Evaluation of the Regional Service Centres Initiative

May 2014

Abbreviations, Acronyms and Symbols

Acknowledgements

The Evaluation Division (ZIE), Office of Audit, Evaluation and Inspection (ZID), of the Department of Foreign Affairs, Trade and Development (DFATD), would like to extend its gratitude to the staff and management involved in the Regional Service Centres Initiative for their cooperation and to the Evaluation Advisory Committee for its indispensable guidance and advice. Special acknowledgement is extended to all stakeholders and representatives from DFATD’s mission network, from OGDs and from the British and the Dutch government departments who agreed to be interviewed for this evaluation.

Executive Summary

Introduction

The formative evaluation of the Regional Service Centres Initiative was conducted by the Evaluation Division (ZIE), Office of Audit, Evaluation and Inspection (ZID), of the Department of Foreign Affairs, Trade and Development (DFATD), in accordance with the requirements of the Treasury Board Secretariat (TBS) Policy on Evaluation and the Department’s 5-year evaluation plan. The purpose of this evaluation was to assess the relevance and performance of the Regional Service Centres Initiative, as well as the efficiency and economy of the implementation of two Regional Service Centres (RSCs) serving Canada's missions abroad. The target audiences for this evaluation are the Government of Canada (GoC), DFATD’s Senior Management, and the management and mission clients for the RSCs.

Background

The Department of Foreign Affairs and International Trade (DFAIT)^{Footnote 1} is responsible for the management and maintenance of Canada’s network of missions abroad, including the delivery of common services. In 2008, the Department created the International Platform Branch (ACM) to transform the management of Canada’s international platform by streamlining common service delivery for improved operational efficiencies and cost-savings. The Regional Service Centres Initiative, a key deliverable of ACM, was proposed as a means of streamlining service delivery and realizing cost-savings while responding to increased demand for common services.

According to the Regional Service Centres Initiative, common services delivered through RSCs were to include financial, human resources for Locally Engaged Staff (LES), information management and technology, procurement and contracting, and property management services. RSCs were to apply regional approaches to common service delivery and process routine, repetitive financial transactions on behalf of their mission clients to maximize economies of scale and improve efficiencies. Ongoing cost-savings and improvements to client satisfaction were expected as well as improving the quality and timeliness of common service delivery by locating decision-makers and subject-matter experts in the field and closer to their clients.

To date, two RSCs have been established: the Regional Service Centre for Europe, the Middle East and Africa (RSCEMA) and the Regional Service Centre for the United States (RSCEUS). RSCEMA was established in March 2011 in Thames Valley near London, UK. RSCEUS was established in April 2010 at Canada’s existing embassy in Washington, D.C.

Evaluation Scope and Objectives

The evaluation covers the period from the launch of the Regional Service Centres Initiative in 2009 to March 2013 when data collection was completed. The objective of this evaluation was to provide senior management at DFAIT with an evidence-based assessment of the relevance and performance of RSCEMA and RSCEUS, in accordance with the 2009 TBS Policy on Evaluation. Additional emphasis was placed on assessing the extent to which the implementation of the RSCEMA and RSCEUS is on-track to achieve its performance targets for expected cost-savings, standardized service delivery processes, improved client satisfaction and increased quality, timeliness and efficiency of client service delivery to missions abroad.

Key Considerations

The implementation of RSCEMA and RSCEUS is not yet complete and their performance has been complicated by contextual factors, such as the roll-out of Deficit Reduction Action Plan (DRAP) initiatives. Given that the RSCs have been established for one or two years and full achievement of their intended long-term results cannot reasonably be expected, the evaluation places emphasis on the RSCs’ activities, achievement of outputs and progress toward expected outcomes. The evolution of the regional model for common service delivery was also considered in the analyses, but the evaluation primarily assesses the relevance and performance of RSCEMA and RSCEUS against criteria identified in the original business case that was developed at the outset.

Evaluation Approach and Methodology

This evaluation relied on multiple sources of evidence to assess the core evaluation issues and objectives, including: document and file review; key informant interviews with key interlocutors at HQ and client missions; financial analyses; a survey of common service clients across the mission network; and field visits to RSCEMA and RSCEUS, and to client missions in London, Berlin, and Dublin for the Europe, Middle East and Africa Region, and visits to client missions in Miami, Los Angeles and San Francisco for the US.

Key Evaluation Findings

The regionalization of common service delivery is widely recognized across the Department as an opportunity to consolidate expertise, identify efficiencies and improve productivity. The Regional Service Centres Initiative has responded to a demonstrable need to standardize service delivery processes and improve the consistency of common service delivery across the mission network. In addition, the RSCs are aligned with federal priorities and DFATD has a role and responsibility to deliver regionalized common service delivery. However, changes in the operational environment of the Department have greatly reduced the potential for RSCs, in particular RSCEMA, to achieve efficiencies and cost-savings as originally intended. Furthermore, the regional common service delivery model for the RSCs was predicated on anticipated growth in the number of positions at missions abroad, which has not materialized due to pressures created by ongoing cost-cutting exercises. Given the current environment of fiscal restraint, there is need to reconfigure the role of RSCs in implementing the regionalization of common service delivery.

Based on findings and conclusions, the evaluation recommended the following:

Recommendation #1: The Department should reassess the business case for the Regional Service Centres Initiative and make the necessary course corrections in the regionalization of common service delivery that would result in the achievement of targeted cost-savings, expected outcomes and improvements in client satisfaction.

Recommendation #2: The Department should develop a comprehensive implementation plan for the regionalization of common service delivery.

1.0 Introduction

The Evaluation Division (ZIE) at the Department of Foreign Affairs, Trade and Development (DFATD) is mandated by the Treasury Board Secretariat (TBS) through its Policy on Evaluation (effective 1 April, 2009) to conduct evaluations of all direct program spending of the Department, including Grants & Contributions programs. ZIE reports to the Departmental Evaluation Committee (DEC), which is chaired by the Deputy Ministers and the Associate Deputy Minister of the Department.

The Formative Evaluation of the Regional Service Centres (RSC) Initiative is part of DFATD’s approved Five-Year Evaluation Plan. Consistent with TBS Policy, the purpose of this evaluation was to assess the relevance and performance of the Regional Service Centre for Europe, Middle East and Africa (RSCEMA) and the Regional Service Centre for the United States (RSCEUS), as well as the efficiency, effectiveness and economy of their implementation. The evaluation was led by ZIE and supported by two consulting firms that implemented the client survey and conducted the cost-savings analyses for the evaluation. The target audiences for this evaluation are the Government of Canada (GoC), DFATD’s Senior Management, the management and mission clients for RSCEMA and RSCEUS, and the Canadian public.

1.1 Background and Context for the RSC Initiative

In 2007, the GoC initiated a Strategic Review (SR) exercise that involved a rigorous review of government spending to increase alignment with priorities and deliver improved results for Canadians. This exercise prompted departments to identify means of enhancing the effectiveness and efficiency of program and service delivery. In response to this exercise, the Department of Foreign Affairs and International Trade (DFAIT)^{Footnote 2} submitted a proposal to transform the activities of the Department and strengthen Canada’s international platform abroad. DFAIT’s International Platform Branch (ACM) was created in 2008 to centralize and streamline common service delivery abroad as part of this SR proposal and the Department’s Transformation Agenda. The Regional Service Centres (RSC) Initiative was identified as a key deliverable of the Transformation Agenda and was situated within ACM to facilitate regionalization of common service delivery abroad.

Under the previous common service delivery model, missions were resourced in accordance with their annual reference levels to deliver common services directly to their clients and partners. Each mission would liaise individually with functional bureaus and divisions at headquarters (HQ) for support and decision-making. Variations in local operating environments and the absence of standardized business processes for common service delivery resulted in duplication of effort and unequal access to common services across the mission network. Expected growth in the demand along with rising costs and ongoing reductions in the funding base for common service delivery made a decentralized approach unsustainable over the long term. A new model for common service delivery was required to address existing and ongoing resource pressures experienced by missions in the field.

The Regional Service Centre Initiative was developed to streamline common service delivery across the mission network and accommodate increased demand while realizing cost-savings. To achieve this, authorities for common service delivery were to be reconfigured with decision-makers located closer to clients in the field, and routine, transactional processes were to be centralized. Currently, two RSCs have been established: the Regional Service Centre for Europe, the Middle East and Africa (RSCEMA) located in Thames Valley, a suburb of London in the United Kingdom, and the Regional Service Centre for the United States (RSCEUS) located at the Canadian Embassy in Washington, D.C. A brief overview of RSCEUS and RSCEMA is provided below.

Regional Service Centre for Europe, the Middle East and Africa (RSCEMA)

RSCEMA was the mechanism for regionalized common service delivery proposed in the Business Case for the Regional Service Centres Initiative. Europe was proposed as the location for DFAIT's first RSC based on the private sector practice of consolidating service delivery in areas with robust infrastructure and systems and access to transportation links and qualified staff. RSCEMA initially took shape when a small team of six officers established a presence in temporary offices in September 2010. RSCEMA was eventually established in a commercial park in Thames Valley, outside of London in March 2011.

RSCEMA serves a total of 77 mission clients across Europe, the Middle East and Africa. The RSC was designed to deliver financial services, human resource services for Locally Engaged Staff (LES), contracting and procurement services, property services, information technology services (IT) and information management (IM) services regionally to client missions in Europe, the Middle East and Africa. RSCEMA was intended to provide support, guidance, training, templates and tools for the regional delivery of these common services. In addition, RSCEMA was intended to process repetitive, labour intensive financial transactions to alleviate some of the administrative pressures from their mission clients

In 2011, mission groupings were created for these 77 mission clients. Under the new Common Service Delivery Model (CSDM) for finance, the responsibility for the administration of financial transactions was moved from RSCEMA to Common Service Delivery Points (CSDP). Five CSDPs were selected: Brussels, London, Berlin, Rome and Nairobi^{Footnote 3}. These CSDPs are financial operations service delivery points located in selected large missions in Europe, the Middle East and Africa that are responsible for processing financial transactions for the missions within their respective groupings. These CSDPs and their client missions were identified through consultations between RSCEMA and key interlocutors within ACM and Corporate Finance and Operations Branch (SCM) at HQ.^{Footnote 4}

Regional Service Centre for the United States (RSCEUS)

RSCEUS was first proposed in 2009 by a working group comprised of senior representatives from groups within ACM formerly identified as the Representation Abroad Secretariat (APD) and the Mission Business Process Innovation and Best Practices Division (ASB). The working group was convened to design a model for common service delivery in the United States (US) that would improve or maintain the current level of service delivery, achieve efficiencies and minimize impacts on local resources. The working group developed a proposal for a geo-centralized model under which US missions were grouped into four service delivery points based on proximity. After three months of consultations, the "Quadrant" model for the US was presented as a potential mechanism for the regional delivery of common service that was consistent with the RSC Initiative

RSCEUS was officially established in April 2010 as part of Canada's mission in Washington. As for RSCEMA, RSCEUS was designed to deliver financial services, LES HR, contracting and procurement services, property services, information technology services (IT) and information management (IM) services regionally to these client missions in the US. In addition, it was envisioned that RSCEUS could also play a limited role in the delivery of regionalized consular and security services to missions. The RSCEUS model capitalizes on the presence of large missions that are capable of supporting regional common service delivery as well as established relationships among missions across the US. As noted above, US missions are organized around four Quadrants located at missions across the country: Los Angeles (West Quadrant) Washington (Central/South Quadrant), Miami (Central/East Quadrant), and New York (North/East Quadrant). These Quadrants were established using existing resources and budgets, and each is responsible for administrating financial services for two to three smaller missions^{Footnote 5}. Quadrant missions are also responsible for leading regional projects that are identified in collaboration with RSCEUS.

1.2 Mandate and Objectives of the RSC Initiative

The Minister of Foreign Affairs is mandated under the Foreign Affairs and International Trade Act to manage and maintain Canada’s network of missions abroad, including the delivery of common services abroad. In accordance with this mandate, DFAIT is responsible for supporting the common service needs of federal government departments and co-locators such as Crown Corporations and provincial governments at 179 missions located in 106 countries^{Footnote 6}.

Common services consist of the infrastructure, staff and services required to maintain Canada’s representation abroad. Under the Common Services Policy, use of common services provided through DFAIT services are mandatory for departments when required to support Canada’s diplomatic and consular missions abroad. Within the Department, ACM is responsible for the delivery of common services delivery and maintenance of Canada’s network of missions abroad. As part of ACM, the broader goal of RSCs is to maintain a mission network of infrastructure and services to enable the GoC to achieve its international priorities

The RSCs were created with the intention of increasing efficiency, generating cost savings and enhancing common service delivery. The service delivery model for the RSCs consolidates resources on a regional basis for services that involve standard, transaction-based processes that do not require onsite presence at missions. This model was to be implemented through reconfiguring the framework of reporting relationships, authorities and accountabilities between HQ and missions. Decision-makers, subject-matter experts and Centres of Excellence were to be located within the field and closer to clients at missions, which was meant to improve the quality and timeliness of common services delivered to client missions.

Objectives and Key Activities

The long-term objectives of the Regional Service Centres Initiative are to increase client satisfaction and increase the cost-effectiveness of client service delivery. In the business case, a performance target of 75% client satisfaction was set for the period of 6-12 months after the implementation of the RSCs but the exact timing for full implementation was not defined. It was also anticipated that the RSC Initiative would generate $3M in annual ongoing cost-savings starting in 2009-2010.

The RSCs were designed to meet these objectives through standardizing and streamlining services, procedures and applicable policies across regionalized missions. The common services planned for delivery by RSCEMA and RSCEUS^{Footnote 7} were determined as part of the operational planning process at DFAIT in consultation with both Missions and interlocutors at HQ.

The original business case for the Regional Service Centres Initiative proposed that the following common service activities should be delivered regionally:

• Finance;
• Procurement/Contracting;
• Property and Material Management;
• Human Resources for Locally Engaged Staff;
• Information Management; and
• Information Technology.

It was expected that the regional delivery of common services through the RSCs would result in a number of operational benefits to missions, including:

• Enhanced operational agility of the platform through provision of a single window for common service delivery and reduced duplication of effort;
• Reduced workload of mission personnel through the regionalization of transactional activities;
• Increased quality of management services provided through locating decision-makers and subject matter experts within the field; and
• Increased consistency in common service delivery through the establishment of standard processes and standards for service delivery.

As transactional workload and other back-office operations are shifted to the RSCs, it was intended that mission clients would have additional time and resources available to focus on value-added activities such as mission management, strategic planning and human resource development as well as new activities, initiatives and programs that would increase the effectiveness of Canada's network of missions abroad.

1.3 Governance

Governance of Common Service Delivery

ACM is responsible for coordinating the governance of operations and activities in support of Canada's Network Abroad. Common service delivery, including regionalized common service delivery through the RSCs, is managed through a series of Departmental and Interdepartmental governance mechanisms.

Deputy Minister Sub-Committee on Representation Abroad (DMC)

The DMC provides strategic direction to the department and ensures alignment between Canada’s foreign policy objectives and the Government of Canada’s international agenda. It also promotes the coordination of policy, programs and the use of common services across Canada’s International Platform. The Committee typically meets twice a year, in January and June. There are 11 federal departments and agencies represented on this committee and it is chaired by the Deputy Minister of Foreign Affairs.

