Government Evolution Towards Increased Efficiency: Shared Services and Enterprise Applications

1. Government Evolution Towards Increased Efficiency: Shared Services and Enterprise Applications Frieda Yueh fyueh@us.ibm.com 914-299-3091 © 2010 IBM Corporation

2. Best Practices from Public and Private Sector Improved customer service Productive business application development Better security Better business continuity and disaster recovery capabilities Lower costs that are predictable and stable Higher IT service and reliability Web enablement Access to enterprise information, services, and resource utilization Enhanced business processes and quicker IT enablement Contractual relationships that simplify the procurement process Measurable and meaningful Service Level Agreements What Do Government Organizations Want?

3. Human Resources Better access to IT skills Access to specialized skills “on demand” Specific application/program skills and assets Replace legacy skills due to aging workforce Relief from day-to-day IT operations issue Focus on their core business Technology Refresh upgrading of existing Hardware and Software (pc’s, laptops, servers, networks) Flexibility IT optimization to maximize value of investment Elimination of capital outlays Consolidation, standardization, and automation Replace “ancient” legacy systems with technology standards What Do Government Organizations Want?

4. State and Local Government Trends State and Local Government Collaboration • Increase abilities to transform IT and business organizations • Stimulate innovation and service improvements • Utilize private sector as an external change agent. Government Transformation • Across their enterprise (horizontal) for infrastructure services • Within agencies for specific applications/programs/services (vertical) Transformation Expectations • Lower costs • Higher service levels • More customer and citizen-centric service delivery model

5. What is Shared Services?A broad and confusing concept that can mean different things to different people Defining SharedServices Bringing together a set of common services/functions to serve multiple business units under a single governance structure that is customer-focused and performance-managed. These services share standard business processes and enabling technology.

6. Shared Services and Functions Client Facing – the Front Office Very immature at present, higher risk, but interest is growing Examples include: • social services • revenue and taxation • health • security and justice • transport • customer relationship systems and case management • call center consolidation • modernization of web portals

7. Needs screening Determines potential eligibility for government-run programs Allows on-line submission of applications http://utahcares.utah.gov/ “Utah Cares” Portal Integrates with the State’s 2-1-1 directory – Provides access to accurate information about community and government-run assistance, over the phone and on the web

8. Web Portal – AZ Motor Vehicle Department’s SERVICEARIZONA • 4 of the 53 services generate 98% of ServiceArizona revenue • Vehicle Renewal, Duplicate Driver License, 3 Day Permit, FTR • 49 services are free; all 53 were developed at no cost to AZ • IBM is paid per transaction and only if customers use the services • 48% of transaction activity is free to MVD and citizens Plate Inquiry, Plate Credit, Address Change, Email Notification, EZ Voter, Fee Recap, Sold Notice, • Reinstatement Inquiries • 50 % of IBM resources focused on • new service development or marketing • 8 Million+ transactions/year, growing • 99% Customer satisfaction rating

9. Trafikselskabet Movia United States Marine Corps US Marine Corps:Access to information in minutes rather than days, reports on areas never before possible and cost savings in processing power, lower resource requirements for faster deployment to areas of conflict. Australian Health & Welfare New York City Police Department Government Enterprise Applications, Analytics & Performance Management:Client Transformations Trafikselskabet Movia:Reformed Denmark government structure to calculate 48 separate budgets instantly when routes, fuel prices and passenger levels change, delivering better service to taxpayers. Australian Institute of Health and Welfare:Significantly reduced the amount of time between receipt of final information and release, leading to lower costs and increased satisfaction from patients and health care givers. NYPD:Developed single point of access to crime data across all 5 boroughs, linked with GIS mapping and visualization tools to head off spikes in criminal activity. 9

10. Shared Services and Functions Corporate Services – the Back Office Most common candidates for shared services Examples include: • Finance • HR • Procurement • Asset Management • Real Estate

11. Enterprise Resource Planning (ERP) Implementations 20-60% cost savings • PA Procurement for goods/services • NY state/local govt and schools saved $18M on bulk computer purchases • 24 US agencies (1.8M employees) migrating transactional HR functions to shared service centers • FDIC combining 20 contracts from 12 suppliers into one • Alberta cut financial reporting cycle to 6 weeks from 4 months; 97.2% satisfaction among end users • USAF migrating 95% of HR transactions to an SSO through Web and contact center channels

12. Tennessee Financials and HR/Payroll Project

13. Manage Resources Effectively:Client transformations Southwest One Joint Venture (UK):Is achieving cost savings and improved efficiency in the delivery of customer services, workforce development, procurement and more. Because gaps between service expectation and affordable delivery, were addressed when three public-sector entities in the UK took an unprecedented step toward the governance model of the future: innovative collaboration. Acting alone, none of the three entities — Somerset County Council, Taunton Deane Borough Council, and Avon and Somerset Police — could afford or produce the results they desired within their existing capacities. So they joined forces with IBM to leverage their respective resources and strengths toward a common purpose. The result is Southwest One, a 10-year joint venture transforming both frontline services and back-office operations for all three. The Government of Denmark established a cooperative effort among central, regional, and local governments to coordinate business transformation related to digitalization of the entire public sector. To take its services to the next level, the government needed to establish better collaboration among local, regional and central government and agencies and develop a consolidated and shared view of the public sector. Key Clients 13

14. Shared Services and Functions Information Gathering pace in private sector but still immature in government Examples include: • common information repositories • federated databases • management and performance reporting • document mgmt • email

16. Shared Services and Functions Infrastructure Quite mature especially in outsourced IT contracts Examples include: • information technology infrastructure • operations and application development • help desk • IT governance • project mgmt • printing services • network management

17. Network Infrastructure Optimization Financial Benefits Implementation of network optimization can result in a total annual recurring cost reduction of 10% to 30% with payback in 4 to 12 months Reduce total annual recurring costs by 10-30-% with payback in 4 to 12 months by: • Maintenance: optimize costs through asset management • Operations: reduce network operation costs by consolidating Network Operating Centers and adopting a shared service model • Voice networks: implement VoIP/IPT through network convergence to reduce long-distance calls and PBX charges • Data/IP network: reduce Wide Area Network (WAN) costs by leveraging a shared backbone network, WAN optimization technologies Business Benefits • Reduced annual communications-related recurring costs through leveraging economies of scale and technologies to gain savings and efficiencies • Enhancement of employee productivity, client satisfaction and revenue streams due to network availability and performance improvements

19. Shared Services: Drivers and Issues Issues facing Governments Drivers for Adopting Shared Services • Lack of sustained leadership • Horizontal nature of SS (new and complex) • Strength of vertical organizations; culture of self preservation and growth • Political timeframes • Creating “win-win” situations • Achieving intended benefits • Reluctance to outsource • Legislative or government policy dictates • Achieving efficiencies/realizing savings (not a universal driver) • Improving citizen-centered service delivery • Delivering policy goals more effectively (govts’ growing concern) • Security

20. This report was researched and written by Sally Coleman Selden, professor of management at Lynchburg College, with financial support from the Pew Center on the States’ Government Performance Project. All data, unless otherwise noted, are drawn from Pew’s most recent 50-state management report card, Grading the States 2008.

21. STATE STATUS – SHARED SERVICES 42 states responded This report was researched and written by Sally Coleman Selden, professor of management at Lynchburg College, with financial support from the Pew Center on the States’ Government Performance Project. All data, unless otherwise noted, are drawn from Pew’s most recent 50-state management report card, Grading the States 2008.

22. Thank you