PMF Reference Guide: Value Chain and Value Model for … · Web viewThe Value Model for the Queensland Public Sector (Value Model) provides a framework to assist employees, clients

Performance Management Framework Reference Guide

Value Chain and Value Model for theQueensland Public Sector

August 2012

Version 2.1

Introduction

Purpose of this guide

The Value Chain for the Queensland Public Sector (Value Chain) shows how the public sector organises itself to ensure it is of value to the people in Queensland. The Value Model for the Queensland Public Sector (Value Model) provides a framework to assist employees, clients and stakeholders of the Queensland Government and the community to understand the connections and alignment between parts of the Queensland Government as a whole, or between the parts of a single agency, or relationships between the parts of a unit within an agency.

The intent of this reference guide is to:

describe the Value Chain

describe the Value Model which uses the tools of enterprise architects to describe the components of the Value Chain

describe the various documents, frameworks, policies, etc. (known as, and referred to in this reference guide as ‘artefacts’) that currently support the Value Model and their alignment to the Value Model.

Intended audience

This reference guide is intended for a broad audience. It provides guidance for all Queensland public sector staff, but is particularly relevant to:

senior executives

performance management and planning practitioners

enterprise architects.

Context

Public value thinking includes the capacity to analyse and understand the interconnections, interdependencies and interactions between complex issues, and across multiple boundaries. Essentially, it is about applying ‘systems thinking’ in a public sector environment. Systems thinking is an approach to problem solving, by viewing ‘problems’ as parts of an overall system, rather than reacting to a specific part, outcome or event, and potentially contributing to further development of unintended consequences.

Performance Management Framework Reference GuideValue Chain and Value Model for the Queensland Public Sector Page 2

To increase public value for its clients, stakeholders and the community, the Queensland public sector needs to work as an integrated system. As such it is important to understand the interconnections, interdependencies and interactions between all parts of the public sector. The Value Chain and Value Model use enterprise architecture techniques to depict these relationships.

Enterprise architecture (EA) is the practice of applying a comprehensive and rigorous description of the components of an organisation including business direction, business services, information, business processes and information and communication technology (ICT). EA describes the terminology, composition of these components and their relationships. The Queensland Government has developed its own EA framework called the Queensland Government Enterprise Architecture (QGEA). It has four ‘layers’: a business layer; an information layer; an applications layer; and an infrastructure layer. In this architecture, the business layer includes business direction, business services, and business processes.

The Value Chain and Value Model depict the relationships between the primary elements in the business layer. The Value Model and Value Chain use a pictorial representation of the Queensland public sector to describe how the public sector organises itself to ensure it is of value to its clients, stakeholders and the community.

An EA also publishes artefacts including strategies, policies, targets and supporting methods, tools and techniques to guide behaviour and decision-making across various business disciplines. Types of artefacts in the Queensland public sector include policies, frameworks, guidelines, and strategies.

Terminology

The terminology used in relation to the Value Chain and the Value Model has been defined in the Queensland Public Sector Glossary of Terms, published by the Department of the Premier and Cabinet (http://www.premiers.qld.gov.au/publications/categories/guides/perf-manage-

framework.aspx).


http://www.premiers.qld.gov.au/publications/categories/guides/perf-manage-framework.aspx

http://www.premiers.qld.gov.au/publications/categories/guides/perf-manage-framework.aspx

Value Chain for the Queensland Public Sector

The Value Chain for the Queensland Public Sector (Value Chain) (see Figure 1) shows how the public sector responds to the expectations and opinions of people in Queensland. The Value Chain depicts the relationship between the external drivers of whole of government direction and how service delivery creates value for clients, stakeholders and the community:

value for clients – direct recipients of government services will value services if they receive a benefit, such as an entrepreneur who receives advice on establishing a business in Queensland, a recipient of a government grant through a fair assessment process, or a patient who receives treatment that improves their health

value for stakeholders – everyone, including clients (residents, businesses, Ministers, service delivery agencies) will value Queensland public sector services if they perceive that they receive a benefit from an action, service or policy of government

value for the community – some services may not benefit individuals but the community more broadly, such as the protection of the environment.

