Key Process Areas - Level 5

Prospective Information
Strategic Improvement Targets
Quality Improvement
Optimizing Financial Management Processes and Performance of Resources

Prospective Information

PURPOSE	The purpose of the Prospective Information KPA is to generate future-oriented information for senior management to extend their breadth of understanding and knowledge necessary to strategically manage the organization. The information includes contextual and external factors that could affect the performance of the organization or its ability to realize its strategic vision. Using this kind of information to predict possible outcomes, the organization can anticipate and prepare itself accordingly and improve the quality of its strategic and tactical decisions.
PI-GO-1	To operate with prospective, contextual, future-oriented, multi-dimensional information that deals with cross-department and corporate-wide issues, and which comes from both inside and outside the organization.
PI-AC-1	The organization identifies and reviews contextual information on external environmental factors that could affect its future performance. This information could potentially be used in strategic planning (e.g., for considering economic trends and conditions, the financial implications of long- term strategies or proposed new programs and policies, etc.).
	Examples of contextual information for strategic planning purposes include demographic data and patterns and economic models.
PI-GO-2	To ensure that information for forecasting is available and used to support activities such as: strategic planning, setting measurable goals, and directing the overall resources and efforts of the organization into a strategy.
PI-AC-2	The organization uses information to quantify the effect of external environmental influences and to forecast their effect on its future performance.
PI-AC-3	The organization develops and maintains simulation models. This exercise typically involves selecting a modelling tool, identifying linkages between inputs and outputs, and identifying external variables that affect the outcomes for the organization.
	This task typically involves:
	Using models to create 'what-if' scenarios when making significant decisions.
	Saving selected scenarios for comparison with actuals.
	Controlling changes to the models.
	Consulting appropriate expertise as needed, e.g., to determine variables that affect the economy or the demand for the organization's products or services when adding new elements to the models
	Piloting new information and simulations to be included in the information management system.
PI-AC-4	Prospective information is continuously monitored for its relevance and usefulness.
PI-AC-5	Problems with, or inaccuracies in, the quality of prospective information are identified and removed.
	This activity typically includes:
	Analytical work to identify defects in the models when actuals vary significantly from selected scenarios or predictions.
	Performing periodic after-the-fact reviews to identify opportunities for improving the use of prospective information as a management tool.
	INSTITUTIONALIZATION COMMON FEATURES:
	Commitment to Perform
PI-CO-policy	The organization establishes, communicates and follows policies for generating prospective information. These policies establish the expectations for the use of prospective information for strategic planning, decision making and reporting performance.
PI-CO-sponsorship	Senior management sponsors the development and use of prospective information.
	Ability to Perform
PI-AB-plan	The organization establishes, communicates and maintains a plan for providing and maintaining prospective information.
	The plan typically covers the process for providing prospective information, getting those affected by the process to agree to it and revising the process as appropriate.
PI-AB-resources	Adequate resources (human, physical, technical and financial) are allocated for developing and maintaining prospective information.
PI-AB-responsibility	Responsibility, accountability and authority for providing prospective information are assigned.
PI-AB-training	Individuals who provide prospective information receive appropriate training. Examples of topics include computer simulation techniques, risk and sensitivity analysis, performance analysis and corporate governance.
	Measurement
PI-ME-measurement	Performance indicators are used to evaluate performance, compliance and improvement of the activities relating to collecting and using prospective information. Indicators include the effort required to maintain models, accuracy of predictions, user-satisfaction ratings and how often management asks for and uses prospective information.
	Verification
PI-VE-assurance	The activities, outputs and controls for generating prospective information are independently reviewed to ensure that they meet the organization's needs and are working as expected.
PI-VE-manager reviews	The responsible manager reviews the activities associated with generating prospective information on a periodic and an event-driven basis.
PI-VE-senior management oversight	Senior management also reviews these activities on a periodic and an event-driven basis.

