The Role of Benchmarking in Performance Improvement

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1 The Role of Benchmarking in Performance Improvement Benchmarking our way to better services, more effectively, more efficiently Grant Mackintosh SALGA/WRC Municipal Benchmarking Initiative Water Services Master Class #1 15 February 2012

2 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

3 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

4 The term benchmarking was first used by cobblers to measure people's feet for shoes. They would place someone's foot on a "bench" and mark it out to make the pattern for the shoes. Source: Wikipedia This led to the standardisation of shoe sizes and the ability to mass produce, thus bringing down cost it also allowed for the best practices of shoe sizing and manufacturing to become more widely adopted One note, however: Shoes would be cheaper but not the perfect fit for everyone

5 Benchmarking is the process of comparing performance metrics and business processes to industry best s and/or best practices from other industries. The maturity of benchmarking: 1. Internal against past performance 2. Internal against a desire based upon addressing the root cause affecting performance 3. External performance measurement against peers (i.e. Similar industries) 4. External (similar industry) performance and practices/processes review against peers to understand what leads to good performance 5. External against leading industries (both practices and performance)

6 Inputs: Performance Assessment Understanding Processes Understanding Attributes Outputs: Performance Improvement In a long-term, sustainable manner Benchmarking is a tool for performance improvement through search and adaption of leading practices Source: Water Utility 21

7 An example of suppliers: Y-axis: Outcome, X-axis: Inputs

8 Guiding and Driving Performance Improvement

9 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

10 Water Services Benchmarking A tool for performance improvement through systematic search and adaptation of leading practices IWA s Task Group on Benchmarking Beyond comparative ranking To performance improvement

11 Background to South African Water Services Benchmarking 1 st National Benchmarking Initiative ran from 2005 to 2008 Led by DWA, SALGA, WRC Aimed to improve performance & support more sustainable water services delivery 67 municipalities by 2008 KPIs from the Strategic Framework for Water Services Laid the basis for the RPMS 2010: SALGA / WRC review of water services benchmarking 2011: SALGA / WRC revive benchmarking to support municipal performance improvement: water services

12 Why revive benchmarking now? Improve performance, with an emphasis on improving service delivery Measurement, analysis, comparison and shared learning

13 Why revive benchmarking now? Service delivery is a by-product of effective, efficient and economical processes that are informed by strategic direction, resource planning and implementation Treasury MFMA Circular, October 2011 Measuring and comparing operational and business performance provides feedback on where and how to improve service delivery Internal comparison, month by month, quarter by quarter External comparison with peers

14 What s the difference between this and the RPMS? Regulatory benchmarking e.g. RPMS Why: External assessment of performance with mandatory requirements - and a big stick Someone else decides what matters Performance benchmarking Municipal Benchmarking Initiative Why: You want to improve your own operational and business performance, and see how you compare with others You decide what matters, and where and how to improve, based on your own needs and objectives For Municipalities, by Municipalities, to the Benefit of Municipal Services

15 How many psychotherapists does it take to change a light bulb? It depends. Does the light bulb really wan to change? Performance benchmarking is about getting serious about measuring performance because..you want to know how you re doing, and want to perform better

16 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

17 The Promise that Municipal Benchmarking Holds

18 Beyond Assessment, to Progressive Improvement

19 The Implementation Process

20 Learning and Improvement

21 Driving Smart Improvement

22 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

23 Key Features of the new MBI High-profile, SALGA-led initiative For municipalities, by municipalities, to the benefit of municipalities Aligned to International Best Practise Initially Focused on Key Themes Municipalities choose themes Well aligned to Sector processes Department of Water Affairs Treasury DCoG Presidency etc

24 We appreciate the difficulties of struggling municipalities and have strategies for dealing with this Maximum inclusiveness, through a stratified, modular approach to performance reporting Surfaces & uses Existing Municipal data Support provided in identifying relevant KPIs and building data assessment systems Focuses on progressive municipal performance improvement Core common indicators for external comparison Knowledge sharing and peer networking through local, regional and national forums Web-based database, able to generate automatic easily readable reports

