It is human nature to believe your department(s) is running well and at top efficiency. In reality, it is important to do periodic assessments with some honest “digging”. The problem is finding the bandwidth to do it! Having a “fresh-eyes” approach, based on a true analysis against like size/region, can make a world of difference. What opportunities are you missing?
A true and unbiased assessment gives visibility to opportunities, leaving you equipped with the right levers to pull. It puts you back “in the know” for areas that may have been running on autopilot or needing critical and money saving updates. But who should you partner with?
There are two types of subject matter experts. Generalists look at processes, and rely on benchmarking and understanding labor techniques. Specialists are experienced in one specific department – i.e. food, security, or environmental services.
A partner who brings a combination of both will bring you the greatest perspective, which allows you to
- Receive the most comprehensive analysis
- Understand the nuances of the department of expertise
- Make recommendations from both a financial and quality perspective
It’s important to make the right long term sustainable recommendations. For example, making recommendations to cut labor without understanding the true overall operational impact might save you a few dollars in the short term but could cause a negative impact on optimal department efficiency and impacting patient satisfaction scores.
For a thorough review, the assessment should be viewed in with a multi-dimensional approach.
- Pure and simple – What do the numbers show?
- An onsite evaluation – What items need to be addressed?
- Key end user’s interviews – What challenges are they having?
This approach offers true opportunity with tangible detailed deliverables.
One piece of the multi-dimensional approach is a look at the data. What are you /should you be paying for? A zero-base budget allows analysis for where department should be operating and the basis to:
- Develop deep visibility into cost drivers and using it to set aggressive yet credible/sustainable budget targets
- Implement strategic goals tied to specific functional areas of the organization
- Group and measure cost against previous results and current expectations
- Justifying/modifying old, recurring, and new expenses
- Put onus on the right player(s) to drive value and optimize cost, not just revenue
- Free up unproductive costs converted to bottom line savings or redirected to more productive areas
Zero-based budgeting can drive significant and sustainable savings.
Once those savings are identified and delivered, a balanced scorecard should be used. A performance measurement framework that combines traditional financial metrics along with quality and strategic measures to provide a “balanced” view of an organization’s performance.
The balance scorecard defines 4 key categories of measurement.
- Learning & Growth – Including measures of employee training, employee competence organizational culture and attitudes
- Business Process – Measuring mission-specific efficiencies while achieving team set goals
- Customer – Both customer and stakeholder satisfaction and loyalty, segmented for deeper analysis
- Financial Health – Revenue, expenses, and profit along with current risk and cost-benefit measures
For each initiative category, Key Performance Indicators (KPI) should be identified and tracked. KPIs that measure the progress and milestones for each initiative. Strategic KPIs:
- Monitor the implementation and effectiveness of an organization’s strategies
- Determine the gap between actual and targeted performance
- Show organization effectiveness and operational efficiency
A balanced scorecard, with operational audits, provides the tools needed to measure and track initiatives for long term “stickiness” and ensures adoption and identifying roadblocks of new operational processes.
Please enjoy the webinar series, Pain in the @ss (support services) for further discussion on the value of a true 3rd party assessment, without negatively impacting your own bandwidth, and the importance of a balanced scorecard.