Office of the Secretary of Technology

The Honorable Aneesh P. ChopraSecretary of Technology

October 2008

Building a Culture of Innovation and Productivity throughCollaboration

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Office of the Secretary of Technology

Agenda for Discussion

I. The Productivity ImperativeI. The Productivity Imperative

II. Culture of CollaborationII. Culture of Collaboration

III. Coda ~ Spirit of CommonwealthIII. Coda ~ Spirit of Commonwealth

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Office of the Secretary of Technology

A Strong Performance Culture Launches Ideas Community

• Best State for Business(2006-8)

• Tied for Top PerformingState (2005, 2008)

• 1st in Best of the Web(2008)

Commonwealth “Ideas” PortalLaunched September 2008

“All Hands on Deck”

Source: ideas.virginia.gov

Drupal Appbuilt in less thana week – for free

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Office of the Secretary of Technology

Taxpayers Consistent on “Price” Willing to Pay for Government

Budget Shortfall

Virginia’s “Price” of State/Local GovernmentCents/$ Personal Income

Despite increased investments needed foreducation, healthcare, public safety and

transportation, Virginia’s historical tolerancefor public investments hovers below 15%

Source: Public Strategies Group; Governor Kaine July 2007 Budget Memo

Program FinancialAlternatives

ProgramPrioritization

Program Re-Engineering

Does it Addressa High Priority

Outcome?(% eligible served)

Is it RunEfficiently?

(cost /customer)

Framework for Budget ReformApproach to $2.5BN Budget Gap

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Office of the Secretary of Technology

Virginia’s Integrated, Outcome-driven Performance Management System

AgencyManagement

Practices

Effective &Efficient Agency

Operations

Virginia’sPerformanceManagement

System

Performance &ProductivityMeasures

ManagementScorecard

Agency Planning and BudgetingOutcome-Based Key Measures

Linked to Long-TermObjectives

Version “2.0”Nearly Complete

Key MeasuresCompleted in 2006

ProductivityMeasuresDue in 2008

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Office of the Secretary of Technology

Foundation of Reform a Modern, Robust IT Infrastructure

Role of IT

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Office of the Secretary of Technology

Towards a Future State with Enterprise Applications, Shared Services

Enterprise Applications

“As-Is”

BusinessIntelligence

ECMePay

men

teS

igna

ture

Portals

Lice

nsin

g

TREDS

Medicaid

TAX

Agency Applications

Shared ServicesHR PRPayroll

FM HREnterprise Applications

Payroll Procurement

Focu

s of

Effo

rt

Enterprise Applications

FM HRPayroll Procurement

Agency Applications

TREDS

TAXMedicaideP

aym

ent Va.gov

ECM

Lice

nsin

g

eSig

natu

re

Portals

DevSupport

BusinessIntelligence

HRShared Applications & Services

ePay

men

t

BICC

CentEx

PayrollFM

“To-Be”

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Office of the Secretary of Technology

Virginia DMVCost to Renew Vehicle Registration

$7.95

$3.19

By Mail

Room for Growth: Only 17.8% ofall renew als take place over the w eb

in March, up from 16.5% in March2007

ByInternet

$4.81

DMV currently uses Activity Based Costing to monitorand evaluate its activities for cost effectiveness. Thisallows DMV to determine unit costs across an array ofactivities.

Vehicle Registration Renewals represent the highestvolume activity at DMV and impact most Virginians on anannual basis.

Vehicle Registration revenue primarily supportsVirginia’s Highways, but DMV retains $4 out of everyregistration to cover administrative costs.

Measure - DMV will reduce the average cost ofcompleting a vehicle registration renewal transaction bymoving transactions to cost effective delivery channels

Pursuing cost effective service delivery will support twoof DMV’s Key Performance Measures: Customer WaitTime and Customer Churn Rate

DMV Productivity Measure

ByIVR

ByDMVSelect

ByServiceCenter

$3.19$3.45

Avg: $5.29

Customer Choice: Majority choosea cost-effective method, but those

w ho don’t drive up DMV’s costs andw ait times for other customers

DMV Case Study Highlights Administrative Cost Savings Opportunity

Productivity Measures

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Office of the Secretary of Technology

