Benchmarkingová iniciativa 2005

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1 From Comparing to Quality Improvement: Benchmarking and Bench-Learning in the Czech Local Government Author: Jana Voldanova, FALA -Training Centre for Public Administration of the Czech Republic Abstract: The aim of the paper is to focus on process, tools, results and outcomes of the Benchmarking Initiative 2005, a bottom-up informal initiative enabling their members, Czech cities, through applying benchmarking cycle, to measure and compare their performance and quality of services, to analyze processes, to find the best practices and their own gaps in performance, to get inspired and to learn lessons from the best performers to be able to prepare and implement changes in their own processes for the sake of improving the quality and effectiveness of service performance. 2. Research method: Benchmarking is a of quality management method stemming from the private business developing the managerial slogan: "What cannot be measured, cannot be managed effectively." This managerial tool has spread to the public sphere in a number of countries during the last years. Metric benchmarking works with measurable dates and indicators enabling the organizations: To measure the performance To compare it to the performance of others involved To share the best practices among those involved To get inspired and learn from others To improve the quality of services continuously through implementing the best practices and lesson learned If this method is used for a longer time, it enables to analyze time lines and trends. FALA, Czech Republic 1

2 Benchmarking as a proven method for comparing the performance is perceived in various ways. Some understand under this expression a comparative analysis of the data, costs and economic results, others see it as a structured exchange of experience, at a strategic level of the organization. FALA -Training Centre for Public Administration of the Czech Republic perceives benchmarking as a structured tool for comparison with the aim to distinguish, define and improve good practical approaches through learning from the others: Bench-learning (seeking for the best practices and learning from each other) Strategic / process benchmarking (analysis and comparing of processes, approaches, policies, strategies,...) Metric / Performance benchmarking (analysis and comparing of performance, costs, human resources, time, etc.) This principle of the method based on improvement through learning from others involved is very nicely expressed in the definition of benchmarking by Ontario Municipal Benchmarking Initiative (OMBI): "Benchmarking is a process in which we are humble enough to admit that others are better in something and clever enough to establish how to become their equal or even overtake them." The benchmarking cycle, originally formulated by OMBI, slightly adapted to comply with Czech local government setting, consists of 7 steps: FALA, Czech Republic 2

3 Figure 1: Benchmarking cycle 3. Starting point 1. Select the areas and / or services to be compared 2. Develop the area / service profile; define the data and comparable indicators 3. Collect and process data 4. Analyze the data and indicators, identify the best performances and your own gaps 5. Select and define the best practical processes and procedures 6. Develop the strategies and action plans to improve / optimize processes and services 7. Repeat the analysis of results achieved and processes optimized One of the Czech public administration reform principles was to bring the services closer to citizens. In 2003, this principle was accomplished through abolishing 81 district authorities, purely state administration bodies, and transferring their tasks to 205 selected municipalities. The process of the transfer was very quick; local authorities had hardly any time to prepare for the new tasks and a lot of improvisation could be noticed. Therefore, the management of the cities, both of the elected, and of C.E.s wanted to find out whether their system how to perform these new competences is effective, efficient and of quality. At the same time, they were motivated to learn from how others were coping with the same issues and take over what they perform better. Benchmarking using measuring and comparing the performance and quality of areas of competences seemed to be an appropriate tool to help them in their effort. The project "Benchmarking within Extended State Administration Tasks of the 3rd-Type Municipalities in the Czech Republic" was developed as a respond to their demand. It was implemented in Altogether 48 municipalities with extended powers were involved. Chief Executives and appointed employees of those municipalities met regularly in 5 working groups (WG) during all the project period and gradually developed methodologies of benchmarking comparison in 30 areas of competences (e.g. IDs, driving licences, register of inhabitants, construction authority, 9 areas of environment protection and other state administration tasks delegated to municipalities). FALA, Czech Republic 3

4 The people involved in the project appreciated the process, exchanging of experiences and results and when the project was finishing, most of them express the wish to continue. 4. Benchmarking Initiative 2005 Such a request proved that the outputs were sustainable and could be built upon them. Therefore, Benchmarking Initiative 2005 (hereinafter BI) was composed as an informal initiative aiming at improving quality of municipal service delivery through applying benchmarking. Since then, BI has developed substantially: The number of members has increased up to 81 (and another 20 municipalities have tried out contemporarily). Figure 2: BI in the Czech local government in 2007 Benchmarking methodology of another 23 areas of performance have been defined, not only dealing with delegated state administration but also with local government tasks, personnel management, management of supporting services, etc. have been among them. FALA, Czech Republic 4