Figure 1 - Value Chain for the Queensland Public Sector


The Value Chain illustrates that in order to create value for clients, stakeholders and the community, the whole of government direction and the direction of its agencies and service delivery must be informed by client, stakeholder and community expectations and opinions, and underpinned by appropriate governance, including performance management. Having a clear line of sight between these elements is essential. Each element informs the next:

The expectations and opinions of clients, stakeholders and the community; political commitments; and cross jurisdictional policies, drive . . .

whole of government direction. This direction is described in the government’s objectives for the community (Getting Queensland Back on Track), priorities and strategies, which in turn drive . . .

agency business direction. This is described in terms of each agency’s purpose, vision and objectives, which in turn drive . . .

agency service delivery. Services are the products and engagements (or interactions with clients through instances of service delivery) of an agency which use capabilities and processes to deliver outputs, outcomes and benefits for the agency and . . .

create value for clients, stakeholders and the community, influencing trust and confidence.

Each component of the Value Chain has been developed with the aim of achieving a desired outcome.

Component Desired outcome

Client, stakeholder and community expectations and opinions

Services are client centred and are continuously improving and reflecting the changing needs, expectations and opinions of clients, stakeholders and the community.

Whole of government direction

The Queensland Government delivers client centred ethical services.

Agency business direction

Agencies collectively deliver the whole of government direction.

Agency service delivery Services benefit the community; create value and influence trust and confidence in public sector service delivery. Where there is alignment between operational planning and setting the agency business direction, the delivery of services should create value.

Governance (including performance management)

Appropriate management and control mechanisms are in place to ensure that all components of the Value Chain operate efficiently and effectively.


Value Model for the Queensland Public Sector

The Value Model for the Queensland Public Sector (Value Model) (see Figure 2) depicts the Value Chain in more detail and shows the relationship between individual components.

The Queensland public sector is a large, complex and diverse organisation that manages multiple objectives for a diverse range of client groups within the community. It can be difficult for each individual part of the organisation to understand how their specific part of the business relates to and affects all of the other parts. The Value Model provides a framework to assist employees, clients and stakeholders of the Queensland public sector and the community to understand the connections and alignment between parts of the Queensland public sector as a whole, or between the parts of a single agency, or relationships between the parts of a unit within an agency.

The primary reasons for the development of the Value Model were:

increasing client, stakeholder and community expectations that access to public services will be seamless and not confusing, and will increase public value

increasing need for internal alignment between whole of government direction, agency business direction and agency service delivery to improve the effectiveness and efficiency of public services

the inability to describe succinctly “how everything fits together” for the whole of the Queensland public sector, or at an agency level or at a unit level within an agency

increasing need for alignment with national performance and reporting frameworks such as those used in the Report on Government Services and the Intergovernmental Agreement on Federal Financial Relations

the need to improve alignment between existing public sector artefacts relating to governance (performance management, risk management and assurance, and compliance)

expectations of the Queensland Audit Office, Parliamentary Committees and the Council of Australian Governments (COAG) Reform Council in relation to the objectives and resulting outcomes of public sector service provision.


Figure 2: Value Model for the Queensland Public Sector

The Value Model illustrates how the components of the Value Chain link together and provides a framework for aligning how the public sector functions as a whole. This will ensure that public servants working in policy development, service delivery, infrastructure, ICT, and/or other areas understand conceptually all the elements needed to deliver value. It also establishes a common language for things that public servants do that are the same across the public sector, such as policy development, project management, risk management and performance management.

All elements in the Value Model have been carefully defined to ensure that the meaning is clear. These definitions are included below and are also set out in the Queensland Public Sector Glossary of Terms (the Glossary). Note that terms in bold font indicate that these terms are also defined in the Glossary.


external drivers Client, stakeholder and community expectations and opinions, political commitments and cross jurisdictional commitments that influence the whole of government direction.

client Person or organisation that receives a service. Note that a client can be internal or external to the organisation.

Synonyms include: customer, consumer, end user, resident, retailer, beneficiary and purchaser.

stakeholder Person or organisation that can affect, be affected by, or perceive themselves to be affected by a decision or activity.

Stakeholders include business or the community. Note, a decision maker can be a stakeholder. Stakeholders who are direct or potential service recipients are referred to as clients.

community A group of people with a commonality of association and generally defined by location, shared experience or function.

expectations and opinions

Activities or outcomes that are expected to be delivered and beliefs that are held.

politicalcommitments

A pledge by a political party to work towards a particular outcome for its clients, stakeholders and the community (such as, election commitments).

cross jurisdictional commitments

Agreements with other governments to deliver or work towards a particular outcome (such as, Council of Australian Governments agreements).

whole of government direction

The government’s objectives for the community, whole of government priorities and whole of government strategies to address current and future challenges for the government.

