Outcome Based Management OBM in Western Australia

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Outcome Based Management (OBM) in Western
Australia
Peter McMullen Assistant Director Financial
Reform 21 October 2008
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Presentation Overview

• Background
• Overview of OBM Framework
• Legislative Requirements
• Using the OBM Framework
• Further Assistance

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Background

• Purpose of Performance Management
• Underlying Principles
• Achieving Outcomes
• Accountability

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OBM Framework

• Results focused with Desired Outcomes
• Service Delivery
• Targets
• Audited KPIs
• Decision Making

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Legislative Requirements

• Financial Management Act
• Annual reports to disclose KPIs and compare
  actual results with targets
• Resource Agreements to disclose financial and non
  financial targets
• Further details in the Treasurers Instructions
• TI 808 Resource Agreements
• TI 903 Agency Annual Reports
• TI 904 Key Performance Indicators

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OBM Hierarchy
Whole of government Strategic Framework
Supporting Strategic Outcomes
Impact for Community/ Environment/End Result
What agency is delivering
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OBM Hierarchy - Example
Enhancing the quality of life and well-being of
all people throughout Western Australia by
providing high quality accessible services
A safe community
Lawful road use behaviour
Traffic law enforcement and management
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Making better use of OBM

• More tangible outcomes
• Better Planning Better Futures - high level
  outcomes
• Well articulated services
• Clearly describe what is being delivered
• Align with organisational structure
• Clarity in outcomes and services helps
  development of useful KPIs

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Making better use of OBM (contd)

• Key performance indicators useful for
• Internal management
• External reporting
• Key clients and stakeholders
• Resource allocation

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Treasury and Finance example

• Desired outcomes are key drivers of service
  delivery
• Quarterly dashboard indicators
• status of States credit rating
• extent to which reports released on time
• of recommendations accepted by government
• Internal KPIs align with external KPIs

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Outcome Structure Review Group

• Membership DTF, DPC, OAG and Health
• Reviews OBM changes
• Set of guidelines
• agency level desired outcomes against govt goals
• services linked to desired outcomes
• services describe what is being delivered
• KPIs are relevant and useful
• Consult with DTF early in the process

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Improvement Tools

• OBM Guidelines
• Emphasise outcomes
• Checklists for outcomes, services, KPIs
• Worked examples
• Outcome Structure Review Groups role
• Available from the DTF web page

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Improvement Tools (contd)

• Treasurers Instruction 904
• Definitions of desired outcomes, services, and
  KPIs
• Effectiveness extent to which desired outcomes
  have been achieved
• Efficiency relates service delivery to resource
  inputs expressed as an index, ratio or unit
• Cost effectiveness outcome compared to cost
• Productivity output to inputs such as time or
  quality
• Outlines annual report requirements

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Effectiveness

• Government desired outcome
• Children and young people in CEOs care receive
  quality care
• Key Effectiveness indicators
• proportion of children in CEOs care safe from
  abuse
• average number of placements per child per year

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Efficiency

• Service
• Supporting Children and young people in care
• Key efficiency indicators
• average cost per child per day in CEOs care
• of care plan reviews completed on time
• KPIs to cover material expenditure level of
  service

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Effectiveness

• Government desired outcome
• A safe, secure, and decent corrective services
  which contributes to community safety and reduced
  offenders involvement in the justice system
• Key Effectiveness indicators
• rate of serious assault
• escape rates
• out of cell hours
• rate of (prisoner) return
• successful completion of community based orders

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Key Messages

• performance management framework
• strong emphasis on outcomes why
• relevant,useful performance information
• beyond compliance to better decisions
• assistance from Outcome Structure Review Group
  OBM Guidelines Ti 904

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Further assistance

• Further assistance
• Financial Policy policy inquiries
• peter.mcmullen_at_dtf.wa.gov.au
• OBM Guidelines
• www.dtf.wa.gov.au/cms/uploadedfiles/obmnov04.pdf
• Financial legislation
• www.dtf.wa.gov.au/cms/uploadedFiles/WAFAB_8
  April_2008.pdf

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Questions?