Indiana creates OV

1
Indiana creates OV V
Governance Its not all about IT

• Zach Main
• Director Division of Family Resources
• Indiana Family and Socialist Service
  Administration

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FSSA/DFR Overview -2006

• The Indiana Family and Social Services
  Administration (FSSA) provides services to low
  income individuals and families, children, senior
  citizens, people with mental illness, people with
  addictions and people with physical and
  developmental disabilities..
• The Division of Family Resources (DFR) is
  responsible for the administration of the States
  public assistance programs such as Temporary
  Assistance for Needy Families, Food Stamps and
  Medicaid
• 107 offices within the 92 counties in Indiana,
  with at least one office in each county.
• With the exception of the application process for
  Medicaid for children, the application process is
  onerous, requiring at least one, but typically
  several trips to a local office
• Local offices are open Monday through Friday from
  800 a.m. to 430 p.m.
• There are no self-service options available
• Clients are reliant on contact with a single case
  worker to receive services
• In 2005 and 2006, FSSA was restructured by
  executive order and legislative action, creating
  new departments and divisions to facilitate
  greater client focus, more effective
  administration and enhanced overall service
  delivery

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How it all began

• January 10, 2005
• FSSA was 92 outsourced

• December 27, 2006 FSSA signs a ten year, 1.16
  billion business process outsourcing deal with
  IBM for welfare eligibility.
• FSSA is now 94 outsourced.

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Keeping that in mind

• What was FSSAs core business?
• Vendor and Contract management.
• How many contract managers did we have?
• None.

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The BPO forced us to question our organizations
mission.

• How do we manage this giant contract against the
  best in the business?
• How do we keep from getting change ordered to
  death?
• How do you manage a 10 year deal in an political
  environment?
• How do you protect yourself against employee
  attrition when your best are being hired away by
  consulting firms?
• How do we measure success?
• How do we track the myriad details with a small
  staff?

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Lesson 1 Start early. Negotiate a good
contract. Plan on it taking twice as long as you
think it will

• We set measurement and governance expectation in
  the procurement phase.
• The vendors were prepared to operate and
  negotiate in this fashion.
• We knew we were facing tough, professional
  negotiators.
• Our in-house counsel would be outgunned.
• So we hired outside counsel.
• We originally assumed 6 weeks for contract
  negotiations.
• It took 5 months to do it right.

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Lesson 1 ContinuedGood contracts make good
neighbors

• Negotiate a deal that clearly puts performance
  risk on the vendors.
• That is what they are paid to do.
• Spend all the time needed on the Statement of
  Work.
• Ours was a 100 page matrix detailing every task
  it took to process a welfare application and
  called out the specific partys responsibility.
• Build a rigorous governance process into the
  contract. Name names, reports, deliverables,
  etc.
• We have 5-6 governance meetings a week. We never
  cancel them unless we absolutely have to.
• Create governance discipline do not cancel
  without good cause.

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OVV is conceived. Lesson 2 Buy institutional
knowledge and longevity

• We needed operational contract management help. A
  traditional IVV engagement would not meet our
  needs.
• How do you keep an eye on operations on a very
  large scale with a limited staff?
• Fight fire with fire. Manage vendors with
  vendors.
• Hire an Operational Verification and Validation
  team.
• You want your own set of mercenaries
• Make them part of the management team

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So what does an OVV team do?

• Managing contracts involves a tremendous amount
  of detailed document review
• Let OVV read for you, with an eye for detail
  and ambiguous language that you do not have time
  for.
• Provide expert advice, the team consists of SMEs
  from many disciplines IT, Programmatic, Process
  Engineering.
• Secret Shopper, Supplemental Project
  management, Federal Oversight documentation, etc.

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In summary, what does our OVV team do?

• Someone has to keep an eye on the shop. Are the
  doors opening and closing on time? Are people
  getting served? Is your vendor living up to the
  terms of the contract or are they cutting
  corners?
• It's still trust but verify. It's still play,
  but cut the cards. It's still watch closely. And
  don't be afraid to see what you see. Ronald
  Reagans farewell address January 11, 1989