Request for Proposal. Supporting Document 3 of 4. Contract and Relationship Management for the Education Service Payroll

Transcription

1 Request for Proposal Supporting Document 3 of 4 Contract and Relationship December 2007

2 Table of Contents 1 Introduction 3 2 Governance Education Governance Board Education Capability Board Education Operational Board 5 3 Relationship Management 6 4 Business Process Improvement 7 5 Risk Management 9 6 Contract Management 10 7 Reward Innovation Process Maturity Model Improved Business Proposition 17 29/01/2013 Page 2 of 18

3 1 Introduction 1. The purpose of this document is to outline the key Education management arrangements the ministry is proposing to set up between the ministry and the vendor. 2. This document supports the main document for this RFP. 3. The document focuses on the arrangements that will be in place after the transition is complete. 4. The following diagram illustrates the proposed management framework: Governance Relationship Management Business Process Improvement Reward Innovation Contract Management Risk Management 29/01/2013 Page 3 of 18

4 2 Governance 1. The ministry is responsible and accountable to the New Zealand government for paying teachers and support staff at state and state-integrated primary, intermediate, area and secondary schools. 2. The Education governance arrangements support the ministry fulfilling its payroll responsibilities. 3. The following diagram illustrates the proposed governance structure: Deputy Secretary Schooling Senior User Education Service Payroll Governance Board invite Vendor representatives strategic and annual planning Senior Manager Education Capability Board member Vendor representatives operational management improvement initiatives Manager Education Operational Board chairs Vendor representatives 2.1 Education Governance Board 1. The Education governance board ensures the alignment of the Education services and the business direction of the ministry. The governance board takes collective responsibility for providing the payroll services to the teachers and support staff. The governance board does this by fulfilling Education responsibilities of: approving and overseeing the implementation of strategic Education policy overseeing the policies, processes, procedures and supporting resources approving the Strategic Plan, Annual Improvement Plan and major improvement initiatives being a forum for the supporting boards to escalate issues and matters of interest establishing working groups, as required to achieve specific tasks ensuring compliance with relevant legislation and government policy. 2. The senior user will chair the board. 29/01/2013 Page 4 of 18

5 3. The members of the governance board are senior ministry managers. The governance board will intermittently invite other interested parties to attend, including the vendor s representatives. 2.2 Education Capability Board 1. The Education Capability Board will advise the Education Governance Board on improving the effectiveness of the ministry s investment in delivering the Education. The Education Capability Board will: account for the ministry s investment in the Education and attribute the cost of providing individual services oversee the development and annual review of the Strategic Plan and present to the Education Governance Board for approval oversee the development of the Annual Plan and present to the Education Governance Board for approval oversee the development of the justification for major improvement initiatives, usually in the form of a business case, and present to the Education Governance Board for approval approve variations to service level agreements approve future process maturity levels have visibility of minor improvement initiatives ensure baseline and regular process maturity reviews occur approve audit recommendations escalate issues and matters of interest to the Education Governance Board. 2. A senior ministry manager will chair the board. 3. The members of the governance board are senior ministry managers and the vendor s representatives. 2.3 Education Operational Board 1. The Education Operational Board provides assurance to the Education Governance Board that the Education Service Payroll is operating effectively and efficiently. The Education Operational Board will: resolve key operational issues deliver and report on minor improvement initiatives deliver delegated audit recommendations escalate issues and matters of interest to the Education Governance Board. 2. A vendor operational representative chairs the board. 3. The members of the governance board are ministry staff and the vendor s representatives. 29/01/2013 Page 5 of 18

6 3 Relationship Management 1. The ministry s approach to relationship management separates roles into leadership, service delivery, and operational. 2. The leadership role is held by the ministry. The purpose of this role is to set the direction for the relationship and to resolve issues that have significant business impact. The vendor will provide a representative who will report to this leadership role. 3. The service delivery role is a partnership between the Ministry and the vendor s representative. The purpose of this role is to manage the day to day aspects of the contract and the associated services levels. 4. The vendor delivers operational management. The purpose of this role is to be the primary Education point of contact for operational related matters. The ministry will provide a representative who will liaise with this operational role. 5. The ministry will work closely with the vendor to define further detail on the relationship management roles. 29/01/2013 Page 6 of 18