The agency business direction must align with the whole of government direction.

government’s objectives for the

community

The government is required to prepare and table a statement of the government’s broad objectives for the community including details of arrangements for regular reporting to the community about the outcomes the government has achieved against these objectives for the community (Financial Accountability Act 2009, section 10).

The government’s objectives for the community are outlined in Getting Queensland Back on Track.

whole of government priorities

Focus areas that support the whole of government direction. The whole of government priorities are informed by the external drivers.

whole of government strategies

Strategies which describe the way the government intends to achieve its objectives for the community and whole of government priorities.


agency business direction

An agency's strategic direction that aligns with the whole of government direction.

purpose (of the agency)

A statement that specifies the overall aim of the agency. An agency articulates its purpose in its strategic plan.

vision (of theagency)

Indicates what the agency aspires to be by reflecting on how it wishes to be perceived by its clients, stakeholders and the community. This statement takes into account the current status of the agency and outlines its future direction.

agency objectives The effects or impacts that an agency seeks to have on its clients, stakeholders and the community. Objectives should deliver the agency business direction and contribute to the whole of government direction, and collectively, agencies’ objectives should deliver the whole of government direction.

agency service delivery

Agencies deliver services to clients using products, engagements, capabilities and processes, and improve service delivery through managing projects and programs to deliver changes.

services The products and engagements undertaken by agencies that deliver outputs and result in outcomes for clients, stakeholders and the community. Ideally, services generate benefits for clients, stakeholders and the community and as a result, are valued by them. The efficiency and effectiveness of service delivery is measured using service standards.

products Tangible deliverables created for consumption by clients including stakeholders.

engagements Interactions, connections and relationships developed between government and its stakeholders (including clients).

capabilities Resources of an agency (including human, financial, information, physical assets and ICT) that are used to their maximum potential for efficient and effective service delivery.

processes A series of activities that utilise capabilities to deliver efficient and effective services.

change portfolio Programs and projects selected, managed and monitored to improve service delivery.

projects A temporary initiative to improve service delivery. Projects that require significant resources or involve major change should apply the Queensland Government Project, Program and Portfolio Management Methodologies.

programs A temporary structure created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver value for the agency and/or its stakeholders (including clients). A program produces an end-state and is finite (albeit, often years) in duration. Guidance on program management is included in the Queensland Government Project, Program and Portfolio Management Methodologies.


governance Governance has a very broad coverage, including how an organisation is managed, its corporate and other structures, its culture, its policies and strategies and the way it deals with its various stakeholders. The concept encompasses the manner in which public sector organisations acquit their responsibilities of stewardship by being transparent, accountable and prudent in direction setting, decision making (including investment decision making), performance management, issue and risk management and other compliance activities, in providing advice and in managing and delivering services, programs and projects.

The Financial and Performance Management Standard 2009 (section 7) describes ‘Governance’ as follows:

incorporates the cultural and operational aspects of an agency that are influenced by its actions and decisions

includes the concepts of openness, integrity and accountability; due care; and public defensibility

incorporates the ethics principles for public officials under the Public Sector Ethics Act 1994, section 4

includes establishing a performance management system, a risk management system and an internal control structure.

direction setting At the whole of government level, it is the mechanism by which the government decides on its whole of government direction through consideration of the external drivers. The extent to which the direction is achieved is measured using the Queensland Government Performance Management Framework. Government is held accountable for its results by clients, stakeholders and the community.

At the agency level, it is the mechanism by which an agency decides on its agency business direction through developing objectives which contribute to the whole of government direction. The objectives are described in the agency’s strategic plan and the extent to which the outcomes meet the objectives are measured using performance indicators. Accountable officers and statutory bodies are accountable for their agency’s performance.

At the service level, it is the mechanism by which an agency decides on its service objectives which contribute to its agency business direction. The service objectives are described in agency operational plans and the extent to which the outcomes meet the service objectives are measured using service standards.

To be effective, the direction should be collectively understood by governance bodies and ensure buy-in across the entire government or the agency through effective communication and engagement.

investment decision-making

The mechanism by which, at the whole of government or agency level, capabilities are prioritised in order to deliver services which maximise the value to clients, stakeholders and the community.

performance management

The management and evaluation of information on the efficiency and effectiveness of whole of government direction, agency business direction and agency service delivery to improve accountability of government, to inform policy development and implementation and to create value to clients, stakeholders and the community.


performance evaluation

A component of performance management that includes the systematic collection and analysis of information to make judgements about the effectiveness, efficiency and appropriateness of activities. Performance evaluation provides advice to the agency to better inform its business direction and service delivery activities.

issues and risks Issues: a problem, query or concern that affects the agency.

