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3. Summary assessment

Introduction

The Department of Veterans’ Affairs is not often at the forefront of the Australian public’s mind. Its work is rarely the subject of major policy debate or front-page media attention and it does not have a high profile within the APS.

Yet DVA is one of the oldest and most stable of Australian Government agencies and its work is well understood, recognised and acknowledged by its clients.

DVA is also one of the more unusual Australian Government agencies in that its operations are closely bound to the statutory entities of the Repatriation Commission and the Military Rehabilitation and Compensation Commission; both of which have broad powers with respect to veteran entitlements and veterans policy.

DVA is a department that looks back into history; perhaps never more so with the upcoming centenary of the World War I. It is also a department that looks to the future; recognising that many veterans from recent conflicts and operations will require support for decades.

It is evident to the review team that DVA staff are strongly committed to supporting the Australian veteran community. There is a palpable, sincere and passionate sense of mission among client-facing, administrative and policy staff within DVA; namely, to support those who serve, or have served, and to commemorate their sacrifice.

However, the environment in which DVA operates has changed at a much faster pace than the speed with which the department has allowed itself to change. The older client base continues to decline while the new younger client base has different expectations. The fiscal pressure facing government today coincides with public expectations of efficiently run government agencies. The concept of shared services—where scale economies are achieved with consistent and increased service levels— is widely spread in the public and private sectors.

The review team acknowledges that the Secretary of DVA and many members of its leadership team have a sense of urgency to bring the department up-to-speed to transform it into an efficient, modern organisation. However, the review team concludes that the department also faces significant challenges to enhance its capability and mobilise its workforce so it can transform into an efficient and effective modern public sector organisation meeting government and community expectations.

The review team has identified three key focus areas needing urgent attention for DVA to transform:

  1. operating structure, governance arrangements and information and communications technology (ICT)
  2. approach to clients, culture and staffing
  3. efforts to formulate effective strategy, establish priorities and use feedback.

These changes should be bound to, and driven by, a fierce commitment to efficient and effective 21st century client service principles and practices which match the passionate and personal dedication of DVA staff to their clients.

Such principles and practices are for DVA to define and express in its own language, but typically would include a commitment to being responsive, providing good access, offering timely service, being clear and accountable for decisions made, and searching continuously for opportunities to improve performance and the client experience.

The department today

Overseen by a new Secretary who has occupied his role for less than six months, DVA is a department with some considerable strengths. It has a professional, diverse group of SES officers; a stable and experienced workforce; significant data holdings; a well-established framework for engaging with stakeholders and providers; and a track record of delivering successful commemorative events, both in Australia and overseas. It has also pursued a number of service improvements, such as the MyAccount online initiative and the establishment of the OBAS, to better meet the needs of Defence personnel who will one day become clients of DVA.

The Secretary has also increased the visibility of leadership throughout the department with his decision to visit state, territory and regional offices wherever possible. The leadership team, along with DVA staff more broadly, appears to be keen to see substantive change for the benefit of clients and stakeholders. As acknowledged by the Secretary and DVA leadership team, there are a number of large challenges including, but not limited to, the need to better communicate strategic direction, improve planning processes and take decisive action to address areas of poor performance.

The scale of change required is significant given that successful whole-of-department improvements have been modest in recent years. A major transformational forward leap is required.

Key focus areas

The department’s three key focus areas are discussed below:

Operating structure, governance arrangements and ICT

In the opinion of the review team, there are many challenges that may impact on the long-term viability of DVA’s delivery efforts. The most threatening of these challenges concern the department’s operating structure, its governance arrangements and its ICT systems.

In assessing DVA’s operating structure, it is evident to many inside and outside the department that the old approaches established for servicing a high volume of clients through multiple mainstream systems are no longer sustainable in the context of a resource-constrained environment and shrinking client base.

A new, more efficient approach needs to be found as a matter of urgency.

A precedent for such reform was established in the 1980s and 1990s when DVA transformed its provision of hospital services to the veteran community by withdrawing from the direct management of its network of repatriation hospitals, but expanding the range of possible providers—public and private—and increasing the levels of localised access to health services. Using this purchasing model, DVA extended its outsourcing arrangements to include allied health and other health services in order to maximise outcomes for clients.

Just as the reformation of hospital services has translated into improved outcomes for veterans, a review of what other activities can properly be considered ‘fundamental’ to the department, and what can be better delivered using the expertise, experience and infrastructure of others, should be approached through the prism of maximising outcomes for clients. The question that needs to be asked is: What is the benefit or ‘value-add’ delivered to the client by DVA for those services the department directly provides; and what level of risk could be managed better by leveraging established service providers outside of DVA.

Serious attention also needs to be given to DVA’s complex ‘matrix’ delivery model which sees geographically dispersed staff trying to provide consistent and efficient services to the veteran community across Australia.

