Improved performance measurement is vital if service functions are to reconcile increasing demands with decreasing resources. Sir Andrew Likierman provides five key areas for improvement.
Service functions have been going through torrid times. The need for efficiency savings, combined with opportunities offered by technology and outsourcing, seem to threaten almost every aspect of their role.
To make it worse, there has been little sympathy for what is seen as the back office – not a complimentary term. Strike action at the BBC in 2005 to try and reverse staff cuts, provoked considerable press concern for potential job losses of “front line” programme makers, but little for those in human resources and other head office services – regarded stereotypically as “pen pushers”.
The move to cut service functions is not new – it happens in every downturn. But, worryingly for the functions, expectations of what they should be delivering continue to rise as, in many cases, available resources fall. The reality is that better performance measurement is crucial for service functions in reconciling increasing demands with decreasing resources.
Indeed it may be the only way to survive for those classed under the damning label of overheads. Using good quality measures elevates the debate above the vagueness and sweeping generalisations that so often characterise discussions.
Yet many service functions using poor measures are reluctant to take the necessary action. This may be because they are worried that better measures will reveal that there are weaknesses. Or it may be that those running the service functions don’t realise how bad the measures are.
So what can a service function do? Set out below are five areas in which practice can be improved. Note that the suggestions come from the perspective of a service function which needs to improve measurement. They are not intended to replace normal and essential questions about value for money, including the possibility of outsourcing.
First, some health warnings. Circumstances will vary between sectors and between organisations of different sizes, so the suggestions need to be taken in context. A similar caveat is relevant in generalising between functions. Some, including finance and internal auditing, have to meet externally determined requirements. Others, such as IT or procurement, do not. For this reason, the references below are to private sector organisations though some of the points are also applicable to the public sector.