Strategic Improvement Targets

PURPOSE	The purpose of the Strategic Improvement Targets KPA is to define desired long-term outcomes, set ambitious targets to measure what the organization wants to achieve and to close the gap between where the organization is now, and where it would like to be (the vision).
	This involves understanding and delivering what the organization needs to excel at in order to continue growth and sustain its existence in a changing environment; developing strategies to minimize costs and maximize results with its available resources; and measuring the organization's performance against other external organizations and learning from the process.
SIT-GO-1	To ensure that the organization understands its current business process capabilities as a basis for identifying where to improve processes or eliminate non-value-added activities.
SIT-AC-1	An initial assessment of the organization's current condition is conducted.
	This assessment typically includes:
	identifying the organization's core business processes
	identifying its primary service products (countable, deliverable)
	identifying the clients for the services and determining their requirements
	evaluating current processes and their ability to meet clients' requirements
	assessing the efficiency and effectiveness of the processes in meeting clients' needs (e.g., identifying value-added activities vs. non-value-added activities)
SIT-AC-2	The organization measures its performance against established external benchmarks, as appropriate.
	This task typically includes:
	choosing the product or process to be benchmarked
	assessing the current level of performance and service delivery process
	identifying an organization for benchmarking purposes
	gathering data, including information about the partners (s), processes and other performance measures
	comparing the entity's performance and processes with that of the organization being benchmarked
	devising a plan for improving performance
	communicating the improvement targets to management and other key people associated with the process
	implementing the plan
	monitoring the progress made in reaching the targets
	revising the improvement plan as necessary
SIT-GO-2	To ensure that the organization's strategic improvement targets for maximizing the use of financial resources are established, understood and accepted by all employees.
SIT-AC-3	The organization clarifies a shared vision of what it wants to achieve and translates this vision into tangible objectives and performance measures that will support its strategic objectives.
SIT-AC-4	Quantitative financial management business goals are established, approved, communicated and maintained for the organization.
SIT-AC-5	Critical success factors (e.g., organizational capabilities) are identified and developed.
SIT-AC-6	An organizational risk exposure profile and tolerance range are established.
SIT-AC-7	Quantitative goals for improving financial management are established, approved, communicated and maintained.
SIT-AC-8	Initiatives are identified that will contribute to meeting the strategic objectives of the organization.
SIT-AC-9	The organization establishes, communicates and maintains a strategy and tactics for maximizing the use of its financial resources. This exercise typically includes establishing improvement targets and operational measures that align with strategic initiatives. It may also involve introducing innovation into the organization's products, processes and business.
SIT-GO-3	To develop a strategic improvement plan that communicates what needs to be achieved, sets the direction and context for decision making and outlines initiatives to close the gap between where the organization is and where it would like to be.
SIT-AC-10	The organization establishes and approves a strategic improvement plan for achieving performance improvement targets.
SIT-AC-11	Changes needed to improve effectiveness of key business processes are implemented.
SIT-AC-12	The organization monitors its progress in achieving its improvement targets and takes corrective action as required.
SIT-AC-13	Progress in achieving improvement targets is reported to senior management.
	INSTITUTIONALIZATION COMMON FEATURES:
	Commitment to Perform
SIT-CO-policy	The organization establishes, communicates and follows policies for strategic improvement. These policies establish expectations for creating the optimum balance between costs and results.
SIT-CO-sponsorship	Senior management sponsors activities to achieve strategic improvement targets.
	Such sponsorship typically includes:
	Establishing goals, objectives and incentives for strategic improvements.
	Ensuring that plans and targets for strategic improvements align with corporate goals.
	Demonstrating to managers and staff that senior management is committed to achieving the strategic improvement goals.
	Ability to Perform
SIT-AB-plan	The organization establishes, communicates and maintains an operating plan for implementing strategic improvement initiatives.
	This plan typically includes a documented process for establishing strategic improvements, getting those affected by the process to agree to it and revising it as appropriate.
SIT-AB-resources	Adequate resources (human, physical, technical and financial) are allocated for strategic improvement activities.
SIT-AB-responsibility	Responsibility, accountability and authority for strategic improvements are assigned.
SIT-AB-training	Individuals responsible for making strategic improvements to activities receive appropriate training. Topics include, for example, business strategies, industry best practices, alternative service delivery, risk and sensitivity analysis and performance analysis.
	Measurement
SIT-ME-measurement	Performance indicators are used to evaluate the organization's success in making strategic improvements.
	Verification
SIT-VE-assurance	The activities, outputs and controls for managing strategic improvements are independently reviewed to ensure that they meet the organization's needs and are working as expected.
SIT-VE-manager reviews	The responsible manager reviews the activities relating to making strategic improvements on a periodic and an event-driven basis.
SIT-VE-senior management oversight	Senior management also reviews these activities on a periodic and an event-driven basis.

