B. Executive Summary

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2 B. Executive Summary Across the country, state governments face tough economic challenges. High unemployment is causing record numbers of citizens to seek public assistance, straining government s aging systems and shrinking staff. To address growing demand, Michigan leaders relied on the state s consolidated information technology (IT) authority to develop and implement a workable federated model that consolidates hardware and software platforms and shares customer relationship management (CRM) services enterprise-wide. Previously, call centers in a number of Michigan departments used multiple legacy systems that could not be configured or scaled to meet changing business needs. Systems varied in age and included nonstandard technology that was costly to support. At the same time, the workforce shrank more than 10 percent, leaving fewer employees to perform these labor-intensive duties. The demand for performance and fiscal pressures are causally intertwined. To manage a growing number of caseloads with smaller staffs, Michigan needed to accelerate maturation of IT solutions. Leaders expanded the CRM service model beyond a sharedsupport team to incorporate IT governance, best-practice strategies, priority setting, and application portfolio management. By replacing aging legacy systems with processes and platforms that could be used across departments, Michigan established the appropriate framework to support sound business practices, maintain accountability, and ensure cost effectiveness. Implementation of the new CRM solution began in April By the end of 2010, six contact centers using this shared platform were providing improved citizen services that range from tax support to food assistance. In 2011, two more centers were added, and several more are scheduled for implementation, including a center for one of Michigan s larger counties. Citizen self-service has climbed, allowing access to services anytime, anywhere. For example, online visits for tax support increased more than 32 percent after implementation of the platform. Annually, approximately 6 million citizen and business transactions use this solution. Implementation timeframes have improved dramatically. Systems that once took six to 12 months to install can now be put in place in two to five months. Departments have realized strategic and procedural advantages as well as operational, efficiency, cost-savings, and cost-avoidance benefits. To date, IT operations cost savings and avoidance have been approximately $3.7 million annually. This number is expected to grow as other government entities take advantage of this CRM solution. Today s growing demand for services can only be met by implementing shared, integrated back-end services that provide optimal solutions for a broad range of needs. By developing its own platform-as-a-service model, Michigan reduced overall ownership costs and the high entry costs for small departments. This model, along with the procedural, personnel, and technology lessons learned, can be emulated by other states, in whole or in part, regardless of their own organizational design and maturity. Page 2 of 7

3 C. Description Business Problem With the rising need for public services and fewer state employees to provide them, Michigan turned to new technology resources to sustain and improve state operations. In 2009, the state s unemployment rate peaked at 15.3 percent, increasing the number of first-time filers for public services such as medical care, food, utilities, and daycare assistance. As caseloads soared, the state had fewer workers to serve customers. A 2010 incentive program spurred the retirement of 4,755 state employees, reducing the workforce significantly. At the same time, citizen demand for online services anytime, anywhere climbed. Although Michigan already offered online services, many departments used multiple legacy customer relationship management (CRM) solutions that challenged information technology (IT) support staff. Existing systems could not be configured or scaled to meet increasing demand. Expensive deployment of separate systems was not an option for departments with reduced funds and workforce. Departments struggled with outdated technology and inefficient, labor-intensive processes. CRM Shared-Services Solution To address these challenges, Michigan looked to information and communications technology (ICT) innovations and developed a strategy for CRM shared services that integrated telecommunications infrastructure with applications to expand self-service channels, including Web and interactive voice response (IVR) resources. Implemented in 2009, the innovative solution leveraged CRM hardware and software at the enterprise level for use across departments and programs with centralized IT support, including Accenture as the integrator. The strategy to build once, use often was accomplished by engaging clients in plans to improve services and governance. Michigan turned to a shared, integrated management, operational, and governance solution to resolve the problem. Department of Technology, Management & Budget (DTMB) leadership facilitated strategic planning meetings with a blended group of IT and business leaders, sharing information on industry best practices and relating success stories from other states and private industry. DTMB worked with contact center managers to understand their shortterm business needs and long-term goals, recommended ways to use innovative CRM technologies, and evaluated vendor solutions. This collaborative process produced a governance structure, a shared-services model, and firm priorities, including a commitment to leverage CRM solutions across departments, share Siebel and Oracle platforms, and develop new enterprise services. After standardizing CRM and telephony software components, Michigan built its own platform-as-a-service model that reduced ownership costs and removed high entry costs for smaller departments. This effort is in line with federal IT strategy of applying light technology and shared solutions. With its consolidated authority, Michigan was well positioned to implement scalable enterprise solutions. Its efforts yielded a workable federated model that maintained the identity of individual department call centers while consolidating and leveraging the hardware and software platforms. This approach set the framework for optimal savings Page 3 of 7