7 4 Business Process Improvement 1. To improve the Education processes the ministry is proposing a strategic planning approach. 2. This strategic planning process will answer four key questions: a. What is the Education business and IT environment after the transition project? b. What is the likely future business and IT demands by key stakeholders, such as the New Zealand government, school boards of trustees and employees? c. What is the Education strategy over the next three to five years? d. What do we want to focus on this year? 3. The following diagram illustrates the Education strategic planning process: Ministry of Education Statement of Intent Minor Improvement Initiatives Education Service Payroll Strategic Plan Education Annual Programme of Work Major Improvement Initiatives Statement of Intent 1. The ministry s Statement of Intent sets out the key elements of how the ministry will contribute to the delivery of government themes and ministerial priorities for education. 2. The document is developed as part of the Ministry s planning process and presented to parliament in May Strategic Plan 1. The Education Strategic Plan will set out goals the ministry will pursue to support its outcomes for New Zealanders. 2. The Strategic Plan will: use the Statement of Intent as a key input consider the needs of all Education stakeholders consider the role the ministry has in the Education Sector identify and road-map the major improvement initiatives to support the current and future Education business outputs. 29/01/2013 Page 7 of 18

8 3. The Education Capability Board will oversee the development of the strategic plan. 4. The document will be prepared by June each year Annual Programme of Work 1. The Education Annual Programme of Work will outline the Education activities that will occur for the next 12-month period. The programme has four key focus areas. These are: business as usual tasks to run the Education planned minor improvement initiatives major strategic plan improvement initiatives legislative changes. 2. The Education Capability Board will oversee the development of the programme of work. 3. The document will be prepared by June each year Major Improvement Initiatives 1. Major improvement initiatives are defined as initiatives that have a: cost more than $100K, or cost not included in the contract pricing high level of risk, or high impact on key stakeholders. 2. These initiatives are: defined as part of the strategic planning processes justified, usually by a business case delivered as projects that follow the ministry s project management guidelines. 3. The Education Capability Board has oversight of these initiatives Minor Improvement Initiatives 1. Minor improvement initiatives are initiatives that do not meet the major initiatives definition. These initiatives are identified and delivered as part business as usual activities. These initiatives can include audit recommendations. 2. The Education Operational Board oversees and reports on these initiatives. 3. A summary of the planned initiatives is included in the Annual Plan. The Education Operational Board can also approve the implementation of unplanned initiatives. 29/01/2013 Page 8 of 18

9 5 Risk Management 1. As a public sector organisation, the ministry adopts a prudent approach to managing risks associated with delivering services that improve outcomes for students, families and communities. 2. The ministry s risk management approach links the success of delivering services against the defined business requirements. The ministry achieves this by assessing business processes, including: activities controls metrics roles and responsibilities. 3. The vendor has a primary role in the Education business processes and will need to participate in the ministry s risk management activities. Please note the business process approach results in all business process roles participating in risk assessments including: BOT payroll representatives the ministry s Education staff the vendor s IT and business process Education staff. 4. To assess the risk of the Education the ministry will: assess business and IT process maturity conduct audits, including security risk assessment. 5. The Reward Innovation section in this document sets out the ministry s approach to assessing process maturity. 6. The ministry s internal auditing team requires that all Education Service payroll processes are audited. The audits will discover the validity and reliability of information, and also provide an assessment of business process internal control. The ministry will work with the vendor s auditing team to establish the approach, key focus areas and timing for the internal audits to be completed each year. 29/01/2013 Page 9 of 18

10 6 Contract Management 1. The Education contract structure is based on a master agreement under which are general terms applicable to individual service schedules. The ministry is adopting this contract structure to: create a reasonable commercial balance between the ministry and the vendor build in the flexibility to meet the demands of a changing business environment simplify the contract negotiation process by setting up a structure that allows individual services to be negotiated. 2. The ministry is currently working on drafting a master agreement and service schedules Master Agreement Structure 1. The master agreement will detail the general terms that are applicable to the individual service schedules. These terms will include: purpose, background, definitions and interpretations commencement and term structure of agreement overview services and obligations payments and charges indemnities, warranties and liability intellectual property renewal and termination. 2. The master agreement will include how the two organisations will manage their relationships. The section will include: governance relationship management roles and responsibilities service level management risk management trademarks and communications confidentiality rewarding innovation. 3. The master agreement will also detail the obligations for acting on behalf of a New Zealand Public Sector. These will include: legislative requirements (for example Public Records Act 2005, Official Information Act 1982) ministry policy requirements Gov3 responsibilities climate change responsibilities. 29/01/2013 Page 10 of 18

