State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 1 Using the Business Case to Guide a Transformation.

State of Maine NASACT Presentation“Using the Business Case to Guide a Transformation Procurement”

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Using the Business Case to Guide a Transformation Procurement

NASACT Conference

August 24, 2015

Presenters:Doug Cotnoir, CPA, CIAMaine State Controller

Mike Russell, CPADirector, KPMG

“By developing a comprehensive business case, and then using that business case to guide our procurement, we were able to choose our course of action with confidence, even when the procurement results did not meet objectives.”

Doug Cotnoir, CPA, CIA

Human Resources Management (HRM) Transformation in the State of Maine


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Factors Driving HRM Transformation In Maine

• Current Human Resource Management System (HRMS) outdated

• HRMS functionality weak in critical areas of rewards, talent management, performance management, legal compliance

• Inability to deploy self service technologies like mobile support

• Current mainframe based system difficult and expensive to maintain

13,000 State

Employees


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Initial Steps To HRM Transformation

• Current Process Flows

• Process Documentation

Initial HR Assessment

• Establish Objectives

• Secure Leading Practice Support

Steering Committee • Stakeholder

Survey• Review Potential

Operating Models

HR Payroll Workshop

Development of A Comprehensive Business Case To Drive Decision Making


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Primary Business Case Components

• Identification of In Scope Processes• Costing of Current Processes

In Scope Processes

• Current Costs on Per Employee Per Year Basis• Four Key Process Areas Noted As Savings Opportunities

Benchmarking Assessment

• New SaaS HRMS and no BPO• New SaaS HRMS and selected BPO• Comprehensive BPO with new HRMS

Future State Operating Model Options

• Transition and Implementation Costs• Future Operational Costs• Potential Savings Based On Current Process Costs

Future State Options High Level Cost Estimates


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Business Case Cost Savings Model

$13.8 Million In Cost Savings

Improved Service Delivery

Legacy Systems Retired

50% FTE Reduction

(Redeployed)


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Evaluation of Business Case Options

Strategic Fit

Technology Fit

Change Management Impact

Communication Impact

Fiscal (Cost Benefit) Impact

Project Organization Impact

Project Complexity & Risk

Steering Committee


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Business Case Option Recommendation

Comprehensive BPO with new

HRMS

Maximum Cost

Savings

Head Count

Reduction

Legacy Systems Retired

Additional Functions

Executive Review

HR BPO With SaaS Procurement Approval

Driving Transformation Requirements Through The Procurement Process


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HRMS Procurement Development

Functional & Technical

Requirements

Current State

Challenges

State Purchasing Guidelines

Technical Workshops

Purchasing Workshops

Functional Workshops


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HRMS Procurement Document Set

Appendix A

Appendix B

Appendix C

Vendor Workbooks

B - Current State Workflows

C - Interface Formats

Response Workbooks

A - Policy Document Listing

• Introduction• Scope of

Services• Key RFP

Events• Submission

Requirements• Evaluation

and Selection• Contract

Conditions


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HRMS Procurement Vendor Responses

Executive Summary• Executive level overview of vendor proposal

Vendor Organization Background and Qualifications• Additional information regarding vendor organization.

Technical and Functional Requirements• Specific information for each requirement including the Vendor Response (Standard, Configurable,

Future, Custom, Not Proposing), Delivery Method, and Comments

Transition Overview & Plan• Information on vendor capabilities, key differentiators, the transition model being proposed and a

transition narrative

Pricing & Fees• Financial response along with any relevant assumptions

Economic Impact Within the State of Maine• Description of vendor’s economic impact upon and within the State of Maine

Governance and Relationship Management• Description of vendor commitment, level of resourcing provided, and appropriate processes


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HRMS Procurement Response Evaluation

Consensus Scoring Process

Individual Evaluator Review of

Each Vendor Response

Consensus Scoring By Evaluation Team For

Each Vendor

Vendor Scripted Demos

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Vendor References

Final Vendor Rankings

“Best And Final Offer” Is NOT Included In Maine Consensus Scoring Process

Revised Business Case Based On Procurement Results


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Revised Business Case Inputs

Functional Requirement Evaluation

Personnel Resource Review For Impacts By Automation

State HR

Process

Labor Costs

Facility Costs

Desktop & Internal Business System Costs

State Baseline

Costs

Update of Software and BPO Services Costs Included in Vendor Proposals

RFP Vendor Costs

Significant Changes In Revised Business Case


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Analysis of Key Business Case Inputs

Full BPO and SaaS

• Limited Responses

• Immature Business Process Service Offering – Public Sector

• Wide range of pricing proposals, exceeding five-year expected budget (proposals)

FTE Reduction30

SaaS Only

• More Responses

• Mature Technology Service Offering

• Efficiency through automation

• Narrow range of pricing proposals, meeting five-year budget goals (estimated)

FTE Reduction25-30


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Revised Steering Committee Recommendation

Executive Review

SaaS Only Procurement Approval

Service Combination Not Mature In Public Sector Market

Limited Vendor Response, Costs

Exceeded Expectations

System Implementation

Would Be Delayed One Year

Continued Reliance On Outdated Technology

Issue SaaS Only

RFP

Focus On Service Delivery With Most Value For State

Questions?

Feedback?

State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 1 Using the Business Case to Guide a Transformation.

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