5 In order to make data collection user-friendly, an on-line database application was created. It has been updated and upgraded several times to comply with growing requirements of the BI members and new functions stemming from these requirements. Nowadays, it enables the members not only to input the data and process the defined indicators, but also to create their own formulas, to select suitable partners for benchmarking comparison based on hundreds of criteria, to model and optimize the areas of performance and to provide sets of data for overall and specific analyses. Beside regular meetings in WG, also other information, communication and training services are provided to members: several types of training; meetings of experts; best practices identified and collected at working groups; reports and sets of other information; moreover general analyses working with data and indicators of all the cities involved as well as specific analyses focused on data of one municipality compared to others resulting in defining the strengths and weaknesses in performance of the municipality. 2. Register of inhabitants 2.4 Working hours for public Type: Calculated formula; Evaluation: Absolute values; Average: Median Figure 3: An example of a benchmarking output (a quality indicator comparing amount of working hours a week in municipal authorities of the size inhabitants; the municipalities are numbered; the city 58 is accessible more than twice as much as the city 13) - not included, due to the size of the picture Those municipalities that have been involved in benchmarking since 2003, now have their own data in a time line of 5 years ( ), which enable them to compare not only with others but also with their own performance in previous years (see the Figure 4). Up till now, over data have been collected, processed and are accessible for BI members. 19. Social benefits and social legal protection of children 19.1 Unemployment rate in the administration territory of the municipality with extended power in Typ: Type: Calculated formula; Evaluation: Absolute values; Average: Median Figure 4: An example of a benchmarking output (an indicator comparing unemployment rate in administration territory of municipal authorities of the size inhabitants; the decreasing FALA, Czech Republic 5

6 7. Register of drivers Benchmarkingová iniciativa 2005 trend is noticeable in all the cities) - not included, due to the size of the picture 7.4 Number of drivers in the territory per an employee Type: Calculated formula; Evaluation: Absolute values; Average: Median Figure 5: An example of a benchmarking output (an indicator shows that the number of drivers per an employee has not increased in average in administration territory with inhabitants; in half of then municipalities it even decreases) - not included, due to the size of the picture 7. Register of drivers 7.3 Number of operations in the territory per an employee Type: Calculated formula; Evaluation: Absolute values; Figure 6: An example of a benchmarking output (an indicator comparing effectiveness of municipal authorities in the same authorities in the area of drivers register; despite of the results in the Figure 5, the number of operations increased in nearly all the authorities substantially last year) - not included, due to the size of the picture The comparisons processed by the on-line software application show the best performers in each area as well as the weak ones and give the managements of the municipalities clear Figure about the state of affairs - figures and background information for planning, evaluation and decision-making processes on performance management and operation of the authority. At the meetings of WGs, results of benchmarking comparison are presented, discussed and the reasons of differences are searched for. The members present their experiences, know-how, processes and approaches and they and work together to find and define the best practices. The benchmarking process in all the working groups is moderated by the professional leaders. However, the agenda is prepared on the basis of the topical members needs and demands. Moreover, all the municipalities are represented in the Steering Committee that sets the guidelines for the BI operation including the Code of Ethics, approves the yearly budget and is submitted yearly reports on progress and results achieved. Support of elected representatives and top management of municipalities is a precondition (but sometimes it is not easy to gain). FALA, Czech Republic 6

