Shared Results: Strengthening the Enterprise

Section 3Core Principles in Practice

The initiatives underway to achieve the objectives and deliver on the strategies described in Shared Success are infused with the three core principles of collaboration, accountability, and a business-driven approach.

Business-Driven Approach

A business-driven approach uses proven best practices to design and implement statewide technology initiatives. These practices include comprehensive planning to identify and quantify business outcomes for major information resources projects. A business-driven approach produces outcomes that meet agency and state goals and objectives.

TEXASONLINE.COM SERVICE DELIVERY

TexasOnline.com is a nationally recognized example of the power of effective public/private partnerships. Developed and maintained with initial funding from the state’s private partner and from user fees, TexasOnline.com does not rely on General Revenue.

In September 2005, DIR executed a significant renegotiation of the TexasOnline.com master contract. Incorporating advice from LBB and SAO staff, DIR “significantly strengthened” the TexasOnline.com contract, according to a November 2005 audit.[5] The renegotiated contract increased the state’s share of TexasOnline.com revenues, instituting the following key provisions:

• required that net revenue be divided evenly between the state and the contractor,
• increased the state’s share of revenue from 10 percent of state transaction revenues to 20 percent of total revenues, beginning in fiscal 2007,
• established a firm contractual deadline for project “breakeven,”
• eliminated the contractor’s right to terminate the contract for convenience, and
• strengthened transition terms in preparation for reprocurement.

TexasOnline.com achieved breakeven in April 2006, a full eight months ahead of the deadline established by the renegotiated contract. At breakeven, the state began receiving 50 percent of net revenues generated by the project in addition to sharing in total revenues. At the same time, ownership of all assets was transferred to the state, including all hardware and software licenses developed for the portal.

As public use of the Internet increases, Texas citizens, businesses, and government reap the benefits. These include the convenience of doing business 24/7 with quicker turnaround time for citizen transactions and decreased administrative costs for agencies to provide services.

Over 80 new services were added to TexasOnline.com in fiscal 2006, including access to vital records and a business portal that simplifies the process of starting a business in Texas into four easy steps. Additionally, an emergency preparedness portal debuted in time for the 2006 hurricane season. This portal is designed to assist Texans in preparing for natural disasters by providing information such as weather updates, evacuation routes, and instructions on how to access government resources.

TexasOnline.com currently offers more than 750 online services—and enjoys a significantly higher revenue share than any other self-supporting state portal in the nation. Of the states with self-funded portals that responded to a recent DIR survey, Texas is the only state that owns both its infrastructure and code. Texas also employs the most beneficial state revenue-sharing strategy in the nation.

Additionally, high customer satisfaction ratings reinforce the value Texans place on the state’s effective and efficient delivery of electronic government services. As of May 31, 2006, more than 99 percent of the customers completing online application surveys indicated that they either “agreed”or “strongly agreed”that they were satisfied with their online experience with TexasOnline.com.[6]

Because TexasOnline.com has achieved breakeven, the state owns the assets and the project will be debt-free when the contract is re-bid during the next biennium. Additionally, this self-funding model is estimated to generate $36 million for the state’s General Revenue fund over the life of the current contract, of which $12 to $14 million will be realized in the 2008–09 biennium.

STATEWIDE TECHNOLOGY COOPERATIVE CONTRACTING

The state’s Technology Cooperative Contracts program has evolved into a high performance procurement model. By leveraging state purchasing power to drive down costs, the program provides a very competitive procurement channel to thousands of public sector entities across Texas. The program’s effectiveness and success is underscored by its growth of customer usage—from $523 million (fiscal 2004) to $750 million (fiscal 2006)—an increase of approximately 43 percent across all eligible government entities.

Beginning in fiscal 2006, state law requires Texas state agencies to buy technology through DIR technology commodity contracts unless an exemption is obtained (TGC § 2157.068). This improves DIR’s ability to leverage the state’s significant consolidated buying power when negotiating technology contracts.

The expansion of the Technology Cooperative Contracts program has revealed new insight into statewide spending patterns that enhances strategic decision-making. By implementing methods and tools that improve collection and analysis of purchasing trends, agencies will realize shorter procurement cycles, lower cost, and improved service levels. One of these methods, the semiannual Planned Procurement Schedule, provides substantial visibility into agencies’ upcoming procurement activities, which enables DIR to negotiate with a number of major manufacturers to gain significant pricing concessions.

DIR reviewed the planned procurement information submitted by state agencies, in March 2006, for a 12-month period. Totaling approximately $110 million in technology commodities, agencies planned to procure, among other items, more than 43,000 desktop computers and 380,000 hours of staff augmentation services. Based on this information, DIR will identify opportunities to lead a collected effort where it makes sense and open consolidated purchasing opportunities to its entire customer base. The planned procurement information collected from state agencies is critical to the state’s ability to develop effective sourcing strategies. While state agencies are the only governmental entities required to report this information, a number of local government organizations are considering using this reporting tool voluntarily to ensure they benefit from the state’s ability to derive best value in technology procurements.