Virginia’s Approach to Building a Culture of Collaboration

I

PromotingTransparency

II

Establishing a PolicyFramework

III

Seeding Innovation

#“Virginia Performs” Portal:Independent websitebenchmarks stateperformance against 50indicators; goal to engagepublic and private entities todeliver responsible economicgrowth, an enviable quality oflife, good government and awell-educated citizenry

#Productivity Investment Fund:Governor’s Initiative tostimulate innovativeapproaches to servicedelivery; goal to build aculture of continuousperformance improvementthrough changemanagement, processredesign, managementtraining

#Public-Private Partnerships:Alternative procurement vehiclefor innovative technology solutions

#Chief Applications Officer:Governor’s appointment to driveapplications governance, standards

#Cross-Boundary Applications: Legalauthority to contract with othergovernments for technologyservices, facilitate shareddevelopment

Three Levers

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Office of the Secretary of Technology

Small, Women and Minority Portal Shines Spotlight on Procurement

Promoting Transparency

Goal: Governor signs EO 33 calling for 40% SWAM spend goal of all discretionary agency spendingPortal: DMBE publishes agency results online inclusive of all procurement – including credit card and sub-contractor performance; tool built on Pentaho and delivered in less than 8 weeksResults: For the quarter ending March 2008, Commonwealth exceeds EO 33 goal with 41% SWAMspending (in excess of $420M); MBE performance in Technology exceeds 48%

Executive Order 33

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Office of the Secretary of Technology

Kaine Administration Focused on Multi-Government Collaboration

Cross-Boundary Applications

Goal: Lower implementation costs on enterpriseapplications through creative partnerships with othergovernments

Problem: Like all major government IT systems,services fees are the vast majority of total project costs;COTS products are strong foundations but publicsector-specific tools are developed by services firms

The Approach: In March, 2007, Virginia issued anRFP for statewide ERP software and directed thevendor community to propose creative models to sharepublic sector-specific implementation tools

Opportunity: Two public sector case studies suggestconsortiums might lower implementation fees 40-50%(North Central Texas Shared Services Center; NorthCarolina ACC Property Tax System)

Enterprise Applications ConsortiaIn Brief

Enterprise Resource Planning (ERP)REQUEST FOR PROPOSALS (RFP) 2007-17

“…the Commonwealth of Virginia isconsidering a multi-government vehicle to

provide for the sharing of valuable intellectualproperty (IP) and other assets capable of

lowering ERP implementation costs. Theseassets would be utilized by the multi-

government vehicle and made available toprospective members.”

In 2007, Governor Kaine signed legislationempowering the CIO to enter into contractswith one or more public bodies for IT services

HB 2196

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Office of the Secretary of Technology

Case Study

Three Texas Cities Collaborate to Lower Costs, Share Best Practices

Shared ERP ModelComparative Cost to Traditional Options

Separate ERPImplementation

(15%)

Implementationsreveal 90%

commonality(50%)

SoftwareUpgrade

North Central Texas COG in Brief

Goal: Develop Shared Services Center to providelow cost ERP solution that meets the needs ofmember cities

Problem: Three localities were facing a costlyupgrade to the same ERP system (including expensivehosting costs), but were trying to solve the matterindividually

The Approach: In Fall, 2003, Arlington, Carrolton,and Grand Prairie cities discussed possiblecollaboration, leading to an RFP in February, 2004

Solution: Form an unbiased party representing allthree cities in negotiation; host solution at a commonlocation; facilitate problem solving/best practicesharing across members

Strategic Value: One city had solved a commonactivity accounting problem that plagued the other 2

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Office of the Secretary of Technology

Award-Winning Open eGov Collaborative Lowers Adoption Cost

Local Collaboration

In 2008, Newport News invites otherlocalities to participate; 4 Virginiancommunities and severalinternational partners collaborate

Virginia’s public-private web portalpartnership actively evaluatingsupport for open source applications

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Office of the Secretary of Technology

Approach

PIFMission

KeyOutcomes

Partner with state agencies to identify, catalyze and implement innovativesolutions which enable a simpler and more effective government for the

benefit of the citizens of the Commonwealth

• Oversight, direction, and implementation of productivityinitiatives

• Manage the Productivity Investment Fund (PIF), $3MM in“seed capital” to catalyze innovative projects

• Improve the constituent experience (e.g., better results, shortertransaction time, reduced constituent expenses)

• Increase government operating efficiency• Advance Governor’s key agency performance objectives

