Financial Management Institute Professional Development Session October 2015.
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Transcript of Financial Management Institute Professional Development Session October 2015.
CHIEF FINACIAL OFFICER BRANCH (CFOB) TRANSFORMATION AT HEALTH
CANADA
Jamie TibbettsAssistant Deputy Minister
Chief Financial OfficerHealth Canada
Financial Management InstituteProfessional Development Session October 2015
To share CFOB’s progress on transforming our organization to improve and strengthen our operations and services.
Sharing our transformation vision How we leveraged the Deficit Reduction Action
Plan (DRAP) to chart a new and necessary course for the Health Canada (HC) finance function
Where are we in our journey
2
Purpose of Presentation
Chief Financial Officer Branch (CFOB) of Health Canada operates within a demanding and complex financial environment, comprising:• A large, decentralized department ($4B and 9,000+ FTEs)
with financial offices supporting multiple regions and branches
• A sizable Grants and Contributions program (44%) and an advanced user fee revenue regime
• Substantial First Nations and Inuit health programming (65%)
• Shared jurisdiction between federal/provincial/territorial governments and new partnerships
• Significant long-term issues of affordability and sustainability• Significant portfolio responsibilities
3
Health Canada Context
The Health Canada Portfolio:• Health Canada (HC)• Public Health Agency of Canada (PHAC)• Canadian Food Inspection Agency (CFIA)• Canadian Institutes of Health Research (CIHR)• Patented Medicine Prices Review Board (PMPRB)
Key areas of responsibility:• Providing access to quality health services for First Nations and
Inuit• Regulating the safety of products, food, contaminants, pathogens • Anticipating, preparing for, responding to and recovering from
public health threats• Providing leadership on health promotion, protection, and capacity • Contributing to research and knowledge development • Supporting provincial/territorial health systems
4
Health Canada Context…(Continued)
DRAP was based on reductions of up to 10%:• For Health Canada: about $200M (ongoing)• For CFOB: $2.9M (ongoing)
By any standard, this is substantial• All the more so given the seemingly continuous increase in
demand / workload in most sectors including Finance
CFOB’s Strategy to address its on-going reduction: • Developed a unifying vision and a change agenda for CFOB• Consulted portfolio partners for shared services potential• Consulted IFMS Management and Operations Boards• Crafted a Transformation Roadmap to guide our evolution
5
DRAP Financial Implications on CFOB
6
Financial Management Transformation
Target State Model• Services are optimized for the needs of the front office, giving managers direct access
to information, services and tools needed to manage resources.• CFO organizations spend less time on routine operational transactions, freeing them up
to increasingly focus on higher-value strategic and analytical services.• Services are enabled through a business model based on streamlined, standardized
business processes and information, and rationalized applications.
Strategic ServicesStrategic direction, business
planning, and performance measurement.
Analytical ServicesExpertise-related. Advice and
direction, reporting, control and audit.
Operational ServicesProcess and transaction oriented (e.g.
AP/AR). Range from simple to complex.
Applications Application
ManagementServices
Business Process
Information
IT Infrastructure
Focus of CFO Organization
Candidates for consolidated/ shared delivery
Advisory
Assisted
Self- service
Front Office Managers
Source: Treasury Board
7
CFOB’s transformation focuses on the following: Organizational Vision
• Design a leaner, highly efficient, more integrated and responsive organization, demonstrably further along the shared services continuum, with clearer accountabilities
• Incorporate a re-balancing of financial management responsibilities and a standardization of financial management practices consistent with the nationalization of the CFOB mandate
People• Maintain an adequate, effective and sustainable level of resource
capacity across our organization• Develop a dedicated, service oriented, strengthened, high-value
resource management, internal control, and corporate planning and reporting capability for Health Canada
“Transformation Without Disintegration”
8
What We Set Out to Do – Key Initiatives
Shared Services with PHAC
P2P Project
Improve reporting and internal controls
RMD Transformation- Improve financial advisory services
Provision of the HC SAP system to AANDC
Adoption of AANDC Grants and Contributions Information Management System
Planning for Enterprise Performance (PEP) Project
9
What Have We Done
Implemented Procure to Pay System (P2P)– Centralized end to end electronic processing for AP and procurement. Reduced processing centres from 26 to 2.