Associate Deputy Minister (ADM) Council on Representation Abroad

The ADM Council provides advice to the DMC on Representation Abroad. The ADM Council advises DMC on mechanisms to implement Canadian foreign policy via Canada’s international platform and monitors progress against the Departmental priorities approved by the Minister of Foreign Affairs. The ADM Council is also mandated to provide advice on the coordination of programs at missions, review resource allocation and approve standards for common service delivery abroad and promote alternatives for more cost-effective service delivery.

Interdepartmental Working Group on Common Services Abroad (IWGCSA)

The IWGSCA advises the ADM Council on Representation Abroad and provides direction and guidance on common service policy and delivery issues. This governance body is mandated to:

• manage initiatives approved by the ADM Council on Representation Abroad;
• oversee the administrative mechanisms that guide the delivery of common services abroad (e.g., the Service Delivery Standards); and
• act as a Formal dispute resolution body concerning the Interdepartmental MOU

The IWGCSA holds regular meetings to discuss issues such as the costing model, common service cost recovery and partner concerns.

Governance of the Regional Service Centres

In addition to these governance committees at HQ, regional governance mechanisms have been developed for the RSCs to provide strategic direction and support the regional delivery of common services abroad.

RSCEMA Steering Committee / RSCEUS Steering Committee

The RSCEMA Steering Committee and the RSCEUS Steering Committee are chaired by the Associate Deputy Minister of ACM, with participation from the Client Relations and Missions Operations Bureau (AFD) within ACM and the Executive Directors from the respective RSCs. A representative sample of Heads of Mission (HOMs) and Deputy Heads of Mission (DHOMs) are selected for the RSCEMA Steering Committee based on mission size, programs delivered in the region and the number of missions located in Europe, the Middle East and Africa. The RSCEUS Steering Committee is composed of all HOMs in the US and is co-chaired by the DHOM in the Canadian Embassy in Washington. Directors General from relevant Geographic Bureaus also provide advice to the two Steering Committees on the operational needs of regionalized missions from the program perspective. The Steering Committees meet quarterly and are mandated to provide advice to ACM to support decision-making on regional priorities for common service delivery and oversee the implementation of new regional initiatives in their respective regions.

Management Boards

The RSCEUS Management Board is chaired by the RSCEUS Executive Director and comprises Management Consular Officers (MCOs) and Management Administrative Officers (MAOs) in the US. Meetings are held weekly to facilitate timely recommendations on operational, policy and financial issues and to identify new opportunities for regional collaboration among missions in the US. The Management Board also convenes Regional Priority Project Teams within the US MCO/MAO community to conduct analyses and develop recommendations for regional strategies aimed to improve efficiency in common service delivery

There are no formal management boards for the Europe, Middle East and Africa region. However, regular meetings are convened by RSCEMA with the MCO/MAO community in the region to facilitate communication. These meetings are typically led by the Director of Operations of RSCEMA and are held on a monthly basis. These meetings serve a similar function as for RSCEUS by addressing operational issues for the regional delivery of common services in Europe, the Middle East and Africa.

1.4 Program Resources

Under the Common Services Policy, mandatory services provided by the RSCs are funded mainly through appropriation whereas optional services are funded by full cost-recovery through a revolving fund or net-voting authority. The Common Services Abroad Charge (CSAC) is levied to fund all incremental CBS or LES common service positions at missions staffed by DFAIT and Other Government Department (OGD) partners.

Table 1 outlines actual operating expenditures for common service delivery through RSCEMA and RSCEUS for fiscal years 2009-2010 to 2012-2013. These figures include both CBS and LES salaries as well as other operating expenditures. Total operating expenditures for the RSCs over this period totalled $10,422,091.

Evaluation Scope & Objectives

2.1 Scope of Evaluation

The Formative Evaluation of the RSC Initiative covers the period from the launch of the RSC Initiative in 2009 to March 2013 when data collection was completed.

This evaluation assesses the relevance and performance of regional common service delivery in the Europe, Middle East and Africa (EMA) region and in the US, as delivered through RSCEMA in Thames Valley and through RSCEUS in Washington, respectively. The focus is on the activities and expected outputs of RSCEMA and RSCEUS, and their progress towards expected outcomes.^{Footnote 8}

DRAP initiatives and commitments identified by the Department were not assessed in this evaluation and were considered in the analyses only where they provided context for the performance story of the RSCs. Similarly, governance and policy development related to common service delivery at HQ were not considered, other than where there are direct implications for common service delivery through the two RSCs.

2.2 Objectives of Evaluation

The objective of this evaluation was to assess whether or not RSCEMA and RSCEUS, in their current forms, provide the GoC with the best value for money in the regionalization of common service delivery.

The specific objectives of this evaluation were to:

• Assess the relevance of RSCEMA and RSCEUS by examining the extent to which they address the needs of the Department and align with GoC priorities and with DFAIT’s strategic outcomes;
• Assess the performance of the RSCs in achieving their objectives effectively, efficiently and economically with allocated resources;
• Determine whether systems, resource allocations, risk management and governance structures are adequate for the RSCs to achieve their objectives; and
• Derive lessons learned and best practices from the RSCs for consideration of RSCs in other locations

3.0 Key Considerations

3.1 Timing of Evaluation

RSCEUS was established in 2010 and RSCEMA in 2011.^{Footnote 9} The full achievement of longer-term outcomes is not reasonably expected since this formative evaluation is being conducted one or two years after RSCEUS and RSCEMA were created. Consequently, focus was placed on RSC activities, the achievement of outputs to date and progress towards expected outcomes. Demonstration of the efficiency and economy of the RSCs was also assessed through an examination of mechanisms intended to facilitate the core business of the RSCs, as described in planning documents.

3.2 Implementation of Common Service Delivery Points (CSDPs) and Quadrants

The evaluation assesses the relevance and performance of RSCEMA and RSCEUS against criteria outlined at the outset in the Business Case for RSCEMA and foundational documents for RSCEUS. The regional approach for common service delivery evolved, however, and Common Service Delivery Points (CSDPs) were created to implement the Common Service Delivery Model (CSDM) for finance in Europe, the Middle East and Africa after RSCEMA was established. The Quadrants in the U.S. were established at the outset of the initiative, however, as described in foundational documents for RSCEUS. The CSDPs and Quadrants were intended to improve the delivery of financial services in the regions by providing more localized expertise and administering the labour-intensive, repetitive, transactional activities related to financial processes on behalf of mission clients, in place of the RSCs as was originally planned. The development and implementation of the CSDPs and Quadrants fundamentally changed the dynamics of common service delivery in the regions, altering the role and activities of the RSCs and their interactions with client missions for financial services.

The evaluation considers the development and implementation of the CSDPs in the analyses but focuses primarily on the relevance and performance of the RSCs themselves. Financial analyses of cost-savings for the RSCs do include savings from the CSDPs but it must be noted that savings from the CSDPs were applied to DRAP commitments rather than towards Strategic Review as was originally intended for the Regional Service Centres Initiative. In effect, the savings targets for this initiative should be higher than the $3M per year for Strategic Review that are noted in the findings if DRAP savings targets are also considered.

3.3 Impacts of Organizational Change

The data collection phase occurred during a time when missions were experiencing dramatic organizational change. At the time of data collection, the GoC’s DRAP initiative was being implemented and resulted in the loss of many positions abroad in DFAIT’s program areas as well as in common service delivery. DRAP also resulted in mission closures across the network, the sale of selected Crown-owned properties and changes to private leasing policies. At some missions, MCO positions, which are held by rotating Canadian-Based Staff (CBS), were converted to MAOs, which are held by Locally Engaged Staff (LES) who do not possess the same authorities as CBS for mission operations. The implementation of the Common Service Delivery Model (CSDM) for finance was also being rolled out in the Europe, Middle East and Africa region as part of the DRAP initiative and also in the U.S. These factors had a profound impact on the dynamics within missions operations, requiring mission staff to adjust to new processes and responsibilities and changing how missions interacted with other missions, HQ and with RSCEMA and RSCEUS. Evaluation findings, therefore, must be understood in this context of organizational change.

3.4 RSCEMA and RSCEUS Comparisons

RSCEMA and RSCEUS developed in parallel to one another with different origins and local environments in which to serve. Common service areas for regional delivery are largely identical^{Footnote 10}, however, and core business objectives and expected targets for cost-savings and client satisfaction are shared between the two RSCs. While the assistance provided to mission clients are generally the same^{Footnote 11}, activities for regional common service delivery were not always identical^{Footnote 12}. The analyses presented in this report capture these similarities and differences. Evidence on the two RSCs is presented together when required, but data are generally presented separately for the two RSCs in order to capture the performance stories of RSCEMA and RSCEUS apart from one another.

4.0 evaluation Complexity and Strategic Linkages

As implementers of regional common service delivery, RSCEMA and RSCEUS are linked to multiple interlocutors and partners both at HQ and in the field.

Strategic linkages at HQ

RSCEMA and RSCEUS are managed through the Client Relations and Missions Operations Bureau (AFD) but accountabilities for the services delivered through the RSCs remain with other groups within the Department.

Within ACM, these include:

• Physical Resources Bureau (ARD) for property services,
• Locally Engaged Staff Services Bureau (ALD) for LES HR Services; and
• Information Management and Technology Bureau (AID) for Information Technology and Information Management Services (IM/IT).

External to ACM, RSCEMA and RSCEUS also have links with the Corporate Finance and Operations Branch (SCM) which is accountable for all financial services and activities within the Department, including in the mission network abroad. Specifically, both RSCEMA and RSCEUS work with:

• Financial Resource Planning and Management Bureau (SWD) for financial management;
• Corporate Finance, Planning and Systems Bureau (SMD) for the Common Services Delivery Model (CSDM) for finance being rolled out across the mission network; and
• Contracting Policy, Monitoring and Operations Division (SPP) for contracting and procurement.

Because RSCEUS also provides assistance in other areas, RSC activities in the US are also linked to those Bureaux and divisions within the Department with functional responsibility for consular services, security and CBS relocation services.

Strategic Linkages in the Field

RSCEMA and RSCEUS are also linked to client missions in the EMA region and in the US to whom the RSCs deliver common services. These client missions have been divided into mission groupings called Common Service Delivery Points (CSDP) for EMA and Quadrants in the US.

The RSCs are also indirectly linked to the wide network of OGD partners and co-locators clients of common services that reside at missions^{Footnote 13}.

5.0 evaluation Approach & Methodology

5.1 Evaluation Approach

The evaluation was managed and completed by the Evaluation Division (ZIE) within the Office of Audit, Evaluation and Inspections (ZID). An Evaluation Advisory Committee (EAC), consisting of the Director General (DG) of Client Relations and Missions Operations Bureau (AFD), the Executive Directors of RSCEMA and RSCEUS and four Heads of Mission (HOM) from selected missions in the EMA region and the US, provided guidance on the work and commented on key deliverables at each phase of the evaluation.

An evaluation matrix for the Evaluation of the Regional Service Centres Initiative was developed to outline the evaluation issues, the related questions, associated evaluation indicators, data sources, and data collection techniques. The evaluation matrix also served as the main tool for designing the data collection instruments and reporting on the evaluation findings. ^{Footnote 14}

The data collection phase of the evaluation lasted from October 2012 to March 2013. Both quantitative and qualitative data were collected through multiple lines of evidence. Experts in survey methods were commissioned to conduct a client survey. Similarly, experts in financial audits were commissioned to complete financial analyses of RSCEMA and RSCEUS costs and savings. The other modes of data collection were executed by a team of evaluators within ZIE. This team of ZIE evaluators also completed the data analyses, triangulating data collected through the multiple lines of evidence to develop findings, conclusions and recommendations, and to produce the evaluation report. Details on each of the data collection methods are provided in more detail below.

5.2 Secondary Data Collection

Document Review

Approximately 300 documents/reports were reviewed and analyzed to support this evaluation. These documents included: descriptive and analytical reports; governance documents, legislative documents; business plans; memos; briefing notes; minutes of meetings; relevant websites; and comparative studies. More specifically, the evaluators examined the following:

• Business Case for RSCEMA;
• Foundational planning documents for RSCEUS;
• Documents related to SR1 and the Transformation Agenda;
• Business process maps;
• Formal agreements (e.g., service level agreements with missions, MOUs with common service areas)
• Financial information shared by RSCEMA and RSCEUS directly and gathered through the Integrated Management System (IMS);
• Annual Reports from International Platform Branch, RSCEMA and
• Websites for RSCEMA and RSCEUS;
• Available wikis for common service areas offered at the RSCs;
• Other communication products (e.g., newsletters, samples of email messages);
• Reports from relevant surveys (e.g., ACM’s client satisfaction surveys);
• Relevant Mission Inspection reports and Evaluation reports; and
• Case studies from other regional models.

Financial Analyses

A consulting firm specializing in financial audits was commissioned to determine the cost-savings resulting from RSCEMA and RSCEUS. These analyses focused on the time period from 2010-11, when both RSCs became operational, to 2012-13, when data collection was completed. Financial data provided by RSCEMA and RSCEUS were used in these analyses to calculate cost-savings. All data related to these analyses were validated against information on position changes provided by the Mission Client Service Division (AFO) within ACM and financial data from IMS provided by the Financial Management Support Unit, Foreign Services Directives Services and Policy (SWCR-ACM). The final calculations for cost-savings and rationales for the exclusion or inclusion of costing or savings elements were validated with managers from both RSCEMA and RSCEUS.

5.3 Primary Data Collection

Key Informant Interviews

A total of 89 key informant interviews were conducted to obtain perspectives from RSCEMA’s and RSCEUS’ mission clients in the field and from key interlocutors at HQ. Interviews were conducted with HOMs and MCO/MAOs from missions in Europe, the Middle East and Africa and the US, as recommended by the EAC and selected through random, stratified sampling^{Footnote 15}. Separate interviews were conducted with both the HOM and the MCO/MAO, except when the mission requested joint interviews. The EAC also provided guidance on appropriate officers for interview at HQ. At HQ, interviews were conducted with ADMs, DGs, Directors and managers from each of the common service areas within ACM and SCM ^{Footnote 16}. Directors General from each of the Department’s geographic regions were also interviewed to capture the impact of regional common service delivery on DFAIT’s program areas. Interviews were also conducted with senior managers from OGDs with representation abroad^{Footnote 17} and officers involved in the conception of the RSC model

Interviews were semi-structured and interview questions were designed to capture views on the utility of the RSCs and the impact of regional common service delivery on mission clients and program areas. Interview guides were shared with all interviewees in advance of their scheduled interview to advise key informants on the purpose and scope of the evaluation and to facilitate their preparation. Face-to-face interviews were conducted with key informants at HQ and telephone interviews were conducted with selected missions. Interviews were conducted in the interviewees’ Official Language of choice and were approximately 60 minutes in length.

Field Visits

Field visits were conducted to RSCEMA, RSCEUS and selected missions to obtain a deeper understanding of the regionalization of common service delivery through firsthand observations of operations at each RSC and their client missions. These field visits facilitated observational data of the facilities as well as providing an opportunity to conduct face-to-face interviews and focus groups with RSC officers^{Footnote 18} and client mission staff^{Footnote 19} at all levels. Where feasible, interviews were also conducted with foreign ministries to explore other regional common service models.

