Applying the framework (continued)
Corrections: Developing innovative approaches to asset management
Corrections manages over $2 billion worth of assets, including prisons, probation centres and supporting infrastructure such as information technology (IT).[15] In support of its core frontline goals of “improving public safety and reducing re-offending”, Corrections must deliver world class assets that are fit for purpose. It aims to achieve this through the use of smart procurement choices.
Corrections has augmented its traditional approach to building, leasing and maintaining assets with a full suite of service delivery approaches. It aims to deliver continuous improvement across the entire Department by leveraging the innovation that comes from targeted private sector partnering.
Corrections is doing things differently…
Corrections' role is changing from administering services to managing outcomes. The private sector service provider is motivated by the normal commercial drivers, leaving Corrections to concentrate on getting better outcomes for the community.
In this new role, Corrections sets the level and standard of service, required to meet its strategic objectives, and then monitors the service provider's performance against the contracted benchmarks.
The service provider is responsible for determining how best to deliver the services to the specification and standards of the contract. As expectations rise, over time, the service provider and Corrections will need to consistently find new and improved ways of working.
- Delivering greater value through new approaches to asset management…
Improved asset monitoring and reporting are central…
The contractual agreements enable Corrections to place greater focus on evaluating performance against a set of defined standards. Payment is aligned with the actual quality of the service Corrections receives, with penalties for poor performance and incentives for good results.
Corrections is using the performance information generated from these contracts to improve its performance across the breadth of the organisational assets. For example, the outsourced facilities management contract enables Corrections to monitor performance in the following areas:
| Key outcome | KPI | Measuring performance |
|---|---|---|
| The condition of building fabric, plant and equipment is maintained or improved over the term of the contract | Effective service life | The effective service life is the current residual economic life of the asset based on the agreed portfolio maintenance deterioration curve at the start of the planning period |
| A Department-approved annual maintenance plan is completed in a timely manner | Lifecycle cost maintenance plan | The lifecycle cost maintenance plan is a forecast of proactive maintenance expenditure over the planning period |
| The condition of building fabric, plant and equipment is maintained or improved over the term of the contract | Condition rating | The condition rating is an accurate assessment of the asset's current asset condition using the accepted methodology at the start of the planning period |
Positive feedback loops back into Corrections…
The key is finding the right balance of public/private involvement to drive the necessary changes needed for Corrections to continually improve its performance efficiency and/or reduce cost.
Establishing long-term, strategic relationships with world-class service providers with clear incentives to remain competitive, allows Corrections to reduce its overall management burden while retaining responsibility for strategic decision-making. Corrections achieves improved levels and standards of service for the same or lower cost. Staff are exposed to private sector disciplines and gain access to innovative ways of working.
The performance management regime ensures greater transparency and, when combined with the competitive tension of being measured against a private provider, drives improvements in the efficiency, effectiveness and economy of Corrections' own operations.
Notes
- [15]Corrections also leases a significant number of commercial properties across New Zealand.