Risks: a potential event that poses a threat (or opportunity) to the agency.

compliance The degree to which an agency adheres to (acts in accordance with) legislation, regulation, policy and standards set by the government, agency or industry.

value The benefits received by clients, stakeholders, the community, or the agency from services. Value is determined by the perception of the usefulness and importance of the benefits. Where public services are valued they will influence trust and confidence in those services.

Value for clients – direct recipients of public services will value services if they receive a benefit.

Value for stakeholders – everyone, including clients (citizens, businesses, Ministers, service delivery agencies) will value public services if they perceive that they receive a benefit from an action, service or policy of government.

Value for the community – some services may not benefit individuals but the community more broadly.

Value for the agency – improvements, whether undertaken through formal projects or through continuous improvements, which are carried out by an agency to increase its capability to deliver benefits, creating value for the agency.

output Products and/or engagements delivered as part of a service.

outcome The result that was generated as a result of the delivery of services. Performance indicators measure the extent to which outcomes have achieved the agency’s objectives.

benefit An improvement resulting from an outcome, which is perceived as positive by a client and/or stakeholder of the agency, or by the agency itself. The more a client or stakeholder benefits from a service, the more it will be valued by them.


Artefacts supporting the Value Model

Artefacts include strategies, policies, targets and supporting methods, tools and techniques to guide behaviour and decision-making across the public sector. All current artefacts in the Queensland public sector should be able to be mapped to the Value Model when applied at a whole of Government or at an agency or unit level.

Some examples of the whole of Government artefacts are set out below.

Example of artefact Value Chain component Value Model element

Getting Queensland Back on Track

Whole of government direction Government’s objectives for the community

Agency Planning Requirements

ICT Resources Strategic Planning (Information Standard IS2)

Agency business direction Purpose / vision / objectives of agency

Queensland Government Business Service Classification Framework

Agency Planning Requirements

Agency service delivery Services

Queensland Government Performance Management Framework

Governance Performance management

In the absence of the Value Model, there is currently no systematic way to identify and classify whole of government artefacts. For example, the development of a new framework by the Queensland Government Chief Information Office (QGCIO) under the QGEA involves engagement with its key stakeholders - Chief Information Officers (CIOs). However, in the absence of a register of artefacts, it is not always possible for the QGCIO to know that other artefacts exist which affect the same element of the Value Model and as such, that there may be a range of stakeholders in addition to CIOs who have an interest in the framework. This is the case for all agencies that set whole of government policies.

The Value Model provides a way of systematically categorising artefacts at the whole of government level, or at an agency or sub-agency level. The development of a public sector artefact register at the whole of government level has commenced and will be published by the Department of the Premier and Cabinet.


Agencies intending to develop new or update existing artefacts which apply to more than one agency, should review the artefact register as part of their environmental scanning processes. Together with the Queensland Public Sector Glossary of Terms also published by the Department of the Premier and Cabinet and the use of the QGEA classification frameworks, this will assist in ensuring that future artefacts and the updates of current artefacts use common definitions of terms and align to and ideally, integrate with other whole of government artefacts.

In addition to identifying areas for improved alignment, systematically categorising the whole of government artefacts will also identify areas of gaps and duplication. Once duplication is identified, the relevant artefact owners can work together to align and integrate the relevant artefacts. When gaps are identified, the Department of the Premier and Cabinet can alert relevant stakeholders to discuss and determine the priority of addressing the gap.


Acknowledgements in relation to the development of the Value Chain

and Value Model

The Value Chain was informed by performance management frameworks and better practices of other jurisdictions including the US Government’s Performance Reference Model and the Public Sector Service Value Chain developed by Heintzman and Marson.

The Value Model has been developed through a collegiate effort between officers of the Department of the Premier and Cabinet (Performance Unit - Judy Dudurovic, Mandy Scanlon, Nicole Tabb, Ester Slee), the former Department of Public Works (Public Sector Development Office - Shane Marshall; ICT Policy and Coordination Office - Vanessa Douglas-Savage, Ee-Kuan Low and Chris Goh; Queensland Government Chief Procurement Office – Amanda Clatworthy), and the former Department of Employment, Economic Development and Innovation (Sally Hall). The Value Model has also been refined through discussions with officers across a range of agencies and in particular through their willingness to test the usefulness of the model by applying it to specific units and projects.


Documents

PMF Reference Guide: Value Chain and Value Model for … · Web viewThe Value Model for the Queensland Public Sector (Value Model) provides a framework to assist employees, clients