaud said.
“The fact is we had all these stakeholders who walked into a room with their own assumptions and came away with a shared vision, a much greater understanding of how the entire strategy fits together and their role in implementing it.
Having the key stakeholders in that room together for the workshops ensures clarity,” he said.
“For the first time ever we now have an overview of what are the initiatives, who’s responsible for each one and what is their deadline.”
Once the desired outcomes and required actions were identified, time-based targets agreed to by all the stakeholders were set.
This provided a baseline to measure and compare performance and gave the organisation the ability to review and quickly drill down to identify wavering forecasts and where corrective action was required.
Predictive Power of Lead Indicators
Mr Morichaud said establishing lead indicators for each strategy early in the process provided excellent real-time data of how the initiative was tracking.
As an example, he said, if TAFE SA’s strategy was to increase international student numbers by 30 per cent over five years, they could not afford to wait until the end of the five-year period to quantify their success.
Lead indicators needed to be put in place to see if the organisation was on track to hit that target.
“We could measure the number of students enrolled after 12 months, sure, that might be of value, but what we should look at even before the first year is up is the number of people from overseas countries who are visiting our website, the further number of people who request information from those countries and the follow-ups from there.”
“Those numbers act as an early warning. If we’re not seeing a 30 per cent increase in those numbers we’re never going to get that 30 per cent increase in enrolments.
Or if it turns out that the inquiries are up by more than 30 per cent but the conversion rate into new students is a bit low then we have pin-pointed the problem and we know exactly where to target our energies.”
The project is seeking to achieve final sign-off for each of the strategies with particular focus on the method, Mr Morichaud said.
“We’ve decided what initiatives need to be implemented, who is responsible and what are the priorities, now it’s about the measures – the KPIs and leading and lagging indicators. Once we get that signed off then we can close the loop and start doing the numbers.”
However, instead of having four to six months to do the budgeting, the organisation will do it in four weeks as a result of a streamlined approach, driven by enhanced processes and use of technology.
“But we will also ensure we have money in the budget for things like a new website that might have been identified in the strategic planning.”
In the new financial year, each strategy owner will report back every three months on how their initiative is progressing.
Keys to Success
Mr Morichaud said the key was to establish absolute clarity among all stakeholders about what had to be done, who was responsible and what the time frames were. Enforcing accountability and maintaining momentum to get things done would be crucial to realising benefits and avoiding change fatigue as the project progressed, he said. “It’s all about the momentum.