Costs and Benefits of Simplifying and Harmonizing

Report
COST AND BENEFITS OF
SIMPLIFYING AND
HARMONIZING BUSINESS
PRACTICES AT THE COUNTRY
LEVEL
UNITAR SEMINAR – February 22, 2012
Christian Schornich - Consultant
Mandate for Study

GA Resolution 62/208:


GA Resolution 64/289:


Calls for harmonization and simplification of business practices in the areas
of human resources management, finance, administration, procurement,
travel and ICT.
Requests the Secretary-General to brief the Economic and Social
Council regularly on progress made and challenges encountered in the
simplification and harmonization of business practices.
ECOSOC Resolution E/2011/L.35:

Urges the UN system organizations to identify and accelerate the
implementation of initiatives promising the highest return from
simplification and harmonization.
Scope of Analysis




Review the organizational and financial feasibility of identified
best practices in the area of simplification and harmonization of
business operations services.
Take stock of experience and lessons learned in the current
initiatives of harmonizing business operations services at the
country level.
Identify reported evidence of increased operational and cost
efficiency of harmonized business practices at the country level.
Make specific recommendations for accelerating the reform
process in the area of business operations regarding both high
quality and cost efficient service delivery.
Methodology



Desk review and analysis of reform initiatives and the progress
of related inter-agency working mechanisms in the areas of
business operations affecting the country level.
Web-based survey targeting all programme countries informing
on the status of harmonization and simplification of business
practices at the country level (common premises, common
services, quantification of costs and potential savings).
Cost-benefit analysis framework comparing the provision of
business operations services through three different business
models (individual agency provision, inter-agency harmonization
of business practices, and establishment of One UN Business
Center.)
Stock Taking
UNDG
CEB
Delivering as
One
HLCM
Albania
Procurement
JFBO Network
Finance
Fiduciary
Management
Oversight Group
Procurement
Network
Human
Resources
HACT Advisory
Committee
Human Resources
Network
Ref Group on
Common Services
Finance and
Budget Network
Administration
Common
Services
Uruguay
Tanzania
Pakistan
Mozambique
ICT
Common
Premises
Cape Verde
Task Team on
Common Premises
DOCO
ICT Reference
Group
CEB Secretariat
Rwanda
Viet Nam
Updates, Country-led and Independent Evaluation
Areas
Stock Taking – UN Working Mechanisms





Services in the area of business operations at the country level
characterized by a high degree of functional similarity.
Agency-specific regulations and rules would not prevent the
harmonization of business practices at the level of policies and
procedures.
Simplification and harmonization of business practices could yield
significant efficiency gains and cost reductions.
Through the coordinated approach by the UNDG and HLCM,
progress has been made in the coordination and harmonization efforts
in several areas of business operations.
Functional areas are organized through separated working
mechanisms.
No integrated change management strategy.
Stock Taking – DaO Countries




Delivering as One- and other selected programme countries have
made progress at the level of implementing a package of basic
common services and developing solutions to joint operational
modalities.
Best practices include the establishment of common premises, piloting
common ICT infrastructure and harmonization of procurement
management.
Selected Delivering as One-Countries have shown very limited success
in providing evidence for sustainable efficiency gains and cost savings
in the area of business operations.
Significant coordination efforts in harmonization have not yet been
met by any quantifiable impact in quality gains or cost reductions.
Stock Taking – Preliminary Conclusion




Coordination mechanisms lack an integrated and results-oriented
strategy to ensure high-quality and cost efficient business operations
services at the country level.
Efforts to harmonize and simplify business practices have been
prioritized with relatively little information on the coordination costs,
real efficiency gains and longer-term financial impact at the country
level.
Limited experience and information available on quantifiable gains
for individual agencies at the country level.
UNCT engagement.
Reform efforts have at large been carefully avoiding any analysis of
an organizational reform of the UN at the country level.
Business Models

Individual agency provision:






Minimum coordination costs
Management control
Agency-specific business solutions
Limited economies of scale-effect
No cost sharing of necessary assets
and services
No cost saving potential through staff
reductions
UNCT
OMT
Agency A
Agency B
Agency C
Procurement
Procurement
Procurement
Finance
Finance
Human
Resources
Human
Resources
Human
Resources
ICT
ICT
ICT
Admin
Admin
Admin
.
Finance
….
Business Models

Inter-agency harmonization of business practices:







Cost sharing opportunities
Economies of scale-effect
Process cost reduction
Very high coordination costs
Limited direct management control
Very long lead-times
Efficiency gains not directly leading
to real cost reductions
.
UNCT
OMT (Common Services Mgmt.)
Agency A
Agency B
Agency C
Procurement
Procurement
Procurement
Finance
Finance
Finance
Human
Resources
Human
Resources
Human
Resources
ICT
ICT
ICT
Admin
Admin
Admin
….
Business Models

One UN Business Center:





Significant savings potential
Economies of scale-effect
Process cost reduction
Efficiency gains directly impacting
operating costs
Streamlining of business services
.
UNCT
OMT
Agency A
Agency B
Agency B
Finance
Finance
Finance
….



Limited direct management control
Change of organizational structures
Different personnel requirements
Business Center
Procurement
Human Resources
ICT
Admin
Global Survey – Selected Trends





Selected trends based on submissions from currently 68 programme
countries.
Apart from building management, co-location to common premises
does in most cases not lead to any increased harmonization of
business practices.
71.6% of all countries have established common Long-term
Agreements (LTA), however only for a limited number of potential
services.
The majority of established common services are related to medical
services (68.5%), security services (91%), travel services (74%),
cleaning services (60.7%) and internet provision (52.8%).
The majority of established common services are not based on an
inter-agency MOU or a cost-benefit analysis.
Global Survey – Selected Trends
What has been preventing the UNCT in your country from further harmonizing
business practices in the different areas of business operations ?
Lack of agency commitment:
52.4%
Lack of UNCT support and guidance:
15.5%
Lack of RC support and guidance:
2.4%
Different rules policies and procedures:
90.5%
Lack of resources:
50 %
Lack of OMT capacity:
21.4%
The UNCT did not see any benefit that could be derived
from sharing business operations functions:
13.1%
Global Survey – Selected Trends




53.9% of submitting programme countries stated that their UNCT has
not achieved any quantifiable cost savings through the harmonization
of business practices in operations.
The trend analysis confirms a limited coordination and management
capacity at the country level for the effective harmonization of
business practices.
Quality and cost efficiency of business operation services as a basis
for effective programme delivery are not prioritized by a majority of
programme countries.
The trend analysis confirms the lack of an integrated reform strategy
and a system-wide coordinated change management approach.
Thank you!

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