This is the fourth in a short series of posts by Richard Butler and his colleague Holger Westphely from Aylesbury Partnerships on managing risk in payment by results contracts.
Information Systems for PbR
Recording and monitoring progress on a PbR contract is crucial to the ongoing success of delivery organisations. It enables them to learn from previous successes (and failures) and build on them. Even a modest investment in IT systems, accompanied by careful thought about the processes behind your service delivery, can deliver results.
Most of what I will say here will seem obvious but we find that too often organisations are so focused on the complexity of their intervention that the basics get forgotten. I will highlight some of the benefits of robust systems in four areas and briefly address cost issues.
Project Management
When your organisation’s revenue is linked to outcomes that are achieved months or even years after delivering its service, understanding the factors that lead to payable outcomes is more important than ever. The more innovative your intervention is, the more uncertain the link between the activities you perform today and the outcomes you achieve.
Monitoring the intermediate steps that lead to your outcomes will improve your estimate of the eventual outcomes. Initially these estimates may be a stab in the dark, but as the first outcomes of your contract are achieved, the data you have collected will improve your forecasts substantially.
For example if you are looking to find employment for young people by training them, you may estimate that out of every 4 users who sign up to your programme, 2 finish the course and one of them finds employment. As the first students finish their training, you may find that actually 3 out of every 4 finish the course on average. Perhaps you can adjust your outcome forecast to 1.5 jobs for every 4 students signing up to your programme.
As the first few jobs are secured you may find that only 1.3 of each 3 “graduates” secures employment. This will again impact your forecast and allow you to pinpoint where things are going well and where more management time needs to be spent.
This simple information can help project managers allocate resources effectively, adjust the emphasis on different parts of the programme, negotiate contract amendments and so on. We often find that even the most experienced organisations rely on intuitively responding to changes versus assumptions and as a result miss opportunities to optimise performance that could have been found this type of basic data analysis.
Reporting
Detailed, clear and intuitive reports on how your intervention is progressing are not only relevant to your delivery team. Trustees, Commissioners, Funders and Investors all need to know how much they can expect in terms of outcomes, payments, social impact and financial returns. The ability to provide them with timely and detailed reports will facilitate your stakeholder management significantly.
We can get excited about using Monte Carlo analysis to understand contract risk on an ongoing basis but often it is the simplest measures, properly illustrated that have the greatest impact. If the information is stored and accessible within a well-designed system, customised reports can be provided to each stakeholder in a visually appealing format.
Securing Investment and Future Contracts
The most compelling evidence when bidding for contracts or seeking investment shows that your organisation has ample experience in delivering the services in question – the track record. Adding detail and interesting statistics to the track record you have built up will increase the impact of that information, convey the impression that you really understand the intervention and that you can pinpoint what has worked and what has not.
This is especially important if the service you are bidding for is innovative.
While you may not have delivered the exact same intervention before, breaking it down into smaller parts and showing detailed analysis about those parts you have delivered in the past will give your supporters the confidence that you are able to succeed.
Intervention Design
Social interventions are complex and difficult to unpick. Understanding what works and what doesn’t requires detailed evaluations and research, which can be expensive.
Interventions where data collection is integrated into day-to-day delivery provides much more material to researchers and can yield valuable insights with comparatively little effort. When key measures are monitored and analysed at regular intervals throughout the delivery period, lessons can be applied within the delivery period.
Cost
Management Information systems can be relatively simple and tailored to each organisation’s need and budget.
They can be based on off-the-shelf software – even widely used spreadsheet programmes such as Excel can form the basis of an effective system whereas more secure, specialised software can cost substantially more.
The most important success factor is getting the initial design right.
Any extra time and effort that is spent carefully choosing what you record and developing data collection processes to work well with your delivery practices will generate additional benefit over the lifetime of its use.
Final thoughts…
Information systems don’t have to be complicated or costly they just need to be well thought out and well used.
Don’t rely on intuition and expert opinion alone, these are vital in arriving at assumptions but need to be tested.
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2 responses
Interesting blog and sound advice. I appreciate the comment about information systems not needing to be complicated or costly. Depending on the size and nature of the operation, I would advocate Access or Excel but have seen too many cases of organisations installing cumbersome management information systems to record simple records of resources, inputs, outputs and outcomes. Having evaluated social programmes for the last 20 years, I can tell plenty of ‘war stories’ about flashy MIS not being able to provide the data to make a judgment on impact. So, keep it simple, and let’s not make the best the enemy of the good!
Thanks Alan. In my experience the best information systems are those which have a clear purpose actually understood by the staff who record the data. There’s often too much emphasis on “you must fill in this form”. The goal has to be: “this is what we’ve learnt from those forms you filled in, how do you think we should do things differently to provide a better service?”