We are often asked about our approach to developing a Program Inventory, and associated Program Costs. Read our latest post to the ICMA and Alliance for Innovation's Knowledge Network, on our latest Tool to help organizations do just that!
Our post on the Knowledge Network:
Hi Leslie - just as you recognize, individual elements of the entire Priority Based Budgeting approach are actually valuable, in and of themselves. Developing a program inventory, along with program costs for that inventory is a completely worthwhile effort, regardless of whether or not your organization further pursues implementation of PBB. Getting to a program level understanding of "what you do," and a transparent and accurate understanding of "how much it costs" to provide those programs is a critical ingredient for understanding what options you have as an organization to change what you're currently doing. Furthermore, the only way to get to the answer of questions like "can we do this program more efficiently," or "are we the best source to provide this service," or "are we recovering the costs for providing this service, both direct and indirect costs" requires a complete understanding of what the program is, and how much it costs. All of this to say, that we appreciate your question so much because we too have recognized the importance of a program inventory on it's own.
As such, you won't be surprised to know that we've just recently developed an approach, and a "tool" to totally simplify and make more intuitive the process of developing a Program Inventory and developing Program Costs. It's a step-by-step approach that is shared between the department and the budget office - where each office fills in the relevant information that they're best suited to provide. And we're finding that the level of effort required in total is not too bad - it's an intuitive exercise, and the results have been excellent.
Best of all, by virtue of going through this exercise, and putting this particular Inventory / Costing Tool in use, you actually have completed one of the key steps in Priority Based Budgeting (if the organization ever chooses to further pursue the path to PBB).
On top of that you have:
- a tool that allows you to evaluate the fees, rates and charges that you have on a program-by-program basis,
- a tool that allows you to make ready comparisons to other public-sector, or private sector service providers, to the extent that you want to evaluate the efficiency or the appropriate sourcing of your programs,
- a tool that brings departments into the process of understanding and communicating better what they do, and how much it costs, on a program level,
- a tool that can allow you to see clearly how your workforce is associated with programs (do you have retirement eligible staff serving a particular program, and are you aware of how you'll address succession planning?, for example),
- and ultimately a tool that helps transition your approach (or the department's approach) from line-item budgeting to program budgeting - a key breakthrough!!
We're really pleased with it. We first beta-tested the tool early this year for a large airport that wanted a "zero-based budget" and saw that this approach to generating a program inventory and program costs would satisfy the same objectives they were striving for. We've used it in a few communities who are integrating it with their implementation of PBB. And we're in the middle of making some great enhancements to it, as one organization adds new "workforce data" to their inventory effort. We'd be happy to demo the tool with you so you can see how it works.
Contact us through Cheryl Hilvert at ICMA's Center for Management Strategies chilvert@icma.org as this is something we're coordinating through ICMA's new Center. Or always feel free to contact us directly at cfabian@pbbcenter.org or jjohnson@pbbcenter.org
Thanks Leslie!
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