At INPUT's 3rd Annual State & Local MarketView Conference Wednesday, I presented on some significant projects that states are procuring in the 2008 time-frame. State priorities are centered around Consolidation, Shared Services, Health IT and Interoperability.

Every year, the National Association of State Chief Information Officers (NASCIO) conducts a survey with the State CIO's on what their main priorities are for the year. The rankings reflect the general consensus on each issue. In 2007 and 2008, 5 out of the 10 priorities were in the Top 10 for 2 consecutive years. These priorities include: Consolidation, Information Security, Disaster Recovery, Health IT, and Shared Services.

Source: NASCIO and CDG

For Wednesday's presentation, I focused on major opportunities that fell under Consolidation/Shared Services/ERP, Health Information Technology, Interoperability. These 4 are driving the bulk of significant IT investments.

Consolidation/Shared Services/ERP

• Georgia Infrastructure Transformation 2010 (GAIT 2010): In August 2007 the Georgia Technology Authority (GTA) partnered with Technology Partners International, Inc (TPI) to conduct an assessment of the state's IT infrastructure. The consulting group closely examined the state's IT infrastructure services and operations such as data center services, desktop services, telecommunications and support functions. Following a comprehensive evaluation of Georgia's IT services, it was concluded that Georgia has an "aging IT infrastructure and faces challenges in meeting industry standards and providing appropriate levels of security and disaster recovery. Moreover, GTA's annual technology expenditure report provides that Georgia's executive branch spends about $617 million in information technology. Therefore, in an effort to relieve the state from millions of dollars in additional appropriations and to ultimately increase efficiency of the state's IT infrastructure The consolidation, although expected to affect the jobs of 1,100 state employees, is also an opportunity for the state to eliminate vacancies that will become available as state employees retire. According to the Governor's press release, in GTA alone "more than 20 percent of the workforce will be eligible for retirement within the next year. The Georgia Technology Authority issued Requests for Proposal (RFPs) on April 21, 2008, to potential service providers who pre-qualified to bid on contracts for Georgia Infrastructure Transformation (GAIT) 2010. The RFP for managed network services, which includes the state's wide area network, was issued to: AT&T, EDS, Northrop Grumman. The RFP for infrastructure services – which includes data centers, mainframes, servers, PCs and laptops – was issued to: EDS, IBM,Northrop Grumman.

  Perdue killed a similar proposal by his predecessor, Roy Barnes, that would have consolidated all of the state's telecommunications services and moved the work to private contractors, "Georgia Converged Communications Project ". Unlike Perdue's plan, the $1.8 billion deal would have awarded a contract to a single vendor rather than multiple companies. Perdue described Barnes' proposal as "a solution looking for a problem." Another big difference which makes this outsourcing deal one to watch for the ages, is the speed in which they are trying to get it done. Every major milestone has been met ahead of schedule. There are any number of reasons why most of these comprehensive outsourcing deals crash. For one, they are taking far too long to get done. Rather than run the procurements like a sprint, the states approach them as a marathon. In Connecticut and Georgia, it took up to two years, which doesn't benefit the states or the bidders that spend tens of millions of dollars chasing the deals.

• Commonwealth of Pennsylvania Shared Infrastructure Services: The Pennsylvania Department of General Services released an RFP for consulting services in early May 2007. The project involves the review and analysis of infrastructure services in the Commonwealth's agencies, boards and commissions under the Governor's jurisdiction. This RFP sub-defines infrastructure services into Computing, Seat Management, and Telecommunications services. The RFP requires for each service an As-Is-Review, the creation of Cost of Ownership Models, and Recommendations for improvement. The RFP optionally requires Implementation Plans for each recommended solution, the creation of Service Provider RFPs/RFQs, a design and implementation plan for Administrative Systems, and a General Contractor RFP/RFQ to manage the implementation and operation of Shared Services.An Award was made to Equaterra, Inc. late 2007 for consulting for approximately $1.5 million. Depending on results of their findings, subsequent RFPs may be released in the future for the three areas of interest. It is possible that one, two or three RFPs can be released if Equaterra sees fit for the Commonwealth to do so in a cost-efficient manner.

