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4. More detailed assessment of departmental capability

This section provides an assessment framed by the leadership–strategy–delivery structure of the capability review model.

Assessments were made according to the assessment criteria set out in Figure 2.

Figure 4–Rating descriptions
Rating Description

Strong

  • Outstanding capability for future delivery in line with the model of capability.
  • Clear approach to monitoring and sustaining future capability with supporting evidence and metrics.
  • Evidence of learning and benchmarking against peers and other comparators.

Well placed

  • Capability gaps are identified and defined.
  • Is already making improvements in capability for current and future delivery, and is well placed to do so.
  • Is expected to improve further in the short term through practical actions that are planned or already underway.

Development area

  • Has weaknesses in capability for current and future delivery and/or has not identified all weaknesses and has no clear mechanism for doing so.
  • More action is required to close current capability gaps and deliver improvement over the medium term.

Serious concerns

  • Significant weaknesses in capability for current and future delivery that require urgent action.
  • Not well placed to address weaknesses in the short or medium term and needs additional action and support to secure effective delivery.

The review team’s assessment of the Department of Veterans’ Affairs capability is outlined in the tables below.

Leadership
Capability Rating
Set direction

Development area

Motivate people

Development area

Develop people

Development area

Strategy
Capability Rating
Outcome-focused strategy

Development area

Evidence-based choices

Well placed

Collaborate and build common purpose

Well placed

Delivery
Capability Rating
Innovative delivery

Well placed

Plan, resource and prioritise

Development area

Shared commitment and sound delivery models

Serious concerns

Manage performance

Development area

4.1 Leadership summary

Set direction

  • There is a professional and collegiate atmosphere amongst the leadership group, who bring diverse experience to DVA.
  • DVA’s mission is clear, but identifying and communicating strategic priorities, setting ambitious goals and making tough decisions are generally not handled well across the department.
  • There is a level of cynicism from many in the department which is manifested as reluctance to embrace change, due to a history of incomplete reforms and projects.
  • The SES group is not working as a corporate resource on behalf of the department or focused on driving high quality, consistent and efficient performance for DVA as a whole.
    It needs to strive for greater efficiency and effectiveness to the client’s benefit.

Motivate people

  • DVA staff are intrinsically motivated to do the best for their clients and there is significant goodwill towards the department among clients, stakeholders and the broader community.
  • DVA lacks a unifying and values-oriented culture focused on operational excellence. The department operates in a siloed, rules bound and unnecessarily risk-averse environment.
  • Leaders are not visible to the workforce and middle management. Many staff are frustrated by poor communication and lack of direction from leaders.

Develop people

  • DVA’s workforce is technically experienced and knowledgeable.
  • While there are pockets of excellence, DVA lacks an adequate strategy and implementation plan to build its future workforce and foster career paths for staff. There is little sense that DVA is actively dealing with key person risks— as there are only limited efforts to capture knowledge from experienced staff.
  • Individual performance plans have been inconsistently developed across the department. There is not a strong culture to proactively manage underperformance or inappropriate behaviour.
  • DVA requires a broader range of skills than it currently possesses. A focus on improving strategic thinking and the problem solving skills of middle management will enhance leadership, complemented by sufficient technical training when required.

Comments and ratings against the components of the leadership dimension follow.

Set direction

Guidance questions

  1. Is there a clear, compelling and coherent vision for the future of the organisation? Is this communicated to the whole organisation on a regular basis?
  2. Does the leadership work effectively in a culture of teamwork, including working across internal boundaries, seeking out internal expertise, skills and experience?
  3. Does the leadership take tough decisions, see these through and show commitment to continuous improvement of delivery outcomes?
  4. Does the leadership lead and manage change effectively, addressing and overcoming resistance when it occurs?

Rating

 Development area

The DVA mission

The department’s mission is ‘To support those who serve or have served in the defence of our nation and commemorate their service and sacrifice’4, as articulated in its recent draft strategic plan. All levels and locations in the department have a clear understanding of and support for the mission.

In considering how the mission manifests in a practical sense through DVA, there is a view that cases are becoming multifaceted and more complex and that contemporary veterans have higher expectations of the department than those of earlier conflicts and operations. These cases, accompanied by an increasingly resource-constrained environment across the public sector generally, an ageing workforce and complex operating structure, are seen as significant challenges for the department.

While DVA recognises these challenges, identification and subsequent communication of strategic priorities is less clear.

There is no consistent understanding within or external to the department of the type of organisation DVA wants to be, what good client service means or how the department will organise itself to deliver this.

In the review team’s opinion, DVA must focus on ensuring its staff understand the department’s goal and strategy and how their roles support the department to achieve its aims. This fundamental knowledge is essential for staff to appreciate their contribution to DVA and thrive within the department.

Without a strong vision for how DVA will operate into the future, clearly articulated throughout the department and among stakeholders, DVA will struggle to maintain and potentially enhance the service it provides to the veteran community.

Collaboration

DVA undertakes a wide range of activities, across numerous locations delivered through a complex service design. This set of circumstances requires strong collaboration (vertically and horizontally) which the department is struggling to facilitate.

Currently, the department operates in silos, not only across offices but equally within offices with staff predominately identifying with their own particular functional area. Sometimes the silos are a consequence of DVA’s fragmented regional delivery model. This is compounded by separate pieces of legislation and lack of encouragement to work across the department on strategic priorities (possibly in the form of a task force), which has allowed silos to flourish and led to diminished collaborative practice.

DVA’s leadership group, while professional and collegiate, at times reinforces the silo mentality with its ‘patch protection’ attitude. The group is not seen to be working as a united corporate resource on behalf of the department in making tough trade-off decisions.

The leadership group would benefit from collectively focusing on fewer high-priority strategic initiatives and driving consistent performance for DVA as a whole through collaborative effort. Staff at all levels would benefit from gaining a better understanding of wider department and APS priorities. In turn, the department could make better use of resources and effectively deliver services to clients on behalf of the government and taxpayers.

Internal communication

Within DVA a lack of communication manifests itself horizontally across offices and work areas, as well as vertically. There are no consistent insights and contributions from lower-level staff adequately communicated to the top. Similarly, strategic priorities and whole-of-department messages are not always sufficiently communicated from the top down and staff generally feel they are ‘talked at’ rather than being part of the dialogue.

The review team consider that communication between policy development and service delivery areas, particularly in Rehabilitation and Compensation, needs to be improved and consultation with front-line operational staff valued. The fragmented delivery model—where staff are often remotely supervised or operate in dispersed teams—adds an additional layer of difficulty to communication. A conscious effort to communicate relevant information using different communication methods and channels could develop a sense of direction and trust towards the leadership group.

For a few staff, the fear of losing control of their personal roles and responsibilities, or changing long-standing processes may create change resistance. But for many, particularly those in state and territory offices, poor consultation and communication about departmental changes, particularly on initiatives that directly affect their daily work, is what creates a reluctance to support change.

The failure to consistently communicate vertically and horizontally across the department has resulted in some duplicated effort, lost learning and lost opportunities for sharing improved practices within DVA.