The Productivity Investment Fund

A Model to Spur Innovation and Productivity in State Government

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Office of the Secretary of Technology

A Portfolio Management Approach to Deliver Productivity Investments

Our PurposeElevate Performance

Cost Savings(14 Initiatives)

Service Improvements(8 Initiatives)

Governor’s Objectives(5 Initiatives)

• Productivity Investment Fund $2.3M investment 14 Projects Projected 5x ROI

Effective Public & Private Sector Governance(PIF Oversight Board & Productivity Advisory Committee)

• Digital Platforms (“One-Stops”) $299K investment 6 Projects Projected 40-50% reduction in

constituent transaction times• Process Improvements

$60K investment 2 Projects Lower costs for industry and

improve functionality

• Shared Operating Services $360K investment* 2 Projects Multi-agency effort underway

• Public-Private Partnerships $332K investment 3 Projects Public-private effort underway

*Does not include $11M dedicated towards VEAP Project Planning

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Office of the Secretary of Technology

Cost Savings Portfolio Expected to Return 5x ROI After Three Years

$1.40

$0.63$0.80

$0.02 $0.05

$1.00

$0.22

$3.70

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

DGS

TAX

DMV

DMME

DOE

ODU

Other

Total

$MM $2.3M invested

Annualized Savings Potential – Base Case

Using the base case, the 3-year return per dollar invested is approximately $5

Cost Savings

Capital: Governor Kaine established$3M fund in January 2007 tosimplify government operations

Portfolio: Across three rounds, wehave invested $2.3M to fund thefollowing savings initiatives:

Productivity InvestmentFund in Brief

DGS: Consolidated Mail Dept of Tax: E-file programs,

Bulk Upload, Upgrade iReg, KFI DMV: Workforce Mgmt System DMME: Field GIS DOE: Google Apps for K12 DOC: Release Card pilot ODU: VIDEO-D-U, Learning

Pods UVA: Improve high risk

prenatal care DOAV: Training/Travel Data-

Sharing Network

Workforce system toalign staff to demand, todeliver 10% productivitygains

ODU to leverage web-channel to expandaccess 4x at lower cost

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Office of the Secretary of Technology

Educational Attainment, Test Scores Affect Our Ability to Compete

Transforming Education

Educational AttainmentVirginia

Test Scores and Economic GrowthOECD Countries

Nation’s Governors failed to achieve 1989 goalto achieve top ranking in science and math by2000; “had the promise been fulfilled …, ourresults suggest that GDP would by 2015 be4.5% greater”–Professor Eric Hanushek, et al.

Source: Council on Virginia’s Future; “College Readiness Report”, August 2007, Virginia Community College System; “Education andEconomic Growth,” Education Next, Hanushek, Jamison, Woessman, Spring 2008

In 2006, based on Virginia’scommunity college entrance scores,developmental education wasrecommended for 76.8% of recenthigh school graduates in mathematics

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Office of the Secretary of Technology

Rural School System Equips Teachers with Open Source Applications

Savings: MecklenburgPublic Schools generates$200,000 in savings over 5years by migratingoperations to Google Apps,OpenOffice

Fund Request:Mecklenburg awarded$50,000 to documentsavings, facilitate replicationacross other school divisions

Collaboration: Soon tolaunch portal to facilitateexchange of ideas,implementation resources

Open ClassroomProject in Brief

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Office of the Secretary of Technology

Empowering Our Brightest Teachers to Publish (Free) Content

Open Education

“Open Source” Physics Flexbook

Secretaries Chopra, Morris and the Dept of Education are pleased to announce our Founding Members ofthe 21st Century Physics Collaborative to create and compile supplemental materials in an open–source formatthat can be used to strengthen existing physics content. Led by retired NASA Scientist Jim Batterson, the teamis: Mike Fetsko, Henrico Co.; David Slykhuis, Mark Mattson, Tom O’Neil, JMU/ Shenandoah Governor’sSchool; Bruce Davidson (retired), Angela Cutshaw, Newport News; Mark Clemente, VA Beach/NationalInstitute of Aerospace; Andy Jackson, Harrisonburg; David Stern (retired), NASA Goddard; John Ochab, JSargeant Reynolds; Professor Tapas Kar, Utah State University, and Pranav Gokhale (student),Montgomery County, MD. The Commonwealth is partnering with CK–12 (www.ck12.org) on this initiative asthey will provide the free, open–source technology platform; goal to publish 02/09

