PO003.2- DigitalNL Quantifying and Reporting on Non-Financial Benefits
North Lanarkshire Council · 16 February 2023
Back to Audit and Scrutiny Panel — 16 February 2023 and its agenda
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☐ Yes ☒ No Ref: KH/LJ Date 16/02/23 PO003.2: DigitalNL Quantifying and Reporting on Non-Financial Benefits From Katrina Hassell, Chief Officer (Business and Digital) E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary The DigitalNL programme is subject to a series of audits with such aimed at providing levels of assurance that the overall programme is progressing against predetermined targets, that governance is robust and that benefits as outlined in the approved Full Business Case are being realised. To date, the DigitalNL programme has been subject to four audits with each making a small number of recommendations with regards suggested improvements. On each occasion management within Business and Digital have viewed the outcome of such reports and the recommendations contained therein as valuable feedback for improving processes within the overall programme. This report focusses on the recommendation made within the most recent internal audit report for DigitalNL completed in November 2021 with regard to the identification, calculation, monitoring and tracking of non-financial benefits. This recommendation was assessed with a residual risk rating of medium. The tools and techniques developed and utilised within the service for the DigitalNL programme are highlighted as is the complexity of such in capturing and reporting on both council-wide and service non-financial benefits in line with the already approved Year 4 Roadmap. The report highlights a number of next steps to be developed in order to finalise and fully deploy the non-financial benefits element of the Benefits Tracker. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Recognise the development and implementation of a bespoke Benefits Tracker to capture financial and non-financial benefits for the DigitalNL Programme (2) Acknowledge the robust processes in place for capturing non-financial benefits (3) Recognise the commitment to the continued development of non-financial benefits through the deployment of the approved Year 4 Roadmap (4) Support the next steps outlined in paragraph 2.23 of this report Otherwise note the report.
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1. Background 1.1 The DigitalNL Transformation Business Case (FBC) approved by Policy and Strategy Committee in March 2019 highlighted that transformation had to go beyond council walls and operations, with a whole place approach required to turn the Council’s Digital Vision and The Plan for North Lanarkshire into reality. Recognising the complexity of change required to operational and customer facing infrastructure, IT services and culture, this FBC proposed two complementary and interdependent programmes (a) Digital Economy and Place and (b) Digital Council Transformation (DigitalNL), be progressed to enable the Council to use technological advancement such as ultra-fast broadband, artificial intelligence and next generation smart devices to redesign services around the needs of communities and businesses. Whilst non-financial benefits were identified as the key drivers of these complementary programmes, our Digital Business partner’s experience of similar transformations indicted the proposed digital solution deployments could also be financially beneficial to the Council. 1.2 The DigitalNL aspect of the Council’s Transformation Programme focussed on three distinct areas: - • Digital Workplace (M365) to improve collaboration • Cloud Storage Solution to create agility and efficiencies • Digital Platform (Customer Relationship Management) transforming how the council interacts with its citizens. 1.3 However, as Members are aware aspirational programmes such as DigitalNL and Smart NL slowed considerably during 2020-21 and 2021-22 as the Covid-19 pandemic took hold. 1.4 As part of the Council’s recovery planning, and the governance arrangements in place for the DigitalNL Programme, during 2021-22 and 2022/23, a series of root and branch reviews of the programme focussed on: • The planning of future years’ business change, service design and technology build • Alignment of associated capital and revenue expenditure • Envisaged financial and non-financial benefits 1.5 At its meeting of 1 December 2022 the Policy and Strategy Committee received a report “PoW003.2 DigitalNL – Next Steps” from the Chief Executive which provided a review of the programme deliverables achieved to date against those outlined in the FBC approved by Members in March 2019. It outlined what had gone well alongside the challenges encountered in achieving financial and non-financial benefits to date. 1.6 Since its inception the DigitalNL Programme, including that of the FBC, has been subject to a series of internal audits with the aim of providing assurance on the adequacy and effectiveness of the arrangements in managing the programme. The Plan for North Lanarkshire Priority Improve North Lanarkshire's resource base Ambition statement (18) Ensure our digital transformation is responsive to all people's needs and enable access to the services they need
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1.7 The fourth such audit was reported to Audit and Scrutiny Panel on 9 December 2021 and recognised that the governance arrangements for the Programme appeared to be adequate. However, the audit also highlighted that given the programme’s performance to date in delivering expected savings, the compression of the programme as a result of Covid and other impacts and the challenges presented by delivering many of the remaining individual projects/workstreams it was considered that uncertainty remained over the ability of the programme to fully deliver future expected savings”. 1.8 The report further recognised the work of Business and Digital in devising a Benefits Tracker, with Internal Audit advising that they were pleased to note that re-baselined financial benefits were being tracked. 1.9 However, there was recognition that non-financial benefits required to be adequately tracked and monitored to allow the Council to demonstrate the achievement of the objectives of the programme. As a result, the report recommended that “the non- financial benefits tracker is finalised and approved with non-financial benefits thereafter identified, calculated, tracked and monitored for all workstreams.” 