Change management

It is fair to conclude that change has not been managed well within DVA, and multiple incomplete or poorly implemented projects and frequent structural change have led to a level of cynicism. Examples include structural changes which centralised and subsequently decentralised many activities over a few years without adjusting for shortfalls and allowing the department to realise the benefits. Several large system-improvement projects, such as the recent suspension of the Veterans First Program and the Rehabilitation Transition Project—intended through retendering to provide a suite of more focused rehabilitation offerings—were not completed for various reasons, including poor articulation of goals, inadequate scope management and project management skills. Additionally, there is limited sense of an imperative for performance improvement or continuous improvement within the department.

While the Secretary and some senior leaders appear to be mindful of the issue, the current leadership environment around change is ineffective without clearer accountabilities for driving whole-of-department priorities. Without a significant improvement in change management skills and a collective willingness to overcome resistance where it raises its head, DVA will likely be unsuccessful in implementing new major projects or any type of large transformational change. Nevertheless, the review team found a strong desire for change among many sections of the department and most notably among newer staff, the SES Band 1 cohort, and those in operational roles who are feeling the pressure of inefficient processes.

Effective change management is crucial for DVA to meet the expectations of its clients and government. Well planned, communicated and implemented initiatives aligned to strategic priorities and driven by strong leaders will assist the department in securing its future and ensure that consistent and improved services are provided to the veteran community.

Motivate people

Guidance questions

  1. Does the leadership create and sustain a unifying culture and set of values and behaviours which promote energy, enthusiasm and pride in the organisation and its vision?
  2. Are the leadership visible, outward-looking role models communicating effectively and inspiring the respect, trust, loyalty and confidence of staff and stakeholders?
  3. Does the leadership display integrity, confidence and self-awareness in its engagement with staff and stakeholders, actively encouraging, listening to and acting on feedback?
  4. Does the leadership display a desire for achieving ambitious results for customers, focusing on impact and outcomes, celebrating achievement and challenging the organisation to improve?

Rating

 Development area

Commitment to clients

A key strength of DVA is overwhelmingly the commitment of departmental staff to their client base. The department strongly believes it provides an important service to veterans and their families and that the work it does makes a real contribution to the veteran community. This extends not only to staff who have direct interaction with veterans, but also those providing indirect support or enabling services in the department and through DVA’s extensive commemorative program.

There is a strong sense of pride in the work the department does, and a feeling that staff go above and beyond to get the best result possible for clients. This approach was strongly encouraged by the former Secretary, is supported by senior management and underpinned by legislative provision which promotes a positive or benevolent approach to the granting of possible entitlements.

However, this commitment to clients does not translate into efficient, modern client service where claims processes, particularly complex ones, could be more timely and easy to navigate from the client’s point of view.

The department needs to consider how it can better capitalise on the intrinsic motivation of its staff, to harness their desire to serve veterans as a powerful tool to drive performance and efficiency.

A high-performance culture

Generally, staff see DVA as a nice place to work, with a family friendly environment that allows for a good work – life balance. The department offers a variety of rewarding work and provides opportunities for deep specialisation. Longevity of service has been actively encouraged in the interests of preserving technical knowledge but this has not been balanced by a department-wide effort to sustain creativity and energy among the workforce. Rather it has taken place at the expense of innovation and fresh thinking in most areas. In addition, lack of mobility seems to have created many separate subcultures. Currently, DVA seems to lack a unifying, values-orientated culture focused on operational excellence. There is a sense that the department is uniquely positioned and therefore protected from broader public service reforms.

DVA’s stable workforce and good technical capability is an asset, but the department needs to leverage this by creating an underlying culture of operational excellence to continue to meet client demands and government expectations.

The replacement of almost one-third of the SES over the last four years, with officers having broad experience across a range of organisations is a positive step in injecting vitality. To work towards creating a reinvigorated department, DVA leadership must bring together and balance enthusiasm and fresh perspectives brought into the department with the technical knowledge and experience of its long-tenured workforce. In doing so, DVA has the potential to establish itself as an ‘employer of choice’ and attract and support the best and brightest recruits.

Currently, staff are not necessarily motivated by their managers and there is no equivalent sense of commitment to the department or the APS as there is to clients. DVA should not rely solely on the intrinsic motivation of its staff, and it must actively engage in resetting staff expectations as the department transforms itself to meet client needs.

Visibility of leaders

Since joining the department the new Secretary has made a conscious decision to increase the visibility of the senior leadership group. He has visited DVA state, territory and regional offices where possible and encouraged his SES colleagues to do the same. Nevertheless, the visibility of senior leaders is patchy across the department. This is felt most in state and territory offices, but is also true within the Canberra office.

DVA recognises this issue, as evidenced by State of the Service Census results, but with little consistent or sustained improvement year-on-year. Many state/territory office staff indicated to the review team a level of disconnect from senior leadership, exacerbated by the distant physical location of their managers.

Opportunities to interact with senior leaders are made possible in Canberra through formal and informal occasions, but these opportunities are less frequent in state/territory offices. Staff who work in state or territory offices but report to Canberra often do not feel connected to the office in which they physically work, nor are they buoyed by the Canberra office.

The term ‘orphans’ is regularly used to describe staff members who are part of dispersed teams and who are remotely managed. DVA’s Deputy Commissioners (DCs) have a responsibility to guide, manage and generally support local staff including ‘orphans’, but unless an issue is raised interaction can be minimal.

Many state and regional office staff believe that Canberra-based staff do not have adequate exposure to clients and that decisions are made in Canberra with little regard for the experience and understanding of operational staff. There is limited interest or enquiry in the state offices about the department, or about how individual roles relate to each other. These silos within the department result in staff not having a real appreciation for the work of their colleagues, that results in a culture that lacks incentives to collaborate.

Some leaders and managers already conduct regular branch or team meetings using video conference or presentations and some travel interstate to conduct occasional face-to-face meetings to improve the disconnect between leaders and across groups. The review team would like to encourage senior leaders to further seek opportunities to have strong engagement with staff, to inspire a united and motivated workforce and build a culture that encourages active engagement with peers and colleagues.  

Develop people

Guidance questions

  1. Are there people with the right skills and leadership across the organisation to deliver your vision and strategy? Does the organisation demonstrate commitment to diversity and equality?
  2. Is individuals’ performance managed transparently and consistently, rewarding good performance and tackling poor performance? Are individuals’ performance objectives aligned with the strategic priorities of the organisation?
  3. Does the organisation identify and nurture leadership and management talent in individuals and teams to get the best from everyone? How do you plan effectively for succession in key positions?
  4. How do you plan to fill key capability gaps in the organisation and in the delivery system?

Rating

 Development area

Workforce of the future

The department has a stable cohort of staff with a passion for their work. It also has one of the oldest age profiles in the APS, with many long-serving, knowledgeable staff members. Yet this key strength is also a major risk due to DVA’s inadequate succession and workforce plan.

