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Reform and Efficiency
The UN General Assembly has, especially in its two most recent resolutions on the quadrennial comprehensive policy review outlined the need for UN to implement changes to pursue “more cost-efficient support services, by reducing the duplication of functions and administrative and transaction costs through the consolidation of support services at the country level; and the requirement for integrated support across the United Nations system for the 2030 Agenda for Sustainable Development."
Based on estimates of potential efficiency gains from various sources (GA Resolution 67/226 and 71/243), the Secretary-General set the target for the efficiency agenda at a dollar value equivalent of 310M USD developed and implemented by a wide range of actors within the UN System:
- Business Operations Strategy (BOS);
- Common Back Office (CBO);
- Common Premises (CP);
- Regional and Global Shared Service Centres;
- New Generation UN Country Teams; and
- Integration on UN Information Centres into RC Offices.
These efficiency interventions are supported by three key enablers defined by the UNSDG Business Innovations Group (BIG):
- Standardized Client Satisfaction principles to safeguard minimum quality standards of services provided;
- Standardized Pricing and Costing standards to establish common standards defining how the price and costs of a service are established across the UN System; and
- Mutual Recognition, which, once endorsed, allows one UN entity to obtain services from another UN entity if the latter can provide services more efficiently.
Other current projects that contribute to efficiency ultimately can be tied back to the above. For example, the Multi-Country Office (MCO) review may realize efficiency gains if the new design incorporates service delivery either through Common Back Offices or Regional and Global Shared Service Centers. The Regionalization project focuses on the design of a new regional architecture, which may deliver efficiency gains if it leverages the concepts of the regional and global service centres for location independent services.
Collectively, these interventions are referred to as “the Efficiency agenda”. Over time, as more projects may be added to the above to increase efficiency gains for the UN System so the Efficiency agenda may expand to react to efficiency opportunities identified throughout the UN System.
UNSDG Business Innovations Group (BIG)
In line with the United Nations Secretary General’s report on the development system of 30th June 2017, UNSDG/BIG’s commitment is to demonstrably increase value for money in the UN system through transformational change in management of back office functions, as outlined by the 2016 UNSDG Vision Paper on Business Operations and HLCM’s strategy.
UNSDG/BIG membership is open to UNSDG and HLCM Members and Observers at the ASG/decision-making level. The two co-chairs are HLCM members.
UNSDG is primarily focused on delivering results at the country level and recognizes that UN system’s transformation of business operations cannot happen without top-down policy making. UNSDG/BIG will pro-actively engage with HLCM on innovations that may lead to policy decisions. Working as a client of HLCM, UNSDG/BIG will seek to solicit HLCM’s capabilities for policy decisions and present its results to the HLCM in a structured manner. To facilitate this relationship, one UNSDG/BIG co-chair will serve as liaison with HLCM and make sure an effective two-way communication with HLCM is maintained.
Principles of engagement for UNSDG/BIG
- Results optimisation. Results at the country level is the litmus test.
- Bringing down silos. The aim is to overcome fragmentation within and/or between UN organisations to leverage economies of scale and achieve efficiency gains.
- Transformational, not incremental. The work will proceed on the assumption that efficiency gains in business operations, from a UN Country Team-led efforts, are near-exhausted. Reaching maximum available gains requires transformation, which in turn requires full engagement and decision-making at headquarters level.
- Opt-in. Ambition and engagement will drive the reform. Organisations should be enthusiastic to collaborate on a reform that benefits all.
UNSDG/BIG Task Teams
UNSDG/BIG will create Task Teams with specific, executable, and time-bound deliverables. Task Teams will present recommendations with to the UNSDG via UNSDG/BIG. Task Teams will internally agree on their working arrangements and prepare Terms of References to be endorsed by UNSDG/BIG.
Task Teams will provide evidence-based analyses after consultation with relevant people at headquarters, region and country levels with the support of DCO. DCO will provide a Knowledge Management Platform to provide the regional and country level data required by Task Teams. DCO will also provide support and help coordinate the work of UNSDG/BIG and Task Teams on behalf of the co-chairs. When needed, it will also help coordinate any joint work which needs to occur with the HLCM.
UNSDG/BIG will adopt recommendations from the Task Teams throughout the year and will meet twice a year.
Business Operations Strategy (BOS)
The BOS is a framework guiding UN business operations at the country level. The BOS facilitates the strategic planning, management, monitoring, and reporting of the UNCT’s joint support to programme delivery through common business operations.
The BOS is a flexible tool recommended for UN Country Teams that seeks to enhance the quality and cost effectiveness of joint business operations.
The BOS achieves its goals by improving business operations at the country level. This can be accomplished in several ways: eliminating the duplication of processes within business operations; leveraging the common buying positions of the UN; and maximizing economies of scale.
The BOS reflects common services that are developed jointly and does not include or replace individual agency operation plans. Common services within BOS do not need to be common to all agencies, but rather can be a common service shared by two or more agencies.
The BOS supports innovation in common business operations and yields impact when it is combined with new ways of delivering quality and cost-effective services that support programme implementation. UNCTs implementing BOS choose common services that meet their needs for quality, flexibility, and cost effectiveness.