1.10 Updates on progress with the development of the non-financial benefits element of the Benefits Tracker were provided to the Audit and Scrutiny Panel in September and November 2022 respectively. Having considered the current position and associated Internal Audit commentary on 24 November 2022, the Panel requested senior management provide a report for their next meeting which details plans to finalise the non-financial benefits element of the Benefits Tracker. This report satisfies that request, but also takes the opportunity to remind members of the progress and approvals realised to date. 2. Report 2.1 It was highlighted in the FBC in March 2019 that non-financial benefits, including process efficiency, upskilling of the workforce and development of data as a strategic asset were the key drivers for the DigitalNL Programme. However, during financial year 2019-20, with the Council moving towards a challenging 3-year budget, the emphasis on financial benefits became the prominent driver. 2.2 Notwithstanding this, initial design concept work for the Council’s benefits management arrangements, and specifically processes for identifying non-financial benefits, continued with support from our Business Partner, PwC, moving into the development phase during early 2020. 2.3 The intended aim behind such a development was to integrate benefits management as the way in which the council would know that the planned change(s) has happened, is fully sustainable and that the benefits identified are being realised. By proactively managing this approach, the Council would ensure that anticipated improvements and returns from investment are realised. 2.4 From the outset the design documents set out five key pillars to ensure the design and delivery of the council’s future state with benefits at its core, would incorporate the following: (i) Be as straightforward and as easy to understand as possible to ensure adherence to processes.
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(ii) Allow tracking and assessment of all identified benefits as part of the future state design. (iii) Form a key facet of programme planning to ensure that a focus on benefits drives all activities and decision-making. (iv) Assign ownership of benefits to ensure there is always a responsible person accountable for successful delivery. (v) Include robust reporting arrangements to ensure the relevant Boards and Committees receive an update regularly. 2.5 The programme consists of three strategic strands with benefits, once identified, linked to one or more of these strands thus ensuring the Council delivers the change and demonstrates the impact of improvement. (*including transactions, workforce, analytics, and insights) 2.6 An update on the non-financial benefits for all three strands was presented within the “PoW:003.2 DigitalNL - Year 4 Roadmap report submitted to Policy and Strategy Committee on 29 September 2022. Additional information on the Digital Economy benefits was submitted to Policy and Strategy Committee on 1 December 2022 with a further update on Digital Communities being presented to the Communities Committee on 6 February 2023. 2.7 Focusing now on the Digital Council, the finalised “Benefits Realisation Management Approach” provides the framework by which financial and non-financial benefits for the Digital Council are realised. This was approved at the DigitalNL Delivery Board in May 2020 and thereafter updated and approved in February 2021 to incorporate the ‘Design to Live’ stages of Business Change. 2.8 Following approval at the DigitalNL Delivery Board the “Benefits Realisation Management Approach” was issued to the Corporate and Operational Management Teams to cascade throughout the organisation, thereby increasing council-wide awareness of the process and templates used for capturing benefits arising from
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redesign activities. The Business Change Team issue this documentation as part of the service design to live process and carry out workshops with senior service-based staff to communicate transformation processes including those required to identify, calculate, track, and monitor financial and non-financial benefits. 2.9 Following approval and cascade of the benefits realisation approaches the scope and design of the tool required to monitor financial and non-financial benefits commenced with phase one of the Benefits Tracker – identifying and monitoring financial benefits (a budget tracker) - being approved at the DigitalNL Delivery Board in February 2021. 2.10 As has been reported previously to the former Transformation and Digitisation Committee, following implementation of the Budget Tracker, and with the focus on the financial position as detailed in 2.1 above, resources were targeted towards the re- basing of the financial benefits defined in the FBC. 2.11 Phase Two, the design of the non-financial tracker, took place during 2021/22, capturing input and feedback from the Business Change Team and ensuring the strategic links to The Plan for North Lanarkshire and associated Programme of Work continue. The outline scope of the non-financial element of the Benefits Tracker was approved at the DigitalNL Delivery Board in February 2022. This summarises the benefits/achievements categorised into one of the three digital strands outlined in 2.5 above. 2.12 Non-financial benefits for the Digital Council comprising council and service-wide benefits are documented in BR08 Benefit Summary (Appendix One). A condensed version of this benefits summary was included in the aforementioned report to Policy and Strategy Committee in September 2022. Non-financial Benefits – Digital Council 2.13 Within the benefits approach a “Benefit” is defined as “The measurable improvement resulting from an outcome perceived as an advantage by one or more stakeholders, which contributes towards one or more organisational objectives” This ensures that all benefits: • are measurable • show the improvement resulting from the change • create links between tangible outputs and strategic goals • ensure alignment of effort, resources, and investment towards achieving organisational objectives 2.14 In order to ensure alignment with The Plan for North Lanarkshire there are five areas of impact to categorise benefits. These are shown in Table 1 overleaf.