Informal or ad hoc succession planning is undertaken in pockets, but there is little sense that the department is actively addressing key person risks. In fact there are limited strategies for transferring knowledge from experienced staff to ensure continuity when long-standing staff retire or transfer from DVA.

The nature of the department’s operational work is moving from more straightforward transactional or procedural work to more focused needs assessment work requiring greater analysis and judgment. This means DVA’s future workforce will likely look different. Staff will be required to manage cases with greater consideration to individual circumstances. Enhanced communication skills to walk clients through the subtlety and complexity of the regulatory environment will also be required.

The department will need to adjust the capability of its workforce to meet client needs and communicate complex decisions going forward. For many years, DVA has leveraged its graduate program to bring in fresh perspectives and build capability. However, without a clearer understanding of the current workforce or the workforce required for the future, the department will more than likely not match its workforce composition and skills mix to its business requirements. The high volume of long-term acting arrangements evident among lower-level staff partly indicates the failure to strategically manage the DVA workforce.

Performance management

Despite the expectation that all staff have performance agreements, only around 50 per cent have formal agreements recorded. This percentage supports the perception that scant attention is paid to management and improvement of staff performance in DVA. Leaders and managers are not driving higher productivity consistently across the department, or supporting a culture where ‘going the extra mile’ is encouraged enough. This lack of rigor is concerning given that lifting the performance of competent staff represents a major potential productivity gain.

DVA is trying to increase compliance with the performance management framework through training and provision of tools. To ensure it does not become merely an administrative ‘tick and flick’ exercise, managers must understand the value of compliance, be committed to the process, have the ability to nurture staff, and engage in timely performance assessments.

The review team heard there is lack of visibility within the department to proactively manage underperformance or inappropriate behaviour, even though policies and procedures are in place.  It was further commented that there was limited capability to manage underperformance. This situation is exacerbated by the department’s fragmented delivery model, with distance making it difficult to monitor performance. Additionally, senior management or corporate areas do not always support management of poor performance, and often there is little obvious real consequence for underperformance.

The review team noted that managers have been trained in giving and receiving feedback. However, training itself is not sufficient to build a high-performing culture and there is an imperative for DVA to better coach and lead middle management in dealing with performance issues and conducting difficult but critical performance conversations. In fact, contemporary approaches to performance management within modern government agencies means effectively dealing with underperformance and complementing this with appropriate strategies designed to drive and encourage better performance across the department.

In summary, recognising, celebrating and promoting good performance and actively managing underperformance will be an important step in motivating DVA staff.

Development opportunities

Currently, there is limited staff movement across divisions and locations, and although DVA’s Intra-Agency Network is a positive initiative, the time and cost pressures associated with releasing staff have limited the success. This lack of movement reinforces silos and limits career progression opportunities since it is more difficult for staff to know what other areas do.

The current fragmented delivery model, which lacks scale, also limits development opportunities for the ‘orphans’ in some areas. Antiquated systems and processes provide little incentive for potential staff hoping to develop their skills to join the department. Old ICT systems also limit opportunities for existing ICT staff to keep their skills current and remain competitive in the broader labour market.

It will be useful, therefore, for DVA to consider structuring its workforce to provide indicative career paths which can facilitate broader skills development and understanding of the department as a whole. For example, DVA could consider instituting a regime of bulk recruitment at APS3 and APS4 levels with some degree of exposure to the Veterans’ Access Network before advancement into more specialised roles. In addition, comprehensive induction training needs to be developed, including DVA’s strategy and service model, and be consistently implemented across all locations. The department should equally think about how it can encourage greater mobility across locations and across functions, particularly between policy and operational areas.

The department also needs to set clear expectations around professional development so that staff are ultimately responsible for and actively manage their own careers. DVA’s role should be to encourage development through training, mobility, mentoring and supervising at all levels to provide opportunities for staff to improve their skills.

Skills

There is a range of expertise across the department, but many of those interviewed by the review team feel this is not appropriately leveraged. For example, Executive Level staff with technical or in-depth legislative knowledge feel their skills are not being appropriately used by the SES who may not have the same skills. Conversely, many SES staff question the basic management skills, such as strategic thinking, people management and even writing, of many at Executive Level.

DVA has recently focused on leadership and staff management training, including its leadership development framework, Executive Leadership Program and Looking Forwards Program. More than 50 per cent of DVA staff have undertaken the Looking Forwards Program since 2010 and close to 400 have participated in the Executive Leadership Program. Still, DVA should develop the technical and leadership skills required for staff below SES to enable sound and timely decision making.

It is evident to the review team that project and change management is a key area of development for the department. A series of poorly planned and implemented projects have resulted in wasted effort and resources, and damaged the faith of staff in the department to deliver on promises. This is an important skill for DVA to significantly enhance if it is to better manage expected future changes.

The department has a significant number of contracts and commercial arrangements. There are pockets of contract management expertise in the department, but this is another area for improvement. Day-to-day management of contracts is effective, but there are inefficiencies in contracting arrangements. DVA would benefit from further development in this area to consolidate existing contracts where possible, ensure lead times are sufficient so the full benefits of competitive contracting can be realised and achieve value for money on behalf of the taxpayer.

Finally, the department could consider leveraging off of APS-wide training in the fields of leadership, staff management, strategic thinking and policy development to ensure knowledge of contemporary practices and a whole-of-government perspective are more broadly based across DVA.

4.2  Strategy summary

Outcome-focused strategy

  • DVA has pockets of forward looking, strategic initiatives, but strategy development has not been comprehensive. The department is developing its updated strategy and is yet to design its business to achieve this, including what areas it will directly manage and where it can use the experience, expertise and infrastructure of others.
  • Service design is not being developed with the end-to-end ‘lifecycle’ client experience in mind or differing client needs. The department’s service offerings are generally reactive, disjointed and delivered in isolation.
  • Strategy is not consistently cascaded through divisional, branch or individual development plans.

Evidence-based choices

  • DVA has one of the most valuable health datasets in the country. While this dataset has been used to achieve positive health initiatives, greater whole-of-client analysis would inform future service provision.
  • Opportunities exist for DVA’s data to more broadly influence the social policy agenda across government, including health and rehabilitation policy. Much greater collaboration with other departments and health organisations would help DVA unlock greater potential for further analysis of core information.
  • Feedback from practical experience and lessons learned are not adequately valued. Strategic work and insight is not being shared and knowledge management is not systematic.
  • While maintaining individual privacy, the Veterans and Veterans Families Counselling Service (VVCS) has a wealth of mental health knowledge and insights that need to be better fed into the department.

Collaborate and build common purpose

  • There is a well-established framework for engagement with traditional ex-service organisations. There is an opportunity to better leverage these relationships to educate stakeholders on the strategic direction of the department. DVA could also build on its current strength in stakeholder engagement to forge new and strengthened alliances.
  • DVA is yet to fully connect with contemporary clients who are not sufficiently represented through traditional consultative approaches. The department’s environment will continue to change and it should continue to build its awareness of its environment and client base and ensure it feeds into DVA’s strategic positioning.
  • Relationships with Defence are expanding and improving. DVA is yet to generate common ownership for improved service delivery and a seamless client experience.
  • There is a greater opportunity for DVA to leverage its relationship with other agencies to fully understand whole-of-government policy and service delivery agendas. In light of its current budgetary limitations, the department will struggle to achieve efficiency without a proactive whole-of-government approach.