25 We recognize the Wide range of Contexts

26 South African Municipal Benchmarking Initiative This website has been set up to make benchmarking part of normal, good business practice that assist officials with their day-to-day operations and demonstrate economic benefits and value to the water services sector. Supporting Partners -IMESA -ethekwini W&S -- MILE -- WOP - Africa Water Demand Management Human Resources & Skills Development Service Delivery Backlogs All your Dashboards Operations & Maintenance Product Quality Financial Performance Collaborate Online

27 All Your Dashboards Dashboard DM Module Completion Status Module Performance

28 All your dashboards Water Demand Management The adaptation and implementation of a strategy by a water institution or consumer to influence the water demand and usage of water in order to meet any of the following objectives: economic efficiency, social development, social equity, environmental protection, sustainability of water supply and services, and political acceptability. Tools Your Overall Dashboard Module Completion Templates Case Studies Data Add data Download data in CSV format

29 Water Demand Management Dashboard DM KPI 1 KPI 2 KPI 3 KPI 4 KPI 5 KPI 6 Additional KPIs

30 Water Demand Management: KPI 3 Dashboard DM Ave Pipe Age 72yrs Data element 1 Data element 2 Data element 3 Data element 1 KPI 3 e.g. Shows NRW trend, current NRW value = 47L/connection/day Ave Pressure 6 Bar Mains surveyed No Data Leaks repaired 68% Data element 2 Data element 3 Data element 1 Data element 2 Data element 3 Data element 1 Data element 2 Data element 3 Additional Variables

31 01/Jan/10 01/Feb/10 01/Mar/10 01/Apr/10 01/May/10 01/Jun/10 01/Jul/10 01/Aug/10 01/Sep/10 01/Oct/10 01/Nov/10 01/Dec/10 01/Jan/11 01/Feb/11 01/Mar/11 01/Apr/11 01/May/11 01/Jun/11 01/Jul/11 01/Aug/11 01/Sep/11 Human Resources & Skills Development Dashboard DM Human Resources Data Element/Variable 1: Number of Staff Required number of staff (as per organogram) Current number of staff Sep Sep-2011 Table Data Accuracy/Reliability A1 (Old IWA) 0 5% (New IWA) Previous results Aug-11 etc Jul-11 etc May-11 etc Apr-11 etc Mar-11 etc Jan-11 etc Oct-10 etc Jun-10 etc Add/Remove Staff # Name Position Add/Remove Staff 1 Mr X Human resources management personnel (B3) 2 Ms Y Customer service personnel (B5) 3 Ms Z Technical services personnel (B6) Et c 28 Ms E Financial and commercial personnel (B4) 29 Mr B Operations and maintenance personnel Graph (B8) Number of staff Target

32 Public View South African Municipal Benchmarking Initiative This website has been set up to make benchmarking part of normal, good business practice that assist officials with their day-to-day operations and demonstrate economic benefits and value to the water services sector. The focus is on hands-on support ( how do I do that? ) and through creating a support network and culture of information exchange between peers ( how did they do that? ). This is being done by: Use of a web-based real-time data-capture and reporting system for tracking and measuring performance. Use of a modular, tiered approach to benchmarking to encourage and enable all to participate, at a level aligned with your current capabilities and future aspirations. Module Completion List of data available (Questions / KPIs) % Answered by WSAs Filter by Province, DM, LM Tools Templates Case Studies Data Request for data Contact details Select area

33 Agenda: What is Benchmarking? Why Revive Municipal Benchmarking now? The Promise Municipal Benchmarking Holds Key Features of the Municipal Benchmarking Initiative Next Steps: Where are we now? 10 min

34 Where is Project Now? Phase 1: Review & Design Phase Phase 2: Initiation amongst all WSAs Initiation of Peer Groups Initiation of PI feedback Development of Web System

35 Thank you

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