Using the Business
Case to Guide a
Transformation
Procurement
NASACT Conference
August 24, 2015
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
1
“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
Presenters:
Doug Cotnoir, CPA, CIA
Maine State Controller
Mike Russell, CPA
Director, KPMG
Human Resources
Management (HRM)
Transformation in
the State of Maine
Factors Driving HRM Transformation In Maine
13,000
State
Employees
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
• 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outdated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
4
Initial Steps To HRM Transformation
• Current Process
Flows
• Process
Documentation
Steering
Committee
• Establish
Objectives
• Secure Leading
Practice Support
Initial HR
Assessment
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
• Stakeholder
Survey
• Review Potential
Operating Models
HR Payroll
Workshop
5
Development of A
Comprehensive
Business Case To
Drive Decision
Making
Primary Business Case Components
In Scope Processes
• Identification of In Scope Processes
• Costing of Current Processes
Benchmarking Assessment
• Current Costs on Per Employee Per Year Basis
• Four Key Process Areas Noted As Savings Opportunities
Future State Operating Model Options
• New SaaS HRMS and no BPO
• New SaaS HRMS and selected BPO
• Comprehensive BPO with new HRMS
Future State Options High Level Cost Estimates
• Transition and Implementation Costs
• Future Operational Costs
• Potential Savings Based On Current Process Costs
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
7
Business Case Cost Savings Model
Improved
Service
Delivery
$13.8
Million
In Cost
Savings
50% FTE
Reduction
(Redeployed)
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
Legacy
Systems
Retired
8
Evaluation of Business Case Options
Strategic Fit
Technology Fit
Change Management Impact
Communication Impact
Fiscal (Cost Benefit) Impact
Steering
Committee
Project Organization Impact
Project Complexity & Risk
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
9
Business Case Option Recommendation
Maximum
Cost
Savings
Additional
Functions
Comprehensive
BPO with new
HRMS
Legacy
Systems
Retired
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
Executive Review
Head
Count
Reduction
HR BPO With SaaS
Procurement Approval
10
Driving
Transformation
Requirements
Through The
Procurement Process
HRMS Procurement Development
Technical Workshops
State
Purchasing
Guidelines
Purchasing Workshops
Current
State
Challenges
Functional &
Technical
Requirements
Functional Workshops
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
12
HRMS Procurement Document Set
Appendix
A
• Introduction
• Scope of
Services
• Key RFP
Events
• Submission
Requirements
• Evaluation
and Selection
• Contract
Conditions
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
Vendor
Workbooks
A - Policy Document
Listing
Appendix
B
B - Current State
Workflows
Appendix
C
C - Interface
Formats
Response
Workbooks
13
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
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
14
HRMS Procurement Response Evaluation
Consensus Scoring Process
Vendor
Scripted
Demos
~~~~~
Vendor
References
Individual
Evaluator
Review of
Each Vendor
Response
Consensus
Scoring By
Evaluation
Team For
Each Vendor
Final Vendor
Rankings
“Best And Final Offer” Is NOT Included In Maine Consensus Scoring Process
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
15
Revised Business
Case Based On
Procurement Results
Revised Business Case Inputs
State
HR
Process
State
Baseline
Costs
RFP
Vendor
Costs
Functional
Requirement
Evaluation
Labor Costs
Personnel
Resource
Review For
Impacts By
Automation
Desktop &
Internal
Business
System
Costs
Facility Costs
Update of
Software and
BPO
Services
Costs
Included in
Vendor
Proposals
Significant Changes In Revised Business Case
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
17
Analysis of Key Business Case Inputs
• Limited Responses
Full BPO and
SaaS
• Immature Business Process Service
Offering – Public Sector
FTE Reduction
30
• Wide range of pricing proposals,
exceeding five-year expected budget
(proposals)
• More Responses
• Mature Technology Service Offering
SaaS Only
• Efficiency through automation
FTE Reduction
25-30
• Narrow range of pricing proposals,
meeting five-year budget goals
(estimated)
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
18
Revised Steering Committee Recommendation
Service
Combination Not
Mature In Public
Sector Market
Limited Vendor
Response, Costs
Exceeded
Expectations
Executive Review
Issue
SaaS Only
RFP
System
Implementation
Would Be Delayed
One Year
Continued Reliance
On Outdated
Technology
SaaS Only
Procurement Approval
Focus On Service Delivery With Most Value For State
State of Maine NASACT Presentation
“Using the Business Case to Guide a Transformation Procurement”
19
Questions?
Feedback?