Comments and ratings against the components of the strategy dimension follow.

Outcome-focused strategy

Guidance questions

  1. Does the organisation have a clear, coherent and achievable strategy with a single, overarching set of challenging outcomes, aims, objectives and measures of success?
  2. Is the strategy clear about what success looks like and focused on improving the overall quality of life for customers and benefiting the nation?
  3. Is the strategy kept up to date, seizing opportunities when circumstances change?
  4. Does the organisation work with political leadership to develop strategy and ensure appropriate trade-offs between priority outcomes?

Rating

 Development area

Awareness of the need to change

Until the late 1990s, DVA had undergone an extended period of time without significant changes in its client base. Its business remained primarily the same and moved incrementally with its ageing clients.

The exception was the reconfiguration through outsourcing of hospital services, which occurred for the benefit of the client. This was not followed by additional reforms in other parts of the department, however. In many respects, DVA avoided the public sector reforms that dramatically impacted on other large, public service delivery agencies at the time.

Since the early 2000s, military operations have seen the emergence of a younger cohort of clients with different and potentially more complex needs. These clients are more informed and expect greater levels of professionalism and timely access to high-quality services. This cohort has been referred to as ‘clients of contemporary service’, or the ‘contemporary client’.

Until recently, DVA focused its service delivery and understanding of client circumstances on ‘traditional’ veterans, who are by far its largest client group. The department’s approach to supporting contemporary veterans has been slow and largely reactive in response to specific issues such as the care of wounded, the service model for war widows and/or dependants, and the move to online services.

A more proactive and integrated approach to DVA’s new client base would mean a swifter, more holistic and effective service offer. The department has long recognised this as an objective. However, DVA struggles to make this a reality and the review team heard that the department’s ‘wheels have being spinning’ for a long time.

Nevertheless, isolated areas in the department have recognised the need for change and reacted. Examples include addressing the mental health of contemporary clients, providing new counselling services and introducing the OBAS. While such initiatives are positive, they are generally isolated and remain individual steps that do not yet contribute to department-wide thinking.

DVA of tomorrow

While DVA is now aware of the need to change and is considering a new service delivery strategy, it has struggled to fully articulate a department wide, client-centric strategy that will shape the design of its business and service delivery model.

Service offerings and how these are delivered are usually considered within individual business areas. Among the contemporary cohort, for instance, rehabilitation needs to concentrate more on getting the client back into the workforce where possible and aiding social integration. However, with the range of services DVA provides, thinking about vocational rehabilitation appears to be less well developed in the context of the sum of all services that contribute to the overall health and social wellbeing of the veteran.

Such a true client focus is not yet shaping how the department interacts with veterans. Limitations such as the lack of a single claim form or unique client number by state are adding to this disjointed service design.

Equally, no holistic approach focuses on the end-to-end ‘lifecycle’ client experience and the concept of client segmentation is absent.

Considering service delivery improvement in stove pipes means opportunities to fully leverage benefits from improved collaboration with other agencies are missed. For example, better collaboration with Defence presents real opportunities with transitioning service personnel through to DVA and more efficiently sharing health records through an agreed arrangement between the two departments. This could significantly increase the department’s ability to process claims and deliver swifter service.

DVA might also consider service design from a risk perspective. For instance, the current approach sees compensation claims processed through the same channels which do not differentiate complexity. The department might look to models used by other organisations, such as insurance companies, that triage claims based upon risk and complexity. This approach would push low complexity claims through high volume, light-touch channels and enable DVA to focus resources on more complex claims. Likewise, where claim types have a significantly high approval rate the department might take a more risk-based approach, which would require less rigorous validation of claims or even an assessment of them on face value with later review. Using data to identify trends such as high likelihood of social or health conditions might similarly help inform such risk-based processes.

There is also little evidence that DVA is actively considering what services it should continue to deliver and what services it could provide through alternative delivery partners. The department has taken some steps in this area, for example using the Medicare system for handling most payments to medical and allied health providers, private hospitals, pharmacy and community nursing. However, far greater opportunities exist to leverage the experience, expertise and infrastructure of other organisations. Exploiting such opportunities could help DVA leverage economies of scale and ensure it maintains efficient and sustainable service delivery while remaining a one-stop-shop for veterans, especially in the context of ageing ICT systems that are not fit-for-purpose. Shifting processing and transactional loads to delivery partners will allow DVA to focus on client interaction and ensure quality services are delivered through smart procurement and contract management. It might also help secure necessary investment in collaborative solutions, where such investment in DVA alone is not forthcoming and would be prohibitively expensive.

To transform its service design along these lines, the department needs to commit sufficient resources and pay sufficient attention. Currently, however, the resources allocated to strategic, whole-of-department service design are not commensurate with the task at hand.

Enabling strategic discussions

Service design work is also an issue for the leadership generally. However, DVA’s top-level forums are not adequately used for strategic discussions or to facilitate a joined-up approach. Rather its primary governance committees tend to focus on operational issues and there is not enough discussion around strategic positioning and future business design.

Strategy does not adequately cascade down from these forums through business planning processes to divisional, branch, team or individual roles.

In the absence of a forum and internal governance practice that adequately supports strategic discussions and decisions, staff have often looked to DVA’s two commissions (the Repatriation Commission and the Military Rehabilitation and Compensation Commission) for answers. The commissions are critical points of reference and authority in the development of policy and strategy. However, the review team believes their deliberations should be informed by strategic discussions emanating from the department rather than as a substitute for them.

Evidence-based choices

Guidance questions

  1. Are policies and programs customer focused and developed with customer involvement and insight from the earliest stages? Does the organisation understand and respond to customers’ needs and opinions?
  2. Does the organisation ensure that vision and strategy are informed by sound use of timely evidence and analysis?
  3. Does the organisation identify future trends, plan for them and choose among the range of options available?
  4. Does the organisation evaluate and measure outcomes and ensure that lessons learned are fed back through the strategy process?

Rating

 Well placed

Extensive veteran data and its opportunity

DVA has a long, close relationship with its unique client base which allows the department to collect a wealth of data relating to health and social wellbeing, such as income support, compensation and rehabilitation information. This data in many cases spans the entire life of a veteran.

The department recognises the value of its health data and has used it to deliver initiatives that have translated into real health outcomes. One such initiative is the Medicines Advice and Therapeutic Education Service (MATES), a data matching service that assesses the overall mix and effectiveness of a veteran’s medication. When possible conflicts or issues are found, the department writes to the veteran and their doctor to recommend a medication review.

However, the department does not put the same value on the myriad of social data it holds.

