Business Operations Strategy (BOS 2.

0)

United Nations Sustainable Development Group (UNSDG)

Business Innovation Group (BIG)

BOS Supplemental Guidance V2

Annual Review of BOS 2.0 for Reporting of 2023
efficiencies in 2024

SEPTEMBER 2023

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Background
In December 2017 report to the General Assembly, the UN Secretary-General (SG) called for scaling the roll-
out of the Business Operations Strategy (BOS), mandating all UNCTs to ensure compliance with an improved
BOS by 2021. In 2019, the UNSDG/BIG developed and endorsed the BOS 2.0 guidance, supported by the BOS
2.0 online platform for global roll-out.

Development of the BOS in all UNCTs and its implementation in 2021 and its subsequent annual reviews in
2022 and 2023 demonstrated several lessons learned and the need for corrections and revisions in the
guidance to further enhance the inter-entity collaborations at the country level. Key lessons learned focused
on assuring data quality and accuracy and reporting efficiencies. Over time, feedback and lessons learned
shared by the UNSDG entities warranted a review of the BOS initiative in the short, medium to long term.

In September 2022, the United Nations Representatives of Internal Audit Services (UNRIAS) started an
assessment of the BOS roll-out and implementation, sampling 8 countries. The result of the UNRIAS
assessment is pointing toward a review of the BOS guidance in 2024 to incorporate suggestions that are
based on the lessons learned and feedback received from entities, both Headquarters and country offices.

Efficiencies estimated and realized from the inter-entity collaboration through the BOS are reported to the
ECOSOC annually in the UN Secretary-General's Report. Since this report will be prepared in April, the UNCTs
are expected to conduct in January-March a review of their BOS, update the country-level collaborations, and
efficiency future estimates, and report the efficiencies realized from collaboration within the UN System every
year.

In 2024, the UNSDG/BIG will undertake a comprehensive review of the BOS guidance, for implementation in
2025 and beyond, therefore, the UNCTs are expected to continue to utilize the existing BOS methodology to
evaluate the relevance of their BOS and report on the efficiencies estimated for future years and realized in
2023. To assist the UNCTs/OMTs, the attached supplemental guidance is issued guiding the annual review
exercise.

This supplemental guidance also introduces information regarding a forthcoming transition in our BOS
platform infrastructure. Specifically, the existing BOS platform, currently hosted by UNDP, is set to be
succeeded by a new BOS platform within the UNINFO enviroment. This move aligns with the larger ecosystem
where other UNSDG inter-agency platforms are situated. The transition aims to centralize and enhance our
platform capabilities and user experience while preserving the integrity of data.

Enforcement clause
This BOS supplemental guidance (2023-V2) is developed by the BOS Technical Group and ratified by the BOS
Task Team, it enriches the BOS 2.0 guidance (2019) and the BOS supplemental guidance (V1-2022). Should
discrepancies arise, this document's clauses will take precedence over the aforementioned guidance. It
remains effective only for the BOS 2.0 review in 2024. Subsequently, its content will merge into future BOS
guidance, rendering all prior supplemental guidances obsolete.

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1. Objective of the Guidance

This guidance aims to assist OMTs in executing a light annual review of the BOS during Q1/2024. The primary
focus will be on reporting the BOS services that were put into action in 2023 and detailing efficiency gains,
encompassing both quantitative and qualitative metrics.

a. Light BOS review

The light BOS annual review only focuses on reporting realized efficiencies for the past year, adjusting
estimates for future years (if needed), and updating BOS implementation status and activities associated
with the planning framework. BOS Annual Review in Q1/2024 will follow the light BOS review.

b. Detailed BOS review

A detailed BOS annual review will take place once every three years to identify potential new common
services, develop service level agreements to scale up service quality, and report on realized efficiencies. The
next detailed BOS Annual Review is expected in 2025, subject to updated and approved revised BOS guidance.

