Advisory Services and Help Desks Results of a Cost Benefit Analysis March 2002

1. Advisory Services and Help DesksResults of a Cost Benefit AnalysisMarch 2002 What is FSKIS What distinguishes FSKIS Methodology followed Qualitative analysis Benefits and Costs What have we learned

2. What is FSKIS • FSKIS is Financial Sector Knowledge and Information Service • Objectives are to improve the quality of work done in Financial Sector and support the best possible advice to clients

3. What is FSKIS What it does • Proactive Products and Services • Weekly topical and regional email updates on financial sector research and analysis (“Updates”) • Web and data base updates • Management of external information resources • Nexus for new/developing financial sector issues • Representation of financial sector • Formal and informal training of electronic resources • Reactive Products and Services • Answering queries • FSAP preparation and support

4. What distinguishes FSKIS(based on survey findings) • Orientation to business objectives was seen as a factor contributing to the success of the service. • When asked about the type of query each center received, responses define queries in terms of the need for information, the source of the response, or the usage the response was to serve. • Only FSKIS defined every query (100%) in terms of its ultimate usage. • Distinguishing characteristics of FSKIS were • Strategic decision to provide in-depth response to queries • Direct connection to Network strategy • FSKIS states uniquely that it “must clearly understand context and goal of requester’s project/mission” as a part of its operating principles. • FSKIS is the only advisory service that participates in the selection of external data bases with the libraries. • FSKIS has business reasons for extending services to the IMF and is doing so consciously.

5. Methodology Followed • Interviewed end users: Richard Roulier, Luc Cardinal, Wafik Grais, Sameer Goyal, and Abdou Sarr. • End user’s words used to preserve intention • Matched qualitative benefits to MDGs and to FSKIS objectives • Listed benefits where the end user expressed a value • Calculated benefits against costs for selected benefits

6. Methodology FollowedProtocol Questions • Sample protocol questions that were most effective: • If the Center were not available to you, how much more time would you have taken to get the kind of information they provided? • Because of the Center’s services, what have you been able to do that you otherwise would not have done? • If you had authority to expend resources, how much would you spend to get the services provided by the Center? • How much is the product improved by the addition of the type of breadth and depth of information they supply?

7. Qualitative AnalysisRelevant Bank Goals • Focused on Bank goals of • becoming more of a knowledge Bank • buildingcapacity

8. Qualitative AnalysisFSKIS Objectives • Objectives of FSKIS • (1) improve thequality of work done in Financial Sector; • (2) support delivery of the best possible advice to client countries.

9. Qualitative Analysis Matching to Bank goals and FSKIS objectives Efficiency

10. Qualitative Analysis Matching to Bank goals and FSKIS objectives Effectiveness (Here)

11. Qualitative Analysis Matching to Bank goals and FSKIS objectives Effectiveness (There)

12. Qualitative Analysis Matching to Bank goals and FSKIS objectives Impact

13. Qualitative Analysis Putting Value on Benefits In the user’s own words “I (would spend) 10% of the cost of the whole project... It may seem a bit too much, but having the right information may determine the success of the project. Getting the information ahead of time also gives us the opportunity to be well prepared for the mission and to save a lot in time, energy and travelling. We may shorten a mission just because we have enough information. This proved well in by last mission in Morocco; I had so much information that I did not have to have so many meetings. Normally, I would have 10 to 12 meetings; this time, after 5 or 6 meetings the information was confirmed and I really did not have to have additional meetings. It would have been repetitive.” Note: “cost of the whole project” refers to the cost of the activity of an FSAP (a type of economic sector work).

14. Qualitative Analysis Putting Value on Benefits In the user’s own words “Most people think that getting another “producer” (e.g., a financial expert, a Task Manager or an Investment Officer) is always the best way to increase productivity. I disagree. Too often, because information doesn’t flow and efforts are needlessly duplicated, we experience “reverse synergies – in the Bank and the IFC, two producers effectively have an output of [something less that 2.0]. Assuming you started with 100 “producers”, I believe that one additional Help Desk staff member could increase total productivity by 3-4% -- perhaps even more – whereas one additional “producer” would, at best, give you a one percent increase in productivity. In fact, in an era of possible staff cuts – the best way to reduce overall staffing (while maintaining existing productivity) would be to increase [FSKIS] staff.”

15. Qualitative Analysis Putting Value on Benefits In the user’s own words “The new Bank structure does not leave adequate time for managers at any level to take the time to disseminate or share information. The Help Desk has the fingers and arms out checking what is being done and, therefore, connecting people, too. It has become a nexus.”

16. Qualitative Analysis Putting Value on Benefits In the user’s own words “It might take me 6 hours to find what I am looking for. They have done it in 15 minutes, because they are knowledgeable, efficient and have often already researched exactly the same item for three or four other staff members. Rather than burying TMs and IOs under more information than the staff can possibly absorb, file or retrieve, [FSKIS staff] provide “just in time” information.”

17. Cost/Benefit Analysis Facts and Assumptions • A conservative estimate of savings: • Facts • Financial expert costs on average $215,000* gross per year • FSKIS staff member costs on average $69,967 gross per year • FSKIS services approximately 720 research queries per year • Assumptions • Query takes 6 hours to research by financial expert • Query takes 5 minutes to discuss with FSKIS to set context and purpose • FSKIS takes 2.4 hours (on average) to complete search *average cost of 1 Financial Sector expert is higher than other sectors.

18. Cost/Benefit AnalysisA conservative example • Potential cost if done by financial expert: $750.00 • Actual cost as performed by FSKIS: $108.05 • Savings per query: $641.95 5.94 times cost • Extrapolating to annual savings on 720 queries: $462,204

19. Cost/Benefit AnalysisImproving access to external sources of information • Selection of Financial External Databases and Subscription Services • Financial databases, e.g., Moody’s, Bloomberg, Bankscope are available across the Bank Group • FSKIS actively participates in selection of about 38 databases (with libraries) • This participation is unique to FSKIS • FSKIS arranges for 5 additional databases otherwise not funded by libraries • Constant usage of all databases gives FSKIS unique qualifications to participate in the selection

20. Cost/Benefit AnalysisImproving access to external sources of information • Service takes 15% of one Help Desk member’s time • Financial expert could not be as efficient or up-to-date on the best external resources • Even so, assuming it could be done in the same amount of time: Potential cost if done by financial expert: $32,250 Actual cost as done by FSKIS: $10,186 Annual savings: $21,755 2 times cost

21. What we have learnedAbout FSKIS Value • FSKIS is linked to business objectives in conscious and remarkably effective ways. • End users are able to state clear benefits of FSKIS service to themselves, their work, and to the Bank’s clients. • FSKIS is strongly justified qualitatively through consistent matching to Bank goals and planned FSKIS objectives. • FSKIS is justified quantitatively even with conservative measures.

22. What we have learned Suitability of the Methodology to Other Services • Cost-benefit analysis is enhanced by a conscious emphasis by the service on business objectives from the start. • Some services may need to redefine the categories within their tracking mechanisms in order to support cost/benefit calculations. • Some services may need to use a survey instead of interviews to gather benefits from their end users. • Quantitative cost/benefit analysis may not be possible in all cases. • Qualitative cost/benefit analysis should be possible in all cases.