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Primary Area Explanation Impact Ambition Statement Financial Saving money or reducing expenditure 21 Continue to identify and access opportunities to leverage additional resources to support our ambitions Process Improving efficiency and promoting channel shift 24 Review and design services around people, communities, and shared resources Customer Enhancing user experience and satisfaction 19 Improve engagement with communities and develop their capacity to help themselves Employee Investing in employees by providing training, tools, and support 25 Build a workforce for the future capable of delivering on our priorities and shared ambition Environmental Reducing the councils carbon footprint by producing fewer emissions etc. 22 Facilitate a North Lanarkshire wide approach to asset rationalisation, including with communities and partners Table 1 – Benefit Categories The Six Stage Process 2.15 In order to identify such benefits, a clear six-stage process is in place: Define Success develops a clear understanding of why the change programme is required Identify and quantify considers the approach to identifying benefits (including discovery workshops, benefits mapping and ‘customer insight’) as well as forecasting the scale of the improvement anticipated and identification of links to The Plan for North Lanarkshire Value and appraise models financial benefits in monetary terms; and assesses value, volume, or transactional measure for non-financial benefits Plan considers the approach to validating and prioritising benefits, selecting benefits measures, engagement with stakeholders, identifying roles and responsibilities, and pulling all document outputs together Realise covers tracking, reporting, corrective action, effective approaches to stakeholder management and achieving change Review considers the importance of review as a basis for learning and continuous improvement before, during and after change 2.16 To be successful in the realisation of benefits, the identification of a defined set of objectives, benefits, and impact is an essential start. Step 1 – identify the original objectives from the FBC – this is the first reference point
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Step 2 – identify and quantify the benefits captured from engagement activity (Opportunity Workshops, Playback Sessions and 1:1’s with Service Management Teams) Step 3 – quantify the impact if the change programme is implemented, ensuring any benefit identified have a direct link to The Plan for North Lanarkshire Step 4 – use the above information to complete the relevant supporting documents including the Benefit Profile and Map. Identification of Non-Financial Benefits 2.17 At the outset of the DigitalNL programme early indicators of non-financial benefits were captured via a benefits log and used as a reference to design benefit maps for each of the service areas within the FBC. At that time Transformation Opportunities were translated into maps with each indicating the following: • Theme • Opportunity • Requirement (relating to process, technology, and people) • New way of working • Benefit linked to one or more of the primary areas of impact: - Process – reduction in front office costs Customer – improved customer satisfaction Employee – improved staff satisfaction Environmental – improving the councils carbon footprint 2.18 Transformation opportunities were linked to associated themes and digital enablers. Digital Themes Digital Enablers 2.19 Appendix Two provides an overview of the Waste Management Self-Service theme and outlines the journey for online capabilities where customers can access online services 24/7 to pay for a service, book a service or report an issue. The final benefits map for Waste Services and that for Built Environment will be completed in January 2023. Thereafter maps will be designed for each service area in line with the approved Year 4 Roadmap.