Recommendations for site locations for these field visits were provided by the EAC, with the aim to visit each RSC and three of their client missions. Field visits were conducted at two larger missions^{Footnote 20} and one smaller mission in each region to examine the impacts of regional common service delivery for different sized missions. Field visits were 1-3 days in duration, depending on the size of the site, and were conducted between November 2012 and January 2013 to the following locations identified in Table 2 below.

Site Visits Conducted

Europe, the Middle East and Africa

Site: RSCEMA
Location: Thames Valley

Site: High Commission of Canada in the UK (Including meetings with the British foreign ministry responsible for common service delivery.)
Location: London

Site: Embassy of Canada to Ireland
Location: Dublin

Site: Embassy of Canada to Germany
Location: Berlin

US

Site: RSCEUS (Including meetings with the British and Dutch Embassies in the US)
Location: Washington

Site: Consulate General of Canada in Los Angeles
Location: Los Angeles

Site: Consulate General of Canada in Miami
Location: Miami

Site: Consulate General of Canada in San Francisco
Location: San Francisco

Client Survey

A client survey was conducted for this evaluation to obtain a broader understanding of missions’ perceptions of and experiences with regional common service delivery. A survey questionnaire was developed by ZIE and finalized by the contractor commissioned to implement the survey and deliver survey results for the evaluation report. The survey questionnaire was available in both official languages and a pre-test of the survey instrument was conducted with MCOs posted at HQ at the time of data collection^{Footnote 21}. All HOMs and MCOs throughout DFAIT’s mission network were invited to participate in this survey. The survey was in the field from January 25, 2013 to February 27, 2013. The final sample size for the survey was 190 respondents with a response rate of 65%.

This client survey captured mission clients’ satisfaction with common service delivery through RSCEMA and RSCEUS, missions’ experiences with their RSCs, and missions’ perspectives on regionalization and its impacts. Survey questions were specific to the different common services delivered through the RSCs or through HQ to facilitate comparisons across different groups^{Footnote 22}. Respondents were asked to report their level of agreement or satisfaction^{Footnote 23} to a series of statements regarding common services delivered through the RSC or on regionalization in general. Likert scales were used to measure levels of agreement or satisfaction and, as required, mean scores were calculated to test for statistically significant differences across groups at a 95% confidence level.

6.0 limitations to Methodology

The evaluation was limited by the lack of performance information. Scoping exercises at the beginning of the evaluation process pointed to a lack of relevant performance data available to capture the performance story. Performance indicators were identified as part of the RSCEMA Business Plan and RSCEUS’ Framework Agreement, but there was no evidence demonstrating that these data were collected consistently. As well, there is no central depository of performance data on common service delivery within the Department that could help inform this evaluation. Although some survey data from ACM were available, these surveys were intended to address corporate reporting objectives and did not provide full performance information for this evaluation. Moreover, response rates for some of these surveys were too low to support reliability^{Footnote 24}. Therefore, primary data were collected for this evaluation using both quantitative and qualitative methods.

This evaluation was also challenged by difficulties in obtaining complete financial information for regional activities. While RSCEMA is a distinct organization with its own budget, RSCEUS does not have a separate budget and regional resources are subsumed within the mission budget for the Embassy of Canada in Washington. Costs for and savings from regional activities for RSCEUS, therefore, were not easily identifiable. The financial analyses conducted for this evaluation used the best available information at the time of data collection but results should be understood as conservative estimates.

In addition, scoping exercises suggested that mission size matters in terms of the impacts of regionalization of common service delivery. Efforts were made to include views and experiences from a representative sample of missions but requests for interview were declined by some missions because they were not yet regionalized and felt they had little to contribute to the evaluation. A variable on mission budget and number of FTEs was included in the survey to facilitate comparisons by mission size. However, there was insufficient variation in the distribution across respondents to provide meaningful survey results for comparison by mission size. Wherever possible, interviews or meetings were also requested with spokes (trade offices) during field visits to capture impacts.

7.0 evaluation Findings

7.1 Relevance Issue 1: Continued Need for RSCs

Finding #1: The assumptions underpinning the continued need for RSCEMA and RSCEUS are no longer valid.

The business case for the Regional Service Centres Initiative was premised on the need to address the rising demand for common services abroad and the increasing costs of global operations^{Footnote 25Footnote 26} . Subsequent to a Strategic Review exercise conducted in 2007, a transformative initiative entitled, ‘Strengthening Canada’s Representation Abroad,” was developed and subsequently approved. Part of this initiative involved the reallocation of positions from headquarters to missions in order to enhance DFAIT’s capacity to achieve results through its overseas platform. It was expected that there would be a dramatic increase in demand for common services due to increased growth of CBS and LES positions abroad, which was projected to double or triple historic norms over a period of five years.^{Footnote 27}

Concurrently, ACM had to adapt to successive and permanent reductions in its funding base as well as ongoing funding agreements with partners that do not account for increases in non-discretionary, market-driven costs of global operations. ^{Footnote 28} It was determined that previous common service delivery practices would become increasingly unsustainable as demand for common service delivery increased. Furthermore, DFAIT faced significant costs associated with remediation of a shortage of common services staff abroad. The implementation of RSCEMA and RSCEUS was seen as an opportunity to address rising costs and increased demand while achieving economies of scale and greater value for money. By positioning the RSCs as a single common service window for missions, it was expected that responsiveness, timeliness and equitable access to management support would be strengthened.

However, the projected organizational needs underpinning the business case for RSCEMA did not materialize as expected. The number of CBS and LES positions abroad increased from 7598 positions in 2008-09 ^{Footnote 29} to a high of 7968 positions in 2011-12.^{Footnote 30} As of March 2013, the number of positions abroad had declined to 7571^{Footnote 31} as a result of position cuts identified through subsequent cost-cutting exercises, as illustrated in Figure 1. The allocation of positions abroad was first deferred due to financial pressures created by delays in the anticipated closure of certain missions abroad. Subsequently, the majority of funds that were originally earmarked for the creation of positions abroad were diverted to help meet savings targets identified as part of a subsequent cost-cutting exercise in 2012-13. Planned investments in new deployments abroad were put on hold, with some limited exceptions.

Source: Actual number of positions obtained from “International Platform Annual Report on Canada’s Network Abroad” (2008-09 to 2009-10) and “International Platform Dashboard – Canada’s Network Abroad” (March 2011, March 2012, and March 2013). Projected number of positions obtained from, “Regional Service Centre Initiative: Business Case for EMEA,” (2009).

The fact that increases in the number of CBS and LES positions abroad did not correspond with initial projections reduced the magnitude of potential cost savings that could be realized through the implementation of RSCEMA and RSCEUS. Projected cost savings were calculated based on estimates of the number of common service delivery positions that would need to be created in order to accommodate the projected increase in CBS and LES positions abroad. It was expected that the implementation of RSCEMA would result in the creation of fewer positions with an estimated cost avoidance ^{Footnote 32} of $3.6M and therefore meet the $3M savings target identified in the Strategic Review exercise of 2007. Because representation abroad did not increase as projected, the expected savings from cost avoidance could no longer be achieved, thus calling into question the validity of one of the major assumptions underlying the creation of the regional service centres in the first place: Realization of Cost Savings.

Finding #2: RSCEMA and RSCEUS have responded to the need for increased consistency in common service delivery over the short-term.

Whereas the achievement of cost-savings and efficiencies were the primary drivers supporting the business cases for RSCEMA and RSCEUS, the Regional Service Centre Initiative also aimed to standardize business processes and promote consistency in common service delivery across missions.

The need for improved standardization and consistency in service delivery arose from inconsistencies inherent in the previous model for common service delivery. Under this model, each mission was resourced individually to deliver common services through annual reference level budgets in accordance with the Memorandum of Understanding (MOU) on Operations and Support at Missions Abroad. Variations in local operating environments and a lack of standardized business processes resulted in inconsistencies and duplication of effort across the mission network as individual missions would adopt customized administrative tools and processes to address their operational needs.

Through this “boutique model” of service delivery, missions would liaise individually with functional bureaus and divisions in HQ to obtain policy guidance, operational support and authorities for the implementation of projects and initiatives. This decentralized model of service delivery contributed to a lack of coordination and prioritization in common service delivery across the mission network. Smaller missions perceived that they were receiving a lower standard of service delivery relative to larger, high-priority missions. It was believed that regionalizing repetitive, transactional operations for common services would maximize economies of scale and increase consistency in service delivery across the network.

The business case for the Regional Service Centres Initiative proposed that delegating authorities and responsibilities for common service delivery to the field would address this need for increased standardization and consistency through the implementation of common tools, processes and service delivery standards. In accordance with the original business case, RSCEMA and RSCEUS have established regional service level agreements (SLA) with client missions that identify common service delivery processes, and set clear expectations for service delivery standards across the mission network.

Finding #3: The regionalization of common service delivery is relevant and is accepted throughout the mission network and at HQ. There are concerns, however, that RSCEMA and RCSEUS may not be the most appropriate mechanisms for implementing regional common service delivery.

Regionalization can be a mechanism for consolidating expertise, identifying efficiencies and improving productivity^{Footnote 33}. Various areas of the Department have used regionalization to improve coordination and responsiveness in the field. For example, the Security Management Bureau relies on Regional Emergency Management Offices (REMO) to facilitate a timely response to emergencies around the globe. Trade and political programs are organized around hub and spoke models to promote coordination and facilitate program delivery. The Canadian International Development Agency (CIDA) uses a decentralized program delivery model to consolidate expertise in the field and facilitate the implementation of projects in developing countries. ^{Footnote 34}

Regionalized common service delivery is widely recognized by interlocutors at HQ and missions abroad as a potential means of promoting consistency and identifying efficiencies while adapting to a shrinking resource base. Interviewees report that, given the current federal environment of fiscal restraint, regionalization of common service delivery is an opportunity for the department to “do more with less.” According to client survey results, HOMs and MCOs/MAOs located at regionalized missions agree that regionalization can increase consistency and efficiencies in common service delivery across missions, and can present a cost-saving alternative for the Department. Furthermore, more than half of survey respondents see benefits to regionalizing common service delivery, particularly among RSCEMA mission clients. (Refer to Figures 2 and 3 below.)

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=91)

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=25)

Common service delivery has been regionalized by both OGDs and other foreign ministries through a range of implementing mechanisms. Citizenship and Immigration Canada (CIC) contracts private firms to process most visa applications in Case Processing Centres across Canada ^{Footnote 35}. The Dutch Ministry of Foreign Affairs has established an arms-length Regional Service Organization that possesses delegated authority to administer financial, consular, procurement/contracting and IT support services to their network of missions abroad. In contrast, the British Foreign and Commonwealth Office has adopted a more traditional “hub and spoke” model of regional common service delivery, involving strategic service "hubs" that provide financial, HR and procurement/contracting services.

Despite the fact that regionalization continues to be relevant, interlocutors at HQ and missions abroad have raised concerns about whether or not RSCEMA and RSCEUS, in their current configurations, are appropriate mechanisms for regionalized common service delivery. Interviewees expressed concern that RSCEMA and RSCEUS may not be able to demonstrate cost-savings due to the cost of maintaining a full complement of staff abroad ^{Footnote 36} and questioned whether maintaining regional service centres abroad is necessary given the availability of new technologies that could facilitate increased consistency and standardization from HQ. Because missions abroad are accustomed to working across different time zones, it was questioned whether increased proximity to clients would provide better value compared to service delivery from HQ or through some other model.

7.2 Relevance Issue 2: Alignment with Government Priorities

Finding #4: The original objectives for RSCEMA and RSCEUS were aligned with GoC priorities as well as DFAIT strategic outcomes.

RSCEMA and RSCEUS were core deliverables of Strengthening Canada’s Network Abroad and the Transformation Agenda, departmental priorities that sought to implement the outcomes of expenditure management exercises

In 2007, the Government of Canada introduced a new Expenditure Management System in order to better manage government spending and applied a rigorous SR exercise to government programming to help ensure value for money.^{Footnote 37} DFAIT’s (2007) SR1 commitments proposed that funding be reallocated to strengthen the Department’s core value-added to government operations, namely the overseas platform. This objective was to be accomplished through transformative change in DFAIT’s structure, operations and activities, including the creation of regional hubs for the delivery of accounting and HR services abroad. ^{Footnote 38}

These SR commitments were further elaborated in the 2008 Strengthening Canada’s Network Abroad submission. The original commitments under this initiative included the rebalancing of positions between HQ and missions, the renewal of common service delivery using innovative service delivery models and the regionalization of select common services such as accounting, procurement and HR services. It was further noted that an ongoing review would be conducted to identify additional common services that could be implemented through a regionalized service delivery model. The GoC’s 2008 budget confirmed that Canada’s network abroad would become more focused on the government’s foreign policy priorities and that significant reinvestments would be made in support of that vision.

DFAIT’s Transformation Agenda was a departmental initiative that was developed to implement DFAIT’s 2007 Strategic Review proposal and Strengthening Canada’s Network Abroad. One of the key objectives of the Transformation Agenda was the streamlining and modernizing of common service delivery abroad through the creation of the International Platform Branch (ACM), which integrated resources, planning and decision-making for all common service functions under a unified organizational structure. ACM is charged with delivering on the third strategic objective of the Department: maintenance of “a mission network of infrastructure and services to enable the government of Canada to achieve its international priorities.” The implementation of RSCs is one of the core deliverables identified for ACM under Sub-Program 3.1.1: “Mission Platform Governance and Common Services.”

Subsequent budgets released by the GoC have continued to emphasize the need to identify cost-savings and review administrative functions and overhead costs in support of Canada’s Economic Action Plan. The resulting change in DFAIT’s operational environment has created challenges for the implementation of some key elements of the Transformation Agenda. In 2011-12, funds previously set aside for the deployment and creation of positions overseas were reallocated to address financial pressures created by delays in the planned closure of certain missions. In 2012-13, $23.1 million of the $27.64 million frozen in DFAIT’s annual reference levels that had been allocated to implementation of Strengthening Canada’s Representation Abroad was reallocated toward the 2012-13 Strategic and Operating Review (SOR) savings targets.

The 2012-13 SOR exercise prompted a re-examination of the commitments made in the Strengthening Canada’s Representation Abroad submission. A conclusion was reached that, with some limited exceptions, it would be inappropriate to invest in new deployments abroad as per the original plans. The need to introduce a more modern operating model that reallocates resources more effectively across the global network was reaffirmed. The core objectives underlying the Regional Service Centres Initiative continue to support this need to identify cost-savings and improve the efficiency and effectiveness of common service delivery mechanisms

7.3 Relevance Issue 3: Consistency with Federal Roles & Responsibilities

Finding #5: RSCEMA and RSCEUS are consistent with federal roles and responsibilities and with DFAIT’s mandate and strategic objectives.

The management of Canada’s diplomatic and consular missions abroad is among the core roles of the Minister of Foreign Affairs set out in the Foreign Affairs and International Trade Act. ^{Footnote 39} In support of this role, DFAIT is responsible for working “with a range of partners inside and outside government to achieve increased economic opportunity and enhanced security for Canada and Canadians at home and abroad.”^{Footnote 40}

DFAIT is also mandated through the Treasury Board’s Common Services Policy to meet the common service needs of over 30 federal government departments and provincial government organizations throughout Canada’s network of missions abroad. Under the Common Service Policy, DFAIT is the mandatory service provider for the procurement of goods, acquisition of goods and services and management of real property when these services are required to support Canada’s diplomatic and consular missions abroad.^{Footnote 41} Although the mandates of other federal organizations may require some degree of international cooperation, no organization other than DFAIT is mandated to manage and maintain Canada’s network of infrastructure and services abroad.