The BOS presents agreed common services lines (outcomes) under which common services (outputs) are prioritized and implemented. The common service lines within any one BOS may include:
Common Back Office (CBO)
Rather than being run as a centralized corporate function, a shared service centre (including Global, Regional or Common Back Offices) operate as an internal client service centre which charges for services provided to its clients and uses Service Level Agreements as a contractual agreement which specifies cost, time and quality performance management. Whether in the UN or in private sector, shared service centres aim to achieve quality and cost benefits based on the same principles:
- Standardization: usually driven at the corporate and/or UNDG level, standardization deals with harmonization of processes to create a range of services that can be provided by multiple agencies based on universal processes;
- Consolidation: depending on the type of service centre, consolidation in the UN happens at either global, regional or local level and creates a “single service window” that provides a range of services to its clients; and
- Optimization & Reengineering: Once the services are standardized and consolidated, the service centre can re-engineer processes to achieve maximum efficiency and quality standards, defined by the needs of the client.
Global, Regional and Local Service centres in the UN provide a range of services, some of which are only available to internal clients (agency country offices), where-as other services are open to “external” clients, such as other agency corporate, regional or local offices. The most important effect of these service centres is that they create option for clients (agencies), whether internal or external, to source services based on the clients expected quality/cost considerations. Together, these service centres create an internal market where agencies can source the services that most closely reflect their needs in terms of quality and financial capacity in terms of price. This in turn enhances efficiency and effectiveness of the UN operational support services that support our programmes at the country level.
The Common Back Office (CBO) is a country level service centre. It is a logical extension of the BOS: where the BOS is a strategy that reflects all common services that make economic sense to be developed and executed jointly, the CBO is the service delivery platform, consisting of a team of dedicated staff that are responsible for the implementation of some or all the common services reflected in the BOS.
The development of centralized capacity at a county level for operational support through the establishment of local service centres offers a unique opportunity to the UN to “outsource” certain (parts of) processes to a local, centralized in-house service provider (a CBO) allowing agencies to focus their resources on their core activities and lower their operational support cost to programme implementation by removing duplication in their support structure.
CBOs, therefore, address the three drivers causing the sustainability issue in the previous section in that they:
- Avoid the duplication of functions for generic support services at the country level by providing these services through one consolidated service desk. The same economic principles prompting agencies to establish regional and global service centres drive the rationale for the local service centres, although at a smaller scale;
- Enhance quality of services provided by putting in place a client-oriented management system that focusses on client needs and perceptions to deliver services, so clients have the means to monitor quality of services and have recourse in case the quality levels fall below their expectations; and
- Create dedicated specialized capacity focused on certain support functions enhancing the quality of these services and reducing the pressure on agency support staff so that they can focus on strategic mandate related operational support.
Premises shared by UN organizations are an important component of the Secretary-General’s UN Reform Programme. The objective of common premises is to build closer ties among United Nations staff and promote a more unified presence at country level in a cost-effective manner.
Task Team on Common Premises
The United Nations Sustainable Development Group (UNSDG) Task Team on Common Premises and Facility Services (TTCP+FS) is an inter-agency group tasked with providing guidance and tools for UNCTs which intend to engage in UN House/UN Common Premises renovation, construction and/or relocation projects, and to study and recommend solutions to enhance efficiencies as well as to increase the number of UN House/UN Common Premises worldwide.
Common Premises entails the co-location of two or more resident United Nations entities present in a country. A Common Premises can be established at national and sub-national level, usually supported by a range of common services enabled by agency co-location.
Common Premises is a key enabler for common services and shared services* between agencies and forms an integral part of the United Nations efforts to harmonize common operations at the country level. The objectives are reflected in the local Business Operations Strategy (BOS) if the United Nations Country Team (UNCT) has a BOS in place. There can be more than one Common Premises at the national and sub-national level.
The primary objectives for establishing a Common Premises is to achieve greater utility of available resources:
- Cost efficiency through reduction of operational costs
- Effective utilization of shared resources
- Enhanced security
- Unified presence at the national and sub-national level
* A Shared Service is defined as two or more resident United Nations entities present in a country, whether or not co-located in a Common Premises that may engage in bi-lateral agreements with similar objectives to those for establishing a Common Premises.
United Nations House
The name United Nations House shall be conferred upon recommendation by the United Nations Development Group, where the following minimum conditions exist;
1. Meets the minimum criteria for establishing a Common Premises.
2. The United Nations House must house the office of the United Nations Resident Coordinator.
The United Nations House is not necessarily a standalone building, and it may have satellite premises and may be referred to as United Nations House Annex. There will only be one United Nations House in any given country.
The objective of Mutual Recognition is to better enable UN organisations to develop partnerships and to work together towards delivering the overall UN mission, the 2030 SDGs, and the specific mandates of the participating UN organisations by benefiting from the different UN organisations’ comparative advantages while incurring minimum transaction costs doing so.
Mutual Recognition essentially entails UN organisations’ Executive Management granting their offices a ‘pre-approved license’ to access and use other UN organisations’ policies, procedures and assets. In humanitarian emergencies – and in a developmental context - this allow UN organizations to cooperate and benefit from already established UN footprints with minimum delay and transaction costs.
The Mutual Recognition policy will list the particular business practices that are pre-approved for mutual recognition and where no further approval is required for heads of office at country level to authorize the use of each other’s business practices and assets. For business practices not included in this annex, Mutual Recognition will require Headquarters approval on a case-by-case basis.
Potential examples; assets such as vehicles, radios, and offices, and support services such as procurement, recruitment IT, transportation, travel, protocol etc.