Over the last six months, DIR conducted interagency workgroup meetings to develop standard configurations for both high performance and standard desktops and laptops. Limiting the number of configurations will enable DIR to negotiate greatly reduced pricing from the major computer vendors. These configurations and the value that they bring will be available to all eligible governmental entities.

The Technology Cooperative Contracts program facilitates DIR’s role as chief negotiator of technology contracts in Texas. The program delivers business value through reduced technology costs, decreased administrative costs, and common technology procurement processes.

STATEWIDE NETWORK COMMUNICATIONS INFRASTRUCTURE

The telecommunications system for the state, known as TEX-AN, provides a network communications infrastructure that is adaptable to changing requirements and can incorporate new and emerging technologies. DIR recently negotiated the contract with its TEX-AN provider, resulting in significant technology enhancements and reduced costs for its diverse customer base.

DIR created a shared, statewide Internet protocol communications platform for TEX-AN in partnership with its service providers to meet the diverse communications needs of its customers. This shared infrastructure will support next-generation network services across state government. These services include call center support, voice over IP (VoIP), Interactive Voice Response, Automatic Call Distribution, Outbound Call Dialer, and other data and video offerings.

The first major initiative to leverage the new, IP-based platform is the statewide 2-1-1 information and referral communications platform, called 2-1-1 Texas. This initiative has benefited from DIR-negotiated pricing—it is expected to save $7,000 per month via new managed services. 2-1-1 Texas establishes a public service call number offered throughout the state that provides community, state, and federal health and human services information for both everyday needs and in times of crisis. The VoIP platform developed for 2-1-1 Texas has been expanded to support the new statewide call center for HHSC’s Integrated Eligibility and Enrollment program. In the wake of Hurricane Katrina, 2-1-1 Texas was used to set up 50 VoIP stations in Austin to handle overflow traffic for the Hurricane Area Information Center.

Customers on HHSC’s legacy wide area network (WAN) are migrating to the IP communications platform, which will provide improved reliability and higher security for all network communications. By utilizing the shared platform, existing HHSC WAN customers will see an estimated savings of $1 million by avoiding future infrastructure upgrade costs.

In addition, the Commission on State Emergency Communications (CSEC) has leveraged the IP platform by subscribing to a fully managed service arrangement for their Texas Poison Control Network, which is converging voice, data, and video communications. By leveraging the IP platform, CSEC reduced its required access circuits by roughly 50 percent, resulting in savings of over $5,000 per month. Several agencies are currently negotiating with DIR to expand their communications services through participation in the IP communications platform.

Collaboration

Collaboration opportunities continuously engage state agency and other stakeholders in sharing and leveraging knowledge and resources, and applying these assets across the enterprise to improve services. Working as one team, key stakeholders participate in areas of common interest.

HISTORICALLY UNDERUTILIZED BUSINESSES

Texas continues to demonstrate its commitment to improve the access of Historically Underutilized Businesses (HUBs) to statewide technology procurement opportunities and increase opportunities for HUB utilization through DIR’s Technology Cooperative Contracts program. In January 2006, DIR and the Texas Association of HUBs signed a collaboration agreement, launching a new initiative that expands the shared commitment to partnership and promoting mutual opportunities in Texas.

The agreement established an advisory board comprising representatives from the HUB vendor community, state agencies, local government, K–12 public schools, and institutions of higher education. The agreement facilitates increased communication and cooperation between HUB vendors and the state and expands communication channels between HUBs and the public sector.

COMMUNICATION CHANNELS

New communication channels have been established to ensure inclusion of public and private sector stakeholders. This community is kept informed through a variety of collaboration opportunities and communication channels, including focus groups, workgroups, and other forums.

DIR regularly conducts focus groups with agency stakeholders to share knowledge and expertise in developing technology policy. These groups provide input in the development of DIR administrative rules, guidelines, and best practices; Texas Project Delivery Framework templates and tools; the state strategic plan; and instructions for agency information resources strategic plans.

Interagency workgroups support development of key statewide programs and initiatives—such as technology commodity purchasing, standard configurations, Planned Procurement Schedules, technology staffing services, and recommendations for streamlining technology reporting.

Through a Posted for Review process communicated through the DIR Policy Listserv, public feedback is obtained on proposed revisions to major policy documents, including the development or revision of each administrative rule, guideline, or best practice.

In addition to the Policy Listserv, DIR manages an e-mail distribution group of more than 6,000 customers that communicate tatewide procurement opportunities through its Technology Cooperative Contracts program. DIR also administers e-mail distribution groups for the state’s training and development community, technology practitioners, and the Public Electronic Services On-the-Internet Working Group, among others.

