How Well Is What We’re Doing Actually Working?

Have you ever jerked your hand away after touching a hot stove? This is your body providing instantaneous feedback that something is wrong and needs to be fixed.

Unfortunately, we often have no such mechanism in our work at King County. Particularly for large processes that require close coordination between multiple agencies, it can be difficult for us to know if what we’re doing is achieving the results we want.

Performance reporting creates that feedback by using available information to let us know how well we are accomplishing our goals. It shows us when the system is working well and when it isn’t; helps us identify kinks and bottlenecks in the system; and indicates where problem solving resources are most needed.

People sometimes worry that performance reporting will be used to assign blame or “keep score.” This shouldn’t be the case. Performance reporting focuses on the process, not the people. An inability to evaluate system performance keeps problems hidden and ultimately hinders us as individual contributors, making our jobs stressful and more difficult.

So, how do we evaluate system performance in order to identify challenges and areas for improvement?

When King County went live with a new accounting system in 2012, the initial goal was to avoid large scale disruption in County operations. Now that we have stabilized the new system, we are ready to raise the bar.

Activity Based Costing of Invoices

A recent Activity Based Costing exercise showed us that manual invoices cost about twice as much as automated invoices: approximately $2.60 compared to approximately $1.40.

An extra dollar and change may not sound like a lot, but multiply by the 160,000 manual invoices the Finance and Business Operations Division processes each year, and you can see that considerable resources are tied up in inefficient processes.

Due to the substantial manual rework involved, inaccurate manual invoices cost even more, nearly $80!

The unit costs above are only the FBOD portion of the total cost. Potential resource savings to agencies would only increase the benefits of a more efficient process.

The next step is to standardize business processes across the County, streamlining cross-agency interaction and improving customer service to both internal and external customers. To do this, we need information on what methods are used, which methods are most effective, and how we can help county agencies adopt the most efficient processes.

Performance reporting can identify which processes generate more expensive manual invoices or inaccurate invoices. We can then task Lean resources with identifying ways to reduce inaccuracies, convert manual processes to automated ones, or transition purchasing to procurement cards. Lean methods can also be used to reduce the unit cost of an invoice, increasing the potential savings.

Finally, performance reports will show us if the improvements identified were successful. The resource savings realized can be used to provide better customer service to county agencies, identify additional improvements, or drive tangible reductions of central service costs.

Matt Lanier is a business analyst with the Continuous Improvement Team.

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