The Digital Public Service branch recently celebrated the 1 year milestone of hosting the New Zealand All-of-Government (AoG) Common Process Model. With 59 agencies on board, things are tracking well.
About the Common Process Model
The Common Process Model (the Model) is a set of business process models that enable public service agencies to design their key back-office functions such as finance, human resources (HR), payroll, procurement, enterprise asset management, workplace health and safety, and information technology (IT) service management.
Based on best practice, the Model brings consistent, common processes to public service back-offices. The Model enables agencies to have a head start and strong foundation to develop their business requirements which makes it easier for staff and project teams.
Who manages the Common Process Model
Initially the Model was licensed from the New South Wales (NSW) Australian Government and updated for New Zealand requirements by Te Tari Taake Inland Revenue (IRD) for its enterprise support services programme as part of the overall business transformation and as an all-of-government resource.
Te Tari Taiwhenua Department of Internal Affairs took stewardship of the Model on 1 July 2021. Over the past year, the team looking after the Model (the Back-office Digital Transformation unit) has grown the usage from 38 to 59 agencies, and — through proactive engagement and communication — has over 352 users.
The Back-office Digital Transformation unit works with the heads of profession for HR, Finance and Procurement who are responsible for these back-office functional roles for all-of-government. They own their business processes in the Model. The unit works in partnership with heads of profession and end users to update these processes as needed.
Case study insights
- In 2018 the Ministry of Social Development (MSD) introduced a new strategic direction and required fit-for-purpose systems, business processes, people capability and information to fulfil this direction.
- MSD needed to replace their outdated Financial Management and Information System (FMIS) and decided to use the Model and the shareable collateral, as it enabled them to view and re-use the same financial processes as Inland Revenue (IRD).
- Benefits included reduced costs, less risk, shorter implementation time, and fewer resources required, allowing them to spend more time training the team on the new FMIS, to ensure success — “it saved us hours and days of thinking time.”
- As a result of the Model, the time taken to achieve the month-end close decreased from 15 days to 5 days, and payments to suppliers are punctual and accurate.
Interview with Stephen Crombie, Ministry of Social Development (MSD)
To find out more about the value and benefits of the Model, we spoke to Stephen Crombie, Deputy Chief Executive People and Capability from MSD.
Video transcript
[Audio]
Karanga performed by Hollie Pohatu
[Visual intro title pages]
Te Tari Taiwhenua Internal Affairs logo, followed by Te Manatū Whakahiato Ora Ministry of Social Development logo.
Title page reads: Common Process Model case study — Ministry of Social Development
Title page reads: The challenge
Stephen Crombie is seated in front of a wall decorated with images of a mother holding a baby, wearing a korowai, and a colourful kete hanging on the wall.
Overlaid title reads: Stephen Crombie, Deputy Chief Executive People and Capability, Ministry of Social Development
[Audio]
So a few years ago we identified that our current financial system was no longer fit for purpose. It was about 30 years old, if I recall. So we thought long and hard about how we should approach the replacement and came across the Common Process Model approach and we thought that was something for us.
[Visual intro title page]
Why choose the Common Process Model?
[Audio]
We chose the Common Process Model approach because it’s the most sensible, most cost effective and was most efficient for the delivery and it met the ministry’s needs because there is a bit of a myth that financial processes are different between agencies. And it is a myth and I believe we’ve proven it because with the Common Process Model you get a really big head start because you don’t have to think about a whole lot of things that you would have to think about if you are building from scratch.
[Visual intro title page]
Helping government
[Audio]
So the Common Process Model is the most sensible way of doing things. You would have thought that IRD and MSD are very different organisations and therefore you’d want to have a lot of tailoring of the financial system. We had hardly any tailoring. But what’s very interesting is that MSD is setting up a new departmental agency, the Ministry for Disabled People. So what we’re able to do is take the Common Process Model an approach that we used for MSD and then apply it to the new ministry so we can actually stand up a new ministry in a relatively short period of time as well.
And we’re planning now to have the new ministry financial system based on the Common Process Model established by first of October of this year. So you can’t do anything that fast if you try and customise for the agency. So that’s why I’m a huge advocate from a taxpayer perspective, you know, it’s less cost, less risk and implementation and you just get there quicker. So I really support that model for that reason.