2. Kick-off
a. Executive Summary

OMT is mandated to revamp the executive summary of the BOS by incorporating the following elements:

Country Context and Collaborative Focus:

- A concise narrative outlining any change in the country context, such as the introduction of a new
Cooperation Framework.
- Focus on the direction and objectives of inter-agency collaborations in the forthcoming medium-
term (3-5 years) period.

Benefits and Service Quality Improvements:

- A demonstration of the benefits and efficiencies gained during the 2023 period. Highlighting
enhancements in the quality of services rendered, demonstrating the value of ongoing efforts.

Legacy Common Services:

- Refer to any common service that has been active and consistently delivering value for more than
10 years and is still yielding efficiencies.

For a more comprehensive understanding and guidance on evaluating the potential for these long-standing
services, kindly refer to Section 4: Opportunity Analysis.

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3. Stock Take
a. Initial date of services

All active common services between two or more entities shall be recorded in the BOS, irrespective of their
implementation start date, but provided that they are locally established (ref. Section 4, point a, para 2).
Common services that started before 2012 shall remain in stock take as the UNSDG Efficiency Reporting
methodology only requires reporting efficiency gains for services for a maximum of 10 years from the first
date of implementation. Information about the common services that started before 2012 and are still
generating efficiencies shall be recorded in the stock take and mentioned in the BOS Executive Summary (ref.
section 2. Kick-off).

For services that are in opportunity analysis, they remain in the opportunity analysis, even if their
implementation time exceeds 10 years. No reporting on efficiency estimates and gains of those services are
expected after 10 years period (ref. section 4, point f).

4. Opportunity Analysis
a. Services moving from BOS to GSS, CBO, or overlap of BOS/CBO/GSS services
As a local framework, the BOS shall not include services that are agreed at the global level nor bilateral
agreements signed corporately between entities HQs. Global Shared Services refer to location-independent
services provided globally across the UN system irrespective of geographical location. Global shared services
may be agreed upon at the corporate level based on bilateral agreements signed by the entity HQ as global
solutions. It may be that some global solutions are agreed upon globally but implemented at the country level.

A BOS framework should only record common services agreed locally between two or more participating
entities. Bilateral services provided by one entity to another, based on corporate agreements signed at the
global/HQ level and implemented at the country level through agency-to-agency service level agreement
(SLA), should not be included in the BOS framework as a common service. Example: UNDP may provide pay-
cycle service at the country level for UNWOMEN based on a global agreement. This is not a locally agreed
common service and shall not be included in the BOS.

If a Common Back Office (CBO) is operational in the country, the services that are provided by the CBO for
the participating entities, shall not be included in the BOS.

If an agency is participating in a service in the BOS, but that service has moved to an ‘active’ CBO or GSS, the
entity shall discontinue recording participation for such service in the BOS.

b. Common premises initiatives

Efficiencies related to rental costs shall not be reported in the BOS. However, common services agreed locally
and utilized in common premises shall be recorded in the BOS. Examples are cost-shared staff for the
management of common premises, common reception services, cleaning services, or security services.

c. Data entry
Cost-Benefit Analysis (CBA) data is a crucial part of the BOS 2.0 framework to decide on and prioritize
collaboration on common services and determine future efficiency projections. The right to enter data for
each entity is restricted to the users of the respective entity. To safeguard the integrity of data, the Entities
must ensure that financial data entered in the BOS platform are accurate to the extent practical, originated,
and quality assured by the entity's respective members. The BOS platform restricts data entry in CBA to the
email address of the individual entity user. Workarounds such as common external BOS consultant inputting

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an entity's data, sharing a user/password, or granting one entity user access to enter data on behalf of another
entity is strictly prohibited.

d. Scope of data entry in 2024

In the 2024 annual review, entities are expected to report ONLY the realized efficiencies of the immediate
past year (2023) as well as to review the future years' estimates. No further adjustment of the data recorded
for past years is possible.

e. Calculating labour and monetary cost;

To calculate labour and monetary cost, the 2019 BOS guidance provides two options1:

a. Based on benchmarks such as the use of the UNDP Universal Price List (UPL) or commercial rates,
also referred to estimated approach at the 2019 BOS guidance.
b. Based on a time-motion study/business process mapping for labour cost for a service or based on
the exact cost entities pay for services, also referred to as exact approach at the 2019 BOS guidance.