7.4 Performance Issue 4: Achievement of Expected Outcomes

The original objectives for RSCEMA were to deliver LES HR, Finance, Property Management, Contracting and Procurement, Information Technology (IT) and Information Management (IM) Services regionally to missions in Europe, the Middle East and Africa. Similarly, RSCEUS was established to deliver the same complement of regionalized common services as RSCEMA, in addition to regionalized support for consular and security services to missions in the United States. The RSCs’ regional activities in these common service areas were expected to produce standardized business processes and formal agreements with mission clients that would improve consistency across the mission network.

It was expected that RSCEMA and RSCEUS would result in cost-savings, increased levels of client satisfaction and improved effectiveness of common service delivery abroad. Performance targets of $3M in ongoing annual cost-savings and 75% client satisfaction were established to assess the extent to which these outcomes had been achieved, with expectations that services delivered regionally by the RSCs would be rendered within established service standards.^{Footnote 42}

Additionally, regionalized common services delivered through RSCEMA and RSCEUS was expected to result in:

• increased agility of the international platform through consolidation of authorities and expertise at the RSCs;
• reduced workload for management staff at missions;
• increased consistency in service delivery across the mission network; and
• increased quality of management services provided to mission clients.

The progress of RSCEMA and RSCEUS toward these expected results is presented in greater detail in Findings 6 through 13 below.

Finding #6: RSCEMA and RSCEUS are not on track to achieving annual cost-savings of $3M as expected. RSCEMA and RSCEUS alone have cost the Department approximately $6.0M^{Footnote 43} since their creation. Ongoing costs are projected to be $0.8M per year.

The implementation of RSCEMA and RSCEUS was intended to result in a combined cost-savings of $3M per year as part of the Department’s 2007 Strategic Review commitments. The financial analysis presented in the Business Case for the Regional Service Centre Initiative estimated that RSCEMA would have a net cost^{Footnote 44} to the department of almost $300K annually, but estimated that an ongoing savings of $3.3M for RSCEMA alone would be achieved with the inclusion of $3.6M in projected savings from cost-avoidance.^{Footnote 45} The calculations for cost-avoidance, however, were premised on an increase in demand for common services abroad, an assumption that is no longer valid.^{Footnote 46} A similar analysis was not completed for RSCEUS but it has been assumed that costs are minimized through the sharing of resources with the Canadian Embassy in Washington where RSCEUS resides. Program documentation suggests that the most significant savings for RSCEUS were to be achieved through savings in salaries and benefits resulting from the deletion of common service positions across the U.S. mission network.^{Footnote 47}

These financial analyses consider the cost-savings for RSCEMA and RSCEUS as described in the original business case for the RSCs, which do not include the CSDPs in Europe, the Middle East and Africa. While the Quadrants were included as part of the original RSCEUS model, the CSDPs were not included in the original business case for RSCEMA but developed later as the regionalization of common service delivery evolved. Savings resulting from the CSDPs were subsequently applied to DRAP commitments. (Refer to Finding #7 for discussion of CSDPs.) Evaluation results presented here exclude DRAP savings from the CSDPs and focus specifically on those costs and savings elements related to the creation and operation of RSCEMA, RSCEUS and the Quadrants applied towards meeting their 2007 Strategic Review commitments.

The financial analyses conducted for this evaluation demonstrate that, to date, RSCEMA and RSCEUS have not achieved their ongoing savings targets of $3M per year. Excluding savings attributable to the implementation of the CSDPs, RSCEMA and RSCEUS together have cost the Department $6.0M from 2010-11 to 2012-13,^{Footnote 48} as described in Table 3 above.^{Footnote 49} Furthermore, ongoing costs for maintaining the two RSCs are estimated to be approximately $0.8M per year.^{Footnote 50} Costs for creating and operating the co-location RSC model in the U.S. is considerably lower compared to the RSC model adopted for Europe, the Middle East and Africa. Ongoing savings are expected for RSCEUS after the Quadrants are fully implemented, which offset the expected ongoing costs for maintaining RSCEMA.

Cost Savings – RSCEMA

The results presented in Table 3 above illustrate that the cost for operating RSCEMA from 2010-11 to 2012-13 was approximately $5.1M, which does not include the one-time fit-up costs of $3.8M for the facilities in Thames Valley.^{Footnote 51} The ongoing cost for maintaining the RSCEMA is estimated to be approximately $1.9M per year.^{Footnote 52}

The costs associated with RSCEMA included salaries and benefits for RSC staff (both CBS and LES), relocation costs and residential leasing costs for CBS, office leasing and operations and costs associated with regional training. The cost-savings analysis presented in the Business Case assumed savings would be achieved through reduced frequency of travel from HQ, through regional procurement and contracting, through lease rationalizations for reductions in annual lease costs for CBS in the region and through cost avoidance under the Common Services Abroad Charge (CSAC) framework.^{Footnote 53} Among these savings elements, however, only savings achieved through reduced travel from HQ were evident and directly attributable to RSCEMA. Savings from the regionalization of the procurement and contracting function could not be achieved as planned due to insufficient delegation of authorities from HQ to the RSCs. Savings resulting from the lease rationalization exercise was not included because, while RSCEMA’s activities have identified potential savings for the Department’s property budget, the role of RSCEMA as implementers of the exercise does not necessitate the attribution of resulting savings to the RSC. As stated above, savings from cost-avoidance were not achieved because the assumptions underpinning cost-avoidance are no longer valid.

Cost Savings – RSCEUS

For RSCEUS, the net costs of maintaining the RSC was approximately $0.9M from 2010-11 to 2012-13 and an ongoing savings of approximately $1.08M is expected.^{Footnote 54} However, these figures are conservative estimates for the creation of RSCEUS.^{Footnote 55} Accurate financial information for the RSCEUS is difficult to obtain because RSCEUS expenditures are subsumed under the budget for the Canadian Embassy in Washington, D.C. and the full operating cost for the RSC is unavailable. Program files indicate that RSCEUS reported a total of approximately $570K in expenditures from 2010-11 to 2012-13,^{Footnote 56} with an additional $200K in project-related costs in 2011-12.^{Footnote 57} Interlocutors at HQ, however, report that these figures do not capture the full cost for operating RSCEUS because the costs for regional activities are not tracked separately from the mission budget for the Embassy in Washington. Accurate financial information on true RSCEUS savings is likewise difficult to determine.

Finding #7: Common Service Delivery Points (CSDPs) were created for the Europe, Middle East and Africa region as the regional approach for common service delivery evolved. Ongoing savings of almost $1.3M are expected with the inclusion of DRAP savings from the CSDPs in the financial analyses. These projected savings, however, remain below the Strategic Review target of $3M and would not meet the expected savings required by DRAP.

The regional model for financial services entails the deletion of accountant positions at missions and the creation of finance positions at the CSDPs in Europe, the Middle East and Africa and the Quadrants in the US. In this CSDM for finance, client missions are divided into groupings that are linked to a particular CSDP or Quadrant in their respective regions,^{Footnote 58} and financial transactions for client missions in each grouping are processed through their respective CSDP or Quadrant. These CSDPs and Quadrants were intended to improve effectiveness and efficiency for financial services through more localized expertise than was possible through the RSC, particularly for RSCEMA.^{Footnote 59} This new regional model for finance removed the repetitive, transactional activities involved in the processing of vendor payments and administration of financial services away from the RSCs to the CSDPs and Quadrants. The creation of these CSDPs and Quadrants as delivery points for financial services effectively shifted the role of the RSCs from processing centres, as originally envisioned, to proposed centres of expertise and financial management.

These analyses assess the total cost-savings for the Department, including the CSDPs in the Europe, Middle East and Africa regions. The identified savings from the implementation of the CSDPs are most appropriately analyzed separately from the other savings elements for the RSCs because the evaluation assesses the relevance and performance of the RSCs against criteria described in the original business case, because the original business case stipulates that the RSCs were established to meet 2007 Strategic Review commitments and because projected savings from the CSDPs were committed towards DRAP savings. The analyses presented in Table 4 below, however, incorporate the CSDP savings for DRAP to illustrate the full cost-savings for the Department as the regionalization of common service delivery evolved. Of note, committing savings from the CSDPs to DRAP effectively increased the total savings targets that the initiative was required to meet, beyond the ongoing $3M in savings per year outlined in the 2007 Strategic Review.

According to these financial analyses, the CSDPs contributed a total of $0.63M^{Footnote 60} towards DRAP savings from 2010-11 to 2012-13, with all the savings achieved in 2012-13. Ongoing savings from the CSDPs after full implementation is expected to be approximately $2.1M for RSCEMA alone. For the U.S., the creation of Quadrants contributed a total of $1.7M in savings from 2010-11 to 2012-13 and an ongoing savings of approximately $1.3M is expected after full implementation of the new finance model in the U.S. Of note, savings from the creation of the CSDPs and Quadrants account for a high majority of savings for the initiative.

The combined total in ongoing savings for both RSCEMA and RSCEUS is expected to be $1.26M, after full implementation of the CSDM for finance. These savings, however, neither meet the $3M savings target for Strategic Review nor address the savings requirements of DRAP.

Finding #8: RSCEMA and RSCEUS are not on track to achieve their target of 75% client satisfaction for common service delivery abroad.

The Regional Service Centres Initiative sought to improve client satisfaction with the delivery of common services by providing streamlined, standardized, consistent and responsive services according to established service delivery standards and service agreements to client missions. Improved client satisfaction was identified as an expected outcome for the RSCs with a performance target of 75% client satisfaction.^{Footnote 61}

The survey conducted for this evaluation measured the level of satisfaction with common service delivery among mission clients who are serviced by HQ, RSCEMA and RSCEUS.^{Footnote 62} Table 4 shows the percentage of respondents who reported being “somewhat satisfied” or “totally satisfied” with the quality of various common services. None of the services delivered through RSCEMA or RSCEUS are currently meeting the performance target of 75% client satisfaction. Moreover, only 37% of RSCEMA mission clients and 56% of RSCEUS mission clients reported being "somewhat satisfied" or "totally satisfied" with the services delivered. In contrast, 70% of clients at missions that receive common services through HQ reported being satisfied with the overall level of service they received.

Sources of dissatisfaction with common service delivery include the completeness of information received from the RSCs.^{Footnote 63} Relative to clients who are serviced by HQ, clients at regionalized missions are particularly dissatisfied with the quality of policy guidance received^{Footnote 64} as well as guidance received on mission operations and management.^{Footnote 65} Moreover, many interviews noted that guidance and advice received from RSCEMA and RSCEUS sometimes conflicts with direction received from HQ.

Finding #9: Common services delivered through RSCEMA and RSCEUS are provided within established Service Delivery Standards.

Service Delivery Standards (SDS) for common service delivery abroad have been developed based on the Interdepartmental MOU on Operations and Support at Mission.^{Footnote 66} These standards support the Department’s commitment to provide consistent, predictable and equitable delivery of common services to all mission clients and form the basis for measurement, assessment and reporting on mission management for common service delivery.

The SDS identify the common services that are provided by DFAIT, the responsibility centres for delivery of each service and the appropriate service delivery standard. The SDS for region-specific common services delivered through RSCEUS are established and managed through the RSCEUS Management Board. Heads of Mission (HOMs) and Management Consular Officers (MCOs) retain the overall responsibility to establish mission-specific service delivery standards, which are reviewed and approved by the Committee on Mission Management (CMM).

SDS are also identified in business maps created by RSCEMA and RSCEUS. These documents have helped manage the service delivery expectations among missions and improve the consistency of service delivery across the mission network. Survey evidence suggests that RSCEMA and RSCEUS are delivering regionalized common services within established SDS and are promoting more consistent service delivery across regionalized missions. Overall, 54% of RSCEMA mission clients and 56% of RSCEUS mission clients reported in the client survey that their mission receives common services within the established SDS.

There are, however, some important challenges that remain to be addressed. Evidence from interviews suggests that some missions perceive longer service delivery times as a result of regionalization, but there are no established systems or service delivery data to support this impression. Interviewees noted that the regionalization of payments has decreased the speed with which payment requests are processed, sometimes resulting in late payments to vendors.

Finding #10: RSCEMA and RSCEUS have made some progress toward the regionalization of common service delivery for HR, Financial and Property Management Services. The RSCs faced some challenges in executing planned activities for the other common service areas.

The original business case for the Regional Service Centres Initiative proposed that regional Centres of Expertise would provide support to missions through the delivery of six common services, including LES HR, finance, property management, IT, IM and procurement/contracting services. The founding documents for RSCEUS proposed that the RSCs could also play a limited role in the delivery of regionalized consular and security services to missions in the United States.^{Footnote 67} Overall, RSCEMA and RSCEUS have made some progress in creating regional services as anticipated. RSCEMA and RSCEUS have, however, faced challenges in implementation outside of their control, most notably resistance among functional groups at HQ in delegating full authorities for common service delivery to the RSCs.

Planned Activities for RSCEMA and RSCEUS

Common Service: HR – LES Administration
Planned Activities: Build staff competency and support consistency in classification and recruitment processes through:

• Creation of standardized recruitment tools, including standard written exam and interview questions
• Provision of assistance with candidate screening processes and participating on interview boards
• Standardization of LES classification processes.
• Delivery of regionalized training

Common Service: Finance
Planned Activities: Strengthen financial oversight, accountability and control through:

• Standardization of common financial processes
• Conduct of routine financial transactions
• Regionalized budget management services
• Regionalized risk management services
• Provision of training and outreach

Common Service: Procurement and Contracting Services
Planned Activities: Promote cost-savings and efficiencies through:

• Negotiation of regional standing offers
• Regionalized purchasing of materials
• Consolidated shipping arrangements
• Provision of regionalized training
• Drafting and vetting of contracts
• Development of standardized contracting tools and processes

Common Service: Property Management Services
Planned Activities: Provide timely advice, guidance and operational support to missions for facilities management, including:

• Property maintenance and repair
• Technical expertise for project and facilities management
• Real estate and asset management expertise

Common Service: IT Services
Planned Activities: Increase timeliness and promote equitable access to services through:

• Oversight of FSITP work plans and prioritization of tasks
• Publication of FSITP visit schedules and work plans
• Creation and management of a stockpile for critical parts and spare equipment.

Common Service: IM Services
Planned Activities: Facilitate implementation of IM systems and promote best practices for knowledge management through:

• Regular outreach with client missions
• Regionalized training delivery

Common Service: Consular Services^*
Planned Activities: Provide informal support to the Consular, Security and Emergency Management Branch (CFM) through:

• Development of work plans and identification of key deliverables
• Conduct of performance/impact assessments

Common Service: Security Services^*
Planned Activities: Support the Security and Intelligence Bureau (CSD) through:

• Standardization of security processes across the mission network
• Provision of operational support to high-risk missions

^* Services proposed for RSCEUS only. Source: The Regional Service Centre Initiative: Business Case for EMEA (May, 2009); Framework Agreement: RSC-USA (May, 2010).

