Achieving operational excellence in public sector organizations

Municipal governments and other public sector entities are under immense pressure to provide services in the most cost effective manner. “Doing more with less” has become the mantra, but it can be challenging for an organization to determine if its operations are fully optimized. If the entity is asking any of the following questions, the best approach is to conduct an operational review.

• Are we organized in a way that allows us to effectively and efficiently deliver services?
• How efficient and cost effectively are we delivering services?
• Should we consider alternative service delivery models?
• Do our business processes promote efficient service delivery?
• Do we leverage technology in the best possible way?
• Are we responding to our citizens need in a timely manner?

What is an operational review and its benefits

During an operational review many components of an organization’s operations are examined. Though the scope should be customized to an individual organization’s needs, an operational review often involves at least some of the following components:

• Business process analysis – Business processes are documented in process flow diagrams to address and eliminate bottlenecks, inefficiencies, redundant steps, and internal control gaps.
• Policy and procedure review – Documented policies and procedures are reviewed and improvements that align with industry best practice are recommended.
• Benchmarking operations against comparable governments – The organization’s performance is compared against similar public sector entities to set expectations. Deviations from the benchmark are investigated to determine a root cause and recommendations are developed to address it and improve operations.
• Organizational structure and staffing assessment – Taking a holistic view of the entity’s operations determines if the organizational structure and staffing model has been optimized to provide services to the public. Reorganization often results in improved service delivery and reduced operational costs.
• Alternative service delivery analysis – Identifying cost savings and improving operational efficiency often requires a bit of creativity. Service delivery, including internal services such as human resources, is evaluated through a cost benefit analysis to verify the most viable solution.

When is the right time to conduct an operational review

Organizations asking one or more of the questions at the beginning of this article are likely ready for an assessment of their operations. For others, the need for an operational review is motivated by a specific reason. Common drivers include:

• Budget deficits and the need to decrease operating costs
• Technology implementation that impacts existing business processes and policies
• New leadership who want to hit the ground running
• Public pressure to reduce costs
• Lack of internal monitoring, such as an internal audit function

Whether a public sector organization is faced with these questions and situations or has never before considered an enterprise-wide assessment, an operational review will increase efficiency, reduce operating costs, align operations with industry best practice, and enhance policies and procedures.

For more information on this topic, or to learn how Baker Tilly state and local government specialists can help, contact our team.