Established Shared Services Accounting Hubs – 2 Hubs are now operational servicing both PHAC and HC. One in the Ottawa and one in Winnipeg.
Realized Clustering Opportunities • HC hosting both PHAC and AANDC on SAP. • HC and PHAC adopting the AANDC G&Cs Information
System (GCIMS).
Resource Management Directorate (RMD) Transformation Initiative
Enhancement of our Systems and Tools - Planning for Enterprise Performance (PEP) Project
Continuous Business Process Improvement
10
What Still Needs to be Completed
RMD Transformation: Vision
Design and implement a streamlined, integrated, standardized and consolidated RMD organizational structure that will:• Strengthen Advice Capability and improve Oversight and
Accountability by re-defining the FMA role to be more strategic, value added insight, and less focused on transactional activities.
• Strengthen Corporate Reporting and Analysis and increase access to corporate information; and
• Make better use and Leverage Technology in SAP for operational planning, budget and forecast information
Overall to be a Trusted Business Partner
11
12
6. Strengthened
Corporate Reporting &
Analysis
RMD Transformation Drivers
1. HC Restructuring
Client
Servi
ce
2. G&Cs Management
3. FN Programs Financial Support
4. Aftermath of Tripartite Agreement
5. Aftermath of FOD
Transformation6.
Strengthened Corporate
Reporting & Analysis
7. Investment Planning
8. Costing
9. CFO Attestation
10. OCG-FMBP
Central Agency Driven
HC Business Improvement
Decisions
Executive Requirements
Client
ServiceClientService
ClientService
Clien
tS
ervice
Client
Service
Client
ServiceClient Service
Client
Service
Clie
nt
Ser
vice
Execution
Infrastructure
Organizational
13
RMD Provides Support Services to Clients - What Needs to be Different?
There are transformation drivers that we must respond to in order to serve
all our clients appropriately.
BusinessPartner
-Value Creation
Business AnalyticsDecision Support Services
Expertise Based ServicesSuch as Costing
Stewardship & GovernanceDrive the Delivery of the financial
Policies
Finance ProcessesDelivery of Transaction Processing
We need to be doing much more of this –better and faster
We have been doingthis in a decentralizedand varied fashion for years
• RMD structure is realigned to meet the need of Senior Management and efficient operations of RMD
• Financial system capability is leveraged to provide timely and accurate financial and non financial information
• Advice capability and oversight is strengthened. FMA role is more strategic and provide more value added insight. Financial information is available at finger’s tip
• Management practices, roles and business processes are consolidated and made more efficient through technology with a focus on the comptrollership function
• More corporate focus for horizontal management.
• Leveraging SAP for planning, budgeting, forecasting and integrated performance report
14
RMD Target End State
• Costing activities are standardized and operate within a known business process and clear roles and responsibilities
• HC’s roles are realigned to promote efficient and effective G&Cs management
• Four clear organizational segments established:1. Financial Management Services – for Branches and Regions
with co-location2. Corporate Resource Management Services – for
departmental and horizontal needs3. Investment Planning Services – for integrated resource
management4. Policy and Infrastructure Services – for continued capacity
building as we undergo this and further transformation• Dedicated FMA presence maintained• Enhanced organizational alignment• Corporate Performance Measurements (CPM)
improvements with focus on non-financials
15
RMD’s Model - Highlights
Took stock of CFO accountabilities: reviewed OCG/TBS/FM-BP policies, directives and competencies
Set a Functional Framework and redefine the Functional Business Model: defined RMD key functions and activities
Redefined RMD Roles & Responsibilities Stakeholder engagement Designed a flexible organizational chart to support DM
& CFO accountabilities and responsibilities Leveraging technology - SAP for analytics - Business
Requirements
16
Methodology
OCG
Fin
anci
al M
anag
emen
t – B
usin
ess
Proc
esse
s Policy Framew
ork for Financial Managem
ent
Financial Administration Act
• FMCF (BMF)
• Internal Financial Monitoring & Reporting
• Revenue Management
• Grants & Contributions Management
• FI Development
• Business Requirements for Financial Systems
• Continuous Improvement and Change Management