Throughout the review it was suggested that opportunities exist for greater, holistic analysis of client data. An example is the work currently underway with the Australian National University to develop a predictive modelling capability. This analysis has the potential to inform more preventive actions, front-line medical services, and long-term support of a veteran post-service. It is also argued that use of DVA’s data could be used to inform the broader APS social and health agendas, including in the field of aged care.

The department has undertaken some ventures with other organisations on the analysis of data, including joint data research projects such as MATES with the University of South Australia, and BUPA Health Dialog for the Coordinated Veterans’ Care program. It has similarly coordinated its research program with Defence and its international equivalents such as comparing data on the reservist experience.

It is understood that DVA has developed memoranda of understanding with agencies such as Defence, the Australian Institute of Family Studies and the Australian Institute of Health and Welfare. It also has strong, regular involvement with organisations such as the Australian Centre for Posttraumatic Mental Health, and overseas veterans’ affairs agencies. However, there are questions around the department’s ability to deliver a greater level of analysis in-house, meaning it may want to consider seeking further collaborations with other departments and organisations. Relationships like this could also help the department achieve greater value from its data without the need to build or rely on significant internal capability.

DVA must also recognise that its multiple ageing ICT systems pose a significant threat to its data holdings and careful management and consideration of the data items it captures is imperative if DVA is to maintain some of the most valuable health data in Australia.

Shared ownership of research outcomes

DVA has a considered, coordinated approach to its research, driven by a strategic agenda. It is a strong collaborator with other agencies and countries on overlapping areas of research.

The department has a wealth of research, commissioned or supported by some key areas. Some examples include the future of health services generally, mental health, ageing and dementia care. However, while valuable research is conducted it is not fully shared or translated into the strategic positioning of the department.

While there are some examples of cross-agency engagement on research, greater follow-through of research outcomes is required to ensure these feed into strategic discussions, inform policy development and shape broader service offerings. Opportunities also exist through collaboration with other departments or organisations to develop shared responses to research outcomes where there are common interests. This includes the National Consultation Framework developed to provide a strong foundation for DVA and its commissions to work closely with ESO representatives.

Service delivery feedback informing policy and strategic discussions

DVA provides the full range of public service administration with policy development, program and front-line service delivery. Through its significant state-based presence, it also serves very different client groups, ranging from a mixed cohort in the north of Australia where the majority of younger veterans reside, to a much older veteran cohort in the south.

Despite this, feedback on service delivery does not systematically feed into policy development, program design or overall strategic positioning. Feedback from frontline service delivery arms is also vital to informing policy that meets the needs of client groups. Aside from individual issues or case escalation, feedback is limited and reliant on individual relationships rather than on a culture of active learning. Lessons about clients also tend to feed only into local initiatives which, in turn, are not always aligned to national strategy or integrated across locations.

This is also true for lessons about clinical practices, with the progressive evolution of clinical theory and practice not being adequately shared within the VVCS network, let alone more broadly across the department.

As the department looks at its future service design it should consider how lessons from the coalface are fed into strategic discussions about service offerings and delivery approaches. In addition to formal channels, DVA should consider how to better support informal feedback channels.

Collaborate and build common purpose

Guidance questions

  1. Does the organisation work with others in government and beyond to develop strategy and policy collectively to address cross-cutting issues?
  2. Does the organisation involve partners and stakeholders from the earliest stages of policy development and learn from their experience?
  3. Does the organisation ensure the agency’s strategies and policies are consistent with those of other agencies?
  4. Does the organisation develop and generate common ownership of the strategy with political leadership, delivery partners and citizens?

Rating

 Well placed

Building a common purpose with client groups

DVA has an extensive consultation framework and consults regularly and nationally with traditional ESOs. It has been regularly praised for its level of engagement and is well respected in this regard. Relationships are also very strong with the department’s older veteran cohort, with client satisfaction surveys returning consistently favourable results.5

Opportunities exist to further leverage these long-standing relationships with clients and ESOs to educate and align stakeholders to the department’s transformational agenda. However, despite its strong relationships and the significant goodwill it can call upon, the department is seen as reluctant to engage its stakeholders in discussing the future state of DVA.

As suggested to the review team, every effort spent on unnecessary administration is effort directed away from better supporting the veterans, and this is understood inside and outside the department.

Changing service design, improving the advocacy model, and generating new channels of engagement with contemporary clients requires proactive engagement and clear articulation of the outcome the department intends to achieve. Generating joint ownership of change will also enable DVA and its interest groups to move towards a single outcome.

DVA also needs to explore how it better connects with its newer contemporary clients noting that for some time successive surveys have identified low satisfaction rates for clients under the age of 45 years.

These clients are not seeking out traditional, membership-based ESOs and the department is yet to discover how to fully engage with these veterans and their representative bodies despite initial efforts to find new ways of communicating online and through social media. Indeed, in this regard, DVA will need to work with the ESOs that provide advocacy services to the contemporary client to ensure they are properly supported through the claims process. Failing to do so will have an adverse impact on the reputation of the department and ESO network.

Moreover, continuing to build an understanding of this cohort will allow the department to ensure it maintains an awareness of emerging issues and shape its mix of services appropriately.

Relationships with Defence

Given their shared client base, strong relationships between DVA and Defence are vital to providing effective support to serving and retired personnel. The two departments are part of a single health care continuum—the actions of Defence have a direct impact on DVA and DVA informs more effective frontline and preventative healthcare for Defence. DVA increasingly works with Defence, for example through the provision of OBAS, the Support for Wounded Injured or Ill program, and the management of the Defence Home Loan Assistance Scheme.

Relationships over recent years have improved significantly with developments in how the two departments work together and engage in sharing information. For instance, there has been a program of work looking to streamline records from Defence to DVA in order to assist timely responses to those who are injured where there is considerable scope for further improvements.

However, there is still room to grow and develop improved services for clients as DVA is yet to secure a truly shared ownership of common issues. Greater investment is required by both parties.

Collaborating across the APS

DVA is comparatively smaller than the other departments with which it regularly engages and often struggles to be heard. While it has ‘punched above its weight’ at times, it is not regularly at the table helping to shape policy agendas. As a result, DVA is often not front-of-mind in the development of policy that will affect it. This often sees them consulted very late in development and missing the opportunity to help shape policy.

If DVA is to be an active contributor to broader policy agendas it needs to continue to build a stronger presence with larger agencies. In fact, the department has a significant knowledge base and wealth of experience in a number of social support and health areas and many of the social and health challenges it faces are also faced by other Australian Government agencies.

It therefore makes sense that DVA play a more active role in influencing broader health and social policy agendas across the APS. This would also help the department leverage the lessons learned by other departments and align or strengthen its own responses to issues.

4.3 Delivery summary

Innovative delivery

  • The department has pockets of innovative programs, primarily in the field of health care.
  • Staff understand the importance of innovation in driving organisational performance and better supporting the client. Many are willing to bring forward creative ideas and solutions.
  • DVA lacks a department-wide innovative framework that supports creative ideas and continuous improvement, and is not proactively managing the associated risks that come with innovation. This extends to a lack of methodology for prioritising and resourcing innovative ideas.