4 and increased efficiencies for IT and business operations. The CRM shared portfolio of projects grew from nine projects to 28 active projects across six departments. Governance and Portfolio Management Michigan expanded the CRM service model to include governance, best-practice strategy, priority setting, and portfolio management at the enterprise level, facilitating ongoing collaboration and communication. Several key pieces of the governance framework were put into place. In 2010, program management offices were implemented across DTMB, and program management for CRM was created. It included creation of a CRM program manager with responsibility for managing the entire project portfolio. Service rates were developed, which provided a method to share costs among tenants for easier budgeting. Technology Maturation This CRM shared service arranges an innovative set of contact center technologies into a scaleable, flexible package that increases self-service channels, provides workforce management tools to gain efficiencies, and uses metrics to drive better decisions. Faster installation reduces implementation costs. Ongoing support savings and cost avoidance reduces annual costs 47 percent compared with stand-alone systems. The solution reduced the total legacy server footprint while providing development, test, and disaster recovery environments that were not available in all the legacy platforms. Security was enhanced, ensuring the integrity of information transmitted to protect citizen privacy and block unauthorized access. This innovative solution was built using the following proven technologies and tools. Oracle s Siebel CRM tracks customer service activity and manages service consistently across multiple communication channels, including eservice for Web. The Genesys Voice Platform, which is the interactive voice response (IVR) solution, includes Call Center Pulse for reporting and analysis. Skills-based routing ensures calls are sent to the agent group with the most appropriate skills. Computer Telephony Integration provides agents with screen pops containing caller information. Workforce management is used to forecast, plan, and schedule work. NICE Perform provides call-monitoring services for quality assurance and training, including metrics to evaluate and improve agent performance. IBM s FileNET provides an image repository as well as a knowledge database. Michigan relied on the CRM IVR solution to provide self-service to citizens in urgent need of assistance. To meet this demand, Michigan implemented a self-service IVR solution in four months. This IVR receives approximately 930,000 contacts per year and provides real-time responses to citizen inquiries on benefit status. This industrysetting example demonstrates how self-service channels can reduce caseworker time responding to high-volume queries so they can better focus on client outcomes. The CRM enterprise call-monitoring platform improved service quality and agent performance. It replaced four legacy systems that were hosted in closets with inadequate security. The new eco-friendly environment reduced NICE servers from 25 to 10 and added development, test, and disaster recovery environments. The solution, Page 4 of 7

5 which is affordable and quick to market, was installed for a tax collections program in two months, compared with eight months required in a siloed environment. D. Significance: Improving Government Operations Michigan took the innovative approach of sharing a unique set of services across a wide range of government entities. The solution had to be flexible enough to meet the business needs of a diverse set of departments, accessible to all, and promise real improvement in government operations. The initial allure of this solution was its potential for savings and cost avoidance, but other factors made it enticing to departments entrenched in legacy solutions and silo mentalities. This collaboration success story matched proven technologies with substantial demand, resulting in measurable benefits and growth potential. At its core, it is a reliable, secure shared solution that multiple departments can use to provide citizens with greater self-service access at lower cost. The significance of this project falls into key areas. Strategy This solution implements the governor s top priorities of fiscal responsibility and Value-for-Money Government. It aligns to goals in Michigan s ICT Strategic Plan that address efficiency and citizen access. This project s strategic improvements include legacy modernization, shared service, self-service, and a governance structure that includes measures for performance improvement. Procedures The CRM solution enables the reuse of a best-in-breed consistent architecture with common processes across departments. The significant procedural improvements include project management, a standardized implementation methodology, the ability to leverage infrastructure, and the delivery of a secure solution. Operations This solution supports more than 6 million citizen and business transactions annually. Significant operational improvements include real-time crosschannel transaction processing; quicker, more responsive customer interaction using intelligent routing and workforce management; consistent answers across state government; delivery of a shared-service team model for leveraged on-site or remote support; and scalability and functionality options to meet the business needs of departments of all sizes. E. Benefits Today, multiple state departments and their customers benefit from this shared solution. As the user base grows, costs are reduced, opening the door to even more usage. Citizens are the true beneficiaries of this project, which opens multiple channels of access to government services, shortens transaction times, provides better privacy protection, and better aligns citizens to the services they seek. The tangible benefits of this solution achieved to date include: Increased Options for Departments For many departments, the prospect of planning, developing, and implementing a CRM solution was prohibitive. Cost was one factor, but other factors included the difficulty of piecing together the right technologies Page 5 of 7