EDUCATION AND TRAINING

A number of educational events are designed to enhance the state’s planning and management of technology. During fiscal 2006, DIR sponsored 57 educational enterprise programs serving 3,131 attendees, and delivered key events, including:

• E-Records 2005: A Practical Guide for Success in Managing Electronic Records,
• Wireless Technology Forum for Texas Government, and
• Internet Security Forum.

DIR collaborates with state entities, as well as the vendor community, to deliver technology leadership and training opportunities to state agencies. Through DIR’s partnership with the LBJ School of Public Affairs, state agencies have participated in a unique course, Executive Leadership in Information Technology Excellence (ELITE), a two-week executive leadership program for technology staff. As a result of partnering with technology commodity vendors on contract, state agencies enjoyed more than $25,000 worth of free technology training in fiscal 2006.

The Texas Association of State Systems for Computing and Communication (TASSCC) is a nonprofit professional association dedicated to advancing education and networking among Texas public-sector technology professionals. Full members of TASSCC are Texas state agencies and institutions of higher education, while associate members are primarily companies involved in information and communications technology. TASSCC sponsors three conferences each year, organizes quarterly luncheons where the state’s technology leaders can share information, hosts special interest groups for the purpose of technical discussion, provides scholarships for state technology staff, and supports many DIR educational events.

Accountability

Accountability establishes a framework to employ a consistent method for assessing outcomes. This approach ensures the connection between business problems and solutions are inextricably linked. The execution, performance, and outcomes of every technology project must be measured against clearly defined standards for success.

DIR CONTRACT SAVINGS METHODOLOGY

In May 2004, DIR formally established a goal of saving the state $270 million in technology infrastructure costs. To gauge the state’s ability to realize these savings, DIR implemented its cost savings tracking and reporting program.

The program identifies and validates savings realized by the state and local governments and K–12 public schools using DIR contracts to purchase technology goods and services. The reported savings result from DIR’s ongoing contract negotiation efforts and, generally, do not exceed a five-year term for the specific contract negotiated. The results are reported to DIR’s management and at quarterly meetings of the DIR Board of Directors, attended by state leadership staff.

To implement the program, DIR developed procedures and processes to ensure that the reported cost savings are accurate and consistently computed over time. As part of DIR’s annual audit plan, the agency’s independent internal audit firm reviews the cost savings tracking and reporting methodology to confirm the accuracy of the approach and the reported savings.

To date, two internal audit reports have been issued and both confirm that the estimated and realized savings were computed appropriately and accurately and that the computation process is sound. As of August 31, 2006, DIR had identified $96.2 million in savings through negotiations of new and existing contracts. Of the $96.2 million projected savings, $68.0 million in savings have been realized.

TEXAS PROJECT DELIVERY FRAMEWORK

At the direction of the Texas Legislature, and in collaboration with state agencies, DIR developed the Texas Project Delivery Framework (Framework) to improve outcomes of and accountability for major information resources projects. The Framework provides a formal structure that emphasizes accountability and decision-making by agency heads at specific points, or review gates, during project delivery.

The Framework ensures that before a project is initiated, a rigorous examination of the agency’s business need is conducted and substantiated. The Framework review gates require careful assessment of whether a project will meet its business outcomes and is ready to proceed to the next stage.  

The agency head is ultimately responsible for the project and must personally approve all business outcomes that result from activities during each review gate. The agency head decides whether a project is ready to proceed to the next stage, ensuring the business solution is aligned with state and agency business goals and objectives.

To satisfy the requirements of the initial review gate, an agency must examine the business value of the project in relation to other projects under consideration. The ability of a project to deliver on its projected business outcomes is tracked and managed by the agency throughout the project. As part of the final review gate, lessons learned from the project are documented and results are shared and incorporated in agency process improvements for future projects.

The Framework enables state agencies to consistently deliver successful major information resources projects that meet business and performance requirements on time and within budget.

INFORMATION SECURITY

The 79th Legislature required DIR to establish a network and security operations center (NSOC) to protect state agencies and other authorized entities against external threats to their networks. NSOC operations will be conducted through a secure facility beginning in March 2007 to help agencies identify and combat internal and external threats and strengthen the integrity of the state’s information resources.

DIR updated state information security rules—Texas Administrative Code, Title 1, Chapter 202 (1 TAC 202)—in 2006 to require that agencies develop effective security plans and processes in line with best practices, including requirements for each state agency to appoint an Information Security Officer (ISO). ISOs, in their key role as the principal information security advisor to agency executive management, are required to analyze and assess risks to their agency’s technology infrastructure and make informed decisions and recommendations on how to spend resources to address security issues.

To improve the statewide focus on these responsibilities, DIR established an information security division and designated the state’s first chief ISO in 2004 with strategic oversight for security of state information systems. DIR is committed to fostering partnerships with state agencies to support their efforts to safeguard the state’s technology investment.

Additional accountability measures for security are a critical issue and are described further in Section 2.