  The Commonwealth's value proposition for pursuing this opportunity includes:Data Powerhouse contact expires in 2009;Many agency servers have utilization <10% of capacity; Limited Server Administration Skill sets in many agencies; Total Cost of Computer Services estimated at $183 Per Year; and 20-40% savings estimated via consolidation and shared infrastructures.

• Illinois Shared Services Program: This program really blends and has components between Consolidation, Shared Services and ERP. In March 2006, Illinois Governor Rod Blagojevich signed Executive Order 2006-06 which began the consolidation of several human resources, procurement and financial functions into five Shared Services Centers (SSC).Two have been implemented -- the Public Safety SSC (PSSSC) and the Administrative and Regulatory SSC (ARSSC). On March 31, 2008 Governor Blagojevich moved to create the last three remaining SSCs when he signed Executive Order 2008-01. These organizations are the Social Services SSC, Healthcare SSC, and the Environmental and Economic Development SSC. The first two new SSCs -- Social Services and Healthcare -- will provide identical services to their agencies as do the PSSSC and the ARSSC and will be housed within the Department of Healthcare and Family Services and the Department of Human Services, respectively. The Environment and Economic Development SSC (EEDSSC) will provide those services as well as IT application development, making it unique among the SSCs.These SSCs will consolidate 158 fiscal IT applications, 175 human resources applications and inconsistent paper-based processes. Many of the IT systems are over 20 years old, technologically obsolete and incompatible with each other. Consolidation should save the state millions of dollars each year.The projects consist of the bid for a Statewide Information System as well a Fiscal & Human Resources Software and Integrator Services. The projects are estimated to be worth over $40M. Proposals remain due June 13th for the SIS project. The RFP release for Software Integrator Services is anticipated late Fall 2008. The big thing to keep an eye on and whether this project takes off and succeeds is the political ramifications of the corruption rumors.Government will come to a virtual standstill while the opposing factions within the Democratic party dukes it out. Because the governor is so unloved by the legislature, they're pouncing on the shared services initiative as a way to deal the governor a defeat – they also don't think much of his ability to manage. This could ultimately lead to this project getting derailed.
• California Financial Information System (Fi$cal): The goal of project is to improve the ability to perform management analysis and reporting at all levels by replacing the infrastructure with the next generation of systems and transitioning the workforce. The project will likely consist of systems integration, software and independent verification and validation. As the new CIO of the Union's largest state, Teri Takai is using the breadth of her 30 years of experience to ensure the success of California's Fi$cal project. Teri's experience in Michigan reorganizing and consolidating the state's IT functions into a centralized department, which serves 19 agencies and over 1,700 employees, seems to be translating very well into her handling of buy-in by FI$Cal's stakeholders. On May 12 – 13, 2008 Teri hosted the 1st Annual Government to Government ERP Forum, a collaborative forum that allowed governments to discuss and share their experiences with ERP projects. Clearly an attempt to inform and involve individuals from across and outside the California enterprise, the forum could be an outstanding vehicle to foster individual investment in the project and collaboration to identify best practices. Another move to garner unity within state agencies is the Memorandum of Understanding (MOU) signed by the State Controller, the State Treasurer, and the Directors of the Departments of Finance and General Services demonstrating support for the project at the highest levels of these organizations. FI$Cal team members, partner agency representatives and State department representatives have begun an education process to include software vendor demonstrations allowing all stakeholders to get familiar with ERP and other related software. The State anticipates the total cost of the FI$Cal Project to be $1.620 billion over 12 years. INPUT expects IV&V and Budgeting System RFP's in the June/July 2008 time-frame, while Integrator and software RFP's are expected later in 2008.

