The first part of this series on strategic planning identified the need to determine ways to address growth challenges to the business as one of the critical factors that drives the process.
The challenges to the business were also identified as key factors that add value to the process and include; establishing clear objectives, creating an advantage that is not only competitive, but sustainable, and being able to translate defined strategies into daily activities.
As a follow-up to the first part of this series, this article aims to highlight the differences in the critical factors for consideration, as well as the differences in the strategic planning process for public sector entities.
Historically, there has been a focus on the Strategic planning process for Private Sector businesses; however with today’s increased emphasis on performance management for businesses, there is now a greater need for application of the Strategic planning process to the Public sector. One of the challenges faced in this respect, is the differences in the management of private and public sector entities.
An initial organizational diagnosis identifies problem areas of the business, as well as the goals and objectives of the organization, where the goals for the strategic planning process are required to be specific, achievable and measurable. The challenge here lies in the fact that public sector entities usually have to follow process related goals such as accountability, representation, and fair processes, and these make the achieving process of goals slower and more complex.
The achievement of strategic objectives that are directly in line with Government commitments including service improvements, cost reductions, and economic development in this instance is the driver of the strategic planning process. In order to mitigate the aforementioned challenges, the planning process for public sector entities should take into consideration the vision, governance requirements, and decision making framework of the organization. As a result, the methods employed in this process will assist in redefining and reengineering Governments’ commitments.
The strategic planning process detailed in the first article that included an analysis of the organization’s current position, and an alignment of this position with its vision through the strategic steps defined, can help to optimize the expenditure of Government revenues, maintain or improve service delivery to the citizens, and can also build linkages between the traditionally isolated private and public sector entities.
According to similar strategic planning methods and initiatives employed in the Canadian public sector, a look at the service delivery commitment shows that there are various options that can be considered, however the most appropriate option requires a strategic planning process that aligns the structure of the option with the overall service delivery vision and goals of the Government.
Today, the strategic planning process for public sector entities covers a wide range of delivery approaches that focus on providing the best value for stakeholder’s money including:
• Direct Delivery – The Government delivers programs and services through its ministries.
• Agencies – Programs and services are delegated to a third-party serving on behalf of the Government.
• Shared Services – Government combines similar programs and services from across its agencies into a single operating unit which serves the needs of multiple ministries.
• Devolution – Responsibility for programs and services are transferred to other governmental and non-governmental entities that receive transfer payments to deliver the service.
• Outsourcing – Government programs and services are provided by private sector companies under long-term contractual agreements.
• Public-Private Partnerships – Government enters into a formal agreement to provide programs and services in partnership with private sector companies where each entity contributes resources and shares in the risk and rewards of the venture.
• Franchising / Licensing – For Franchising, government grants a right or privilege to sell a product or service in accordance with prescribed terms or conditions. For Licensing, government grants a license to a private company to specifically sell a product or service.
• Privatization – Government sells its asset or interest in a program or service to the private sector, but may protect public interest through legislation and / or regulation.
The first four options involve service delivery solutions provided directly by the government, and the last four involve service delivery options where the government has either oversight responsibility for provision of the service, or is completely relieved from the responsibility. The range of options detailed is all open to the government; however in most cases only a subset of these may be applicable.
In the strategic planning process, an analysis of the options that provide the majority of benefits to the organization will be used to define the strategic direction for the company. The resulting plan will document the vision and provide the framework and process with which the organizations’ opportunities can be evaluated and implemented.
This article was prepared by Maria George. Maria is a Consultant with Deloitte’s Strategy and Operations Consulting division, and is an MBA graduate with over 5 years of professional work experience within the domestic Caribbean region, The United States of America, and Italy. Deloitte Consulting provides a wide range of economic, strategic, human capital and business planning services including detailed business plans, business and marketing strategies, financial analysis and feasibility studies and business valuations.