News : Tension Between Management and Staff Rise at Herefordshire Council
Sept 11, 2014 -- The "aggressive" and flawed implementation of a £1 million customer service IT system saw tensions rise between management and staff at Herefordshire Council.
This tension was especially evident in the council’s contact centre – the frontline for customer service.
A whistleblower who raised concerns related to the system claimed that these concerns were not fully followed up by senior councillors and officers.
These were three key findings put to the council’s audit and governance committee for a response this week.
The findings feature in a report by an external auditor into the council’s implementation of a new customer service IT system called CRM
That report said the business case for CRM was not backed by "robust analysis" and is unlikely to have met its intended £1.6 million savings target. Financial analysis for the project was neither transparent nor "fully realistic" the report said.
The committee called for formal updates - within the next six months - on progress addressing issues identified in the report.
A task group drawn from the committee will also further examine the report’s findings.
Members accepted that more needed to be done with the council’s current whistleblowing policy to make council staff confident of coming forward.
The CRM complainant – who remains anonymous - raised a number of concerns informally about the procurement and implementation of the project with senior officers and members of the Council over a period of time.
It is alleged that these concerns were not followed up in all instances by senior members and officers. Those officers who lead the CRM project are no longer with the council.
The complainant was reluctant to share relevant evidence with an investigation by the council’s external auditor Grant Thornton for fear of compromising their anonymity, making it difficult to verify the validity of the concerns expressed.
As a result, Grant Thornton advises the council – through the report – that it "may wish" to ensure its internal complaints procedures are "well understood and robust."
The CRM whistleblower went to Grant Thornton in January this year.
A subsequent investigation under the Public Disclosure Act found that the business case for CRM system was not "fully owned" by all parts of the council, nor were the estimated cashable savings identified in the business case backed by "robust analysis".
The report finds that those savings were, in fact, were premised on centralising services and cutting back office staff in individual departments, while CRM as a project did not subsequently extend to all of the services envisaged within the business case, making it "unlikely" that key elements of its cashable savings have been realised.
Evidence also suggested that the "aggressive" implementation of CRM may have impacted on staff working particularly in the Contact Centre and that this resulted in tension between management and staff.
However, the procurement processes around CRM were found to have been "appropriate".
Crucial to the council’s concept of a shared front office function, CRM went live in 2011 through a contract the council awarded to Ciber (UK) Ltd.
CRM was the subject of an options paper put to the council in November 2009, with an outline business case presented for acceptance the following February.
The relevant customer strategy was approved in May 2010 and the business case backed - with a benefits model - in October 2010.
But the report reveals that CRM subsequently did not offer complete visibility of all customer information or allow proactive responses to customer data - which were key elements of the original plan.
The council concedes that CRM has only been partially successful and that its momentum has stalled.
Cuts are one reason cited for that stalling, with the council no longer able to fund the full implementation of the project.
Back office savings which were supposed to be delivered by CRM were "probably" delivered by other means the council says.
The Council's model - on which CRM was based – of providing services to meet all customer demand has changed to constraining demand and promoting self-service where practicable.
With insufficient corporate and departmental support to extending CRM further its was, the report says, difficult to gauge whether the money spent on the project so far provided value for money.
The original budget for CRM was subsequently under spent because the original business case was not fully implemented, with the system now possibly over engineered for its current use.
Preparation of the business case for CRM was overseen by the council’s then assistant director for customer services and communications - who acted as project executive - supported by a senior supplier and a day-to-day project manager who prepared the project initiation document which set out estimated net cost savings.
The report finds that it was "unclear" as to where the overall benefits of CRM were derived beyond actual baseline revenue reductions in the cost of service or in the cost of project work already planned, savings that could be made through avoidance of future costs, or quality or productivity gains that cannot be equated to a direct revenue reduction.
As such, the report says, the bulk of the cashable benefits arose in savings on back office costs through cutting staff as services were centralised.
The investigation found no evidence of any independent report or cost benefit evaluation of the project carried out by the council’s finance department - although there was finance input into preparation of the relevant financial information.
Instead, the project was IT led with the "robustness" of the business case weakened.
The report found that despite the promised of non-cashable benefits from the project, those benefits needed to be weighed against the costs and savings arising from the project.
This, the report said, was not possible as the financial analysis was neither transparent, owned by all parts of the Council, nor fully realistic.
Posted by Veronica Silva Cusi, news correspondent
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About Herefordshire Council:
Herefordshire Council is the local government authority for the county of Herefordshire in England. It is a unitary authority, combining the powers of a non-metropolitan county and district.
Published: Friday, September 12, 2014
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