Source: virginia.ck12.org

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Office of the Secretary of Technology

HealthcareInformationTechnology

Standards Panel(HITSP)

NationwideHealth

InformationNetwork

ArchitectureProjects (NHIN)

The HealthInformationSecurity and

PrivacyCollaboration

(HISPC)

The CertificationCommission for

HealthcareInformationTechnology

(CCHIT)

AmericanHealth

InformationCommunity 2.0

Virginia Driving National Health IT Strategy Despite Fiscal Pressure

CMS EHRAward toleveragenational

certification toassist physicians

Virginia servingon a leadershipteam to develop

policies andguidelines

GovernorKaine signed

legislationrequiring

interoperabilitystandards for

state purchases

Virginiahonored to host

two NHINimplementation

pilot sites

Transforming Healthcare

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Office of the Secretary of Technology

Administrative Simplification

Payer-Provider Collaborative to Lower Transaction Costs

The VHEN CharterFollowing an initial summit in Richmond with Virginia payers and providers discussing scope and focus for aVirginia Administrative Exchange modeled on NEHEN, the VHEN workgroup formalized a charter inOctober 2007; charter members include 9 health plans and 7 health systems including MCV, UVA, Riverside,Anthem-Wellpoint, Aetna, and DMAS

Provider Eligibility Verification by

Type of Method

(Average labor cost per transaction)

None ($0)

3 4 %

IVR ($0.88)

1 %

Web ($1.37)

1 5 %Fax ($1.96)

0 %

270/271 ($0.25)

4 3 %

Phone ($2.70)

7 %

Source: CORE Patient Identification Survey, 2006; funded, in part, by California HealthCare Foundation

Goal: Lower transaction costs associated withverifying a patient’s insurance eligibility by jointlyprocuring a common portal for Virginia providersto use when interacting with Virginia Payers

Scope: Allow a provider to retrieve up-to-dateeligibility information on a patient from anyparticipating Virginia health plan from a singlepoint of entry.

Timeline: RFI responses due August 15th, 2008;vendor selection expected October 29th, 2008;implementation in 2009

Universal EligibilityPortal

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Office of the Secretary of Technology

Develop EHR Applications Center of Excellence in Rural Virginia

Goal: Establish a public-privatepartnership to support multiple EHRapplications in a shared services center

Problem: Deliver EHR services at low-cost in an environment that encouragesrapid best practice adoption

Strategy: Simplify EHR acquisition,drive public sector adoption, andpromote rural economic development

“E-Store for EHRs”

In October, 2006, Virginiainvested $150K in theOnePartner Advanced

Technology and ApplicationsCenter, expected to employ 40

health IT jobs

Vision of the Future

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Office of the Secretary of Technology

Inpatient, ED, Outpatientprocedures

All discharge summaries fromInpatient stays

All Operative notes

All ED visit summaries

Letters

Phone calls

Encounter summaries

All inpatient, ED, outpatientvisit diagnosis in the daterange requested

All Lab results (chem, hem,urinalysis, blood gases etc.)

All reports from CT Scan,Pathology/Biopsy, X-ray,MRI, Cardiac Catheterization,EEG, ECG/EKG, PET Scan,Pulmonary Function, CardiacReports and Tests

Pilot Project to Lower Costs, Increase Quality, Promote Safety for Military, VAEndorse Hampton Roads pilot linking civilian and military/VA health systems; potentialinitiatives leverage CCD reporting through PHR systems for pediatric consultantsbetween Portsmouth Naval and civilian providers; additional “value cases” to bedeveloped as opportunities arise

Hampton Roads Uniquely Positioned as National Leader on HIE*

*Health Information Exchange

Social Security Number

Name

Gender

Birth time

Address

Phone number

Next of Kin information

Demographics Problems/Results Procedures/Summary

HITSP-Approved Continuity of Care Document

Coda ~ Instill a Spirit of Commonwealth

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Office of the Secretary of Technology

A Global Call for Innovators to Serve the World’s Poor, Profitably

Virginia’s “Bottom of the Pyramid”

•Nearly 1MM Virginians lack health insurance•Nearly 1MM Virginians lack a GED

•Nearly 750k Virginians live in poverty•Nearly 450k Virginians secured a payday loan