PPPs in PracticeKey Success Factors
ICT Sector Week
Chris NeffVice President of Marketing
March 28, 2011
www.nicusa.com
Overview
NIC’s PPP approach Solutions provided Business models Governance & organization structures Risk management Supporting PPP growth
2
NIC’s PPP Approach
About NIC Manage eGovernment services in 24 states Serve +3,000 federal, state & local government agencies 19 years of delivery through flexible PPP models
Pilot-to-enterprise Start small & grow Expand through voluntary success vs. mandates
Key fundamentals Government retains all controls – process, data, financial
management Self-sustaining model supported by transaction fees Reinvestment focus Partnership – all sides need to benefit
3
PPP Partners
4
Scope of Solutions
G2C / G2B / G2G Official government websites Digital government services Secure payment processing
Emphasis on self-service solutions Constituent-facing services Adding value to existing solutions & adding new ones Generating wins for government partners
+7,500 installed services Aligned by vertical / agency Mobile Point-of-purchase
5
Scope of Solutions
Technology and process neutral Interface with hundreds of legacy backend systems Align with existing processes Focus on creating efficiencies and updating processes as
a result of streamlined operations
End-to-end life cycle Hosting & infrastructure Application development Marketing & promotion Customer service Security Billing & payment processing Enhancements & upgrades
6
Business Model
7 7 7
Self-sustaining model (“self-funded”)Used by the federal government, 24 states, and
several hundred cities & countiesModest per-transaction fees applied to a select
number of servicesEmphasis on business-facing services and
commercially valuable datasetsHigh volume business services create core
revenue stream to support enterprise servicesVast majority of services (+80%) are offered to
constituents at no cost
Business Model
8 8 8
Self-sustaining model (“self-funded”)Key services that support self-sustaining
eGovernment:- corporations filings - professional licensing- trucking/transportation - court case filings- vehicle titles & plates - driver history records- payment processing
Industries value fast access to government and digital adoption does not suffer
Fees set by government based on market research
$0.50 - $3.00 typical range
All agencies benefit – eliminates the have/have not problem
Business Model
9 9 9
Self-sustaining model (“self-funded”)Zero cost solution for governmentSupports long-term growth by eliminating
reliance on the appropriations processMinimal risk when partnering with an
experienced private sector provider
Best practices for decentralized organizations: Focus on key industry verticals Remember that a small fee applied to a high
volume transaction is far better than the reverse
Fixed Cost
Time & Materials
Hybrid
Governance & Organization Structures
10
• Range of governance models to oversee PPPs
• Governing board• Public sector / key agency participation
• Some states include private sector representation from key industries
• Direct report to agency – usually IT or budget / administration office
• Direct report to individual – usually CIO or appointed agency leader
• Key success factors:• Buy-in from the highest possible levels
• Governance empowered to make decisions
• Voluntary agency participation vs. mandates
Some states have one person whose part-time role is eGovernment oversight
Contracts & Operations
11
• Contracting basics
• Umbrella / enterprise contract outlines deliverables
• Based on voluntary agency participation (defined by separate service level agreements for individual projects)
• Flexible design for all agencies (including locals)
• Key elements customized to each government: flow of funds, reporting requirements, legal specifics
• Operating structure• Local subsidiaries established in each market
• 100% dedicated to single government’s operations
• Cloud-based solutions provide enterprise support (payment processing, hosting, CMS)
• Emphasis on local hiring to support economic development
Risk Management
12
• Insurance & indemnity standard – specifics customized to each government
• Financial components also customized
• IP held in escrow and available to government after breakeven is reached (usually 1-2 years)
• Rigid security protocols• Sarbanes-Oxley and PCI DSS compliant operations
• Third party validation (Verizon Business Security Management Program) includes annual on-site assessments
Supporting PPP Growth Build awareness of alternative approaches
Procurement training is essential
Benchmark successful engagements
Pilot project-driven protocol
Provide long-term support during engagements
Take the time to understand the challenges & opportunities
Get broad internal buy-in and executive-level support before issuing a tender
Recognize that PPPs are evolutionary and being first is not easy
13
