Functional reviews are a form of systematic enquiry often adopted to assist in the renewal and strengthening of an entity or divisions thereof, by enhancing its efficiency and effectiveness and enabling it to deliver services that are more responsive to the needs of the businesses and of stakeholders. The fundamental process of functional review is one of gathering information about:
- What functions are carried out, through its constituent bodies;
For what purpose; - Within what organisational structures; and
- At what cost.
This information can then be used to formulate proposals that will lead to the right things being done by the right people, in the right way and in the right place, and at the right cost. This simple formula encapsulates a number of important points, issues that must be addressed through the review process:
- Doing the right things means that the activities being carried out include all those things that it is necessary for the entity to do in order to discharge its legal obligations, meet its own policy objectives and exclude those things to which there is no legal or policy justification for devoting resources.
- The right people are those with appropriate skills and experience for the task in hand; it also suggests that they have been selected on merit through appropriate recruitment and promotion procedures in accordance with regulations and conventions designed to protect the integrity and effectiveness of the enterprise.
- Doing things in the right way implies that the actions being taken will be effective in achieving the entity’s intended outcomes; it also suggests that standard processes and procedures have been established wherever appropriate and are being adhered to by the staff concerned, and that staff have received the necessary training to enhance their competence.
- Doing things in the right place embraces both internal organisational questions: are activities being conducted within the most appropriate unit to ensure coordination and consistency in the work of the enterprise, without gaps or overlaps between areas of responsibility and larger questions: has the enterprise withdrawn from active involvement in productive activities which are best left to the market, and have divisions divested themselves of service delivery functions which should be decentralised or delegated to agencies and other bodies?
Finally, the right cost is first and foremost a cost which is affordable and sustainable for the enterprise; activities should be of an appropriate scale, proportionate to enterprise wealth, and conducted without waste or inefficiency. At the same time, however, it is possible for inadequate resources to be devoted to an issue. For example, a government which devotes minimal effort to the regulation and facilitation of a major potential area of economic activity may not be gaining the best results in terms either of development or of protection of the people or the environment.
In order to ensure that all of these questions are considered a functional review must address several different kinds of issue:
- Institutional issues – the legislative framework and other formal and informal rules and conventions, that determine both the allocation of functions between organisations, between tiers of government and between government and other actors in society, and the way in which functions are carried out;
- Organisational issues – the structure, internal systems and processes, and human, financial and physical resources of the organisations concerned, including the means by which objectives and strategies are determined and resources allocated, the alignment of objectives with the high level aims of the government, the alignment of the tasks carried out with those objectives, and the efficiency and effectiveness of work processes;
- Individual issues – the skills and capabilities of staff members to do the jobs required of them, their understanding and ownership of those jobs and the objectives they relate to, and their motivation, morale and attitudes to their work.
Functional reviews in general can serve many different purposes. For example, they may be employed to produce recommendations for new organisational structures to improve the coordination of policies and services, or the re-allocation of roles and functions into more logical groupings; they may be used to plan the re-allocation of staff and other resources between different parts of the enterprise or between core government bodies and other agencies or layers of government; they may focus on identifying possible mergers or abolition of functions, or possibilities for outsourcing of some activities to external service providers.