[Visual intro title page]
The benefits
[Audio]
The main benefits of using the Common Process Model are in time, so the time for implementation is shorter because you’re not having to rebuild or do detailed analysis of all the business processes you’ve got and then configure the system to those business processes. You effectively take the business processes that are there. That leads to less resources required to implement, which also leads to a reduction of risk because you’re taking the learning forward, you don’t have to learn it through the implementation and the risks that were identified in previous implementations you can take forward. So those are the main advantages.
[Visual intro title page]
Key metrics
[Audio]
One of the interesting metrics that we’ve discovered, we’ve just done our first month end close and normally it takes quite a while, many days and a lot longer than we hope, maybe up to 15 days. It took five days to close in our first month. So that’s a good sign in terms of some of the performance of the system overall.
[Visual intro title page]
The bigger picture
[Audio]
So one of the challenges with financial systems when they are all unique and very different is that it’s very hard to get common data across the broader system. So if you talk to Treasury, the thing that they would like is to be able to look into agencies’ systems and be able to see and abstract data that is in common so they can then get a real time view of what’s happening with government financials in pretty much real time and of course, that’s not possible unless the information that’s in the systems are structured in an appropriate way.
So I think the Common Process Model leads us into that where you get very much common information structures, common chart of accounts, common information that then can be abstracted out for purposes such as broader financial planning across government.
And one of the things the Common Process Model facilitates is a continuous learning process. So every implementation of a financial system creates new understanding and new knowledge which can be reapplied in the next one. So it does become a strong accelerator for change of the financial systems and therefore capability and really leading to performance across the whole system.
[Audio]
Karanga performed by Hollie Pohatu
[Visual outro title pages]
Te Tari Taiwhenua Internal Affairs logo, followed by Te Manatū Whakahiato Ora Ministry of Social Development logo.
Title page reads: Opening and closing Karanga performed by Hollie Pohatu
Outro page displaying Te Tari Taiwhenua Internal Affairs logo, Digital Public Service, Te Kāwanatanga o Aotearoa New Zealand Government logo.
Why choose the Common Process Model?
We chose the Common Process Model approach because it’s the most sensible and most cost-effective option. It was most efficient for the delivery, and it met the ministry’s needs. There is a bit of a myth that financial processes are different between agencies and we’ve proven that. With the Common Process Model you get a really big head start because you don’t have to think about a whole lot of things that you would have to think about if you were building from scratch.
Helping government
The Common Process Model is the most sensible way of doing things. You would have thought that IRD and MSD are very different organisations and therefore you’d want to have a lot of tailoring of the financial system. We had hardly any tailoring so effectively the same system that was in IRD we’ve transferred into MSD, even though the agencies are very, very different in how they operate.
I’m a huge advocate from a taxpayer perspective. It’s less cost, less risk and implementation and you just get there quicker.
Benefits
The time for implementation is shorter because you’re not having to rebuild or do detailed analysis of all the business processes you’ve got and then configure the system to those business processes. You effectively take the business processes that are there, which leads to less resources required to implement, which also leads to a reduction of risk because you’re taking the learning forward.
The bigger picture
One of the challenges with financial systems when they are all unique and very different is that it’s very hard to get common data across the broader system.
If you talk to Treasury, the thing that they would like is to be able to look into agencies’ systems and be able to see and abstract data that is in common so they can then get a real time view of what’s happening with government financials in pretty much real time and of course, that’s not possible unless the information that’s in the systems is structured in an appropriate way.
The Common Process Model leads us into that, where you get very much common information structures, common chart of accounts, common information that then can be abstracted out for purposes such as broader financial planning across government.
What is Back-office Transformation?
Back-office Transformation is the term used across government to describe budgets or projects to transform the unseen business functions and systems that deliver frontline services to New Zealanders — for example, finance, procurement, human resources, and payroll-related activities.
Back-office Transformation is driven by redesigning the services to upgrade existing systems, many of which are at end-of-life, outdated, out of support or are no longer fit for purpose. The Common Process Model enables agencies to transform their back-office processes through an easier, cost-efficient manner.
Summary
The digital landscape is constantly changing and evolving, and government agencies must be adaptable and shift with it. This is where the back-office processes in the Model comes in use by enabling digital change. Without it, the government faces avoidable escalating costs and risks.
Find out more
Public service agencies can register for access to the AoG Common Process Model by emailing enterprisesupport@dia.govt.nz.
For more information on back-office digital transformation and the Common Process Model visit Common Process Model.