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2.20 With non-financial benefits having been reviewed for those Council and Service sprints already complete, the updated BR08 Benefit Summary was considered at the Business and Digital Delivery Board on 15 December 2022, with Board Members confirming such sufficiently assures them that non-financial benefits are being tracked, monitored and recorded in accordance with benefit maps. Non-Financial Benefits – Achievements to date 2.21 With improved tools for communication and collaboration rolled-out across the organisation through the M365 project, the first non-financial benefits were identified through increased productivity, efficiency, and environmental sustainability. The enablement of an agile, flexible, and modern workforce by the delivery of modern technology has led to easier collaboration both internally and with external partners. A smoother hand-off between staff on business-critical documents are now evident along with the ability to implement hybrid and home working without disruption to the working day. Further details are provided in BR08 - Digital Council Summary (Appendix Three) which provides a detailed overview of the non-financial benefits currently being tracked. Category Activity Impact Process Improvement – leading to an efficiency saving by reducing manual transaction- based activities and adopting an automated on-line solution Customer Services Hub Business Intelligence Hub Robotic Process Automation (RPA) M365 File Management Digital Self Service: Transactions designed in a way that they require minimum effort from customers and staff Real-time dashboards and analytics allowing the Council to make informed operational decisions Automation of simple / rules- based queries and tasks removing time consuming low value activities The ability for staff and partners to collaborate. Staff are highly mobile and not tied to council offices Information stored in line with Corporate File Plan and retention and disposal of information managed with an electronic records management tool Improved Customer Experience – by enabling the service user to self-serve online and receive automated notifications enhancing the user experience and digital skills Customer Portal (Dynamics) Website (Drupal) Internet of Things (IoT) – Damp Monitors A digital customer interface that enables customers to self- manage, self-assess, and provide a single point of access to services Installation of damp monitor sensors to automate reporting, response and fixing of problems
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Category Activity Impact Employee Development – by providing training, tools, and support, enhancing digital skills and the workforce M365 Rollout Customer Services Hub Digital Platform and Azure Development Training ITIL Qualification On-line training suite developed for M365 Additional customer care training for customer services staff Knowledge transfer and upskilling of in-house developers and ICT staff Introduction of ITIL training for ICT and Business Change teams Environmental Sustainability – a reduction in the Council’s carbon footprint Virtual Housing Repairs Inspections Customer Portal Reduced travelling and increased productivity A digital customer interface to – reduce printing and postage costs Next Steps 2.22 Full implementation of the Benefits Tracker remains a key objective and will be supported through: • Maximising the use of the Digital Platform to achieve non-financial benefits • Identifying, calculating, and tracking the impacts of non-financial benefits arising from redesign activity detailed within the approved Year 4 Roadmap • Focussing on recommendations from Internal Audit to satisfy any further recommendations for improvement so identified. 3. Measures of success 3.1 Success will be evidenced through the realisation of non-financial benefits through the approach outlined in the Benefits Realisation Management Approach 3.2 Specific measures of success will be identified in the benefits log and maps associated with the Year 4 Sprint Roadmap. 4. Supporting documentation Appendix One – Combined Benefits Summary Appendix Two – Benefits Map – Waste Services Appendix Three - Non-financial Benefits – Digital Council Katrina Hassell Chief Officer (Business and Digital)
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☐ No ☒ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐
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If Yes, please provide a brief summary of the impact? Business and Digital is responsible for the design, deployment and maintenance of all ICT and digital assets required by the Council. It has approved revenue and capital funding available to maintain supportable applications and transition Council services towards increased self-service and community-focussed delivery. Significant changes are envisaged regarding connectivity, IoT, software and hardware, but all will be considered by the Council’s Enterprise Architecture Governance Group (EAGG) as part of the overarching deployment process. Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Business and Digital have a defined risk management strategy in place to capture, assess and mitigate risks and issues. The annual review was reported to the Delivery Board on 12 December 2022 and provided clear integration between corporate, service and programme risks. Within the risk register R81 – Failure to realise identified benefits within the programme may lead to the programme not being able to deliver expected capabilities and outcomes. DNL Programme Risk Likelihood Impact Rating Evaluation Last Review Date Next Review Date Failure to realise identified benefits within the programme may lead to the programme not being able to deliver on expected capabilities and outcomes. 4 4 16 High 19/12/2022 16/01/2023 (reviewed monthly) 5.10 Armed Forces Covenant Duty
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Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services.
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Appendix One Combined Benefits Summary
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Appendix Two
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Appendix Three