At issue is not the degree to which the model provides for centralised versus decentralised delivery but whether staff can operate effectively within the delivery model and the degree to which it supports or hinders the offering of a comprehensive service to clients. Indeed, to prove successful any such matrix delivery model requires clear and comprehensible lines of accountability, as well as an appropriate scale of operation.

Yet the model operating in DVA today often produces sub-optimal outcomes for clients, with various external stakeholders and staff within DVA commenting that it is disjointed, inconsistent and slow. In fact, the current model encourages operations that are sub-scale and financially unsustainable, such as the running of 18 separate call centre functions across the portfolio.2

Given the diversity, volume and significance of the services DVA provides, and the importance of maximising operational efficiency, the review team was surprised that the department does not give greater attention to an integrated client and delivery approach coordinated at a senior level.

The fragmented delivery model further inhibits the development of a unified DVA culture, making it difficult to establish career paths, and presenting challenges in managing individual staff performance. It leaves many staff operating in isolation from their colleagues with such ‘small cells’ typically presenting a greater integrity risk to the department and frustrating management’s efforts to effectively allocate workloads across functional areas.

The current governance arrangements equally tend to work against the conduct of vital strategic conversations within DVA. The number of committees, duplicated membership and confused accountabilities inhibit decision making. Sometimes agendas seem to overlap, while other times it seems that important matters are not aired or discussed at the appropriate level. For example, the composition and agenda of the Executive Management Group (EMG), the primary governance committee within DVA, appears to the review team to be overly focused on operational matters. Across the governance framework more generally, it is unclear where strategic discourse is being conducted.

Noting that the governance arrangements have been reconfigured on a number of occasions in DVA’s recent history, any further structural change in these arrangements should endeavour to simplify these arrangements and create an environment where strategic discussions and the making of tough decisions are encouraged.

The review team also heard much during its inquiry about the inadequacy of DVA’s ICT and the number of antiquated stand-alone systems.

DVA has an ICT strategy in place. However, the review team questions whether the strategy is adequately linked to the department’s current and future business requirements. It is imperative that the strategy align with the overarching departmental strategy, describe an end-point for staff and set forth a roadmap for managing change over time.

Ideally, a sound ICT framework for DVA would provide efficient access to systems and integrated business applications which support program delivery. However, the reality is that the ICT platform has not been developed to support contemporary service delivery practice and investment in ICT for many years has been inadequately planned or provided an insufficient return. This has resulted in sub-optimal, patchy solutions.

For example, there are some 200 individual ICT systems operating in the department with a dated desktop. Typically a client facing employee or assessor may need to open three or four separate applications, none of which ‘talk to the other’, in order to deal with a single client request or claim. Furthermore, staff or assessors may need to access additional separate applications (likely through another staff member) to determine if a client had a transport booking, or to check a client’s eligibility for glasses or dental treatment.

In the absence of a single client number or reference point, it is impossible for staff to see the full range of services that may be given to, or purchased for, an individual at any one point in time. his is somewhat ironic given the commitment of individual staff to their clients.

Indeed, the array of disparate and ageing systems works against developing an integrated view of the client and is inconsistent with the principles of good client service. It creates a considerable number of legacy challenges for the department and tends to reinforce existing processes rather than encouraging more comprehensive process re-engineering to deliver more effective and efficient client services.

It is commendable that DVA, in 2011, adopted a shared services arrangement with the Department of Human Services which saves DVA approximately $11 million a year. This took place after long-standing ICT contracts with IBM expired. DVA needs to continue to modernise its ICT infrastructure. The decision to suspend the ‘Veterans First’ initiative—intended to provide an integrated claims system across multiple legislation—represents the type of challenge DVA faces in improving its legacy ICT systems as it seeks to transform its business.

In the opinion of the review team, mapping future ICT system needs should start with the client journey and processes should be built accordingly. Ensuring that DVA business processes are clear and ICT systems are designed in synchronisation is all the more important from an integrity viewpoint given the high levels of devolved authority within large parts of the department.

In short, there is much work to be done in reforming DVA’s operating structure in the interests of greater efficiency, establishing good governance arrangements and reconfiguring its ICT in a way that supports rather than acts as a barrier to high quality, client-focused service delivery.

Clients, culture and staffing

DVA’s mission is clear to its staff and for staff the mission is compelling.

The SES brings a diversity of experience from across the public sector and a friendly and collegiate quality is evident amongst this leadership cohort.

However, the leadership is not currently working together strategically at a department-wide level to fulfil DVA’s mission. As a cohort, the leadership group needs to better drive its efforts, and the efforts of its staff, towards higher quality and more consistent performance through clear department-wide prioritisation.

In the opinion of the review team DVA leadership should increase their visibility to staff, particularly in the regions, and better communicate the department’s priorities, the need for change, and improved ways of working. The leadership needs to be open, facilitate two-way communication between themselves and staff, and draw on the insights from the department’s technically skilled and experienced staff in decision making.