Plan, resource and prioritise

  • A governance framework exists, but is not used effectively for strategic direction setting. The coverage of agenda topics at times is duplicated across committees as is committee membership. This duplication and the number of committees confuses accountabilities and complicates and slows down decision making. The lack of prioritisation seems to exacerbate the staff workload.
  • Divisional and branch planning is not adequately linked to priorities for delivery of the department’s broader strategic outcomes.
  • Despite some recent successful examples of program delivery, resourcing is generally based on historical trends and allocations are not rebased or strategically aligned, resulting in inconsistent sub-scale processes and uneconomical use of resources.
  • The department has insufficient expertise and discipline in change and project management and strategic procurement. This is evident in recent project failures.

Shared commitment and sound delivery models

  • The operating structure is disjointed and sub-scale. In combination with the department’s financial arrangements this structure is unsustainable and does not easily facilitate shifting resources with changing priorities. The fragmented delivery model inhibits the building of a unified DVA culture and works against the effective use of available staff and resources.
  • While desktop modernisation work is underway, DVA’s ICT plan does not articulate a clear end point for managing its many long-standing unintegrated legacy systems, supporting front-line staff to be efficient or providing a whole-of-client view.

Manage performance

  • DVA’s current suite of key performance indicators (KPIs) do not adequately drive the department towards operational efficiency.
  • KPIs are not robust or aligned to strategy and performance reporting is largely inconsequential.
  • DVA needs to review its approach to risk management, including the setting and review of its risk tolerances and active mitigation strategies.

Comments and ratings against the components of the delivery dimension follow.

Innovative delivery

Guidance questions

  1. Does the organisation have the structures, people capacity and enabling systems required to support appropriate innovation and manage it effectively?
  2. Does the leadership empower and incentivise the organisation and its partners to innovate and learn from each other, and the front line, to improve delivery?
  3. Is innovation explicitly linked to core business, underpinned by a coherent innovation strategy and an effective approach towards risk management?
  4. Does the organisation evaluate the success and added value of innovation, using the results to make resource prioritisation decisions and inform future innovation?

Rating

 Well placed

Pockets of innovation

The department’s Executive leadership acknowledges the importance of driving and supporting innovation and innovative thinking has led to a number of improvements with recent examples predominately in the fields of health and community services.

Particular high-profile examples of innovation include the Mental Health Strategy, the Coordinated Veterans’ Care Program and MATES, which seek to facilitate improved health outcomes for veterans and their dependants through early intervention. The Department of Human Services has been engaged to process primary health payments on behalf of DVA. While service delivery innovation has focused primarily on modernising technology to access DVA services online through MyAccount, the use of social media to engage younger veterans is also increasing with recent initiatives including You-Tube videos, mobile applications, Twitter and Facebook communication.

Compared to the Health and Community Services division, innovation within the Rehabilitation and Support business is relatively limited. This is of particular interest given the increased workload pressures on Rehabilitation and Support business and the subsequent threat to the department’s reputation, which would normally be a catalyst for innovative thinking.

In considering why this division has not been as innovative as other parts of the department it is noticeable that major reform projects, such as Veterans First and the Rehabilitation Transition Program, have been suspended while their objectives and project controls are reassessed. Nevertheless, it appears that some staff are inclined to be passive in the face of the challenges the business faces and there is a failure to look outwards for inspiration and options to current dilemmas. Factors such as staff longevity, the staff age profile, and risk aversion seem to have been progressively reducing the department’s appetite for innovation.

Building an innovation framework

Innovation tools within DVA have incorporated the ‘innovation central’ intranet page which makes reference to various departmental strategic papers and includes an iblog for innovation ideas. However, this loose existing innovation framework lacks support from senior management and presence among staff and is often only recognised as a place to push for technological improvements.

Regrettably, some successful innovations, like MyAccount, which allows clients to update their details and transact with the department online, have been regarded as merely catching up with the broader APS and private industry. Furthermore, the lack of collaboration across DVA locations means that innovative success implemented in one location is not necessarily or swiftly implemented across the others.

The intranet site on innovation needs to be brought to life and the department could consider implementing an innovation program integrated across business areas, led by a dedicated team. At the very least the framework needs to be encouraged by management and innovative ideas then assessed relative to strategic priorities and those which make sense, supported by appropriate resourcing. Successes should be celebrated and lessons learned promulgated across the department.

DVA could also consider leveraging better practices of other agencies and industry to help the department modernise its business while managing its complexity. Innovation could also be enhanced by making greater use of staff, including those at the front line. By encouraging innovation, leaders could also set the tone for continuous improvement across the department to constantly strive for better ways to serve clients.

Plan, resource and prioritise

Guidance questions

  1. Do business planning processes effectively prioritise and sequence deliverables to focus on delivery of strategic outcomes? Are tough decisions made on trade-offs between priority outcomes when appropriate?
  2. Are delivery plans robust, consistent and aligned with the strategy? Taken together will they effectively deliver all of the strategic outcomes?
  3. Is effective control of the organisation’s resources maintained? Do delivery plans include key drivers of cost, with financial implications clearly considered and suitable levels of financial flexibility within the organisation?
  4. Are delivery plans and programs effectively managed and regularly reviewed?

Rating

 Development area

Effective governance

Effective service delivery in DVA is adversely impacted by its complex governance framework that sees a number of committees overlapping, some committees operating without the right representation, and generally confused accountabilities which complicate and slow decision making. Multiple committees also require similar data or reports, which requires time for staff to prepare the input and forces senior leaders to attend multiple meetings with limited return.

The senior leadership group agrees that the department is ‘over governed’ and the fragmented framework contributes to inefficient, untimely and ineffective decision making.

Some initial realignment of the governance structure by the new Secretary has occurred and it is understood that more action is likely. At present, however, responsibilities are not shared across senior management, creating tension and impacting, most noticeably on the effectiveness of the overarching governance board, the EMG. The board’s membership is unbalanced with seven of the 16 seats occupied by Deputy Commissioners, and the forum lacks a strategic agenda with much of its time devoted to operational issues.

In summary, the review team believes the governance structure needs to be simplified for such a comparatively small department with a focus on providing strategic direction and driving operational excellence. DVA’s commissions and governance arrangements should also work in a more complementary way with seamless decision making and follow through.

Business prioritisation

Reform of the governance arrangements to allow for more strategic discussions will be a small but important step in clarifying priorities and moving resources within DVA in accord with these priorities.

The Business Prioritisation Roundtable process within DVA is useful in advising on priority areas for investment of available capital funding but tends to focus on how to support new initiatives such as the development of the department’s online capacity and the OBAS. It does not appear to directly address the alignment of resources to strategic objectives or reappraise the resourcing needs of DVA core business.

There is also a relative lack of review and evaluation of departmental planning and prioritisation with many business initiatives added without reprioritisation or removal of existing initiatives despite the work of the Roundtable.

Similarly, DVA develops divisional and branch plans which reflect its broader strategic plan and enterprise risk framework but are only loosely linked to strategic objectives.