Progress toward regional common service delivery through RSCEMA and RSCEUS has been uneven. Significant progress has been made in regionalizing and standardizing LES Administration and Financial Services, but insufficient delegation of authorities has impeded progress toward regionalizing other areas of common service delivery as intended. These challenges, particularly for Property Management, Procurement/Contracting and IM/IT Services, demonstrate the importance of securing sufficient buy-in from key stakeholders prior to implementation. Some of the activities and outputs achieved by RSCEMA and RSCEUS are described in the sections below.

Human Resources for LES

Progress has been made toward the delivery of regional LES HR Services through RSCEMA and RSCEUS as intended. The RSCs have developed standardized tools and templates, including generic job descriptions and interview questions, to support recruitment and classification processes at client missions. Furthermore, the RSCs have supported staffing processes at missions, either by administering the entire process or assisting with certain phases such as screening applications according to established criteria. Some progress has been made in standardizing LES classification processes through the development of a regional Virtual Classification Committees (VCC), but evidence demonstrates that delays in providing sufficient training for new VCC members has resulted in some challenges for implementation.

The RSCs have also successfully delivered regional training and coaching. RSCEMA coordinates a mentorship program wherein new officers are matched with and mentored by more experienced staff. In addition, RSCEMA has engaged an officer from CFSI who has extensive experience as an MCO to provide on-the-job training. RSCEUS provides regional training through the development of webinars, but these tools have not been well received by clients.

In addition to these planned activities, the RSCs have assisted with the conduct of other LES Administration tasks that have traditionally been performed at HQ. The HR Section at RSCEMA has updated LES employee profiles in HRMS on behalf of HQ, addressing a once substantial backlog. RSCEUS HR staff now administer LES payroll, pensions and benefits^{Footnote 68} for all LES Full-time equivalents (FTEs) in the US and have provided surge capacity to facilitate planned mission closures. Some LES HR functions, however, remain at HQ to maintain consistency across the entire mission network through a global application.^{Footnote 69}

Finance

Although implementation of the financial model has faced some delays, progress has been made by the RSCs in establishing regional financial services. The RSCs have helped standardize financial processes through the development of SLAs and business process maps for the delivery of financial services. RSCEUS has also successfully consolidated bank accounts in the US in order to reduce service charges and realize efficiencies for bank reconciliations. Finally, the RSCs are in the process of implementing standardized electronic payment systems to centralize and streamline the administration of vendor payments.

The RSCs, however, do not process routine financial transactions as originally intended. Responsibility for routine financial transactions was moved from RSCEMA and RSCEUS to the CSDPs in Europe, the Middle East and Africa and the Quadrants in the U.S. Routine financial transactions, bank reconciliations, and accounts payable and receivable are now conducted by the CSDPs and Quadrants whereas RSCEMA and RSCEUS are responsible for providing the challenge function for financial reporting and financial management. The transfer of responsibilities for these tasks to the CSDPs and the Quadrants under this new financial model fundamentally altered business processes and changed the relationship between mission clients and the RSCs for financial services in a manner that does not strictly adhere to the original vision for RSCEMA and RSCEUS.

Limited progress has been made in the establishment of standardized risk management practices and regional budget management services, although interviewees report that risks to the Department have been reduced through the standardization of business processes. Final decisions for resource allocation remain with AFD at HQ, but there is evidence that both RSCs recommended budget re-allocations based on regional priorities. Some regional training delivery have been observed, including a Financial Management Officer (FMO) workshop organized by RSCEMA and regular outreach to mission clients performed by the Executive Director of the Finance section at RSCEUS. However, little training has been established to support common services officers at missions in adapting to their new responsibilities under the regional financial model.

Procurement and Contracting

Some initial progress has been made in establishing regional procurement and contracting services, but insufficient delegation of authorities has prevented most planned activities from being implemented. Some regional procurement is taking place at RSCEUS and RSCEMA for office supplies, legal services, communication services and vehicle purchases, for example, that have resulted in in economies of scale. Actual savings from these regional contracts are difficult to determine, however, because most of these contracts are new and the use of regional contracts vary from year to year. The RSCs have been involved in establishing regional Contract Review Boards (CRB) to support the vetting and approval of regional contracts. The RSCs have also contributed to the standardization of contracting processes through supporting the Procurement Modernization Initiative led by the Corporate Procurement, Asset Management and National Accommodation Bureau (SPD).^{Footnote 70}

The Contracting Policy, Monitoring and Operations Division (SPP), the policy centre at HQ for all contracting issues, continues to provide support to missions for their contracting and procurement needs, including those missions served by RSCEMA and RSCEUS. Limited progress has been made in establishing regional contracting and procurement expertise at the RSCs in that positions for contracting officers at RSCEMA have not been staffed as envisioned. Whereas contracting specialists are on staff at RSCEUS, their role in the delivery of regional procurement services has been limited. Moreover, there is little evidence that the RSCs have made progress toward establishing regional standing offers, consolidated shipping arrangements or the provision of regional training to officers at client missions.

Property Management

Progress has been made in delivering property management services through RSCEMA, but insufficient delegation of authorities by HQ has prevented the progress at RSCEUS. An MOU between RSCEMA and the Physical Resources Bureau (ARD) delegated authorities to RSCEMA to support missions in managing their crown-leased staff quarters (SQ), conducting property maintenance and managing small property projects funded by the Asset and Life-cycle Management Section (ARAF). The property section at RSCEMA has supported missions through the management of property maintenance and repair projects and has provided technical expertise and guidance on facilities management. Real estate specialists at RSCEMA also conducted lease rationalization exercises for the global mission network that resulted in savings for the Department. In contrast, missions in the US continue to receive property services directly from ARD because no authorities for property services were delegated to RSCEUS.

Some interviewees reported that property experts at RSCEMA are knowledgeable and have provided useful assistance in light of cuts to property services positions at missions in Europe, the Middle East and Africa, whereas others report that they have not received adequate guidance or advice. Furthermore, some mission clients have received conflicting property management guidance from RSCEMA and HQ, citing ongoing tensions between RSCEMA and some units within ARD.

Information Technology

Information Technology (IT) Services are provided to client missions through an existing regional model managed by the Information Management and Technology Bureau (AID). Under this regional service delivery model, Client Support Regional Managers (CSRM) manage IT activities regionally and IT professionals embedded within individual missions conduct outreach and provide services throughout the mission network.^{Footnote 71} RSCEMA has been incorporated into this regional IT service delivery model to the extent that the CSRM for Europe is situated in Thames Valley. In contrast, missions in the US receive their IT services through the CSRM at HQ and no authorities for IT service delivery have been delegated to RSCEUS.

Overall, little progress has been made by RSCEMA and RSCEUS in implementing their expected activities for IT service delivery, including oversight of regional IT work plans, publication of IT Professionals’ visit schedules, and establishment of a regional stockpile of critical IT equipment. Furthermore, questions have been raised regarding the utility of RSCEMA’s regional IT service delivery role given that the CSRM for Europe does not service all missions in the entire EMA region.^{Footnote 72}

Information Management

There has been limited progress toward the delivery of regional IM services through the RSCs. Some regional IM positions have been created at both RSCEMA and RSCEUS, but IM managers at both RSCs report directly to the CSRM for the Americas, located at HQ. Although IM officers at RSCEMA have actively engaged in outreach with client missions, interviewees report that RSCEMA is not adequately resourced to address the IM needs of their client missions. Similarly, although IM staff at RSCEUS have developed IM broadcast messages to and offered regional training to promote IM best practices, mission clients in the US report that they generally do not contact RSCEUS regarding their IM needs.

Consular

Program files indicate that a regional approach for consular services started to develop among the MCO community in the US around 2010-11, around the same time RSCEUS was first established. Responsibilities for the management and delivery of consular services rest with the Consular Services and Emergency Management Branch (CFM). RSCEUS, however, facilitates communication and provides support to consular officers through publishing information on its RSC website about policy directives and service standards for consular services and emergency management.

Overall, little progress has been achieved toward the implementation of planned activities such as the development of work plans and the conduct of performance assessments for consular projects. The Consular Operations Bureau (CND) was developing a regional delivery model for common services at the time of data collection, which includes plans to standardize and improve consistency on the information provided to clients and hours of service across missions. As part of this exercise, it is anticipated that CND will consult with the RSCs to explore how they could be involved in this new regional model for consular services.

Security

RSCEUS facilitates information sharing on security issues through its RSC website, providing security hotline numbers and well as precautions and security tips. Little progress has been made, however, toward the standardization of security processes across the mission network in the US or the regional provision of operational support to high-risk missions. Data collected from field visits to RSCEUS indicate that security concerns are being addressed and MPSS are sent around the U.S. to meet client needs, but evidence is inconclusive on the role of the RSC in these activities.

Finding #11: RSCEMA and RSCEUS have helped to standardize business processes and increase consistency across missions.

The boutique model of common service delivery contributed to inconsistencies across missions and perpetuated a lack of standardization in business processes. In this decentralized model, each mission delivered common services to clients and partners individually and liaised individually with functional bureaus and divisions at HQ for support and decision making. Evidence from interviews and program documents suggests that this decentralized approach to common service delivery contributed to inequitable access to common services across the mission network as the service needs of larger missions tended to be prioritized over those of smaller missions, contrary to established service delivery standards. In addition, some missions did not adhere to appropriate policies and business processes, creating potential risk for the Department.^{Footnote 73} Regionalization of common services, therefore, was identified not only as a means to improve consistency and standardization but also to reduce risk for the Department.

Evidence from interviews and surveys suggest that RSCEMA and RSCEUS have demonstrated value-added in facilitating standardization and improved consistency in the management of financial and HR services. For example, Canada’s missions in the United States were each previously affiliated with different local banks. RSCEUS facilitated the consolidation of US missions under one bank, resulting in long-term savings in banking fees and bank reconciliations. The administration of certain HR functions was identified as another potential common service area for which RSCEMA and RSCEUS could facilitate standardization and improved consistency. The RSCs have developed generic job descriptions, interview questions and written exam questions to help standardize staffing processes among client missions. Finally, virtual conferencing technology has been leveraged to coordinate regional management committees and regional training for mission staff.

The establishment of Service Level Agreements (SLAs) between RSCs with each mission client in their respective regions have similarly contributed to improved consistency in roles and responsibilities for common service delivery among regionalized missions. A formal SLA that outlines roles and responsibilities for the delivery of common services is signed with each mission as they become regionalized. For example, SLAs are used to establish and communicate the roles and responsibilities for the RSC, CSDP/Quadrant and client missions for the delivery of financial services (e.g., documented signing authorities, payments processing). The SLAs between RSCEMA and their mission clients address financial services only. SLAs between RSCEUS, Quadrants and mission clients also include defined roles and responsibilities for HR services for both CBS (e.g., relocation services, CBS personal banking) and LES (e.g., payroll, staffing).

The creation of business process maps^{Footnote 74} for financial services and HR services, as well as for property services at RSCEMA, has also contributed to improved consistency in service delivery processes across missions. These business process maps identify key steps in each business process (e.g., travel claims, vendor payments, position creations, reclassification of positions) with identified tasks, timelines, accountabilities and service standards. Mission clients, however, report that these business process maps are a good reference tool, but are rarely used in their daily mission operations. Survey results indicate that approximately half of mission clients for both RSCEMA and RSCEUS report awareness of financial business process maps but only about a third agree that business process maps are useful.^{Footnote 75}

Finding #12: RSCEMA and RSCEUS have not improved the agility of the international platform for missions abroad as envisioned and have instead resulted in duplication of efforts.

The agility of the international platform refers to the ability of the platform to respond to changing priorities and business requirements for missions. The extent to which the RSCs have contributed to increased agility of the international platform was assessed along three dimensions in the client survey conducted for this evaluation: development of innovations, provision of single window for common service delivery and improved decision-making. Survey respondents were asked to report their level of agreement on these dimensions of agility in reference to their own RSCs. Survey results are presented in Figure 4 for RSCEMA and Figure 5 for RSCEUS.

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients displayed in bar graph do not total 100% because some respondents selected, “Not applicable” or “I don’t know.” (n=91)

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients displayed in bar graph do not total 100% because some respondents selected, “Not applicable” or “I don’t know.” (n=25)

According to survey results, RSCEMA and RSCEUS have not improved the agility of the international platform as intended. In particular, mission clients reported that the RSCs have not provided a single window for common service delivery and that the RSCEMA’s have not contributed to improved decision-making at missions. Although mission clients report that RSCEMA has not contributed to innovation, nearly half of mission clients in the United States^{Footnote 76} report that RSCEUS has contributed to the development of new and innovative ways to improve common service delivery. Interview data and program documents demonstrate that RSCEUS developed the financial business process maps^{Footnote 77} and also initiated Quadrant-led projects to improve understanding of regional approaches.^{Footnote 78} Any innovations developed by RSCEMA are less apparent to their mission clients.

More than half of both RSCEMA’s and RSCEUS’ mission clients surveyed for this evaluation reported that the RSCs have not created a single window for common service delivery. 56% of RSCEMA’s mission clients and 64% of RSCEUS’ mission clients disagree that RSCs provide a single window for common service delivery. Evidence from interviews supports these survey results. Interviewees report that, because functional responsibilities for common services lie with different groups at HQ, missions have typically had to confer with multiple points of contact at HQ. This did not change with the implementation of the RSCs; MCOs and MAOs typically speak to different officers for different common service issues at their RSC due to the specialization of common service areas. The noted difference at the RSCs, however, is that the appropriate officers at RSCEMA or RSCEUS are more easily identified and missions report that they are able to establish stronger ties with their service providers. Another advantage is that common service professionals have easier access to one another at the RSCs, facilitating collaboration and consultation on various issues for their mission clients as required.

RSCs were also intended to be a single window for HQ through which efficiencies could be maximized. Rather than tasking each mission in the network individually, the vision was for HQ to delegate corporate activities to the regions through the RSCs. This objective could not be achieved, however, because officers at HQ have tended to exclude the RSCs in their tasking. For example, requests for information from HQ were often communicated to the RSCs only after officers at HQ had tasked the missions. When the RSCs followed up with their client missions for due diligence, their involvement was viewed by some mission clients as a duplication of effort. These results suggest that greater coordination between the field and HQ is required to regionalize the delivery of common services successfully.

Another objective in establishing regional common service delivery was to bring decision making closer to the field. The intention was to provide a more timely response that is relevant to the local context of each mission. Survey results indicate that 56% of RSCEMA mission clients and 64% of RSCEUS mission clients disagree with the statement, “Regionalization has improved decision-making at the mission level.” These results may reflect the RSCs’ challenges related to delegation of authorities.^{Footnote 79} Evidence from interviews and field visits to the RSCs indicate that decision-making did not move closer to missions because authorities were not delegated to the RSCs as expected. As a result, RSCs are often required to confer with HQ for decisions on policy and then relay these back to their mission clients, reducing the timeliness of decision making.^{Footnote 80}

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients displayed in bar graph do not total 100% because some respondents selected, “Not applicable” or “I don’t know.” (n=91 for RSCEMA; n=25 for RSCEUS)

Contrary to the objectives of the Regional Service Centres Initiative, regionalization of common service delivery through RSCEMA and RSCEUS has added another layer of bureaucracy and duplication of effort. More than half of respondents to the client survey reported that added bureaucracy is a challenge for the establishment of regional common service delivery. As displayed in Figure 6 above, both RSCEMA and RSCEUS mission clients report that there is duplication of effort between RSCs and HQ and that RSCs are extensions of HQ. HOMs and MCO/MAOs at missions, managers and senior managers at HQ and some staff at RSCs identified RSCs as “a mini HQ.” Missions expressed frustration because this has created inefficiencies and delays in decision making when timeliness was paramount.