Indeed, the review team was struck by how many operational staff, as a consequence of DVA’s fragmented delivery model, are disconnected from the department, work in isolation as opposed to in teams and can, as a consequence, feel under-valued. Many operational staff in the state/territory and regional offices mentioned there is often little appreciation of what a colleague in an adjacent workstation is doing. Indeed, one staff member commented to the review team that their work in DVA is ‘so interlinked, yet so removed’.

Such a siloed and rules-bound culture means that opportunities for improvement are lost, agility is forsaken, risks are exaggerated in the absence of a broader perspective, and motivation to support veterans and their families can be hard to sustain.

Openness to discussion and a visible presence are all the more important given that SES and middle management do not have credibility in the eyes of some operational staff; which from the perspective of operational staff, rightly or wrongly, is contingent upon technical knowledge. It would be beneficial if DVA’s leadership could build a culture that valued variety and diversity of skills, including business acumen and leadership as well as technical competence.

Attention needs to be given to establishing a unified and values-based workplace culture through more focused communication, modelling of positive behaviours and genuine staff engagement. A culture that supports and nurtures staff, fosters formal and informal opportunities to learn more about the department’s business and each other and encourages cross-divisional effort. A culture that is consistent and recognisable irrespective of whether a client or other agency is interacting with the department’s health services, rehabilitation and income support operations or its commemoration unit. A culture that measures what is valued and uses that to drive for excellence. A culture that see merit in clear, consistent and expeditious decision making. A culture that acknowledges the worth of differing skillsets, whether managerial or technical, which encourages new ideas and creative contributions and above all else echoes the commitment of staff to the client.

Building such a high-performance culture also involves valuing efficiency and securing value for money on behalf of taxpayers. This is important to any government department servicing the needs of its clients in a timely, equitable fashion. As positive as the focus on the client is within DVA, leadership needs to inculcate a stronger sense of responsibility for efficiency and effectiveness throughout the department on behalf of the Australian Government and the community. These challenges require a balanced approach, with careful management of the high levels of expectation and support required for all veterans against the broader efficiencies expected by the Government.

At present there is concern that the keenness of DVA staff to meet veteran expectations, in the absence of well-articulated parameters, is at times leading to inconsistent service levels. Perversely, prompt access to service may also be denied at times by virtue of an excessive aversion to risk grounded in fear of giving offence to the veteran community; and not being sufficiently well equipped to communicate fair decisions to clients when the outcomes under legislation do not meet client expectations.

Indeed, genuine client service should not be confused with acquiescence to every demand. SES and middle management need to lead staff to strive for greater efficiency and effectiveness for their clients, by being as consistent and clear about their decisions as they are in their commitment to client service.

When considering the DVA workforce it is noticeable that the average staff age is among the highest of APS agencies and that length of tenure is also long.3

Experience and stability are important to any workforce but may also represent a challenge. Just as there is little sense that the department is sufficiently confronting its significant cultural challenges, there is little sense that it is actively dealing with its key person risks or succession planning or that it is gaining the benefits of a more diverse workforce that blends tenure with fresh ideas and approaches.

There is equally limited appreciation that the skills of the department’s future workforce will likely look markedly different as transactional activities shift online, manual processes wind back, and more intensive case management requires greater levels of understanding and judgment. These attributes will become the norm to support the subset group of veterans within an overall declining client population.

In the immediate term, DVA should fill gaps in expertise relating to change such as project management, contract management and procurement. For the department to successfully transform itself, the review team suggests that DVA consider bringing in external expertise, particularly in project and change management. Comments were made throughout the review that as much as the department needs deeper technical ‘bench strength’, it has an equivalent need for breadth of skills which are applicable across various roles. In the opinion of the review team, there is equally a need for a higher level of business acumen throughout the department.

Finally, there is scope for DVA to improve the skills and willingness of management to deal with existing performance issues. At present, there is not a strong culture of managing poor performance or inappropriate behaviour and this is having an adverse impact on staff morale and overall productivity.

Strategy, Prioritisation and Feedback

As clear as the DVA mission is to staff, its translation into strategy is proving problematic for the department.

A more fulsome understanding of the changing environment and the different needs of the contemporary veteran is emerging within the department, but DVA is yet to articulate how it will redesign its business in response.

Indeed, what strategic thinking and policy development occurs within DVA seems often ad hoc and silo bound. Insights are not usually shared or actively sought across the department and subsequent service offerings are seen as disjointed and at times appear to overlap or allow for gaps. It is notable that the functional area responsible for defining the strategic framework and bringing the client’s perspective to bear in service design is comparatively under-resourced given the imperative for major reform.

In short, the review team’s view is that on the current trajectory the department will continue to struggle to formulate a tangible roadmap.

