Concept Note on Business Operations Strategy (BoS) Operations Management Team (OMT) December 2012

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1 Concept Note on Business Operations Strategy (BoS) Operations Management Team (OMT) December 2012 UN General Assembly as well as Economic and Social Council (ECOSOC) resolutions have consistently called for the UN system to harmonize business operations, with the aim of reducing operational transaction costs and duplication of the operational support to programme delivery. In this context, the UN Development Group (UNDG) has been working with UNCTs to improve programme and business operations. Moreover, the Secretary-General has recently launched a report focusing on the need to enhance strategic planning and analytical processes, in particular to strengthen strategic thinking and prioritization of harmonization efforts with a concentration on the highest value added. Furthermore, the report also mentions the need to improve monitoring and evaluation and reporting mechanisms to demonstrate results achieved in the area of business operations harmonization. The new Business Operations Strategy (BoS) is the UN Development Group (UNDG) response to these requests. BoS is a voluntary framework focusing on joint business operations developed in close cooperation with UNCTs, allowing them to take a strategic and results-oriented approach to planning, management and implementation of harmonized business operations in the country. BoS is a flexible and strategic tool, allowing for UNCTs to focus on contextual and specific programmatic needs, while providing an easy-to-use monitoring, evaluation and reporting system to manage joint operations. As BoS is a part of the UNDG framework focused on enhancing functioning of the UN system at the country level, it is an essential tool to strengthen the linkages between business operations and programme delivery, particularly within the context of a Delivering as One (DaO) country such as Ethiopia. 1. Principles of BoS The Business Operations Strategy is based on the following principles: BoS is a voluntary instrument, which can be used in full or in parts, allowing for better linkages with UNDAF, BoS only covers joint business operations initiatives, BoS provides strategic and medium-term (UNDAF cycle) focus and prioritization based on quantitative and qualitative cost and benefit analysis, BoS provides the basis for monitoring and reporting on progress and results of business operations, BoS provides the basis for resource management and mobilization at country level. 2. Why BoS? The development of the Business Operations Strategy supports the development of harmonised business operations to achieve the following results: Enhanced linkages between programmes and operations: By analyzing the programme strategy through an operational lens and identifying the operations required to deliver the programme, the linkages between programme and operations are established. As both UNDAF and BoS are on the same cycle, it enhances the linkages between the UNDAF and UN operations support to that programme strategy. Reduced costs: BoS provides a strategic focus on operational support services and initiatives aimed at harmonizing and/or simplifying business operations. It allows for multi-year planning of operations and facilitates strategic planning of the operational effort. It also facilitates monitoring and evaluation of the operational effort at the country level. It focuses on reduced lead times to execute processes through streamlining operational process, and reduced direct monetary cost for example by leveraging UN System wide bargaining position when procuring goods and services. Harmonized work processes, elimination of the duplication of business initiatives, and reduced transactions costs for the UN and its partners are some of the few benefits of BoS implementation. Enhanced quality: By jointly procuring services in larger volumes, the UN increases it bargaining power with the service provider and enhances its ability to monitor and evaluate overall quality of service delivery of providers. 1 P a g e

2 Enhanced operational focus and prioritization: Instruments like cost benefit analysis, transaction cost analysis and business process analysis provide light, easy to use tools to identify and prioritize high impact harmonization initiatives and facilitating monitoring and evaluation of harmonization initiatives against pre-established baselines. 3. What is BoS? The Business Operations Strategy has three components: Business Operations Results Framework, reflecting medium-term outcomes and outputs in line with the UNDAF cycle, Monitoring and Evaluation Framework, reflecting outcome and output level indicators allowing for progress monitoring and evaluation of impact of business operations, Management Arrangements of UN Business Operations outlining the way the UN organizes itself in order to deliver cost effective operational support that meets UN Programme requirements. The following graph provides an overview of BoS processes: Moreover, a typical BoS includes the following chapters: Chapter 1: Introduction: Sets the context of BoS. Chapter 2: Operations Analysis: Defines the results focus and prioritizes the results areas according to the outcome of costs and benefits for each suggested business solution. o Includes Baseline Analysis, Needs Analysis, Requirements Analysis, Cost Benefit Analysis, Prioritization. Chapter 3: Business Operations Results Framework (with narratives): Translates the business solutions in specific result statements (outcomes, outputs) and adds a short narrative for each results area. It also adds a required budget per outcome/output. Chapter 4: Business Operations Monitoring, Evaluation and reporting: Defines outcome and output level indicators, targets and baselines. Chapter 5: Business Operations Governance Mechanisms. 2 P a g e