Finding #13:Regionalization of common services through RSCEMA and RSCEUS has not made progress in alleviating work pressures or improving the quality of management services for mission clients.

The RSCs were intended to enhance common service delivery and alleviate missions’ workloads by consolidating resource-intensive tasks so that clients could refocus their efforts on core, value-added activities. The client survey conducted for this evaluation assessed the impact of RSCs on their mission clients along three dimensions: improved capacity at mission to focus on other responsibilities, reduced volume of work, and improved quality of management services.^{Footnote 81}

According to survey results, RSCEMA and RSCEUS are not on track to meet these objectives. Figures 7 and 8 illustrate that a higher percentage of mission clients disagree with all three statements for both RSCEMA and RSCEUS. In particular, the RSCs have not reduced the workloads of mission staff or increased the capacity of missions to focus on value-added activities. Furthermore, the implementation of RSCEMA and RSCEUS has not improved the quality of management services received.

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=91)

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=25)

Evidence collected through interviews and field visits support these survey results. When asked whether or not regionalization has alleviated work pressures, most HOMs and MCOs at client missions report that the workloads of administrative staff have increased, not decreased as intended. Most of these comments, however, were in reference to financial services and the changes resulting from the deletion of accountant positions at missions. With the loss of immediate access to financial accountants at mission, the roles and responsibilities shifted at missions as program assistants and common service officers were required to assume additional administrative tasks. Missions reported that they experienced greater administrative burden, particularly for smaller missions that have fewer resources.

The new financial model requires program areas to assume more responsibility for the administration of their program budgets than when an accountant was positioned at each mission. Some program areas at mission reported having to reduce their time spent on programming because of the additional administrative burden. Interviews indicate that programs have always been accountable for their program budgets but were reliant on their accountant at mission in the boutique model of common service delivery. Moving the responsibility for administration of financial transactions to program assistants is believed to reduce risk for the Department because programs have greater control over their own finances under the new regional model.

For other areas of common service delivery, regionalization through the RSCs does not appear to have a discernable impact on alleviating work pressures. While most missions reported improvements in standardized processes and consistency through templates shared by the RSCs, the overall volume of work for common service delivery does not seem to have been reduced. Larger missions reported that information provided through the RSCs was helpful but the mission typically had sufficient resources to administer their own staffing actions and property projects. Smaller missions reported assistance from the RSCs to be useful but some reported increased communication is required to yield the best results.

7.5 Performance Issue 5: Demonstration of Efficiency & Economy

The Business Case for the Regional Service Centres Initiative identified a collection of critical factors essential to the successful implementation of the RSCs. Consultations with stakeholders at HQ and missions abroad suggested that the following implementation issues could pose considerable risks to the success of the RSC Initiative if not properly addressed:

• Proactive planning informed by systematic outreach to stakeholders;
• Regular communications with stakeholders and clearly defined roles and responsibilities;
• Availability of standardized tools, templates and systems;
• Availability of trained and qualified staff;
• Sufficient delegation of authorities for common service delivery;
• Availability of performance information against established benchmarks; and
• Sensitivity to local operating environments.

Many of these critical success factors were not addressed in the implementation of the RSCs, particularly for RSCEMA. The evaluation found that the RSCs’ ability to demonstrate efficiency and economy in their operations was limited through a failure to address these issues appropriately. The impact of these challenges on the successful regionalization of common services through the RSCs is discussed in greater detail in the following findings.

Finding #14: Support for RSCEMA and RSCEUS has been inconsistent across the Department at both the management and working levels. Buy-in from groups impacted by the regionalization of common service delivery is required to improve effectiveness and efficiency for the RSCs.

RSCs were impeded by insufficient buy-in across the Department. In particular, concerns were expressed by interviewees from each of the common service areas at HQ regarding the role of the RSCs in the delivery of common services. Some interviewees believed that the RSCs would be unable to overcome the tendency for groups within the Department to work in silos and the resulting challenges in ensuring sufficient cooperation and coordination between missions and HQ. Some noted that their concerns were largely related to the lack of a sufficient strategy for change management as the Department transitioned to a regionalized approach for common service delivery. The effect of these difficulties in obtaining sufficient buy-in contributed to insufficient delegation of authorities, which subsequently had a negative impact on the capacity of the RSCs to deliver some common services to their client missions ^{Footnote 82}

Buy-in has generally been insufficient among program areas in the field. MCOs and HOMs were engaged during the development of the Business Case for the Regional Service Centres Initiative and some remain involved through RSC steering committees and teleconferences with mission clients. However, political and trade officers at missions reported that they were engaged too late in the decision-making process to address how their programs would be impacted by the establishment of regional common services, particularly for the development and implementation of the new financial model. This view was echoed by some senior managers during interviews at HQ. Although common service clients at missions and at HQ accept the Department’s decision to pursue a regional approach to common service delivery,^{Footnote 83} there has been a lingering reticence among programs to fully accept the RSCs and the new regional model for common service delivery.

The evaluation also found that the qualifications of the management staff at the RSCs greatly influence the level of buy-in from RSC clients in the field. Consensus at both HQ and abroad is that management staff must possess the appropriate skills and have sufficient experience in the field to be advocates for their mission clients yet maintain a corporate perspective for the RSC to address HQ priorities. Furthermore, strong and stable leadership was also required at HQ in order to provide strategic direction and maintain the vision for the RSCs. There was significant turnover among senior management as the RSCs were being implemented, which some key stakeholders contend necessitated increased efforts by RSCEMA and RSCEUS to renew buy-in from key interlocutors throughout implementation.

Buy-in and support among stakeholders at HQ and missions abroad has been greater for RSCEUS compared to RSCEMA due to the differences in their structures and costs for start-up. RSCEUS was established using existing resources through formalizing and strengthening existing relationships within the MCO community in the States, which resulted in a higher likelihood for cost-savings. RSCEUS is generally viewed favourably across the Department. In contrast, the Department spent $3.8M^{Footnote 84} to build the facilities for RSCEMA, and implementation was further delayed when increased security was required for the new building. Because RSCEMA is a distinct organization apart from missions, it was exposed to more questions and criticism compared to RSCEUS as the GoC placed increasing emphasis on the need for fiscal restraint. These ongoing questions and criticism have been difficult to overcome.

Finding #15: The absence of a comprehensive implementation plan created challenges when establishing RSCEMA and RSCEUS.

The Business Case for the Regional Service Centres Initiative identified the need for a phased implementation approach with clearly defined deliverables and timelines. It was also proposed that a transition plan be developed which outlines the conduct of regular impact assessments and documentation of lessons learned to allow for course correction prior to continued implementation.^{Footnote 85} This proactive planning process was to be informed by a clear understanding of the varying needs of missions, including requirements for training, systems and standardized processes. Program documents for RSCEUS are less explicit in the call for a transition plan but also state that the successful implementation of a regional CSDM should include regular evaluations and documentation of lessons learned to ensure regional strategies continue to be aligned with RSC and ACM priorities.

RSCEMA and RSCEUS incorporated some of these key factors for successful implementation with respect to certain initiatives. For example, RSCEMA incorporated a phased implementation of DRAP initiatives such as the new financial model among mission clients and the creation of the CSDPs. RSCEMA also conducted some post-implementation meetings to identify lessons learned from the CSDP pilot at the mission in Rome which were subsequently applied when other CSDPs were created. Similarly, lessons learned were developed and applied by RSCEUS as the processing of financial transactions was increasingly being administered regionally.

There is limited evidence, however, that a detailed implementation plan was developed to guide the initial implementation of RSCEMA and RSCEUS, beyond the regionalization of financial services. Strategies for implementation are described in foundational documents for both RSCs, but a comprehensive plan was not developed, identifying the transitional needs of individual missions, key milestones, timelines and records of consultations with key stakeholders.

Instead, the transition to regional common service delivery at RSCEMA and RSCEUS has primarily been a reactive process and the lack of strategic planning created challenges for implementation. An improved understanding of the operational needs of each mission is required, including the identification of necessary training, procedures and systems that must be made available prior to implementation in order to support the transition to regional common service delivery. Furthermore, although the foundational documents for both RSCEMA and RSCEUS identify performance indicators and targets against which to assess the implementation of the Regional Service Centres Initiative, this information is not systematically tracked and analyzed to assess the extent to which results been achieved and inform potential course corrections.

Finding #16: The absence of an effective communication plan for the RSCs has resulted in confusion among key stakeholders about the roles and responsibilities of the RSCs.

Implementation of RSCEMA and RSCEUS faced challenges due to the failure to establish clear roles and responsibilities for service delivery abroad, one of the critical success factor identified in the business case for the Regional Service Centres Initiative. This need for clear roles and responsibilities could have been addressed through the development of a strategic communications plan supporting the implementation of the RSCs. A communication plan for RSCEMA was developed and shared with ACM in early 2013, well after the RSC was first established. A formal communication plan was identified as a key deliverable in the foundational documents for RSCEUS, but there was little evidence that this plan was actually developed and implemented. Officers at both RSCEMA and RSCEUS noted that a formal communication plan may have helped to build greater buy-in for the RSCs among key stakeholders at missions.

Although both RSCEMA and RSCEUS initiated regular communication with stakeholders, these efforts did not always provide the information that client missions needed to establish a clear understanding of the RSCs’ role in delivering common services as well as the potential impacts of RSCEMA and RSCEUS on their day-to-day operational needs. Both RSCEMA and RSCEUS initiated regular communication with stakeholders at client missions via teleconferences, email communications, RSC newsletters and annual reports, RSC websites, the Department’s wiki tool and scheduled outreach visits. However, these communication tools were not always useful for mission clients. Some mission staff noted that RSC websites were not updated regularly and that the links provided were not always functional. Some interviewees noted that the utility of RSC newsletters would be strengthened with an increased focus on facilitating mission operations rather than on RSC promotion.

Communication with the mission network was effective in sharing the broader mandates and objectives of the RSCs but did not successfully establish clear operational roles and responsibilities for common service delivery. Figures 9 and 10 illustrate survey results regarding the clarity of roles and responsibilities and understanding of the RSCs' mandate and objectives. These survey results demonstrate that most mission clients for both RSCEMA and RSCEUS understand their RSC's mandate and objectives. Less than a third of survey respondents, however, reported that roles and responsibilities for common service delivery had been clearly defined and that the roles and responsibilities for their RSC are clear. This lack of clarity appears to have negatively impacted the implementation of RSCEMA and RSCEUS: in total, 75% of all survey respondents identify the lack of roles and responsibilities as a challenge to the implementation of the RSCs.

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=91)

NOTE: Mission clients include both HOMs and MCOs. Percent of mission clients do not total 100%. Some respondents selected, “Not applicable,” or “I don’t know.” (n=25)

Some of the confusion surrounding the roles and responsibilities of the RSCs may reflect the fact that missions were in the early stages of implementing some new DRAP initiatives when the evaluation was conducted, including the CSDM for finance. HOMs reported a need for additional clarification from the RSCs and HQ on roles and responsibilities for budget planning and reporting in light of the removal of accountants from their missions. Not all of the confusion surrounding roles and responsibilities can be attributed to the implementation of the new financial model, however. Interviewees noted that there was a need for better communication of roles and responsibilities across multiple common service delivery areas. For example, both HOMs and MCO/MAOs reported a need for greater clarity regarding the role of the RSCs in providing HR advice and guidance given that all HR decisions continue to be made at HQ. The RSCs often refer mission clients back to interlocutors at HQ to resolve their HR queries, contributing to questions surrounding the value-added of the RSCs in delivering HR services.

Finally, managers in program areas at HQ reported insufficient communication and ongoing confusion regarding the range of common services delivered through the RSCs, stating that they had little knowledge of RSC activities. Although it was generally accepted that the Department was moving toward a regional approach to common service delivery, most managers at HQ were unclear about the role of RSCs in delivering common services abroad and questioned whether or not implementation of the RSCs would result in cost-savings and efficiencies as anticipated. Moreover, OGD partners reported that they were not well-informed about the development and implementation of RSCs, stating that their knowledge of regional common service delivery through the RSCs stemmed primarily from their own officers in the field. Brief updates on the implementation of RSCEMA and RSCEUS were shared at interdepartmental meetings, but these updates were perceived as insufficient to address OGD concerns about how a regional model for common service delivery would impact the management of their own programs.

Finding #17: The systems and tools necessary to support regionalization were either not operational in advance of implementation or mission staff were not appropriately trained to use available systems for their new responsibilities

The development of streamlined practices and accessible tools to support service delivery was identified as critical to the delivery of standardized common services through the RSCs. These key tools include databases, systems and templates that facilitate the management of common service delivery processes. Program documents indicate that ideal systems for service management should capture and save performance measures for corporate use, include tracking and reporting functions to inform timely decision-making, be easy to use and be interoperable with other systems to facilitate information sharing both within and across missions. Furthermore, there is a need to provide sufficient training and support to staff at RSCs to ensure that they have the knowledge and experience necessary to carry out their duties

There is broad agreement that the necessary tools and systems were not available for the RSCs to facilitate regional common service delivery abroad and that, as a result, the Department was not fully prepared for the implementation of RSCEMA and RSCEUS. Only 17% of survey respondents served by RSCEMA and 32% of survey respondents served by RSCEUS reported that the necessary tools and systems were available to implement regional common service delivery.^{Footnote 86} Some of the tools necessary to facilitate common service delivery through RSCEMA and RSCEUS were being piloted at the time of data collection, with assistance from the RSCs and client missions (e.g., Procure-to-Pay ^{Footnote 87}). Managers at HQ and in the field, however, contend that RSCs should not have been established in advance of the development and implementation of the appropriate tools. The absence of appropriate tools at the outset created additional challenges for the RSCs and their client missions, increasing anxieties and frustrations among mission staff who were required to take on new or expanded responsibilities under the new regional model.

Finally, because common service areas use different systems and tools that are not always interoperable, common service providers at mission are increasingly required to build fluency in a number of different tools. Training needs were not given sufficient attention prior to the implementation of the RSCs and mission staff have not been fully trained to use these new tools. For example, the implementation of the new financial model required staff at client missions to take on new responsibilities and most expressed a need for additional training to help them adapt to the requirements of their new roles, such as use of the IMS system. Likewise, program managers and their assistants at mission require training in budget management and financial reporting given that these functions are no longer supported by MCOs at missions. Although there is some evidence to demonstrate that RSCs have developed tools for distance learning (e.g., webinars), mission clients report that these tools are not always useful and that they require additional support in adapting to their new responsibilities.

Finding #18: Authorities for common service delivery were not delegated to the field from HQ as planned, limiting the capacity of RSCEMA and RSCEUS to provide services as intended.

Although the RSCs are tasked with regionalized common service delivery abroad, the accountabilities for these common services remain with other areas in the Department until authority is delegated to RSCEMA and RSCEUS. The regional implementation of common service delivery was predicated on appropriate delegation of authorities to the field in order to create a single window for common service delivery abroad and therefore avoid duplication of effort. Authorities for common service delivery, however, have not been delegated to the RSCs as intended and that the extent to which these authorities have been delegated differs between RSCEMA and RSCEUS. Delegation of authorities to RSCEMA and RSCEUS for common service delivery is outlined in Table 6.