The business planning process is driven principally by the senior leadership, involves limited collaboration across the department and gives minimal consideration to bottom-up input and feedback loops.

It is noted that the strategic plan is being reviewed and updated to move away from a version that was voluminous and not particularly strategic. While the latest draft is improved, the challenge remains to turn this into operational priorities.

Resource management

Within DVA, tools such as the Workload Assessment Reallocation Methodology are assisting in taking an evidence-based approach to resourcing decisions even if the tool itself needs to be developed to better allow for predicting workloads and future volumes. Recent initiatives, such as the reallocation of compensation claims across state offices to address a backlog of cases, also demonstrate a willingness to move resources to priority areas but these have been more the exception than the guiding rule for DVA. The department can equally point to initiatives, such as the establishment of its online service capacity and the OBAS, which were fully funded internally to demonstrate its capacity to resource new programs.

Reform of DVA’s financial arrangements and operating structure has been driven by long-standing policy to maintain a visible presence in all jurisdictions.

Nevertheless, current financial arrangements, like DVA’s operating structure, are unsustainable in the context of a resource-constrained environment even if this is not immediately evident given that arrangements are based on historical data and incremental change.

In general, resources are not re-based and the department is operating as if there is very little scope to redirect funds for future workloads or changing business priorities. Moreover, business-as-usual processing is rarely critically assessed, translating into perceived and actual inequitable resource allocations.

Furthermore, the financial capability throughout middle and senior management varies, which is inconsistent with a reasonable expectation of the level of sophistication and fiscal discipline required when managing a $12.8 billion portfolio.

The department would benefit from reassessing its funding model as well as the way it allocates money and inform this by a sound understanding of its capacity and capability needs into the future. To this end, while some areas have strong analytics for resourcing, as previously noted, there is no overarching plan articulating DVA’s approach to meeting future workforce requirements.

As discussed later in this report, the department’s fragmented delivery model is inefficient, confuses lines of accountability and is unsustainable. This is further impacted by the physical location of staff across offices in capital cities and regional Australia.

For a department of approximately 2000 staff, DVA has multiple full-time and part-time locations comprising Veterans’ Access Network offices, VVCS centres, services provided through Centrelink offices, and 33 OBAS locations. Such a dispersed model contributes to DVA’s fragmented workforce, translates into a lack of scale, and unclear accountability stemming from national lines of business managed in various locations and independent of each other. It also results in multiple teams undertaking similar work, duplicating efforts and hindering the ability to leverage knowledge. All of which is uneconomical.

While there are some necessary splits in location such as VVCS and DVA, a better organisation design and consolidation of functions would make more efficient use of financial and staffing resources.

In short, the diversity, volume and significance of the services provided by DVA and the importance of maximising operational efficiency, should dictate the need for a function that takes primary responsibility for driving an integrated client and delivery approach, but this is missing from the DVA structure.

The steps taken by the department to reform its approach to planning and priority setting, including the initial reform of its governance arrangements and actions such as reallocating compensation claims across state offices to deal with the backlog of cases, suggest that progress can be made. Matters such as the governance structure and the planning process are issues that are well within the scope of the DVA leadership to address expeditiously.

Given DVA’s relatively modest record in seeing major reforms through to completion, the review team strongly encourages leadership to take definitive action to establish the necessary internal processes and tools that will assist in delivering sufficient resources to priority projects, and support this by building greater program management capability and business acumen throughout the department. This in turn will need to be backed up by adopting a more sustainable operating structure and delivery model.

Improving project and program management, and strategic procurement

Project management is internally perceived as a capability required for ICT projects in DVA. While smaller non-ICT projects such as the Mental Health Strategy and private hospital tender process, appear to be managed well, there is limited program and project management capability to deliver larger transformational projects, regardless of whether they involve ICT or not.

Having said that, the Choice and Maintainability in Veterans Services—a large-scale business and ICT project which commenced in 2010—has been successful. Its success can be attributed to the proper management of budget and scope under an experienced project manager. DVA has also implemented a shared services project jointly with the Department of Human Services which required a complex transition from previously outsourced ICT services implemented over two years. Also of note, the Review of Military Rehabilitation and Compensation Arrangements and Veterans Pharmaceutical Reimbursement Scheme, which are not purely ICT projects, are recent examples of successful projects developing policy and liaising with stakeholders.

Tools such as Project City—a suite of online checklists and guidelines—are supported by the Enterprise Project Management Office and there is provision for the accreditation of staff in the Prince 2 methodology.

Nevertheless, DVA generally seems to lack change, project and risk management discipline, particularly in large scale, cross-functional transformation projects. This is evident in project failures such as maximising the use of aDVAnce—an ICT platform for the support and maintenance of service delivery departmental applications—and more recently Veterans First and the Rehabilitation Transition Project. It is commendable that these recent projects were suspended although they should arguably have been suspended prior to the engagement of an external audit consultancy.

Of particular note is DVA’s unclear project accountability whereby project managers are not accountable for outcomes but the project board is. It has also been noted that the department often aims for 100% solutions for 100% of stakeholders which directly impacts on project scoping.

DVA is involved with numerous procurement activities. This includes (for 2011–12) approximately $6 million on consultancies, $63 million in ICT procurement expenditure and $5.5 billion for arrangements with healthcare providers.

While some parts of DVA have good processes for reviewing contractual arrangements, other areas fail to optimise their resources and negotiating position.  For example, in some cases DVA has started contract negotiations too late to ensure good return on investment and strategic alignment with departmental priorities or it has done so without the sufficient focus and attention of the senior leadership.

In the opinion of the review team, DVA would benefit from engaging specialist project management and procurement skills to support future major program management activities and ensure sound project scope, budget management, project implementation, benefits realisation, and value for money with appropriate return on investment. In the process, the department should build its in-house project and change-management capabilities.

The recent self-assessment of DVA’s Portfolio, Program and Project Maturity Model P3M3 self assessment corroborates this finding by suggesting that the department needs to significantly improve on benefits realisation.

Shared commitment and sound delivery models

Guidance questions

  1. Does the organisation have clear and well understood delivery models which will deliver the agency’s strategic outcomes across boundaries?
  2. Does the organisation identify and agree roles, responsibilities and accountabilities for delivery within those models including with third parties? Are they well understood and supported by appropriate rewards, incentives and governance arrangements?
  3. Does the organisation engage, align and enthuse partners in other agencies and across the delivery model to work together to deliver? Is there shared commitment among them to remove obstacles to effective joint working?
  4. Does the organisation ensure the effectiveness of delivery agents?

Rating

 Serious concerns

A sustainable operating structure and delivery model

DVA’s current operating structure is a complex matrix—an unsustainable hybrid of fragmented national and dispersed business lines, comprising multiple service models, much of which is delivered and processed in-house (with the exception of health services which is outsourced).