Medicaid Management Information Systems & Health IT

• California Medicaid Management Information System and New York Medicaid Management Information System: California and New York are the two largest states for persons who are eligible for Medicaid, with largest number of beneficiaries and largest number of Medicaid payments made. California (27+ Million payments) and New York (37+ Million payments) are the two largest states for Medicaid payments and will need big/updated systems to process these claims. the two largest states for Medicaid payments will need big systems to process these claims. California is the first state to have online eligibility determination available. The state renewed its contract with EDS for the third time in April 2003 for $407 million over 4-year duration. Medi-Cal Fiscal Intermediary (CAMMIS-FI) is the largest and most complex Medicaid claims processing system of its kind in the nation. It is anticipated that the next contract, which will completely replace the existing 30-year-old mainframe legacy system, will likely be valued in the $700 million to $1 billion range for a multi-year duration (July 2010 to June 2015).The state anticipates to release the 2nd Draft RFP in summer 2008 and the final RFP document in fall 2008 time frame. Medi-Cal Fiscal Intermediary (CAMMIS-FI) is the largest and most complex Medicaid claims processing system of its kind in the nation. It is anticipated that the next contract, which will completely replace the existing 30-year-old mainframe legacy system, will likely be valued in the $700 million to $1 billion range for a multi-year duration (July 2010 to June 2015). The state anticipates to release the 2nd Draft RFP in summer 2008 and the final RFP document in fall 2008 time frame.

  New York extended its contract with CSC in June 2006 for $276 million over a 3-year period. CSC will continue to manage the state's MMIS system through 12/31/2009. CSC processes more than 100 million Medicaid eligibility verification requests a year and 350 million claims and payments of more than $43 billion for NY Medicaid healthcare providers. CSC initially won the 6-year, $351 million MMIS contract in 2000 to develop a new information system for claims processing and reporting, create a large-scale data warehouse, and provide various electronic data interchange (EDI) services. CSC has worked with NY's Medicaid program under two previous contracts since 1986. The New York State legislature passed the FY 2009 approved budget in April 2008 and allocated $95 million for services and expenses related to the operation of the Medicaid eligibility verification system, operation of the Medicaid override application system and the development and operation of the replacement MMIS. The Medicaid related procurements will be split into two segments: 1) Medicaid Data Warehouse and 2) MMIS. The Medicaid Data Warehouse will be the first released and is currently being finalized. Before the Department of Health can release the Medicaid Data Warehouse RFP it must be reviewed and approved by CMS; therefore, no estimated release date is available. The MMIS will be procured second and no time-line is available at this time. INPUT estimates at the earliest an RFP may be released in summer 2008.

• Oregon Health Record Bank: An RFI was released December 12, 2007 to gather vendor information, insights and preview solutions. Several vendors that responded were selected to provide demonstrations. The vendors selected were: Wellogic, Software Engineering Services, Omnimedix, OCHIN, JBS, IBM, Centrihealth and Browsersoft. Currently the Department of Human Services is engaged in establishing plans to implement, support and sustain the health record bank of Oregon, drafting and reviewing the RFP and establishing the initial health record bank hosting. An RFP is tentatively anticipated for June 2008. The ultimate goal of this project is to provide higher-quality care and better health outcomes at a lower per-patient cost than is now being achieved. The project ($5.5 Million) will be funded through the Medicaid Transformation Grant from the Centers for Medicare and Medicaid Services. 5 significant things about this opportunity include: Open-Standards; Consistent with MITA; Patient-Centric; Stakeholder engagement; Financially sustainable model.

Public Safety Interoperability

• Oregon Wireless Interoperability Network : :The OWIN project is designed to establish a statewide emergency communication system. It would involve upgrading what is considered a very fragmented and often unreliable system. The big controversy surrounding the OWIN project is the battle between Gov Ted Kulongoski vs. the Legislation around the proposed price tag of over $650M. Senate Bill 136 was introduced in 2007 and killed in the legislative session in May 2007 due to the budget tag for the project. Legislation appropriated $6M in 2007. PSIC Grant funding will provide the state with only another $12 million, so massive state investment will be needed to achieve anything like what the governor proposed. In February the Oregon Legislature set aside $76M in bonding authority for OWIN infrastructure development (e.g. buildings, towers, microwave equip) in the northwest, down the coast, the southwest and south-central Oregon. Basically a portion of the state's bonding for the OWIN project was earmarked. To actually get the bonds sold and the money put in to the OWIN project, the OWIN Program Office must go to the Emergency Board in June and 1) describe a detailed ";spend"; plan, 2) document the specific partnerships with other governments (e.g. sharing of bldg, tower, other), and 3) a cost estimate for the next phase after they spend the $76M.