Delegation of Authorities to RSCEMA and RSCEUS

Common Service: Financial Services
Authorities Delegated:

• Some authorities were delegated to the field through an MOU between ACM and SCM.
• Authorities for decisions on budget allocations remain with HQ.

Common Service: HR Services
Authorities Delegated:

• ALD retains the authority for certain LES HR functions at HQ (e.g., LES Pensions and Benefits, staffing relations and grievances).
• The RSCs are responsible for facilitating staffing and classification processes for their regions.

Common Service: Property Services
Authorities Delegated

• Authorities for the management of property projects were delegated to RSCEMA via an MOU.
• ARD has not delegated property authorities to RSCEUS.

Common Service: IM/IT
Authorities Delegated:

• The Client Service Regional Manager (CSRM) for Europe is situated at the RSCEMA while the CSRM for the Middle East and Africa is situated at the mission in Nairobi.^{Footnote 89},^{Footnote 90}
• No authorities have been delegated to RSCEUS and IT services for the region are managed out of HQ
• All IM positions at both RSCEMA and RSCEUS report functionally to the CSRM at HQ.

Common Service: Procurement and Contracting
Authorities Delegated:

• CFO has not delegated authorities for procurement and contracting to RSCEMA or RSCEUS, although there are some contracting resources situated at RSCEUS.

Common Service: Consular/Security
Authorities Delegated:

• There is little evidence that demonstrates any delegation of authorities to RSCEUS for consular services and security.^{Footnote 91}

The impact of this partial delegation of authorities has been a loss of efficiency and effectiveness as well as diminished credibility for the RSCs. Because RSCEMA and RSCEUS do not have decision-making authority, requests from missions must be forwarded to the appropriate authorities at HQ. Some missions expressed concern that RSCs are responsible only for common services and that any advice required for other areas (e.g., budgets) must be requested directly from HQ. Most stakeholders at missions noted that RSC staff are responsive and willing to address missions’ needs, but that the RSCs are incapable of providing useful assistance without the appropriate delegated authorities. This issue undermines the value-added of the RSCs and contributes to low levels of buy-in among mission clients.

Interviews with stakeholders at HQ revealed a general reluctance to transfer authorities to the RSCs for common service delivery. Most interviewees note that the reluctance of senior managers to delegate authorities to the RSCs is an example of due diligence in the management of potential risks to the Department and the conduct of activities for which they continue to be accountable. This reluctance stems from a need for these common service areas to improve their processes at HQ prior to delegating authorities for common service delivery to the RSCs. Other factors contributing to insufficient delegation of authorities include cultural aspects of the department. In particular, there is a tendency for functional groups throughout the Department to work in silos as well as an ongoing division between groups operating out of HQ and those that operate out of Canada’s missions abroad.

Mission clients acknowledge that efforts were made by both RSCEMA and RSCEUS to deliver common services to the full extent of their capacity but most note that the usefulness of the RSCs was limited without the delegated authorities transferring decision-making to the field. The importance of sufficient delegation of authorities in ensuring the success of the RSC Initiative suggests that these delegated authorities should have been negotiated with stakeholders at HQ prior to the implementation of RSCEMA and RSCEUS. Although RSCEMA and RSCEUS have actively engaged with HQ for delegated authorities, particularly for contracting and procurement services, most interviewees expressed uncertainty that these authorities will eventually be delegated to the RSCs as intended.

Finding #19: Activities that were adopted by RSCEMA and RSCEUS outside of its core mandate provided value to the Department but at a higher cost.

RSCEMA and RSCEUS were designed to offer a suite of common services to mission clients, creating economies of scale and improving the quality of common service delivery. RSC activities and objectives evolved, however, when authorities were not delegated to the field as expected, resulting in a change in scope and activities for RSCEMA and RSCEUS. There was little evidence to demonstrate how decisions were made in directing these changes and how these changes would align with the original objectives of the Regional Service Centres Initiative.

RSCEMA staff report taking on new tasks when authorities were not delegated as anticipated. For example, the HR section at the RSCs assumed responsibility for updating of employee profiles in HRMS on behalf of ALD. Because manual systems had been used to track LES HR information, there was a backlog of required changes to employee profiles for classification and payroll purposes. The HR Section at RSCEMA successfully addressed these inconsistencies in historical employee data for the Department. Both RSCEMA staff and ALD agree that these activities alleviated work pressures for HQ and ensured accuracy of information for the future. However, this data entry function was costly to the Department since temporary services could have been contracted at HQ to complete the data entry. This would have been accomplished with the same results but at a lower cost. This also suggests that the HR section at RSCEMA was underutilized.

Both RSCEMA and RSCEUS also facilitated mission closures related to DRAP. Interviews with officers who were posted at missions identified for closure in the US suggest that the HR professionals at RSCEUS were effective, efficient, professional and sensitive to the circumstances and requirements of affected staff. In addition, real estate experts situated at RSCEMA completed the lease rationalization exercise for entire global network of missions, another DRAP initiative targeted at realizing savings through reductions in annual leasing costs. According to the Business Case, RSCEMA was responsible for reducing annual lease costs for Europe, the Middle East and Africa only, but this task was expanded to include the global network of Canada’s missions abroad.

Some RSC staff have commented that the emphasis placed on DRAP initiatives over 2012-13 directed their focus away from regional common service delivery projects such as improving communication activities. Interviewees within ACM indicate that Branches’ response to DRAP would not have been possible without the participation of the RSCs. However, while the RSCs facilitated the implementation of DRAP initiatives and the expertise provided by RSC staff was invaluable, these DRAP commitments could have been met without the RSCs since the Department would have pursued other options for implementation and actioned other resources to move the process forward.

Finding #20: The absence of established performance measurement systems and frameworks makes it difficult to measure and monitor progress toward expected outcomes.

The Business Case for RSCEMA identifies specific performance indicators for each of the common service areas to be delivered by the RSC. Similarly, the Framework Agreement for RSCEUS states that the RSC would establish and implement a tracking and management system to support service delivery and provide performance data. The availability of performance information against established indicators and targets was intended to track the success of the implementation process for the RSCs and inform necessary course corrections. Although there is evidence to demonstrate that some performance information on regional activities was collected,^{Footnote 92} there was an absence of available performance measurement systems overall to collect information on the progress of regionalization of common service delivery.

The evaluation found that, although RSCEMA, RSCEUS and their mission clients are aware of the need for relevant performance information, there are no centralized performance measurement systems for common service delivery. Common service areas have their own systems and tools to assist in delivery (e.g., ABRA for LES HR in the US, IMS for finance), but these tools are not necessarily designed to track performance. Furthermore, a lack of interoperability between these systems limited any efficiencies that could have been achieved in performance reporting. Because each mission possesses their own means of tracking performance, there are widespread inconsistencies in performance reporting across the mission network and opportunities to share performance information are limited. For example, InfoBank could reportedly facilitate the tracking of financial service requests across service providers and their mission clients in the absence of a more appropriate tool. However, not all missions had access to InfoBank at the time of data collection. There was some evidence that larger missions in the US were beginning to work with the missions in their Quadrant to develop individualized processes for tracking performance but, while proactive and innovative, there is a need for a more centralized approach that is capable of tracking performance across regionalized missions.

Insufficient performance data created challenges for both RSCEMA and RSCEUS in reporting on their implementation progress. Although both RSCs were engaged in regional activities, the absence of consistent tracking and monitoring impeded their ability to demonstrate the results achieved. As observed by managers at the RSCs and mission clients, regular tracking of activities can help to ensure that common services are delivered effectively and efficiently in accordance with established service delivery standards. Reliable and timely performance data can also support the shift to regional common service delivery by guiding strategic decision making as the implementation of regional models proceeds. In absence of these data, senior management was limited in the extent to which they could critically assess the progress achieved in implementing RSCEMA and RSCEUS and identify changes required to improve efficiency and economy.

Managers at HQ and at missions note that a centralized system for performance measurement and monitoring with interoperable capabilities across common service areas and that facilitates both data analysis and performance reporting would be ideal. However, platform lacks a sufficient tool for performance measurement that can be used across Branches at HQ and at missions. Efforts have been made within the Department to develop performance measurement systems (e.g., Procure-to-Pay to monitor financial transactions) and the RSCs have been actively engaged in facilitating these processes where possible, but performance data remain inadequate to demonstrate the full performance story of the RSCs.

Finding #21: The model for implementing the regionalization of common services should be responsive to the business needs of the specific regions that will be receiving common services through a regionalized approach.

One of the lessons learned through the regionalization of common service delivery has been that not all regional models are the same. The needs of the client mission and the context within which it conducts business are paramount to designing the appropriate model.^{Footnote 93} HOMs, MCOs and MAOs agree that regional models that are appropriate in one area of the world are not appropriate in another and that a “cookie cutter” approach to regionalization of common service delivery is not useful. All missions are different and, while improved consistency and standardization is essential for the Department, there must be some inherent flexibility in the regional models to accommodate the unique working conditions and operational environments of different client missions. For example, electronic payment systems for vendors are not feasible at missions in countries that operate primarily in cash-based transactions. Inconsistencies will continue to exist across missions due to local laws and local environments, and regional models for common service delivery should be sufficiently flexible to accommodate these differences.

The number of missions that an RSC (or CSDP or Quadrant) serves should also maximize economies of scale but not at the risk of reduced efficiencies. Some program documents and interview data indicate RSCEMA was originally intended to serve the missions in Europe only, but the Middle East region and later Africa were added to the regional model in order to increase economies of scale and because this EMA grouping is aligned with other regional models that have been established in the private sector. Some interviewees both in the field and at HQ question the effectiveness of serving 77 very different missions through one RSC. One RSC for Europe alone would increase efficiencies and effectiveness since European countries are more alike in their business environments than compared to countries in the Middle East or Africa, although there are still noted differences across European countries. ^{Footnote 94} Moreover, interviewees at HQ and client missions report that some of the relative success of RSCEUS can be attributed to the fact it serves various mission clients across a single country that possesses similar laws as well as a common language and currency.

8.0 Conclusions of the Evaluation

This evaluation assessed the relevance and performance of RSCEMA and RSCEUS as instruments of regional common service delivery. In particular, this evaluation examined the continued need of the RSCs, their alignment with departmental and GoC priorities and the federal role for RSCs in delivering common services abroad. Performance of the RSCs was also assessed based on the extent to which the RSCs are on track to achieve their expected results efficiently and economically. The following conclusions were derived based on these assessments, as presented in the findings described above.

Conclusion #1: RSCEMA and RSCEUS are not on track to achieve their annual savings target of $3M or client satisfaction targets of 75%, demonstrating that a re-examination of the approach for the regionalization of common service delivery is required.

RSCEMA and RSCEUS were expected to achieve specific and identified targets for cost-savings and client satisfaction as part of the 2007 Strategic Review exercise and the Transformation Agenda. However, there are currently no cost-savings attributable to the RSCs beyond those achieved through the implementation of the CSDM for finance. Furthermore, the RSCs are not on track to achieve performance targets for client satisfaction and have not improved the agility of the international platform or the quality of common services delivered to date. Moreover, RSCs resulted in increased bureaucracy between the field and HQ and duplication of efforts. Taken together, the evaluation findings suggest that a re-examination of the regional approach for common service delivery is required. There would be value added from a review of and revision to the business case for the Regional Service Centres Initiative in order to facilitate progress towards the achievement of their performance targets and expected results and position the platform more strategically as regionalization of common service delivery moves forward.

RSCEUS faced similar challenges as RSCEMA in terms of delegated authorities, perhaps to a greater degree since fewer authorities were transferred to RSCEUS due to the close proximity of the RSC to HQ. However, evaluation results for RSCEUS were generally more positive: ongoing savings are expected for RSCEUS, a higher percentage of mission clients are satisfied with the common services provided through the RSC and RSCEUS is generally viewed more favourably across the Department. Some of these positive results may be attributed to the fact that RSCEUS does not face the same challenges as RSCEMA since it serves one country with one language and one currency. As well, RSCEUS is not required to overcome the same legacy of identified start-up costs and delays in implementation as for RSCEMA. Decisions on the strategic direction for RSCEMA and RSCEUS should be considered separately given these differences.

Conclusion #2: Insufficient delegation of authorities to the field weakened the capacity of RSCEMA and RSCEUS to contribute to the regionalization of common service delivery abroad and negatively impacted their efficiency and economy.

The regional delivery of common services through the RSCs was predicated on sufficient delegation of authorities to the field, but full delegation of authority was not transferred to the field from HQ as expected. Insufficient delegation of authorities was one of the primary factors that negatively affected the performance story of RSCEMA and RSCEUS. Although progress was made in delivering regionalized LES HR and financial services through the RSCs, and property projects for RSCEMA, insufficient delegation of authority limited the extent to which RSCEMA and RSCEUS could deliver services for procurement and contracting, property management and IM/IT services as intended. The challenges in obtaining delegated authorities are understandable considering that functional responsibilities are divided across different groups in the Department and strong controls must be maintained to avoid compromised accountabilities. The impact of these limited delegated authorities was that the RSCs were not able to achieve all of their expected results efficiently and as planned.

Conclusion #3: Additional activities taken on by RSCEMA and RSCEUS were helpful in addressing HQ priorities, but were not aligned with the RSCs’ core objectives.

Insufficient delegation of authorities resulted in changes to the scope of tasks and activities undertaken by RSCEMA and RSCEUS, tasks that did not maximize the expertise available at the RSCs and offer value for money for the Department. For example, RSCEMA updated LES employee profiles, a task that alleviated operational pressures at ALD but one that could have been completed at less cost from HQ. With the implementation of the CSDM of finance, the RSCs’ administrative activities also shifted from a focus on the “back-office,” repetitive tasks for financial transactions, as originally envisioned, to a focus on financial management for their respective regions. The role of RSCs for financial services fundamentally changed with the implementation of the new financial models at the CSDPs and the Quadrants, and changed how missions interact with their RSCs. RSCEMA and RSCEUS did adopt an oversight function for the CSDPs and the Quadrants, but this function could be repatriated back to HQ for increased savings.

Conclusion #4: The lack of a comprehensive implementation plan limited the RSCs in maintaining their strategic direction and ensuring that they were appropriately equipped to deliver on their original mandate.

The Regional Service Centres Initiative was envisioned to serve a mission network facing an existing deficit in common service resources across the mission network as well as expanding programs and increasing demands for common services abroad. Critical success factors were identified to direct implementers of the RSCs toward successful regionalization of common service delivery. However, increase in demand for common service delivery abroad did not materialize as anticipated and the implementation of the RSCs faced some of the challenges that were predicted among the critical success factors described in the business case and foundational documents for the initiative. These foundational documents outlined an implementation strategy but a comprehensive and detailed transition plan was not developed for the RSCs. The transition from the introduction of the concept of RSCs to the practical implementation of regional common service delivery in the field was not well-defined for RSCEMA and RSCEUS.