Quality Improvement

PURPOSE	The purpose of the Quality Improvement KPA is to reduce the cost of quality by changing the processes to get maximum value for money. The emphasis is both on eliminating anything in the organization's processes that could compromise or reduce the quality of its programs, products or services, and on doing the job right, the first time, every time.
	This involves analyzing the factors that have resulted in poor quality in the past and ensuring that these factors will not cause quality problems in the future.
QI-GO-1	To identify any causes of poor quality that prevent or hinder the organization from achieving its quality goals.
QI-AC-1	People performing each operational task identify the factors that prevent or hinder the achievement of established quality goals.
	This exercise typically includes:
	Reviewing established processes, standards, procedures, method and tools applicable to the task, with an emphasis on recent changes.
	Reviewing process improvement goals.
	Reviewing the list of factors that cause poor quality or hinder the achievement of quality goals and the recommended preventive actions.
QI-AC-2	Inhibiting factors and other problems in the process and its outputs are identified.
QI-AC-3	Selected problems are subjected to causal analysis, and actions are proposed to eliminate the root cause of these problems, according to a documented procedure.
	Examples of root causes include:
	inadequate training
	breakdown of communications
	Examples of proposed actions include changes to:
	the process
	training
	tools
	methods
	communications
	outputs
	Examples of specific actions include:
	providing training in techniques for preventing common defects.
	automating all or part of a process
	resequencing activities in a process
QI-GO-2	To correct those factors that hinder the organization from achieving its quality goals.
QI-AC-4	The organization reviews, approves and co-ordinates proposed action aimed at correcting problems, as identified by the causal analysis exercise. (See QI-AC-3, above)
QI-AC-5	The teams co-ordinating the activities to improve quality record and track all relevant data.
QI-AC-6	The organization monitors the status and results of these activities and initiates corrective action as required.
	INSTITUTIONALIZATION COMMON FEATURES:
	Commitment to Perform
QI-CO-policy	The organization establishes, communicates and maintains policies for quality improvement. These policies establish expectations for identifying and systematically eliminating factors that compromise quality and the organization's ability to achieve its goals.
QI-CO-sponsorship	Senior management sponsors activities to support quality improvement.
	This support typically includes:
	Establishing goals, objectives and incentives for improving quality.
	Ensuring that plans for improving quality align with the organization's strategic plans.
	Demonstrating to managers and staff that senior management is committed to improving quality.
	Ability to Perform
QI-AB-plan	The organization has a plan for establishing and maintaining initiative to improve quality.
	This plan typically includes a process for linking planning for quality improvements with the organization's strategic planning.
	Documenting the process for quality improvement.
	Documenting the quality improvement plan.
	Conducting peer reviews of the quality improvement plan and process.
	Reviewing and getting those affected by the quality improvement plan to agree to it.
	Revising the quality improvement plan and process as necessary.
QI-AB-resources	Adequate resources (human, physical, technical and financial) and funding are allocated for quality improvement activities.
QI-AB-responsibility	Responsibility, accountability and authority for providing quality improvement are assigned.
QI-AB-training	Individuals who carry out quality improvement activities receive appropriate training. Topics include, for example, defect-prevention methods, how to conduct causal analysis meetings and statistical methods/analysis techniques (e.g., cause and effect diagrams).
	Measurement
QI-ME-measurement	Performance indicators are used to evaluate performance and compliance with, and improvement of quality improvement activities. Indicators include the effort spent on preventing defects, and the number of defects, noncompliance issues open and closed, and action items proposed/open/completed.
	Verification
QI-VE-assurance	The activities, outputs and controls of quality improvement initiatives are independently reviewed to ensure that they meet the organization's needs and are working as expected.
QI-VE-manager reviews	The responsible manager reviews quality improvement activities on a periodic and an event-driven basis.
QI-VE-senior management oversight	Senior management reviews and approves quality improvement initiatives on a periodic and an event-driven basis.

