Service delivery can create complicated cost/benefit models, particularly there are cross-jurisdictional boundaries. The benefits realised through a service may not be recorded by the agency and/or agencies that are required to invest. A thorough understanding of the costs and benefits is required to establish an appropriate investment model to support the creation and on-going management of the service. It is mandatory for agencies to meet the Commonwealth Procurement for: value for money, encouraging competition, efficient, effective and ethical use of resources, and accountability and transparency. Implications Business initiatives will need to be fit for purpose and deliver and benefit. Business initiatives will need to be prioritised in terms of their relation to the Australian Government’s vision, policies, strategies and plans. Agencies will need to assess the ROI for each business initiative. Public ROI should be based on agencies taking a rewards-based approach to ROI measurement and encompass the following three areas: Financial ROI Social ROI Political ROI Traditional or Impact of government Impacts the system of “classic” measurement of financial gains services on a societal level governing and policy decision with quantifiable results making Direct, measureable benefits Indirect and difficult to Motivational feasibility of the and costs measure public good project, or the benefits of benefits and interested parties (champions, opponents, decision makers) e.g., reduced transaction costs e.g., are citizens safer? Are e.g., are we delivering (such as in procurement by children in a particular government programs that reducing the cost creating a jurisdiction receiving match policies, legislation purchase order from $28 to adequate medical services? and mandates? Are we $21) or fewer steps in the Are the vulnerable receiving delivering on the promises of workflow of approving a budget sufficient support? our politicians? request In addition to assessing the public ROI for each business initiative, a total cost of ownership (TCO) approach will be required. The TCO will need to assess the investment against other priorities, as well as balancing the costs of development, support, security, risk mitigation, disaster recovery and retirement against the costs of government’s requirements for flexibility, scalability, ease of use and reduction of integration complexity. There will need to be improved whole-of-government usage of business benefit management and benchmarking, e.g. P3M3, MSP approaches.
Service delivery can create complicated cost/benefit models, particularly there are cross-jurisdictional boundaries. The benefits realised through a service may not be recorded by the agency and/or agencies that are required to invest. A thorough understanding of the costs and benefits is required to establish an appropriate investment model to support the creation and on-going management of the service. It is mandatory for agencies to meet the Commonwealth Procurement for: value for money, encouraging competition, efficient, effective and ethical use of resources, and accountability and transparency. Implications Business initiatives will need to be fit for purpose and deliver and benefit. Business initiatives will need to be prioritised in terms of their relation to the Australian Government’s vision, policies, strategies and plans. Agencies will need to assess the ROI for each business initiative. Public ROI should be based on agencies taking a rewards-based approach to ROI measurement and encompass the following three areas: Financial ROI Social ROI Political ROI Traditional or “classic” measurement of financial gains with quantifiable results Impact of government services on a societal level Impacts the system of governing and policy decision making Direct, measureable benefits and costs Indirect and difficult to measure public good benefits and Motivational feasibility of the project, or the benefits of interested parties (champions, opponents, decision makers) e.g., reduced transaction costs (such as in procurement by reducing the cost creating a purchase order from $28 to $21) or fewer steps in the workflow of approving a budget request e.g., are citizens safer? Are children in a particular jurisdiction receiving adequate medical services? Are the vulnerable receiving sufficient support? e.g., are we delivering government programs that match policies, legislation and mandates? Are we delivering on the promises of our politicians? In addition to assessing the public ROI for each business initiative, a total cost of ownership (TCO) approach will be required. The TCO will need to assess the investment against other priorities, as well as balancing the costs of development, support, security, risk mitigation, disaster recovery and retirement against the costs of government’s requirements for flexibility, scalability, ease of use and reduction of integration complexity. There will need to be improved whole-of-government usage of business benefit management and benchmarking, e.g. P3M3, MSP approaches.
AGA_EA_Principles_-_V1.1_0.docx