• Relationship Building
• Financial Analysis & Advice
• Resource Supply
• Financial Planning & Budgeting
• Forecasting and Budget Review
• Investment Proposal & Challenge
• Costing, User Fee and Cost-Benefit Analysis
• Preparation of TB Submissions and MCs
• Strategist Responsibilities
• Management of Expenditures
• Internal Controls
• Internal Audit
• Performance Measurement Processes and Methods
• Financial Statements
• Statutory Reporting: RPP, DPR and Proactive Disclosures
• Asset Management
• Strategic Risk Management
Primary Contributory
Policy & frameworks
Trusted Business Partner
Service & Transactions
Business Analytics & Advice
Roles: Steward , Operator, Catalyst, Strategist
Financial Management Competency Model
RMD Functional Framework
17
On the Road To Success
Budget ManagementFramework
Salary Management
Grants & Contributions
Costing
CFO Attestation
Define FMA Responsibilities
RACI
Leveraging Technology
FMAs will use a risk-based approach with better tools in the challenge of the MVR information
Streamline and standardize SM towards a National Salary Management Strategy and clear roles and responsibilities
Strong financial oversight on G&Cs and clear roles and responsibilities
Costing Instruments for IP purposes; Costing User Guide
Improved workflow processes and regular review meetings with programs; guidance, instruments and clearer roles and responsibilities
Functional Framework, Clarification on core financial management roles and responsibilities.
RMD and clients will benefit from clearer delineation of roles and responsibilities under CFO Model
Maximizing use of technology via PEP Project, etc
18
19
On the Road To Success: How Did We Get Where We Are?
- Workshops for Task Teams
- RMD Staffing Strategy & Vacancy Management Strategy
All Staff Meeting
- Consultation with Clients & Stakeholders
- Announcement of RMD Transformation and Vision
- RMD Functional Framework
- Business Metrics
- Organizational Re-Structuring
- Launched eight Task Teams
- Transformation Drivers
- Lunch & Learn Sessions for Employees
- Final RMD OrganizationalStructure & Transformation Announcement
- Consultations with Human Resources
Change Agent
Network
we are here!
Started
here!
- Leveraging Technology: enhance systems and tools
PEP Project
Engagement and BR
gathering
20
PEP Project Vision
SAP - COSAP - FM
Business Warehouse
BPC
BI Tools
PEP SOLUTION
• Strategic and fact-based advice
• Integrated reporting – linking financial and operational data
• Data mining, data modeling & predictive analytics
• Enterprise resource planning
• Multi-dimensional reporting
• Business analytics• Single version of truth
RPPDPR
P2P
MVR
OPS PLAN
Performance Mgt. Indicator
HR – People
Soft
Investment
Planning
BMF
PAA
GCIMS
SFT
FINANCIAL NON FINANCIAL
PEP = Planning for Enterprise Performance
The Planning for Enterprise Performance (PEP) solution will: Transform existing planning and reporting business
processes, creating a standardized environment, fully integrating strategic, operational, and financial information needs
Implement common best practices and processes on a common technology platform, with a uniform data repository
Establish a standard set of intake, analysis and reporting tools
Serve as a trusted system of record
21
PEP Vision Statement
PEP Value Assessment
Opportunities & Benefits: Achieve department efficiencies and increase
productivity Integration of financial and operational data in unified
enterprise-wide solution Empower optimal decision making by improving financial
and operational data analysis Increase automation of manual processes Minimize the use of black books. Enhance visibility of performance information Eliminate the ‘wet-ink’
22
PEP Value Proposition
Consistency in planning, performance monitoring and reporting throughout the department. One version of the truth Reduction of duplicate information requests,
spreadsheet-farming and errors Improved operational communications, reporting, and
costing accuracy Leading Government
Continued HC leadership in innovative management practices
Next step in HC evolution to meet, and exceed, MRRS and MAF standards
Keeping pace with and inform GoC transformation
23
PEP Value Proposition….continued
Ability to respond rapidly to changing needs Flexibility and confidence in our information to respond
to increasingly complex reporting requirements Workforce Empowerment
Empowering staff to focus on higher value analytical and advisory activities
