Federal Benefits Provider

Our client (the Agency) provides benefits to a large and diverse customer set with a mission to deliver benefits and services that meet the changing needs of the public. The Agency provides direct payments to nearly 65 million U.S. citizens every year of varying age and socio-economic background.

The Agency provides financial and other forms of assistance to veterans, those with disabilities, the orphaned, the elderly, and those with financial hardships. The Agency oversees a broad variety of programs including: payment distribution, fund management, records management, claims adjudication, and benefits education. The Agency is comprised of six departments. Each major geographic region in the U.S. is served by a regional office with subordinate state and local field offices. Each department has representatives at the regional office level, but not in all subordinate offices. Each of the Agency’s main departments fosters its own unique and long-standing organizational culture, while further sub-cultures have developed within each of the regional field offices. Lateral communication among department leaders is rare, which lessens the effectiveness of Agency-wide initiatives. Over the next 10 years, the Agency faces a major expansion in its number of customers. To address this increased demand for services, the Agency’s Strategy Office is building a long-term 10-year vision. This 10-year vision will enable the Agency and its workforce to be well-positioned to continue providing exceptional service and to meet delivery expectations for current and future generations of customers.

Deloitte has been asked to help the Agency’s top leaders formulate the 10-year vision using both qualitative as well as quantitative analytics and build a strategic roadmap to achieve the Agency’s goals. Deloitte has also been asked to develop a change management strategy that helps institutionalize the goals of the 10-year vision within the Agency and its workforce culture.

Question 1 What steps should the Deloitte team take to develop a 10-year strategic roadmap for the Agency? Example answer: A great answer may include: Collecting input from stakeholders for the 10-year vision to interpret what the vision means and how to operationalize it Conducting a current state analysis of the organization to understand what is happening in the organization. This includes engaging internal stakeholders and reviewing Agency documents to understand the origin or root cause of issues and how they are addressed in Agency goals Incorporating this current state analysis into initiatives to operationalize the 10-year vision Using open source research and international benchmarks as case studies to corroborate findings from stakeholders and to identify methods to operationalize Agency goals Building a change management plan that makes stakeholders aware of changes coming with the 10-year vision and increase stakeholders’ enthusiasm to adopt change by having them engaged in the process Question 2 What are the components or metrics of a business case that should be considered to justify the development of a 10-year strategic roadmap? Example answer: A: Problem definition B: Performance metrics C: Proposed solution D: Potential risks & mitigation strategies All of these answers would be good components or metrics to include in a base case justifying the development of the 10-year road map. A good answer would include two-three components and a great answer would be able to incorporate five or more components. Question 3 In building the 10-year strategic road map, the Deloitte team realizes there are several key challenges that pose impediments to implementing the Agency’s vision. What is the cost of each challenge to the Agency? Reference the data sheet as you determine your answer. Example answer: Cost of data security: $1B $20 million cost in data breach / 4 million citizens = $5 cost per citizen $5 cost per citizen * 200 million citizens records = $1 billion ANSWER: Total Cost = Possible $1 billion to protect records Cost of increased demand for services: $1.3T Administrative costs: $6.0 bil in administrative costs * 0.3 = $1.8 bil; $1.8 bil + $6.0 bil = $7.8 bil in administrative costs Benefits costs: $1,000 bil * 0.3 = $300 bil; $300 bil + $1,000 bil = $1,300 bil in total benefits payments ANSWER: $1,300 bil + $7.8 bil = $1,308 billion ($1.3 trillion) over 10 years Cost of improper payments and fraud: $5.85B $6.25 bil in overpayments - $1.75 bil in underpayments = $4.5 bil in net overpayments in one year $4.5 bil * 0.3 = $1.35 bil; $1.35 + $4.5 = $5.85 billion in possible net overpayment over 10 years ANSWER: $4.5 bil in net overpayments in 2015, $5.85 bil over 10 years Cost of workforce knowledge and retention: $900M 60,000 employees x 30% eligible to retire = 18,000 employees leaving 18,000 employees leaving x $50,000 cost to train new employee assuming 1 to 1 replacement = $900 million to train new employees over 10 years $900 million / 10 = $9 million per year ANSWER: $9 mil per year, $900 mil over 10 years Question 4 Leaders in the various departments remain skeptical that the 10-year vision can positively impact their unique operations, while employees are largely unaware of the 10-year vision initiative. How might Deloitte develop an impactful change management strategy to institutionalize the goals of the 10-year vision and ensure buy-in across the Agency’s diverse workforce? Initial interviews with a sample set of Agency employees highlighted several recurring concerns. Employees feel: Department leadership is unaware of the daily concerns of the Agency’s workforce and are weary of new management-led initiatives There are few opportunities for advancement or recognition Compensation is not commensurate with work levels Collaboration is rare with individuals in different departments Example answer: A great answer would identify five or more of the following items: Create an internal media strategy to increase Agency-wide awareness of the 10-year vision Establish a nationwide survey to identify department- and region-specific employee concerns Develop trust-building initiatives which link departmental leaders with customer-facing and back-office employees Create rewards programs to incentivize performance towards achieving the 10-year vision goals Align new hire and experienced employee training with the 10-year vision goals Create a campaign to effectively highlight successes in achieving Agency-wide goals Design a system to recognize innovations in individual offices and foster local employee assistance to apply new best practices Agency-wide Develop a strategy to promote continued collaboration between departmental leaders in order to decrease stove-piped communications Establish inter-departmental and inter-regional employee conferences to foster lateral communications among Agency non-management workforce Build and communicate an Agency ecosystem map displaying how each office and employee fits into the overall 10-year vision