Process Improvements: How to begin to transform your collections organization

1. Process Improvements: How to begin to transform your collections organization Ted London, Vice President, CGI May 5, 2010

2. Agenda Background Getting started: Operational review Sample Process Improvement Success Stories Questions

3. Realities of today’s environment

4. …but despite these challenges Government will continue to be expected to do more with less Significant accomplishments can be made through Process Improvements True Transformation is Possible

5. Agenda Background Getting started: Operational review Sample Process Improvement Success Stories Questions

6. Recognizing the need to change

7. How to start the transformation?

8. Collections Operational Review

9. Operational Review Results Provide areas where the agencies’ practices are consistent with or leading current best practices Provide opportunities for improvement Processes Staff utilization Tools Provide approaches to achieve the improvement Provide an estimate of the ROI if recommendations are implemented Estimate would include a timeline for the achievement of benefits

10. Operational Review Benefits

11. Agenda Background Getting started: Operational review Sample Process Improvement Success Stories Questions

12. CGI’s approach to process improvements Right Account Right Resource Right Time Right Tools Right Results

13. Sample process improvement success stories

14. 1. Looking for lost cases Many collections workflow processes grow over time While cases are worked diligently up-front, productive cases can be under-worked later Through analysis these “lost” cases can be identified Sometimes payment can be made simply by calling the right individual at the right time

15. 2. Gather asset information automatically • Government typically has many ways to gather asset information for free • Other agencies • Data supplied to government • Historically, gathering asset information has been manual • Agencies are now capturing asset information directly from remittance equipment • Through automated asset gathering and advanced workflow, cases can be automatically prioritized based on available asset information

16. 3. Large account group Work large dollar accounts more timely Give agents additional time to perform skip trace activities on large dollar accounts Assign fewer cases to these collectors who can therefore focus on them Often working with attorneys and CPA’s Assigning the right individuals to this group is key

17. 4. Plain-talking letters Letters often written by attorneys And can only be understood by attorneys Experience has shown letters need to be: Simple Straightforward Focus the debtor on what is owed, how to pay, and what are the consequences of non-payment Significant increase in collections through plain-talking

18. 5. Revisit collections statutes

19. 6. Mandate electronic funds for payment agreements A number of governments have found that EFT can dramatically reduce the default rate Private sector typically only takes EFT California and Minnesota reduced defaults from the 40-50% range to the 3-5% range Benefits • Allows departments to increase their “wallet-share” • Can be a customer service benefit • Frees staff to work other cases

20. 7. Credit card payments Allows payment when the taxpayer does not have liquid assets Vendors will work with Government so the taxpayer pays the credit cards fees Brings in money quickly and efficiently Moves the collection risk from the Government to the credit card company

21. 8. Consolidated debt collections

22. 9. Predictive modeling Move from “Treating all taxpayers the same” to “Treating all similar taxpayers the same” Use yield instead of strictly dollar amount Order cases for phone call based on risk score Alter rates paid to PCA’s based on risk score Assign to staff based on risk score

23. 10. Active PCA management Find appropriate usage of PCA’s Review portfolio for best timing for PCA assignment Use primary and secondary placements Alter assignments based on scorecards Encourages healthily competition Change percentage of cases going to each PCA each month/quarter Monitor PCA’s closely and have authority to terminate the contract easily if performance warrants

24. Other opportunities

25. Agenda Background Getting started: Operational review Sample Process Improvement Success Stories Questions

26. Contact Information About the Presenter • 17 Years with CGI exclusively working with State, Federal and Local tax and collections agencies • Leader of CGI’s Global Tax and Revenue and Collections Practice • Experience with more than 20 different revenue agencies • Experience with enhancing collections, audit and tax accounting systems and business processes • Oversees estimation and measurement for CGI’s benefits funded tax projects ISO 9001 Certified Ted London Vice President Tax, Revenue and Collections Center of Excellence (916) 284-7277 Ted.London@cgi.com www.cgi.com/tax 26

27. About CGI 6th largest independent IT services provider in North America Founded in 1976 End-to-end services 100+ offices serving clients in 16 countries 26,000 IT and BPS professionals Focused industry expertise F2009 results: revenue $3.8b 100+ business solutions Customer satisfaction score of 8.9 (1) NYSE: GIBTSX: GIB.A • 2009 ranking out of 10; part of CGI’s ISO 9001:2000-certified Client Partnership Management Framework

28. CGI Experience in Tax and Revenue Kansas $182 Million California $570 Million $176 Million $41 Million $37 Million Virginia $231 Million Missouri $55 Million Hawaii $252 Million $73 Million Other Collections projects Benefits Funded Collections projects Other Tax and Revenue Projects CGI Tax and Revenue Practice Canada Revenue Agency • Over 300 Subject matter experts and delivery personnel • 25 Years experience • Global presence • National, State, Provincial and Local clients • Product Agnostic • Proven experience generating revenues New York City Internal Revenue Service Grand Total Over $1.6 Billion Australian Tax Office