Reshaping HC as a forward-looking organization, Able to meet the expectations of a renewed Public
Service workforce (e.g. Blueprint 2020)
24
Potential Value of Performance Management & Budgeting
Delivering Public Service for the Future: Navigating the ShiftsAccenture study (2012)
PEP Project
National Accommodation Strategy
Shared Services
P2P
Cost Recovery
25
Project Overview – PEP Project Objectives
26
The objective of the PEP solution is to deliver a standardized planning and performance reporting environment that fully integrates:
• Strategic information, e.g., TB Submissions, Priorities, Risks
• Operational planning and reporting
• Financial planning and reporting
• Performance monitoring and reporting
Strategic and Operational Planning• ensure timely and integrated financial and non-financial performance information, clearly
linked to outcomes. • bring value to front line planners, managers and executives• integrate fully with the budget management process
Financial Planning and Management• replace the current suite of financial planning system modules• plan by PAA/program and functional areas/cost centres• supporting the alignment of financial and non-financial information, budget development,
and in-year reconciliation of adjustments
Performance Planning and Business Analytics• provide improved tools for performance reporting and an extensible platform for business
analytics• better access and alignment of priorities and strategies• improved transparency and accountability• analytical tools will assist managers to integrate resources and deliver performance• replace inefficient and disconnected tools (e.g. spreadsheets).
27
Project Overview – ScopeThe scope for this project is clear and touches on every business line in Health Canada.
Expanded HC SAP Architecture
Business Objects Business Intelligence (BI) Suite 4.0
• Dashboarding• Self-Serve Interactive Analysis• Exception & Customized Reporting
Strategy Management (SSM)
• Alignment Visualizations (PAA/PMF > Risks > Logic Models)• Scorecarding of Expected Results/Initiatives/Deliverables• Performance Commentaries/Notations
NotesManagement
(NM)
Business Planning & Consolidation
(BPC)
• Multi-Dimensional Planning & Budgeting (i.e. CC, PAA, Fund, Work Plans)• Salary/Headcount Planning, • Qualitative Operational Info/Forms Management (Deliverables, milestones)• Traceability of Funding Sources• Workflow, Version Control, Document Management, Attestation
Planning Application Layer
ERP Layer
Information Presentation Layer
SAP - COFM
• Cost Centre Accounting• Project Systems MDM
• Funds / Budget Mgmt & Control (CCM Level)
SAP NetWeaver Business Warehouse
• Data Models• Data Integration• Data Mining & Predictive Analytics
Data Management Layer
• Cost Centre Accounting• Project Systems MDM• Operational Budgeting
(CCM/Bureau)
28
Part of PWGSC Contract for SAP EIISS
SAP Technology outside of EIISS Offering
What it Means to Our People
Access to enhanced systems and tools that enable timely reporting and business analytics
Ability to respond to the needs of their clients at all levels
Standardized and automated processes A redefined role to be more value added and less
focused on transactional activities Established employees competency profiles :
provide insights into employee career aspirations matching of employees skills with available jobs
Talent Management Strategy to facilitate career development opportunities to help employee advancement
29
CFOB is leading the way in transformation:• Integrated performance reporting - linking financials and
operational information• Increasing focus on higher value analytical services• Enabling services are enabled through a business model based on
standardized business processes and information (i.e. single version of truth)
CFOB is already leaner, more integrated, more standardized, more automated, and demonstrably further along the shared services continuum, with:
Clearer accountabilities and strengthened capability A more streamlined, technology-based, standardized, transaction-
oriented, accounting and procurement shared service Effective ongoing Internal Controls over Financial Reporting Continued leadership by building upon cluster foundation to offer
financial and program reporting and analysis improvements for HC, its partners and the GoC at large
Strengthened financial management advisory functions
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The Bottom Line
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? Questions
Comments
Thank You