The review team suggests that in overcoming this barrier, a fundamental shift be made to conceptualise the service offer by client cohorts, and across client lifecycles, rather than by current service lines. A shift from a vertical product focus to a horizontal client focus which is supported by systems that provide a single view of the client as opposed to a fragmented view would see staff less concerned about whether individual determinations will be overturned at review, to one which was concerned about getting to the right decision quickly in the  majority of cases. A shift in approach which provides for more intensive, deliberative processes for the minority of complex cases and regular updates to clients and advocates on the progress of their matters. A shift which is less concerned with audit, towards greater monitoring and evaluating of outcome effectiveness.

Such a shift would also have to align with modern client service practices and there is much recent APS experience in redesigning service delivery along these lines that DVA could tap into. Such experience would aid DVA in that many of these reforms have been driven to enable agencies to manage increased demand within existing or shrinking resources, recognising the reality that discipline and commitment to driving efficiency without compromising quality of service needs to be embedded in the lexicon of DVA leadership and management.

Equally the service offer, particularly in the field of claims assessment, needs to be more closely linked with the risks and return-on-work effort. At present, the fractured design of DVA’s operations in the liability, compensation and rehabilitation areas can distance the client to the extent that, as one staff member explained to the review team, a claim “is not seen as a person but an exercise in processing paper”.

A transformation in service approach from one-size-fits-all to a risk-based model that triages urgent and complex claims could help streamline processing to deliver more timely client outcomes. This would be consistent with the objective driving most contemporary insurance operations—early intervention and expeditious reintegration of clients into the labour market and society. It is all the more important in DVA since claims assessment experience sets the tone for all future interactions between veterans and the department.

In short, the benevolent philosophy that has been much promulgated throughout the department, and actively looks to provide veterans with their entitlements, needs to be matched by benevolent design.

Processes for setting priorities through divisional and branch planning are also problematic for DVA. Despite the availability of forums, such as the Staff and Resources Committee, to consider how best to align available resources to strategic priorities, it appears that DVA’s resourcing decisions are largely based on historical trends without due reference to the changing client population and evolving needs. This increases the pressure in some areas over time, lessens it in others and generates a sense of inequity across locations.

DVA nevertheless has the potential to be far more flexible and agile when allocating resources and should not allow matters such as its old siloed processes and legacy ICT systems to stifle its approach.

The significant state and territory-based presence of DVA is an asset in better understanding the client and working with external stakeholders. It is also a source of intelligence on how business practices can be improved. However, this resource could be drawn on more systematically within DVA. For example, there is a lack of systematic feedback loops—from the coalface to those who develop policy and design national programs.

DVA can be congratulated for its willingness to invest in research, particularly in health care. In fact, there is much potential for the department to become a model of better practice within the APS in this area. To do so requires DVA to more fully exploit the wealth of evidence and data it has to improve its own operations and help inform whole-of-government policy and influence its service delivery agendas. This has occurred in a number of instances with DVA’s health and community-service activities.

Notwithstanding its well-established framework for engaging with traditional stakeholder groups outside government, interview and survey analysis demonstrated that DVA faces challenges in connecting with contemporary clients who do not favour traditional consultative approaches. The department needs to connect better with this cohort and secure the buy-in of contemporary stakeholders to effect the strategic realignment necessary for DVA to continue to effectively serve the veteran community.

If it is to secure political support for necessary changes in strategy and operations, the department needs to leverage its relationships within government, secure more return from its collaborative efforts with other agencies (like Defence and Health) and better inform its authorising environment.

In the last two decades of the 20th century, prior to the deployments in Timor Leste, the Solomon Islands and the Middle East, the accepted thinking within public administration was that DVA was approaching its use-by date.

Today, the need for a stand-alone department dealing with veteran entitlements and health is the subject of bipartisan political agreement.

The demand for veteran services is inevitably a consequence of the Australian Government’s foreign and defence policy. If it is to secure its future as a highly regarded department, DVA’s challenge is to be agile in the face of new deployments and find the best methods of delivery in the context of the broader imperative facing all government agencies to prove their worth.

For DVA to build its capability to efficiently and effectively carry out its functions it needs to:

  • Reform its operating structure in the interests of greater efficiency, amend and more effectively utilise its governance arrangements and configure its ICT in a way that supports rather than impedes good service delivery
  • Build a genuinely client-focused business supported by a high performing and collaborative culture and leadership that values and develops DVA staff
  • Formulate a service design that is holistic and strategic, is given effect through the priorities set within DVA and is regularly recalibrated on the basis of business intelligence and feedback.

 

2  The review team notes that the department in October 2013 the department initiated a review of its telephony strategy, including the possible consolidation of its call centre operations.

3  Australian Public Service Commission State of the Service Report 2011–12, p. 112. APSC Australian Public Service Employee Database Internet interface.