3 Chapter 6: Business Operations Budgetary Framework: Describes the resource requirements, including a resource map of existing resources, the resource gap and a resource mobilization strategy. Chapter 7: Operationalizing the Business Operations Strategy: Outlines the implementation of BoS through work planning, including the concepts of integrated (OMT) work plan and the use of the standardized MoU for Common Services. BoS aims to assign an outcome for each operational activity/area such as common procurement, human resources, information and communication technologies, and security. Each outcome is later split into a few outputs with clear indicators and targets. Here is a template for a BoS matrix for common procurement: Sample BoS Outcome 1: By 2015, the UN in Utopia has realized a reduction of UN Operating Costs by an average of 5% per year. Sample BoS Output 1: By 2015, the UN System in Utopia has reduced cost of procurement by 4% through the development and implementation of Common Procurement initiatives. Annual Deliverable 2012: In year 1, cost reduced by 2% of baseline year 2012 through the establishment of three additional LTAs (established baseline Jan 2012: 5 LTAs in place, target Dec 2012: 8 LTAs in place) Annual Deliverable 2013: In year 2, cost reduced by 1% of baseline year 2012 through the establishment of seven additional LTA s (established baseline Jan 2012: 5 LTAs in place, target Dec 2013: 12 LTAs in place) Sample BoS Output 2: By 2015, the UN System in Utopia has reduced operating cost by 2% through the development and implementation of VoIP. Annual Deliverable 1: Annual Deliverable 2: 3 P a g e

4 4. BoS for DaO in Ethiopia BoS is a perfect match for Ethiopia, as UN Ethiopia has already committed to DaO principles. Since DaO pays particular importance to reducing costs and harmonizing business activities through joint business initiatives, BoS would serve as an easy-to-use framework to better synchronize, monitor and manage UN s joint business activities. It would also allow the OMT (and the UNCT) to improve monitoring, management and implementation of joint business initiatives in the mediumterm and in a coherent way by establishing clear linkages with UNDAF. By focusing on and synchronizing with the UNDAF cycle, BoS will allow OMT to plan ahead for the medium-term needs, detailed at a later stage by annual work plans for each area of work. The following figure summarizes the linkages between BoS and UNDAF: BoS applies results-based project management principles to OMT and other business/operations-related activities. Therefore, it will simplify and quantify management and monitoring of business initiatives, leading to improvements in existing services and establishment of new ones. In other words, implementing BoS in Ethiopia would better the working methods of the OMT and its working groups. 5. Implementation Roadmap UNDG reported that BoS will be piloted in a few countries, including Ethiopia, from Within the framework of DaO, OMT Ethiopia has committed to adopting and implementing BoS to address increasing requests from the UNCT to provide results-based and measurable results for planned and ongoing common operations activities. UNDG will provide Ethiopia and other pilot countries with technical support and capacity development. UNDG reports that the average time needed to adopt BoS is 6 to 8 weeks. Considering the large number of agencies working in Ethiopia, it is estimated that all the operational analyses should be completed by end of March 2013, and BoS should be finalized by the end of April The BoS operational analyses to be conducted include prioritization of potential areas of collaboration in terms of operations through baseline, needs, requirements and cost-benefit analysis. Given the number of UN entities present in Ethiopia, OMT Ethiopia will use the light version of BoS operational analyses with estimates to ease the implementation process. 4 P a g e

5 A consultant was hired in early December 2012 to work with OMT on common procurement. Although her primary assignment is to create a common procurement framework, she will also prepare for BoS adoption and implementation by conducting the necessary preparatory work, including completing the necessary BoS operational analyses in the field of common procurement. All OMT member agencies were informed of this activity, and asked to share copies of their LTAs in selected areas of common procurement with the consultant by end of December The following areas of common procurement were declared by OMT as priority: Fuel, travel services, hotel and lodging, vehicle maintenance, customs clearance, paper and stationary, IT equipment and disposal, cleaning services, communications (including mobile communication costs), printing, postal and courier services, office equipment, and security services. The consultant will work with Chairpersons of the OMT Working Group on Procurement to coordinate this activity, create a repository of suppliers to facilitate the creation of an inter-agency vendor database, and submit the results of this activity to OMT at the OMT Retreat in late January This will allow OMT to discuss and decide on priority areas for BoS, particularly in the field of common procurement. A Common Operations Management Skills Training will be organized in Ethiopia with the UN Staff College in January 2013 during the OMT Retreat to enhance the capacities of the relevant operations staff to implement BoS, by focusing on issues such as common procurement (including the HLCM Guidelines), results-based management, and common operations planning and management skills. Another consultancy will be initiated in January 2013 for 3 months to work exclusively on BoS adoption and implementation. This consultant will finalize the operational analyses held for common procurement as well as the common procurement framework, including an implementation strategy and budget, and template Memoranda for Understanding (MoU) for selected priority field of common procurement. Moreover, the consultant will also work with Chairpersons of other OMT Working Groups to conduct and finalize the relevant BoS operational analyses for each OMT Working Group. The OMT will seek the support of the UNCT Technical Working Group on Monitoring and Evaluation, who provide technical expertise to create and monitor UNDAF, in creating, monitoring and implementing the BoS. Meanwhile, all OMT Working Groups will spend January 2013 with coming up with an annual work plan, budget and activity schedule. These will be submitted to Heads of Agencies during the UNCT Retreat in early February 2013 for their review and endorsement. As these will later need to be linked to the BoS Results Framework, the consultant will assist the OMT Working Groups with this task. Moreover, the consultant will provide UNCT with a review of the BoS adoption and implementation process. The consultant will finalize all required operational analyses, and submit their results to OMT together with a draft BoS, including the draft BoS Results and Monitoring Framework, to OMT by the end of March The draft Results Framework will reflect the mandate and work of all OMT Working Groups, and include both qualitative and quantitative outcomes and outputs, as appropriate. Furthermore, based on these, the consultant will also help each OMT Working Group with linking the UNCT-approved annual work plans, budgets and activity schedules up with the BoS Results and Monitoring Framework. Last but not least, the consultant will also finalize the common procurement framework, including the implementation plan and template MoU for proposed common services, and provide the OMT with them by end of March The OMT will hold a BoS Retreat in early April 2013 to review the draft BoS, and finalize the BoS Results Framework. UNDG/DOCO will be asked to provide strategic planning support during this meeting through a mission. The consultant will finalize the BoS after this meeting, and it will be submitted to UNCT to be signed into effect. 5 P a g e