Optimizing Financial Management Processes and Performance of Resources

PURPOSE	The purpose of the Optimizing Financial Management Processes and Performance of Resources KPA is to continuously look for opportunities to learn new ways and adopt new techniques and new technology:
	to measurably improve the efficiency and effectiveness of the organization's financial management processes and practices (to be the "best in class"); and
	to optimize the efficient and economical use of limited resources in order to minimize costs and maximize payback.
OFM-GO-1	To continuously look for and evaluate opportunities to improve financial management processes by aligning them more closely with the organization's needs, and by making them more efficient.
OFM-AC-1	The organization identifies opportunities to improve financial management processes.
OFM-AC-2	It evaluates proposed process improvements, according to a documented procedure, in order to predict how these improvements will benefit and affect various groups and the organization as a whole.
OFM-AC-3	Initiatives to improve financial management processes are piloted according to a documented procedure.
OFM-AC-4	Senior management approves process improvement proposals.
OFM-AC-5	The status and results of initiative to optimize financial management processes are monitored.
OFM-GO-2	To continuously and measurably improve the organization's performance.
OFM-AC-6	Proposed process improvements are evaluated for deployment across the organization, according to a documented procedure.
OFM-AC-7	The process improvements that will be deployed are selected according to a documented procedure and approved by senior management.
OFM-AC-8	The plans for deploying the selected financial management process improvements are established and maintained according to a documented procedure.
OFM-AC-9	Deployment of these improvements is managed according to a documented procedure.
	This procedure typically includes:
	Tracking the deployment of the financial management process improvements against the deployment plan.
	Co-ordinating the deployment of improvements across the organization.
	Co-ordinating the activities of operational groups, support groups, and organizational groups for each improvement.
	As required, revising process-improvement measures, goals, priorities, and deployment plans.
OFM-AC-10	The organization measures the effects of the process improvements.
	Measurement typically includes:
	Measuring the actual cost, effort, and schedule for instituting each financial management process improvement.
	Measuring the value of each improvement.
	Measuring the progress toward achieving the organization's quantitative goals for improving financial management.
OFM-AC-11	Records of the organization's process-improvement activities are established and maintained.
OFM-AC-12	Feedback is provided to the organization on the status and results of the improvement.
	This feedback typically includes
	Informing the people who submit proposed financial management improvements about the disposition of their proposals.
	Informing those affected on a regular basis about the plans and status for improving particular financial management processes.
	Recognizing the contributions of the people and teams who submit and implement improvements.
	Preparing and distributing to those affected a summary of financial manage ment improvement activities, including:
	the status of any financial management improvements, either proposed or in-progress significant innovations and actions relating to improving financial management the results of the improvements
	INSTITUTIONALIZATION COMMON FEATURES:
	Commitment to Perform
OFM-CO-policy	The organization establishes, communicates and follows policies for optimizing financial management. These policies establish the expectations for introducing technical and other innovations that measurably improve the organization's financial management processes.
OFM-CO-sponsorship	Senior management sponsors initiatives to optimize financial management.
	Such sponsorship typically includes:
	Establishing goals, objectives and incentives for optimizing financial management.
	Ensuring that plans for optimizing financial management align with strategic organization plans.
	Demonstrating to managers and staff that senior management is committed to optimizing financial management.
	Ability to Perform
OFM-AB-plan	The organization establishes, communicates and follows procedures for optimizing financial management processes within the organization or individual units.
	This task typically covers documenting the plan and process for optimizing financial management, getting those affected by the plan to agree to it and revising the process as appropriate.
OFM-AB-resources	Adequate resources (human, physical, technical and financial) are allocated for optimizing financial management.
OFM-AB-responsibility	Responsibility, accountability and authority for optimizing financial management are assigned.
OFM-AB-training	Individuals responsible for optimizing financial management receive appropriate training. Examples of topics include technology transfer and change management, process improvement, cost/benefit analysis and statistical quality control.
	Measurement
OFM-ME-measurement	Performance indicators are used to evaluate performance, compliance and progress toward optimizing financial management. Indicators include effort expended, the number and type of innovations evaluated and piloted, the cost of implementing improvements, the cost of quality and trends in return on investment.
	Verification
OFM-VE-assurance	The activities, outputs and controls of initiatives to optimize financial management processes are independently reviewed to ensure that they meet the organization's needs and are working as expected.
OFM-VE-manager reviews	The responsible manager reviews the activities relating to optimizing financial management processes on a periodic and an event-driven basis.
OFM-VE-senior management oversight	Senior management also reviews these activities on a periodic and an event-driven basis.