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Administrative and Support Services Benchmarking Report for the Financial Year 2010/11

Appendix 2: Glossary of Terms and Abbreviations

This appendix describes the terms and abbreviations used in this report.

Table 1 | Glossary of terms
Terms Definition
A&S services See administrative and support services
Administrative and support services Services that support the work of Government agencies without directly being part of the service offered to the public end user.  These include the following functions: Human Resources, Finance, Procurement, Information and Communications Technology, Property and Corporate and Executive Services.
Benchmark A standard or set of standards, or another point of reference, used as a basis for evaluating performance or level of quality.  The activity of benchmarking is comparing things to such a standard or point of reference.
Best demonstrated practice The highest current performance level in a cohort.
Centre of expertise An organisational unit that provides critical insights, specialised functional expertise and decision support services to business management, characterised by:
  • its highly skilled resources, focused on expertise and analytical activities rather than transactional, operational or delivery activities
  • a role of business partner for multiple decision bodies within the businesses
  • a value and reward structure based on business impact and value provided
  • its provision of a centralised or bundled resource that avoids fragmentation of skills and capabilities
  • its focus on supporting the functional perspective of the performance of the business
  • its functional experts that can drive standards and integration across business units—sharing knowledge, improving information sharing and reducing the need to 're-invent the wheel'.
Departmental Internal Control Evaluation Reports commissioned by the Treasury and conducted by Audit New Zealand or audit providers contracted by them.
DICE See Departmental Internal Control Evaluation
Economies of scale Refers to lower unit costs for delivering the same single product or service
Economies of scope Refers to lower unit costs for delivering multiple products or services
Efficiency The ratio of output to input; the use of resources in a manner that minimises cost, effort and time.
Effectiveness The extent to which activities achieve intended or targeted results.
FTE See full time equivalent
Full time equivalent Full time equivalent staff (FTEs) are employees weighted by the proportion of a full time position that they fill.  A staff member that works four days a week in a prorated full time role would be considered to be one employee but 0.8 (4/5) of an FTE.
Fully loaded labour cost Compensation for full time and part time employees based on a regular working week, and includes:
  • salaries and wages
  • overtime
  • on costs (superannuation, leave loading, workers compensation and payroll taxes)
Inflation Inflation-adjusted cost figures have used the annualised average percent change in the Consumer Price Index as at the June quarter, excluding GST, to inflate the prior year's costs.  All FY 2009/10 cost figures have been adjusted by 2.3 percent to compare them to FY 2010/11 cost figures.
Leading Practice Superior performance within a function (independent of industry, leadership, management, or operational methods or approaches) that leads to exceptional performance.
Management Practice Indicator Management Practice Indicators (MPI) are adopted from the UK Audit Agencies A&S service performance measurement methodology.  Within that methodology, the MPI score assesses "the extent to which...[a] function achieves a set of key management practices which will provide an indication of whether it is a well-run, modernised and mature function."[62]
MPI See management practice indicator
NZ cohort To support comparison among agencies with operational similarities, agencies have been grouped into smaller cohorts of the NZ full cohort using the following criteria:
  • Size of operating budget
  • Number of organisational FTEs
  • Agency type by primary function
  • Distribution of people/service.
Occupied Workpoint The occupied workpoint area includes the property space around all workpoints (including vacant workpoints) plus all ancillary spaces such as meeting rooms, conference rooms, training facilities, libraries, office storage areas, break-out areas and circulation spaces.  Used by the Australian government to set property occupational density targets.
Optimisation The adjustment of a process within certain constraints in order to improve some specified set of parameters.  The most common goals are minimising cost and maximising efficiency and effectiveness.
ORC See organisational running costs
Organisational running costs The revenue of the organisation minus revenue that is passed on to another organisation or individual who then makes the decision on how it is spent.  Organisational running costs exclude:
  • transfer payments, including benefit payments and other unrequited expenses
  • grants made to other organisations, such as community groups
  • subsidies paid to third parties
  • funding passed on to other Crown organisations to undertake their own operations
  • capital expenditure. Depreciation funding should be included and the Capital Charge should be excluded.
Where a third party is contracted by the organisation to provide a service, that cost is included in the organisational running cost for the organisation.
P2P See procure-to-pay
Performance Improvement Framework A framework applied by a small group of respected organisational leaders to provide insights into agency performance, identifying where agencies are strong or performing well and where they are weak or need to improve. The framework covers both results (in terms of effectiveness and efficiency) and the organisational management factors that underpin sustainable superior performance.
PIF See performance improvement framework
Procure-to-pay The end-to-end procurement process from requisition through to invoice payment.
Shared Services Consolidation of A&S functions from several agencies into a single, standalone organisation that has A&S service delivery as its core business.
State sector The State sector is broader than the State Services.  It includes:
  • all the State Services
  • some departments that are not part of the State Services
  • tertiary education institutions
  • Offices of Parliament
  • State-Owned Enterprises.
State Services The term for a broad range of organisations that serve as instruments of the Crown in respect of the Government of New Zealand.  It consists of:
  • all Public Service departments
  • other departments that are not part of the Public Service
  • all Crown entities (except tertiary education institutions)
  • a variety of organisations included in the Government's annual financial statements by virtue of being listed on the Fourth Schedule to the Public Finance Act
  • the Reserve Bank of New Zealand.
Strategic processes Processes that deal with issues that are complex, high level and that tend to be unique to agencies, such as budgeting and strategic planning.  They are distinguished from transactional process.
Taxonomy In this context a taxonomy is a set of agreed terms and definitions that assist ensuring consistency of information.  For example, the HR taxonomy lists all the processes that fit within the HR function.
Transactional processes Transactional processes are often common across all agencies.  They tend to be well-defined, repeatable processes, and common to several agencies.
Transformation In this context, transformation is change in order to align people, process and technology aspects of an organisation more closely with its business strategy and vision.  Transformation aims to support new business strategies, meet long term objectives, and lift organisational performance.

Notes

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