11 6.1.2 Service Schedules 1. The service schedules will detail any conditions specific to the service schedule and the individual services required. The schedules will include: purpose, background, definitions and interpretations specific conditions detailed description of services and obligations key performance indicators charges. 2. The following table summarises the proposed Education service schedules. Please note the service schedules listed are draft only, and may change. Service Schedule Manage Employee Information Assess Teacher Salaries Description This service is based on the Manage Employee Information business process described in the RFP supporting document High Level Business Processes for the Education Service Payroll. The service excludes process activity that assesses a teacher s salary. Key performance indicators will focus on: processing efficiency processing effectiveness quality of 2nd level support. This service is based on the key Assess teacher salary activity in the Manage Employee business process. This business process is described in the RFP supporting document High Level Business Processes for the Education. Key performance indicators will focus on: processing efficiency processing effectiveness quality of 3rd level support. 29/01/2013 Page 11 of 18

12 Run Education Service Payroll Manage 2nd and 3rd level Support This service is based on the business processes described in the RFP supporting document High Level Business Processes for the Education, which are: entering and running payroll updating business information generating reports. This service is based on the key Assess teacher salary activity in the Manage Employee business process. This business process is described in the RFP supporting document High Level Business Processes for the Education. Key performance indicators will focus on: processing efficiency processing effectiveness quality of 3rd level support. This service outlines the vendor s responsibilities in the support processes that integrate across the vendor and the ministry. The service is based on the Manage Service Support Processes business process described in the RFP supporting document High Level Business Processes for the Education. The service includes: defining the service support responsibilities for the Payroll Centres and IT Support identifying key service support inputs from the ministry a high level description of the event (including incident) management and problem management support processes. The service does not include: defining the service support responsibilities for the Service Desk and the Teacher Salary Assessment team identifying key service support inputs from the BOT payroll representatives a high level description of the change management support process. Key performance indicators will focus on that quality of support. 29/01/2013 Page 12 of 18

13 Manage Service Desk Manage Education Software This service is based on the key Service Desk role in the Manage Service Support Processes business process. This process is described in the RFP supporting document High Level Business Processes for the Education. The service includes: defining the service support responsibilities for the service desk identifying key service support inputs from the BOT payroll representatives. The service does not include: defining the service support responsibilities for the Payroll Centres, IT Support and the Teacher Salary Assessment team identifying key service support inputs from the ministry a high level description of the event (including incident) management, problem management and change management support processes. Key performance indicators will focus on that quality of support. This service manages the software solution for the IT requirements described in the High Level IT Requirements for the Education supporting document. The service includes the Acquire and maintain software IT hosting process and the software activities that relate to the following IT hosting processes: manage changes install and accredit solutions and changes ensure systems security manage the configuration. Key performance indicators will focus on service being provided and controls in place. 29/01/2013 Page 13 of 18

14 Manage Infrastructure Manage Secure Hosting Facilities Reward Innovation Professional Services This service provides platform services to support the Education software, including: enterprise hardware and operating systems web hosting services secure hosting access gateway services. This service includes the Acquire and maintain infrastructure IT hosting process and the infrastructure activities that relate to the following IT hosting processes: manage change install and accrediting solutions and changes manage performance and capacity ensure continuous service ensure systems security manage the configuration manage data manage the operations The IT Hosting processes are described in the High Level IT Requirements for Education supporting document. Key performance indicators will focus on service provided and controls being in place. This service describes the secure hosting facilities that house the IT infrastructure. The service includes the following IT hosting processes. These are: ensuring continuous service managing the configuration managing the physical environment The IT hosting processes are described in the High Level IT Requirements for Education supporting document. Key performance indicators will focus on service being provided and controls in place. This service is based on the information in the Reward Innovation section of this document. This service is ad-hoc professional services from the vendor. 29/01/2013 Page 14 of 18

15 7 Reward Innovation 1. The ministry intends to create a framework to reward innovation by the vendor. 2. This framework will use a business process maturity model to deliver an improved business proposition for the vendor. 7.1 Process Maturity Model 1. The ministry will use a process maturity model to: define a shared process vision quantify process risk and capability prioritise process improvements. 2. The maturity model is based on the COBIT framework Assessing Processes 1. To assess the Education business processes the ministry will undertake an exercise to create a collection of best practices. The ministry will use the COBIT framework to assess IT processes. 2. The following outlines the assessment process the ministry will follow: Maturity Levels I. Complete a baseline assessment of all business and IT processes as part of closing the Transition project (please refer to Appendix F: Transition project section in the RFP document). II. Agree target maturity levels for each process III. Define the road-map to achieve process maturity levels. This forms part of the process to develop and update the Education Service Payroll Strategic Plan (please refer to Business Process Improvement section in this document) IV. Annually review key processes and regularly review all processes. 1. The following table outlines maturity levels the ministry will use to assess processes: Maturity Level Description 0 Non-existent 1 Initial/ad hoc There is no recognition by management to need formal processes or internal controls. There is no use of technology to automate processes. The organisation is totally reliant on a small number of key staff to deliver services to customers. The approach to managing processes is ad hoc and disorganised, without communication or monitoring. There is little or no use of technology to automate processes. The organisation is highly reliant on a small number of key staff to deliver services to customers. 29/01/2013 Page 15 of 18