6 and understanding the potential of each service offering. Since the initiation of this solution, the number of active projects has grown by 200 percent. Shared Solution Across Departments Michigan s departments vary in size and business objectives. The solution needed to be scalable to meet the call center demands of all departments and allow all of them to take advantage of the solution. It also will allow city, county, and township government participation. Time to Implement This shared CRM solution has reduced deployment time by more than half. What took six to 12 months to deploy now takes two to five months. For example, the CRM shared Siebel platform allowed a call center solution for medical professional licensing to be implemented in five months, compared with 10 months required in a siloed environment. The ability to record and track the customer interactions improved services, reduced processing time, and provided worker efficiencies to process 375,000 annual licenses. Technical and Capital Resources Leveraging This shared service model maintains the identity of the individual departments while providing an economical and greener enterprise-wide approach. Using common hardware and software lowered maintenance costs, simplified upgrades, and provided cost savings and cost avoidance. $509,000 was saved by sharing Siebel, Oracle database and NICE, reducing the number of required servers by 43. $83,000 was saved by reducing development hours with the shared platform. $750,000 was saved through a one-time software discount for volume pricing. Lower Worker Demands Because this alignment of solutions provides citizens with the power to do it themselves, agents time on the phone is reduced. Customer service representatives have better information that allows them to handle more calls effectively. Using this platform, a department increased Web self-service by 14.2 percent in It anticipates a 32 percent increase for Improved Efficiency Many features in this suite of software promote business efficiency, cut times for common tasks, and provide for quicker, repeatable processes. Examples of efficiencies gained through this solution follow. Agents have the ability to record calls on demand, decreasing the time devoted to this task, reducing paper use, and allowing an electronic review process. Four departments pooled training resources, reducing costs by 40 percent. Departments that may not be able to afford full-scale training can now participate in sessions with those departments that have training funding. Analytics allow for the prediction of spikes and lulls in call volumes. Real-time and historical statistical data is provided at the desktop, helping agents and managers make business decisions faster. The same IT staff is leveraged for support and management across multiple departments, allowing quicker resolution of technical problems. Service monitoring and notifications help uphold service level targets. Page 6 of 7

7 Reduced IT Spend (Annual Savings) Michigan s departments realized reductions in their total cost to serve by increasing automation, sharing services, leveraging infrastructure, eliminating repetition, and reducing manual tasks. The chart below shows the cost avoidance departments realized by using the smaller enterprise team sharedsolution approach versus separate teams supporting separate solutions. Enterprise Support Team vs. Separate Support Teams - Annual Cost Avoidance Department Separate Teams Shared Enterprise Team # IT FTEs Cost # IT FTEs Cost Treasury 5 $1,352,000 Retirement Services 5 $1,352,000 Secretary of State 4 $1,081,600 Civil Service 3 $811,200 Community Health 2 $540,800 Human Services 1 $270,400 Vendor support fixed contract costs $1,807,000 DTMB 3 $561,600 Total: $5,408,000 Total: $2,368,600 (FTEs include 70% vendor staff and 30% state staff) Total Annual Cost Avoidance: $3,039,400 Other Annual Savings Annual Hosting/Storage Separate Environments $992,600 Annual Hosting/Storage Shared Services Total Annual Savings: $650,000 $342,600 Future Direction for Improving State Operations Implementing a CRM platform has enabled Michigan to leverage this shared solution across multiple departments. DTMB has started to build a state-of-the-art enterprise IVR platform, which is scheduled for completion in July DTMB is exploring additional shared platform capabilities. These may include: Further infrastructure optimizations by moving from siloed to shared platforms Virtual hold technologies to improve citizen satisfaction and lower long-distance charges Web chat capabilities for more effective real-time interaction Proactive outbound communication to citizens The ability to leverage contact center agents across participants, balancing the demand across the various contact centers This solution has the potential to grow to include 16 state departments and hundreds of local governments sharing infrastructure, software, training, and support. This implementation of shared, integrated back-end services provides the optimal solution for meeting the broad range of citizen needs and the growing demand for services. Page 7 of 7

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