When conducting CBA, entities are encouraged, where feasible and practical, to determine their entity costs
(both monetary or labour) using available means such as business process mapping, time-motion studies for
labour, or actual cost entities pay for services in a scenario of 'current costs/without collaboration' and 'future
cost/with collaboration’.

In cases where the entities consider feasible and practical, they may refer to the UNDP’s or any other entities
Universal Price List (UPL) or the Local Price List (LPL) as a reference tool for calculating labour costs. The
use of UPL or LPL – a UNDP cost calculation methodology – was suggested as a tool to facilitate the
calculation of labour costs. The UNDP UPL service cost drivers are: (a) staff salaries; (b) time spent by
personnel in providing transactional services, and (c) share of general operating expenses such as office
space and use of essential office of equipment and supplies. UPLs reflect the last available pro-forma salary
costs for each applicable UNDP office location at the time of their publication. In addition, the staff time
allocation reflects full costs by including leave entitlements.

The entities are no longer required to use a single approach for calculating their labour and monetary cost when
participating in a common service, they may utilize any of the two options provided above. If unsure, the entity
may consult their regional or HQ BOS focal points for guidance.

f. The time horizon for reporting common services efficiency gains

Aligned with the UNSDG efficiency reporting methodology, the time horizon to report the efficiency of
common services is up to a maximum of 10 years from the service implementation start date. At the CBA
step, efficiency estimates shall not exceed 10 years from the service implementation start date at the country
level. Example: common services started before 2013, no estimates shall be recorded beyond 2023 which is
the last reporting year. Similarly, for common services initiated in 2015, the maximum estimate for efficiency
will be 2025.

g. Length of projection/estimates in CBA

To the extent practical, the entities shall estimate CBA data (cost and volume) for up to 5 years, but a
maximum of 10 years from the common service implementation start date. In the instances where a five-
year projection is unavailable, the entities may replicate the second coming year's data toward future years—
noting that such data can be adjusted in the following annual reviews.

h. Calculation/quantification of current cost (cost without collaboration) of common services

initiated before 2019 (Legacy common services)
Several common services existed in the UN system before BOS 2.0 was introduced. These common services
are captured in the BOS 2.0 stock-take exercise with their implementation start date noted. The common
services that remain active and continue to provide benefits have cost-benefit information recorded to

1
Reference BOS 2.0 guidance 2019, annex 4

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quantify their financial benefits in future years for a maximum period of 10 years. Lessons learned in the past
years indicate that quantification of the current cost (cost without collaboration) for the legacy common
services is challenging. Thus, in instances where the OMT cannot quantify the cost of services without
collaboration (current cost) based on extended past years, the entities may benchmark 'current cost' based
on the cost for the entity in 2019 without collaboration.

i. Calculation of realized efficiencies

Entities are expected to report 'realized' efficiencies for the immediate past year that has just concluded –
i.e. 2023. By definition;
- Realized efficiencies should be reported only for the immediate past year (2023) and not for
future years.
- Realized efficiencies are reported only if the common services were active and the entity used
them. Otherwise, the realized efficiencies should reflect the cost of the service incurred by the
entity without collaboration to ultimately result in a $0 benefit.
- Entities can adjust their volume and cost of the services as deemed practical to the reality of the
utilization of the services, discounts, or cost reductions attained from the collaborations.

j. Changes in volumes
Operational requirements at the country level, guided by the programme delivery requirements, can have an
impact on the operational volumes. A change in the United Nations Sustainable Development Cooperation
Framework (UNSDCF), the country context, or even the market may impact the efficiencies estimated by the
entities during BOS development or review. In such cases, reduction or increment in volumes in recurring
costs/labor costs (when applicable) shall be reflected in both current costs and future costs fields.