16 Maturity Level Description 2 Repeatable but intuitive 3 Defined process 4 Managed and measurable 5 Optimised Processes are in place with appropriate controls, but the processes are not documented. There are some major weaknesses in process and if these are not addressed some services may be severely impacted. Technology is used to automate a small number of processes with little or no monitoring of the process controls. The organisation has some reliance on a small number of key staff. Processes are in place with appropriate controls, and the processes are adequately documented. There are informal process improvements, with reviews being undertaken and some key process issues being addressed. There is a medium to high likelihood that key issues may not be identified and some services may be severely impacted Technology is used to automate some processes with basic monitoring of the process controls. The organisation has a high number of employees who understand processes. There are effective processes and appropriate controls in place. There are formal process improvements in place. Process issues are likely to be identified and addressed. Technology is used to automate major processes with basic monitoring of the process controls. Employees are sometimes involved in identifying process improvements. An enterprise-wide process improvement programme provides continuous and effective process improvements and risk/issues resolution. Technology is used to fully automate processes with real-time monitoring, including monitoring of controls, risk management and compliance. Employees are proactively involved in process improvements Rewarding Process Improvements 1. The ministry will link process maturity and contractual rewards. The definition of this will form part of the contract negotiation process. 29/01/2013 Page 16 of 18

17 7.2 Improved Business Proposition 1. The ministry is aiming to improve the ministry s investment in the Education by improving the business value proposition for the vendor. The key to achieving this aim is to improve process maturity though increasing the use of modern technology. 2. The following diagram illustrates how the ministry views the current process maturity and use of technology in the Education Services Payroll and the target state the ministry would like to achieve: Current Education Service Payroll State Future Education Service Payroll State poor service and ineffective investment excellent service delivery and return on investment poor service and ineffective investment excellent service delivery and return on investment Generate Reports Update Business Information Ability to utilise modern technology Enter and run payroll Manage Employee Information Generate Reports Update Business Information Manage Service Delivery processes Ability to utilise modern technology Manage Service Delivery Enter and processes run payroll Manage Employee Information Manage Service Support processes Manage Service Support processes poor service and return on investment excellent service and inefficient investment poor service and return on investment excellent service and inefficient investment Process Maturity Process Maturity Current State 1. The characteristics of the current state are: a low customer focus a large number of staff members who primarily enter payroll forms manually and process the pay obsolete technology with little or no capability to automate processes, no e-business capability and a high maintenance cost high expenditure on low-skilled staff salaries that have small revenue margins low expenditure on experienced staff that have high revenue margins. 29/01/2013 Page 17 of 18

18 7.2.2 Future State 1. The future state will: use e-business technology to allow payroll information to be entered on-line use e-business and call centre technology to deliver self help facilities create a Service Desk that can resolve 75% of events, (please refer to Service Support business process described in the RFP supporting document High Level Business Processes for the Education Service Payroll) enable Payroll Centre staff to use modern IT systems that will automate workflow management and a significant number of business processes enable Education stakeholders to use real-time business process activity monitoring to measure process service levels, proactively and quickly resolve incidents without impacting business activities, and proactively identify process improvements. 2. The ministry expects that it will not be possible to implement e-business technology for all BOT payroll representatives and approximately 20% of Education forms will still need to be processed manually. 3. The future state will change the distribution of the Education workforce and increase the use of modern technology. The future state will impact the vendor s business value proposition by: considerably reducing manual entry of payroll forms by vendor s staff and therefore significantly reducing low skilled staff salaries that have small revenue margins increasing the number of skilled staff, such as Service Desk staff, who have high revenue margins moderately increasing technology costs significantly reducing business processing costs. 4. The forecasted outcome of the future Education state is that the total cost of the future Education state will reduce and the vendor s revenue margins will increase. 29/01/2013 Page 18 of 18