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Evaluating Outsourcing and Franchising in Government Services: Pros and Cons

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The presentation by Philip McKinney at the Pacific Emerging Issues Conference explores the dynamic landscape of outsourcing and franchising within government services. With 2,200 judges, 30,000 employees, and an annual budget of $6 billion, the judicial system faces unique challenges. This session covers current service delivery models, risks of resistance from stakeholders, and the criticality of effective partnerships. Strategies for successful outsourcing, including establishing Service Level Agreements (SLAs) and performance measures, are discussed, emphasizing the balance between cost savings and maintaining service quality.

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Evaluating Outsourcing and Franchising in Government Services: Pros and Cons

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    1. Philip McKinney August 23, 2007 Outsourcing/Franchising Government Services - Pros & Cons Pacific Emerging Issues Conference

    2. ? 2,200 Judges ? 30,000 Employees$6 Billion Annual Appropriation ? $500 Million Spent on Contracts ? $6 Billion Annual Appropriation ? $30 Billion Registry Funds ? 94 Independent Court Districts ? 600 Geographic Locations ? 5000+ Financial System Users

    3. Each Judicial district is composed of the following court units: ? District Court ? Bankruptcy Court ? Probation Office ? Pretrial Services Office ? Federal Public Defender

    4. Some Guidance and Oversight the Judiciary is not subject to: ? Chief Financial Officers Legislation ? Inspector General ? Audited Financial Statements ? Office of Management and Budget Directives ? Federal Acquisition Regulations

    5. The AO provides administrative support services for all Judiciary activities. In the financial arena, the AO provides the Judiciary with the following: ? Core Financial Systems ? Fine & Restitution Collection Systems ? Registry Fund Investment System ? Personnel and Payroll Systems ? Criminal Justice Act Payment System

    6. Current Service Delivery Model

    7. FAS4T Service Delivery Model

    8. ? Significant Cost Savings and Avoidance ? Not our Core Business ? Were Not Particularly Good at Providing Services ? Technology Changing too Fast ? Government Procurement and Personnel Regs

    9. ? Hosting Services ? Hardware, Upgrades and Maintenance ? Application, System and 3rd Party Software ? OS & DBMS ? Application & 3rd Party Software ? Any other software (TMS, Monitoring, HD, etc.) ? Configuration Management

    10. ? Security ? Personnel ? Data ? Physical ? Standards ? ISO 9001 ? SAS 70 ? NIST 800-18, 26, 30, 53, and 60 ? NACI

    11. ? Backups and Off-site Storage ? Local and Remote ? Disaster Recovery at Remote Site ? Full Recovery 48 hrs After Declaration of Disaster ? Philadelphia ? Tier 3 User Support

    12. ? India Oh No!!!!! ? Resistance from Internal Stakeholders ? Control, Accessibility and Performance ? Trust ? Security ? Loss of Institutional Knowledge ? No Experience with Outsourcing

    13. ? Vendor Understanding of Judiciary Business ? Functions ? Drivers ? User Base and Culture ? Negotiating Service Levels

    14. ? Solicit Partnership and Buy-in w/Stakeholders ? Clearly Document Services to be Outsourced ? Document and Circulate Detailed C/B Analysis ? Stakeholder Review and Input ? Document Current Measurable Service Levels

    15. ? Attempt to Establish SLAs w/Contractor ? Conduct Proof of Concept w/Champion Users ? Require Contractor to Meet or Exceed Current Levels ? Negotiate SLAs Based on Proof of Concept ? Review Results w/Stakeholders & Agree to Proceed

    16. ? Availability of the hosted application ? Production ? Test ? FTP ? Performance of the application ? Production Only ? Responsiveness of key services ? Database refresh ? Incident notification ? Incident escalation

    17. ? Availability (SiteScope) ? Performance (Tuxedo) ? Incident response times (Remedy) ? Intrusion Detection System (NetSec)

    18. Availability Measures * Mon thru Fri 7am until 10pm ET excluding Federal holidays. Excludes scheduled downtime, authorized requests by the AO, outages caused by or controlled by third-parties, items not under direct control of Contractor, periods during which a Force Majeure event applies.

    19. Performance Measures

    20. Responsiveness Measures

    21. ? Partnership w/ Stakeholders and Contractor ? Built on Mutual Trust ? Measurable Data Sources ? If not Important Dont Measure ? Established Mechanism to Measure

    22. ? Less is More ? Dont Over Complicate ? Root Cause Analysis ? Incentives + or - Penalties ? Review and Revisit Regularly

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