k. Calculating future discounts

When planning a common service and calculating the future cost/cost with collaboration (i.e., a situation
where entities are collaborating on a common service and expecting a future lower cost), the participating
entities shall agree on a fixed discounted rate target as an ideal outcome of their negotiation or joint initiative,
rather than a percentage. It is important, as a percentage discount in future costs may result in a different
value for each entity.

l. Common services not established at the agreed “Implementation Start Date”

When planning a common service, the OMT will need to agree on an “Implementation Start Date” by indicating
the year when the common service will be established and ready for use. The BOS platform indicates the year
in the “Implementation start date” field in the Opportunity Analysis tab. This field cannot be changed for
common services already included in the BOS platform during the development of the BOS or during the 2024
annual review.

In case a common service was not established timely and entities did not utilize it, all participating entities
may reflect a $0 benefit, i.e., the same values reported for current costs shall also be informed as future
costs.

m. Impact of inflation/currency fluctuation on the estimates

Estimates are projected at least one year before the actual usage of the common service. Therefore, some
countries can have situations where inflation and/or currency fluctuation can significantly impact the
estimates, making them unrealistic compared to the actual realized costs. In such cases, the necessary
adjustments of the impact of inflation and/or currency fluctuation on recurrent costs can be made, bearing
in mind that it should be applied similarly to both estimates and realized costs, at both current and future
scenarios.

n. No CBA common services and quality KPI

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The BOS guidance has four types of CBA for common services: detailed CBA, simplified CBA, LTA CBA, and
no CBA. While some common services have a high potential for cost avoidance, others benefit country offices
from a quality perspective by being delivered better and faster. These services are pre-loaded as ‘no CBA, and
they do not require financial data for CBA. As this year’s review is a ‘light review’ for no CBA common services,
quality gains should be reported for the immediate past and estimated for future years.

5. Planning Framework
a. Implementation Plan – Deadline for updates/new entries

The implementation plan is the only step of the BOS document that remains open throughout the year, even
after the sign-off of the annual review, to allow OMTs and OMT working groups to track the progress of
common services implementation and key activities.

This year, given the migration of BOS 2.0 to a new platform (please refer to section 8. New BOS platform in
UNINFO), to allow data migration, the implementation plan at the current BOS platform will be locked to view
only from 1 October 2023, OMT working groups shall record any changes after that date directly at the new
BOS platform, during the annual review period.

6. Sign-off
a. Corporate-level data validation and quality assurance by entities
Upon completion of the CBA step, the data entered in the BOS platform is considered quality assured by the
entity at the country level. As introduced in 2023, entities, at their discretion, may set up corporate quality
assurance and data validation for their entities' data. The entities are ultimately responsible for ensuring the
validity of the data.

It is important that country users timely consult with their corporate validation team their data accuracy, and
not keep this step to the last minute or hold the other entities from signing off the BOS

Once an entity corporately validates its data, any changes by the country user will require internal consultation
and authorization from the respective entity HQ focal point. The country user will not be able to overwrite
data if it's already validated by their corporate validator.

This step is introduced to enhance data accuracy and entity ownership of the data but is not mandatory. Entities
have informed DCO of their decision to utilize or not utilize this step in 2023, but this decision can be revised
for the 2024 annual review and shall be informed to DCO by December 2023.

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7. BOS annual review timeline

1 January DCO triggers the Annual Review and opens the BOS platform for edits. Global
webinars on BOS annual review with a focus on CBA shall be provided, as well
as twice a week 1 hour ask anything on BOS' webinars for each region in their
time zone, for the entire duration of the Q1
1 January – 15 January Entities and OMT working groups to convene and update BOS

15 January – 28 February Entities to complete the CBA, Reporting (entity data only), and Planning
(activities) of BOS
1 March OMT Chair to submit the reviewed BOS for QA
1 March – 15 March Quality assurance period (to save time, entities may consider QA data with
entities during the 15 Jan – 28 Feb)
22 March UNCTs receive quality-assured BOS for endorsement and presentation from
the OMT chair
31 March RC signs off on behalf of the UNCT, upon UNCT endorsement.