A full implementation plan could have helped the RSCs to adapt to a changing federal context more readily and deliver on expected results. Instead, RSCEMA and RSCEUS faced challenges in implementation that limited their ability to deliver their mandate and objectives. For example, an implementation plan would include a fulsome communication plan to ensure that the mandate, objectives and roles and responsibilities are clear for all key interlocutors. A well-developed HR plan as part of implementation would ensure that common service providers taking on new roles are sufficiently trained and knowledgeable to deliver quality service. A comprehensive implementation plan would also include mechanisms for feedback on progress so that established milestones towards expected results could be recalibrated as required and strategic direction for the regionalization of common service delivery could be reviewed periodically to facilitate continued alignment with governmental and departmental priorities.

Conclusion #5: Common services are being delivered within established service standards and the RSCs have contributed to improved consistency across missions and standardized business processes.

Prior to the development of RSCEMA and RSCEUS, the existing model of common service delivery perpetuated an unequal and uneven delivery of common services across the network as missions interacted directly with HQ. Missions tended to be self-contained and processes often differed for the same common services. With the implementation of the RSCs, however, Service Delivery Standards (SDS) for common service delivery were established across regionalized missions to help improve consistency in delivery time and allow for equitable access to common services across the mission network. Progress was also made on improving consistency across missions and standardization of business processes through the provision of standard tools and templates for HR processes, the development of SLAs with mission clients and the standardized business maps for the delivery of financial services. Less progress was made in standardizing processes for some areas of common service, such as in contracting and procurement services due to lack of sufficient delegated authorities.

Conclusion #6: Regionalization of common service delivery abroad remains relevant, but is being implemented through various models.

The regionalization of common service delivery remains relevant for the Department and is considered to be an appropriate approach for improved consistency and reduced risk. The standardization of business processes also ensures missions are adhering to policies and observing appropriate protocol. The objectives of regional delivery models are aligned with governmental priorities and there is a federal role for regional common service delivery.

However, the RSCs in their current configurations may not be the most appropriate tools for implementing the regional common service delivery model. The offering of a suite of common services through a single delivery point seems effective and efficient in theory but the approach is ambitious in practice, primarily because the Department is not organized in a way to facilitate this model. Functional responsibilities for common service areas are distributed to different bureaus within ACM and accountabilities for financial services lie with SCM. While there have been improvements in communication across Branches, there is still a tendency to work in silos within the Department. As well, some bureaus at HQ must address issues within their own processes before delegating authorities to the field. The LES Pensions and Benefits program, for example, was transferred from TBS to DFAIT in 2011 and is not ready for regionalization. These factors combined create challenges for the RSC model when a whole-of-department approach and full buy in from key interlocutors is required.

One size does not fit all for regional common service models. Foreign ministries have adopted different approaches for regional common service delivery that are appropriate to their respective organizational needs. For DFAIT, the differences between RSCEMA and RSCEUS illustrate that a “cookie cutter” approach does not address the department’s platform needs, that a regional model in one geographic region may not be suitable for another geographic region. Moreover, regional models that are appropriate at one point in time may not be appropriate in another given that the federal context changes and regionalization is a dynamic process that requires regular alignments to evolving organizational needs. Specific consideration must be given, therefore, to time and place when developing a regional approach for common service delivery.

9.0 recommendations

The following recommendations are directed to the Department based on evaluation findings and conclusions.

Recommendation #1: The Department should reassess the business case for the Regional Service Centres Initiative and make the necessary course corrections in the regionalization of common service delivery that would result in the achievement of targeted cost-savings, expected outcomes and improvements in client satisfaction.

Regional efforts currently in place in each common service area should be re-examined, with a fully consultative, whole-of-department, client-focused approach to meet corporate priorities and maximize synergies across the different common service areas. Based on these re-assessments, alternative mechanisms for regional common service delivery could be pursued that would provide the cost-savings and improved efficiency and effectiveness expected from this initiative.

Recommendation #2: The Department should develop a comprehensive implementation plan for the regionalization of common service delivery.

For ongoing initiatives for the regionalization of common service delivery, the Department should ensure that a full implementation plan is developed. This implementation plan should include:

• A governance structure that includes representation from across the Department as well as from the field to facilitate cohesion and collaboration;
• Delegated authorities to the field, with sufficient internal controls to ensure accountabilities are maintained;
• Short-term and long-term milestones that are to be reviewed at regular intervals to accommodate changes in the federal context;
• A communication plan that facilitates shared understanding across key interlocutors on the mandate, objectives and roles and responsibilities;
• A performance measurement framework to monitor progress towards expected outcomes and facilitate timely, informed decision-making;
• Centralized operational systems to facilitate the tracking of performance; and
• A detailed HR plan for implementation which would include affected positions, required positions and training.

10.0 management Response and Action Plan

Recommendation 1:

The Department should reassess the business case for the Regional Service Centres Initiative and make the necessary course corrections in the regionalization of common service delivery that would result in the achievement of future targeted cost-savings, expected outcomes and improvements in client satisfaction.

Regional efforts currently in place in each common service area should be re-examined, with a fully consultative, whole-of-department, client-focused approach to meet corporate priorities and maximize synergies across the different common service areas. Based on these re-assessments, alternative mechanisms for regional common service delivery could be pursued that would provide the cost-savings and improved efficiency and effectiveness expected from this initiative.

Associated Findings: Overall

Management Response & Action Plan: Agree with Recommendation 1

The regionalisation model has been under review and evolution since its launch in 2011 and has evolved considerably from the two models evaluated. It continues to evolve. Lessons have been drawn from stakeholder feedback, the success of Common Service Delivery Points created in 11 locations, best practices arising from the existing RSC models, Evaluation team feedback and in response to shifting objectives and environment. An outline of the action plan now in place for necessary course corrections, timeframes, consultation, governance structure and stakeholder engagement is incorporated in the response to key Recommendation 2. This will be revised to respond to specific evaluation feedback.

Given the changing landscape and lessons learned, the IPB agrees that there is a need to reassess and reconfigure the RSC model, in particular the stand alone RSCEMA model.

IPB is in continuing dialogue with Foreign Ministries of like-mind countries since all are at various stages of regionalization and/or centralization, and much is being learned from the experiences and experimentation of the others.
Responsibility Centre: AFD RSCEMA RSCEUS SMD LDN
Time Frame: Ongoing to 2015

Management Response & Action Plan: An action plan is in preparation to evolve the RSCEMA to merge with the London mission. This is concurrent with the acquisition of 2-4 Cockspur in November 2012 and availability of space with the LDN mission. Focus will be on consistency with the new CSDP model (now in four missions) that merges financial processing and common service support. This model has incorporated lessons learned and reflects the Evaluation recommendations.
Responsibility Centre: LDN RSCEMA AFD SMD
Time Frame: By 2015 to parallel the move to New LDN Chancery space

Management Response & Action Plan: Experience has also shown that combining Europe, the Middle East and Africa into under one RSC was too large a scope and span of control. While the question of span of control was not addressed in the Evaluation, an Action plan is in development to create a CSDP, consistent with the new model, in PRET to better address the issues that are unique to Africa.
Responsibility Centre: PRET AFD SMD RSCEMA
Time Frame: By 2015 to parallel the move to New LDN Chancery space

Management Response & Action Plan: The IPB accepts the Evaluation results as overall strategic guidance and is moving forward with the evolution of the RSCEMA model to merge it with LDN, continuing the progress in establishing the regional network model for CSDPs drawing from lessons learned, cost analysis, consultations with senior management and stakeholders and as new business tools are available.
Responsibility Centre: AFD SMD RSCEMA LDN RSCEUS
Time Frame: Comprehensive action plan to be in place by June 2014. Ongoing to 2015 when lease for the RSCEMA can be terminated and space in Cockspur will be available.

Management Response & Action Plan: The IPB will ensure that the key factors noted by the Evaluation as essential to further regionalisation are part of the forward action plan.
Responsibility Centre: AFD SM
Time Frame: Detailed action plan with milestones in place by Dec 2014.

Recommendation 2

The Department should develop a comprehensive implementation plan for the regionalization of common service delivery.

For ongoing initiatives for the regionalization of common services, the Department should ensure that a full implementation plan is developed. This implementation plan should include:

• A governance structure that includes representation from across the Department as well as from the field to facilitate cohesion and collaboration;
• Delegated authorities to the field, with sufficient internal controls to ensure accountabilities are maintained;
• Short-term and long-term milestones that are to be reviewed at regular intervals to accommodate changes in the federal context;
• A communication plan that facilitates shared understanding across key interlocutors on the mandate, objectives and roles and responsibilities;
• A performance measurement framework to monitor progress towards expected outcomes and facilitate timely, informed decision-making;
• Centralized operational systems to facilitate the tracking of performance; and
• A detailed HR plan for implementation which would include affected positions, required positions and training

Associated Findings: 10, 15, 16, 17, 18, 19, 20, 21

Management Response & Action Plan: Agree with Recommendation 2

Building on the CSDP financial processing model that was developed by experience with the RSCs and taking advantage of lessons learned, new model CSDPs (merging financial processing and common service support) were established in Asia, Latin America in 2012-13. More are scheduled for 2013-14. These latter roll-outs include best practices established by the RSCs (and confirmed by the Evaluation) including structured Service Level Agreements, governance structures and communication strategies, and further refined to include broad consultations to maximize effectiveness and promote acceptance of a regional and systematic approach to the delivery of Common Service.
Responsibility Centre: AFD/AFO ALD (for LES HR) ARD (for real property) AAD/SPD (for procurement) SMD (for financial authorities)
Time Frame: By 2014 with ongoing review

Management Response & Action Plan: The IPB will refine the implementation plan that has been developed in the roll out of the current CSDPs to reflect guidance from the Evaluation as outlined below.
Responsibility Centre: AFD SMD
Time Frame: By 2015

Management Response & Action Plan: An implementation plan is in development to move ahead and relocate the RSCEMA operations from Thames Valley to the new facilities for LDN, once renovations and fit-up are completed. The move will be phased in to take into account 2-4 Cockspur renovation timelines as well as the lease break date of Thames Valley in 2015.
Responsibility Centre: AFD LDN RSCEMA SMD
Time Frame: Implementation plan in place by June 2014

Management Response & Action Plan: A performance measurement plan will need to be developed to capture, assess collective progress toward regionalisation objectives so that the global model and framework can be validated and adjusted as needed.
Responsibility Centre: AFD/SMD/ALD/ARD
Time Frame: Plan in place by December 2014

Management Response & Action Plan: Finally, IPB is continuously evaluating plans in conjunction with the CFO to further advance financial transaction delivery, in particular to take advantage of banking advances (SPS, regional bank accounts), technological solutions (P2P electronic signatures) and applications being developed and refined by SMD (MOPS, LESPPB). An implementation plan, communication plan and HR strategy will be part of further consolidation envisioned including centralization of all financial functions into fewer processing centres, maximizing economies of scales while ensuring the most effective combination of service delivery and control.
Responsibility Centre: AFD/SMD/ALD/HFP/ARD/SWD
Time Frame: Full implementation plan in place by December 2014

Management Response & Action Plan: The current CSDP regional network approach is being assessed against cost effectiveness, client service, business consistency and stakeholder views.
Responsibility Centre: AFD SMD
Time Frame: Ongoing to completion of transition in 2015

Management Response & Action Plan: Based on this ongoing assessment, further consolidation of financial transactions is being considered.
Responsibility Centre: SMD AFD
Time Frame: Ongoing to completion of transition in 2015

Management Response & Action Plan: Metrics will be put in place to better measure and assess progress toward objectives and client service.

1. Agreed

Specific response for the points highlighted are discussed below:

Governance: The Governance structure now in place includes:

Management Response & Action Plan:

• A Steering Committee for each region comprised of regional Heads of Mission in addition to Platform and Program representatives at the Director General level. All Steering Committees are chaired by the IPB ADM.

Responsibility Centre: AFD
Time Frame: Established Quarterly meetings

Management Response & Action Plan:

• An Implementation Group of the senior MCO at CSDPs, AFO Regional Mgr, IPB/SCM divisions (finance, HR, IM/IT, property, etc.).

Responsibility Centre: AFD/SMD Missions
Time Frame: Established Bi-weekly

Management Response & Action Plan:

• MCO Management Board consisting of regional network MCOs, DMCOs, MAOs.

Responsibility Centre: AFD/ALD/HFP/HFR/SMD
Time Frame: Established Bi-weekly calls

Management Response & Action Plan: Authorities: The need to further delegate authorities to the field is acknowledged as a contributing factor preventing the RSCs to fulfill their full mandate. IPB and CFO branches will review delegations required to maximize effectiveness in common service deliveries, with consideration for required internal controls and accountability.
Responsibility Centre: ACM AFD/AFO SMD/SMFF ALD ARD
Time Frame: By 2014-2015

Management Response & Action Plan: Milestones: The CSDP integration process has now established an ongoing cyclic process to ensure client input and feedback. This has been a required step for each client mission transition and will continue. AFD/SMD will determine specific milestones for review by the Governance committees at determined time frames
Responsibility Centre: AFO/SMD/RSCs Client Missions
Time Frame: Determined following the mission assessment

Management Response & Action Plan: Communication: A communication plan for forward regionalisation will be outlined and approved by the Regionalisation Governance committees, Mission’s Committee and Corporate Management Committee. In addition to elements outlined below, it will ensure improved communication with DFATD strategic governance committees.

Key elements of this plan:

• The CSDP integration process has an established consultation and planning step for each client mission transition. Current practice now also requires an extensive communication outreach to ensure a full understanding by the HOM and all programs and personnel of each mission.
• In addition to extensive consultation, site visits by SMD, the FIs posted to RSCs, or MCOs and FIs from CSDPs will continue to be made to assess financial operations as well as the administration team composition required to most effectively deliver common services.
• A detailed Service Level Agreement is signed between the CSDP and individual missions that they service.
• More proactive communication with geographic senior management in DFATD and active participation in HOM training

Responsibility Centre: AFD/RSCs
Time Frame: Fall 2014

Management Response & Action Plan: Performance Measurement: For each Service Level Agreement signed between a CSDP and its client mission, an appendix will be developed for each Common Services function to be transferred (finance, human resources, etc., as applicable). These will constitute a comprehensive performance measurement framework permitting monitoring and evaluation of progress, both at the mission level and for IPB management.
Responsibility Centre: AFD HFP SDM
Time Frame: Ongoing to completion of transition in 2015

Management Response & Action Plan: HOM accountabilities will be clarified and established in line with the performance measurement framework.
Responsibility Centre: AFD HFP FTRN
Time Frame: By 2015-16

Management Response & Action Plan: Centralized Tracking: IPB is in the process of adopting “Remedy” as a centralized tasking system which will enable centralized monitoring of performance for various common service functions (HR, property and drivers requests, etc.). In addition, the introduction of new financial tools such as P2P will also enable centralized monitoring for financial functions. These functionalities will be incorporated as the new applications are implemented across the mission network. Performance measurement targets will be evaluated based on the understanding that there will be a transition period to allow for full implementation and integration, taking into account the realities of change management.
Responsibility Centre: AFD
Time Frame: Ongoing to completion of transition in 2015

Management Response & Action Plan: HR Plan: The CSDP integration process has now established a Client Mission Assessment as a required planning step for each client mission transition. This process involves a complete review of the common service framework at the mission.

Using this information, and in consultation with ALD, future implementation plans will require a comprehensive HR plan to accompany.
Responsibility Centre AFD/AFO HFP SMD ARD ALD
Time Frame Ongoing to completion of transition in 2015