1. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 1 Using the Business Case to Guide a Transformation Procurement NASACT Conference August 24, 2015

2. Presenters: Doug Cotnoir, CPA, CIA Maine State Controller Mike Russell, CPA Director, 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

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

4. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 4 Factors Driving HRM Transformation In Maine Current Human Resource Management System (HRMS) outdated HRMS functionality weak in critical areas of rewards, talent management, performance management, legal compliance Inability to deploy self service technologies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

5. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 5 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

6. Development of A Comprehensive Business Case To Drive Decision Making

7. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 7 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

8. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 8 Business Case Cost Savings Model $13.8 Million In Cost Savings Improved Service Delivery Legacy Systems Retired 50% FTE Reduction (Redeployed)

9. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 9 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

10. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 10 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

11. Driving Transformation Requirements Through The Procurement Process

12. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 12 HRMS Procurement Development Functional & Technical Requirements Current State Challenges State Purchasing Guidelines Technical Workshops Purchasing Workshops Functional Workshops

13. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 13 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

14. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 14 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

15. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 15 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 ~~~~~ Vendor References Final Vendor Rankings “Best And Final Offer” Is NOT Included In Maine Consensus Scoring Process

16. Revised Business Case Based On Procurement Results

17. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 17 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

18. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 18 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 Reduction 30 SaaS Only More Responses Mature Technology Service Offering Efficiency through automation Narrow range of pricing proposals, meeting five-year budget goals (estimated) FTE Reduction 25-30

19. State of Maine NASACT Presentation “Using the Business Case to Guide a Transformation Procurement” 19 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

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