This complexity has partially been shaped by the combination of multi-act eligibility and an increase in claims made under the MRCA which is more challenging to administer, but primarily through the division of responsibility for staff, policy and service delivery, all of which can be split across two or three divisions and two or more locations. This complex structure lacks scale and has contributed to the development of fiefdoms in state locations and functional silos to the detriment of consistency and efficiency of performance across key business outcomes, particularly compensation claims processing.

That said, while the department’s operating environment is complex, it is not necessarily unique relative to other large public sector service delivery agencies which also operate in complex legislative and operational environments.

In short, DVA’s operating structure needs to support service delivery by being effective and efficient, meeting the needs of traditional and emerging clients, and being considerate of the end-to-end client experience. For example, currently case escalation exists for exceptional cases, but into the future the service delivery model needs to allow for increased demand in individual case management. This partially stems from the increasing number of cases falling under the MRCA or across the three Acts and partially from the changing needs of the younger cohort. The reality is, however, that DVA’s structure as configured will not allow for such a shift; at least not easily.

In state locations Deputy Commissioners maintain a senior presence and in addition to their ceremonial, representational and stakeholder management role, they oversee the rehabilitation and compensation claims processing, and client-facing functions. As part of their leadership responsibilities, Deputy Commissioners undertake duty of care in supervising state-based staff, however this approach is not consistent across locations resulting in some staff feeling isolated, particularly those operating in a dispersed team possibly across multiple locations. In turn, this has an impact on the department’s ability to provide seamless client service.

It is clear that the operating structure is difficult to navigate and this has an impact on staff ability to share understanding about job roles and responsibilities across and within locations.

DVA’s leadership, almost to a person, agrees that the operating structure and fragmented delivery model is not sustainable and needs to be streamlined if the department is to address future challenges.

The review team concurs with this judgment.

A roadmap for information and communications technology

DVA is responsible for providing access to or delivering services to more than 300,000 veterans and their dependants, resulting in a relatively high volume of transactions. The department receives approximately 5,800 client phone enquiries daily, arranges 16,700 individual journeys for clients to receive health treatment per week, sees some 93,000 clients per year, provides access to more than 10 million medical consultations and services, handles 750,000 dental consultations, manages 330,000 hospital separations per year, and finalises approximately 570 claims for compensation each week.

In short it is a sophisticated, high-volume service delivery environment. Yet the department is delivering through some 200 ICT systems which are so antiquated that new staff feel they have been transported back ‘10 years or more’. Applications are not integrated, making it difficult to obtain a whole-of-client perspective. This is further affected by a lack of a single client identification either within DVA or flowing from Defence through to DVA. Past investment has been a patchwork in the absence of a definitive ICT blueprint, which has generated cynicism and frustration.

The majority of the work undertaken in DVA is ICT dependent and therefore it is critical that the infrastructure and applications support the business and further that there is an ICT blueprint to provide a roadmap aligning ICT with departmental strategy.

The lack of ICT system alignment to support service delivery is a significant issue across the department and transformation is needed to better meet the needs of staff, particularly those in front-line service delivery roles. Given the volume of historical applications and the reality that full-scale and immediate transformation of ICT is unrealistic, this could potentially be addressed, if cost effective, by developing a new temporary front-end system that sits over the old systems until such time as they are updated or are no longer required.

Staff have also expressed concern about the understanding and responsiveness of the shared services arrangement of its ICT infrastructure with the Department of Human Services and consideration should be given to ensuring appropriate and timely escalation of issues to achieve good service outcomes. The ICT strategy beyond 2015 is currently being considered, but it is unclear if the blueprint will link with departmental strategy and drive business solutions that facilitate more timely service delivery. Any transformation will require the business to drive ICT change, not the other way around, while also considering how processes can be re-engineered to minimise the customisation of off-the-shelf products.

The success of any future transformation will also largely rely on project management capability, along with ICT improvements and early, continuous engagement of subject matter experts. Strong project management at program level will ensure the realisation of such a transformation.

Manage performance

Guidance questions

  1. Is the organisation delivering against performance targets to ensure achievement of outcomes set out in the strategy and business plans?
  2. Does the organisation drive performance and strive for excellence across the organisation and delivery system in pursuit of strategic outcomes?
  3. Does the organisation have high-quality, timely and well-understood performance information, supported by analytical capability, which allows you to track and manage performance and risk across the delivery system?
  4. Does the organisation take action when not meeting (or not on target to meet) all of its key delivery objectives?

Rating

 Development area

Measuring what is valued

DVA has a number of reports that measure KPIs, the principle one being the EMG Dashboard Report, the latest version of which was established in 2012.

Notably and for a long time compensation claims processing has not met time-taken-to-process targets and while this issue receives the greatest amount of scrutiny at EMG and elsewhere, the results are inconsequential. DVA has recently devoted resources to address the ongoing failure to resolve this issue. Nevertheless, it remains an ongoing and unresolved issue which by now should have triggered more substantive alternative thinking or pilot initiatives such as triaging claims upfront based on potential risk.

The current suite of KPIs could be aligned to the full client service experience. The value of KPI measures for the Executive would be further enhanced by considering measuring not just timeliness, but responsiveness, access, quality, the seamlessness of handovers at critical service points and overall service satisfaction, supported by continuous improvement and benchmarking.

A revised suite of KPIs should be ‘SMART’ – that is specific, measurable, assignable, realistic and time-related - and drive the behaviour of the department. Indeed for DVA meeting KPIs is more than simply working harder and finalising more claims. As important as this is, the measures DVA values should reflect those valued by the client and government.

It is also important to acknowledge that not everything can be measured. Less tangible elements of the business, like policy and communications, still need to be monitored. This should be carried out in a visible and recognisable way.

DVA needs to be disciplined to rectify failed KPIs, prioritising and prompting action, if it is serious about performance reporting to drive business improvement. Demonstrating real action in meeting targets would be a positive step towards improving DVA’s reputation as a truly modern and client focused department.

Effective risk management

Departmental staff have described DVA as being ‘terrified’ of the risk of adverse media attention, particularly in relation to its rehabilitation and compensation functions, and how the department works hard to avoid risk at all costs rather than proactively managing it.

This is consistent with the review team’s observation that there is a level of complacency in the department and that its audit functions appear to focus predominately on compliance rather than as a contributor to service delivery improvement.

The department has established a risk management framework and identified a number of enterprise risks. These risks are measured and regularly reviewed by the Performance and Change Committee. That said, the trigger points for action under the risk mitigation plan are unclear to the review team.

Risk management provides an opportunity to take risks where there is an expected return. However, the concept of risk return seems absent from departmental processes. For example, there is no risk-based approach to claims processing which would seem sensible in the current context. Conversely, given the important and high-profile World War I commemorative activities that will take place over the next four years, which carry significant reputational risk for DVA, it would be natural for the department to lower tolerance levels in this area over the forthcoming period.

Finally, a change in the department’s operating structure and delivery model may help mitigate risk by ensuring reporting lines and accountabilities are clearer and by driving consistency with processes and procedures. Further, consolidating functions such as contract management could be approached from a risk-management perspective and help drive consistency and provide further efficiencies.