Case Studies of Successful Public Private Partnership Programs in e-Gov

Presented to The World Bank Conference on e-Gov PPP

Dean Merrill, Vice President Consulting

June 25, 2008

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Among largest independent IT

and BPS providers

Among largest independent IT

and BPS providers

100+ proprietary business solutions

100+ proprietary business solutions

Founded in 1976Founded in 1976

100+ offices serving clients in

16 countries

100+ offices serving clients in

16 countries

Revenue run rate of CDN $3.7B (1)Revenue run rate of CDN $3.7B (1)

Global delivery model – onshore,

nearshore, offshore

Global delivery model – onshore,

nearshore, offshore

Client satisfaction score of 8.8 (2)

Client satisfaction score of 8.8 (2)

End-to-end services

End-to-end services

Approximately 26,500

professionals

Approximately 26,500

professionals

Focused industry expertise

Focused industry expertise

(1) Q12008 results, ending December 31, 2007(2) 2007 ranking out of 10; part of CGI’s ISO 9001:2000-certified Client Partnership Management Framework

CGI Today

A world-class IT and BPS leader

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Public Private Partnership (PPP) and Benefits Funding Approach

Public Private Partnership “A public private partnership can be defined as an agreement

between government and private entities for the purpose of delivering a project or service, by sharing of risks and rewards of the venture.”

Benefits-funding is a type of PPP CGI has performed successfully Refers to vendors being paid as technology and process

investments lead to revenue benefits beyond an established baseline.

Traditional Projects and deliverables paid through increased revenue (Funds qualitative and quantitative improvements)

Fixed price, not revenue sharing Partnership arrangements between public and private sectors as

with other PPPs (e.g, shared savings, outsourcing and other performance based approaches).

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CGI in Tax & Revenue ManagementBenefits Funded Projects in the U.S.

CGI Footprint in Revenue Agencies

Internal Revenue Service

Kansas$182 Million

Kansas$182 Million

Virginia$231 Million

Virginia$231 Million

Grand Total$1.55 BillionGrand Total$1.55 Billion

Missouri$55 MillionMissouri

$55 Million

California$570 Million$176 Million$41 Million$37 Million

California$570 Million$176 Million$41 Million$37 Million

Hawaii$252 Million

Hawaii$252 Million

Canada Revenue Agency

Benefits Funded projects

Australian Tax Office Other Tax and Revenue projects

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Benefits Estimation and Measurement

Benefits Estimation Based on detailed analysis Derived from programmatic changes that will be proposed for

the project Calculated by extrapolating from similar implementations in other

States Intended to be conservative and achievable

Benefits Measurement Requires a more detailed analysis Needs to be defensible to external scrutiny Will provide monthly measures of the specific increases in

revenue over a defined baseline due to the project

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Guiding Principles for Estimating Benefits in Tax and Revenue

Financial benefits typically come from overall improved tax compliance

Improvements in audit and collections typically drive benefits-funded programs

Changes in voluntary compliance are significant, but are difficult to measure in a way that is auditable and can withstand public scrutiny

The significant efficiencies in operations will be utilized within the department to improve customer service

Desirable to fund the project during the project life-cycle Partners must be committed to success

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Guiding Principles for Benefits Measurement

State tax agencies, by their very nature, are very much in the public eye

When a State tax agency undertakes a benefits funded project it must be able to withstand the highest level of public scrutiny

The benefits measurement methodology must therefore be a clear, conservative, defensible depiction of identifiable benefits

Important to plan and achieve quick wins

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Case Study:CGI and the Franchise Tax Board

Faced with significant budget gaps in the early 1990’s

Estimated tax gap of $2.7 Billion Identified significant opportunities, but

could not get approval to proceed

Solution:Look for strategic partners to share the risks and rewards

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Success Highlights

CAPS (Business Collections) - $37 M in first year, paid for itself in 45 days

BETS (Business Tax) - $11 M in new revenue Added important data sources for FTB’s Compliance

Programs PASS (Audit Data Warehouse) - $176 M in increased

revenue for California Supports more than 800 staff

ARCS (Personal Collections) - $570 M in increased revenue for California Utilizes risk models to maximize staff effectiveness

INC (Non Filer) - Generates annual revenue increases in excess of $36 M per year

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Another California Example

California Child Support Project: teaming the State, IBM, Accenture, and CGI  in implementing a Statewide Child Support System

California just received their certification of the system which resulted in a penalty rebate of $193M. A portion of the project is paid based on programmatic performance improvements such as increased collections.

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Case Study: State of VirginiaBusiness Challenges

Concern over Virginia’s revenue administration Critical state auditor report in 1993 Lack of efficiency, poor public image

Aging technology infrastructure Inflexible tax administration software tools Data entry, remittance, microfilm and mail opening equipment

obsolete and beyond repair

Existing processes and systems could not support customer-centric vision for revenue and collections management

Severe budget constraints

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Case Study: State of VirginiaEnd State Vision and Approach

Six-year program undertaken to re-engineer all business processes, applying technology where appropriate

New customer-centric practices reinforced with next generation technology

Integrated end-to-end program strategy: eGov self service Financial and revenue management systems Organizational design, change management, & training

Benefits funded through improved collections: Risk/behavior modeling and development of decision analytics

via Strata CACS for collections case management CRM and contact management

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Case Study: State of Virginia-Results

More than $230 million in additional revenue collected ─ with no additional cost to taxpayers

More than 336,000 individuals and 59,000 businesses filed $970 million in tax returns via iFILE through VATAX’s Web site

Fifty percent of new businesses have registered online through iREG, with more than:

480,000 documents accessed through the Policy Library

452,000 filings through Telefile