6 Support Required from UNDG For BoS adoption and implementation, OMT will seek the support of UNDG/DOCO, in particular: Technical support over the internet during the whole activity to help with BoS operational analyses, and facilitate the finalization of BoS, including the Results and Monitoring Framework. Provision of relevant common procurement and BoS-related documents and best practices, including existing common procurement frameworks and template MoU of other DaO countries, standard business process maps (of UNDP) for select field for which BoS operational analyses will be conducted, and any other BoS-related document. Organization of a capacity development session with the UN Staff College during the OMT Retreat in late January 2013 for relevant operations staff members, covering issues such as results-based management, common procurement, and skills for planning and managing common operations and services. Provision of contact details for relevant UNDG, UN Staff College and HLCM staff members and consultant to facilitate BoS implementation and creation of the common procurement framework. Provide relevant OMT staff members and consultants with access to the UN Global Market Place (UNGM) to facilitate BoS adoption and implementation, and creation of the common procurement framework. Quality assurance support over the internet to help finalize BoS, including the Results and Monitoring Framework and annual work plans. Proposed Timeline Date Milestone Ongoing UNDG provides continuous technical support for BoS adoption and implementation via the internet OMT staff members and consultants share all relevant documents, reports and analyses with UNDG on a rolling basis. December 10, 2012 Consultant hired to work on common procurement and conduct preparatory work for BoS adoption and implementation. UNDG s online support to facilitate BoS adoption and implementation begins. December 18, 2012 The consultant presents the roadmap for the creation of a common procurement framework, and BoS adoption and implementation to OMT. OMT approves the priority areas for common procurement, as per the recommendation of the Chairpersons of the OMT Working Group on Procurement and the consultant. December 21, 2012 The consultant works with OMT member agencies to gather a list of suppliers and the existing long-term agreements (LTAs) of agencies in the OMT-approved priority areas for common procurement. The consultant will work with Chairpersons of OMT Working Group on Procurement to conduct BoS operational analyses (baseline, needs, requirements and cost-benefit analysis) for common procurement, including security, ICT equipment and banking. 6 P a g e

7 Late December 2012 UNDG provides OMT with relevant common procurement and best practice documents such as common procurement frameworks and template MoU of other DaO countries, business process maps for relevant fields, etc. UNDG facilitates the access of relevant OMT staff members and consultants to UNGM. January 11, 2013 The consultant finalizes BoS operational analyses for common procurement, and submits the findings to OMT together with the draft common procurement framework. This includes a repository of reliable suppliers and existing agency LTAs. Through support provided by the consultant, OMT Working Groups begin creating their annual work plans, budgets and activity schedules for Mid-January 2013 January 24-25, 2013 Meeting held with UNCT Technical Working Group on M&E to seek their support for BoS adoption, implementation and monitoring. OMT Retreat: OMT reviews the draft common procurement framework and BoS operational analyses for common procurement, and finalizes priorities in this field to be reflected in the BoS Results Framework. Capacity development session held for OMT members in Ethiopia. Late January 2013 Consultancy on BoS adoption and implementation begins. The consultant starts working with Chairpersons of OMT Working Groups to conduct the relevant operational analyses for each field of work, and create the associated outcomes, outputs and indicators for the BoS Results Framework. The consultant provides support to OMT Working Groups in finalizing their annual work plans, budgets and activity schedules for February 13 14, 2013 UNCT Retreat: Finalized annual work plans, budgets and activity schedules of OMT Working Groups shared with UNCT for approval. UNCT briefed on ongoing and planned BoS-related activities. Late March 2013 The consultant finalizes all required operational analyses, and submits their results to OMT together with a draft BoS, including the draft BoS Results and Monitoring Framework, to OMT. The consultant finalizes and provides OMT with the common procurement framework, including implementation plan and template MoU. The consultant will help each OMT Working Group with linking the UNCTapproved annual work plans, budgets and activity schedules up with the BoS Results and Monitoring Framework. 7 P a g e

8 Early April 2013 OMT BoS Retreat: OMT reviews and comments on draft BoS, including the Results and Monitoring Framework. UNDG will hold a mission to provide strategic planning support during this meeting. April 2013 Late April 2013 The consultant works to finalize BoS based on OMT feedback. Finalized BoS submitted to UNCT for review, approval and signage. 8 P a g e

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