8. New BOS platform in UNINFO

a. New BOS platform in UNINFO

The current BOS 2.0 platform, hosted by UNDP, is set to be decommissioned by the end of 2023. The data
from this platform will be transitioned to a new BOS platform hosted in the UNINFO, an environment that also
hosts other UNSDG inter-agency platforms like the Common Premises and the Cooperation Framework.

The pre-launch of the new BOS platform is scheduled for October 2023, for final testing, migration and
training. The final launch is expected in early December 2023. To ensure a smooth transition and
familiarization process:

- A series of webinars and virtual training sessions will be conducted by DCO.

- Instructional videos will be created, enabling BOS users to navigate the new platform effortlessly.
- The BOS resource center will be updated to cover all sections of the platform.
- Support mechanisms, including Helpdesks and #AskAnything sessions, will be in place, ensuring
users have the necessary resources to address queries or technical issues during the BOS annual
review.

b. Transition and data migration to new BOS platform

For the 2024 BOS annual review, we'll be utilizing the new BOS platform. All data from the existing BOS
platform will be transferred to the new BOS platform. This semi-automated data transition is scheduled to
occur between October and November 2023. Please note: During this migration phase, the current (UNDP-
hosted) BOS platform will be set to "read-only" mode, prohibiting any data input or modifications.

c. What if an error is identified

Errors may occur during the data migration process. DCO will conduct quality assurance of the migration
process to identify errors. If errors are identified at the country level during the annual review, they should be
escalated to DCO Regional BOS Coordinators, for correction.

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As the 2024 BOS annual review doesn’t envisage the revision of past data, only the data previously reflected
at the legacy BOS platform will be adjusted, in case it was wrongly migrated to the new BOS UNINFO platform.
Changes in the figures reported during the 2023 BOS annual review will not be allowed.

9. The clarity in the definition of key BOS terminologies

a. Common services
Common services are services managed or provided by one UN entity for one or more UN
agencies (clients), inclusive of joint procurement activity and management of long-term
agreements (LTAs).

b. Bilateral services (including collaborations based on Global Shared Services)

BOS framework should only record common services that are agreed locally between two or
more participating entities. Bilateral services, based on agreements signed at the entity HQ
level as global solutions and implemented at the country level, such as the provision of
services by one agency on behalf of another agency (such as UNDP processing pay cycle for
UN Women) should not be included in the BOS framework as a common service.

c. Current cost (cost of service without collaborating with any other entity)
Current costs are calculated by summing the total monetary and labor costs of an entity
using a service in a given defined area without collaborating with any other entity. If an entity
is using the LTA of another entity, the cost of the services utilized through an LTA of another
entity is not a current cost but a future cost or cost with collaboration.

d. Future cost (cost of service after collaborating with one or more entities)
Future costs are calculated by summing the monetary and labor costs of establishing and
collaboratively implementing that service, with one UN entity taking the lead in implementing
the common service on behalf of other UN entities. The future cost of an agency is
determined from the current cost minus the reduction expected after collaboration. The
future cost is determined as an 'estimate,' and after the implementation of the service, the
'realized' benefit is reported.

e. Estimated Approach
An estimated approach is based on benchmarks and provides a valuable indication of trends
and potential change. The CBA draws on approximate figures from alternate regional or
country data for similar costs, such as a Universal Price List (UPL) or a Local Price List (LPL).

f. Exact Approach
An exact approach is based on an entity-specific time-motion study or business process
mapping for labour cost or the exact cost entities pay for services.

g. Estimated Costs
Refers to the estimated cost of services (labor and monetary) calculated for future years. It
is calculated based on forecasts, estimated prices, and estimated volumes of
implementation of services. It is calculated for both current costs (cost without
collaboration) and future costs (cost with collaboration).

h. Realized Costs
Refers to the actual cost of services (labor and monetary) for the past year. It is calculated
based on the actual volumes and prices paid for the implementation of the services. It is
calculated for both current costs (cost without collaboration) and future costs (cost with
collaboration).

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