7 The added value of the method and the approach applied is that the local government staff members have been directly involved in the whole process. They themselves choose the areas for benchmarking and have developed the methodology deciding upon relevant and important areas and figures for them. This regulates the processes, keeps it very practical and, last but not least, creates the ownership. Moreover, the learning process based on learning from each other s best practices, experiences and approaches is very valuable and has generated a number of best practices that have been described and distributed over other BI members and implemented in other authorities. 5. Examples of usage of benchmarking results for decision making processes of the Municipal Board and Council and Central Government bodies: Benchmarking results can be used in different ways. Some examples are listed below: Background materials for strategic management and decisions Analyses on comparing incomes and expenditures when developing a municipal budget Support on decisions concerning the amount of budget expenditures on authority operation including decisions whether to contract out or not. 42. Incomes and expenditures (in thousands of CZK) 42.1 Own incomes per an inhabitant (in thousands of CZK) Type: Calculated formula; Evaluation: Absolute values; Figure 7: An example of a benchmarking output (an indicator comparing own incomes of municipal authorities the administration territory is between inhabitants during last 3 years) -- not included, due to the size of the picture Decisions on setting the amounts of local fees 37. Local fees (in CZK) Total payments of local fees per an inhabitant of the municipality (in CZK) Type: Calculated formula; Evaluation: Absolute values Figure 8: An example of a benchmarking output (an indicator comparing total amount of local fees per an inhabitant in a region during last 3 years) - not included, due to the size of the picture FALA, Czech Republic 7

8 Background materials for decisions on merging, decreasing or increasing of the size of schools Making of contracts governed by the public law on performing of state delegated tasks (background information like an average expenditure for a pupil, cost for administration of an offence, etc.) Comparison of numbers of employees and effectiveness in particular areas when deciding upon the number of employees of an authority and operational costs Measures and systematic changes towards quality increasing of services for citizens, clients, working hours, dispatch systems, etc. Decisions on systematic measures concerning the absorption capacity of a municipality as to EU and State programs, grants, funds and subsidies Support on negotiations on contributions for performing of performing state administration tasks delegated to the municipality Support on negotiations on subsidies at State budget level and regional budget Support on negotiations on any changes based on sharing best practices within BI Background information for developing action plan resulting from benchmarking, which is then approved by the Municipal Board and Council 6. Examples of usage of benchmarking results for decision making processes in a local authority: Defining of an optimal number of employees in particular areas of performing state administration tasks delegated to the municipality Usage of benchmarking results at yearly structured interview with employees in managerial positions at a municipality Support on setting down the amount of budget expenditures on authority operation, training of employees, purchase of hardware and software, etc. Support on decisions concerning the amount of budget expenditures and saving measures on authority operation or, on the contrary, on increasing the expenditures on particular items Defining of measures and systematic changes for the sake of quality improvement of services for citizens, clients, working hours, dispatch systems, etc. FALA, Czech Republic 8

9 Developing of the action plan for implementation of changes resulting from benchmarking Usage of all the benchmarking results for the purpose of internal audit, personnel and process audit. Usage of selected benchmarking results for implementation of CAF, ISO, reingeneering and other methods of quality management. 7. Conclusions The figures showing benchmarking outputs in the text above are just examples of thousands options; working with the on-line database application using selection of number of years; working groups, size of the authorities, areas, indicators and ways of presentation as well as their combination is a worthwhile tool for all the users. FALA has implemented altogether 11 benchmarking projects, most of them for local governments but also for social services. Each of the projects helped us to move further, to develop new methodologies, new functions of software, new services for those involved. The results and outputs are regularly presented at national conferences on quality in public administration. A number of BI members has been granted a national silver or bronze award for improving quality through applying benchmarking. Moreover, the Benchmarking Initiative 2005 was also selected as one of the 3 model cases to represent the Czech Republic in the 4th Quality Conference for Public Administration in the EU which was held in Tampere, Finland, in September 2006 ( But these are not the reasons why the people from municipalities are willing to be involved in this informal initiative, to find the time in their busy time schedule, to make an effort to collect the data, to prepare themselves and come to working groups several times a year, to describe best practices, etc. Their motivation has been feed-backed regularly and what has been found out? The most frequent reason for them to start with benchmarking was the fact that even if they were able to measure their performance, they did now know whether the results were good, bad or average. The examples of particular usage of benchmarking are very practical: on the basis of benchmarking a number of action plans for implementation of changes has been adopted the background information submitted to elected bodies have better, more relevant arguments FALA, Czech Republic 9

10 the number of employees in particular departments has been decreased (or increased) in quite a number of authorities the organisational structure of several authorities has been revised a number of working processes and procedures have been amended, up-dated, up-graded the people involved are enthusiastic seeing the changes implemented improve their results some contracts with companies providing out-sourced services have been renegotiated in several cities People also appreciate to have a chance to discuss topical problems with colleagues from other authorities, exchange experiences and best practices and learn from each other. Prague, April 2008 FALA, Czech Republic 10