Indianapolis Outsources Imaging

Outsourcing to reduce risk and to allow staff to focus on their primary responsibilities.

by / July 31, 1996
has outsourced
its imaging
operations in
order to reduce
the risk of
using complex
technology and
to allow staff
to focus on
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Every day, the Indianapolis Department of Metropolitan Development (DMD) uses imaging to store and retrieve documents pertaining to building development and land use, but none of the staff of the department is responsible for scanning the documents. The imaging software, the server and the optical storage system does not belong to the department that uses it. In fact, the only technology the department owns are the PCs for viewing the images and the database that manages the index for document retrieval.

The arrangement suits Andrew Swenson just fine. Swenson, imaging project manager for the department, would rather see his staff use their time serving the public, not having to learn a whole new technology. If something goes wrong with the imaging system or the scanning, Swenson doesn't worry. "Our approach," he said, "has shifted the risk away from us to the outsourcer."

Big Outsourcing Business
Everybody is doing it. Several market research firms estimate that 70 percent of the country's largest corporations have outsourced their information systems to some extent.

Big deals are growing. In 1989, the outsourcing industry signed two deals worth more than $200 million, according to Dataquest Inc., a consulting firm. In 1992, eight deals worth a total of $6 billion were signed. In 1995, outsourcers inked 24 megadeals worth $18 billion.


Outsourcing in government has been going on for a number of years. States have outsourced Medicaid claims processing; counties have outsourced their data processing. In the United Kingdom, two-thirds of the central government's expenditures on information technology is outsourced. Here
in the U.S., the Department of Defense is considering outsourcing its data processing.

Most organizations outsource so they can cut computing costs, receive better value from their IT dollars, improve the quality of service or focus more strongly on their core business. A number of corporate giants, most notably Kodak, Xerox, General Dynamics and Delta Air Lines, have outsourced some or all of their data processing.

With imaging, many organizations outsource backfile conversion, the scanning of thousands -- sometimes millions -- of backfiled documents needed to make some imaging applications operational. But to outsource virtually all image processing is another matter.

According to Ned Geiser, a senior manager at Crowe Chizek, a systems consulting firm, the outsourcing contract with DMD is their first. For those familiar with Indianapolis, however, it comes as no surprise that the city is taking a lead in outsourcing imaging. In 1995, the city signed an agreement to turn over the management of all its data processing to a private firm. "Our mayor (Stephen Goldsmith) is very interested in having our government focus on what it does best and let the private sector do what it does best," explained Swenson. "He has pushed for outsourcing and privatization, so this was a top-down decision."

DMD is the second largest issuer of building permits in the country, processing more than 80,000 permits each year. Up to 7,000 permit requests must be researched, a laborious five- to seven-hour process of sifting through backfiles and microfilm. Customers also faced the task of standing in several lines just to get a single permit issued. To overhaul and improve the permit and research process, DMD hired Crowe Chizek in 1993 to implement a business process reengineering program. Elements of the program included the consolidation of the permits issued, reorganization of work from multiple departments into one permit division, redesign of the permit work process and automation of the permit issuance system, including the use of document imaging and workflow.

According to Swenson, imaging is expected to dramatically reduce the time it takes to research permits and land-use petitions. Data from numerous permits is consolidated into a single file, along with documents and engineering drawings. DMD staff can enter an address into the system and pull up a single file that contains all the records necessary for building, drainage, transportation, zoning and sanitation.

When documents arrive at DMD, staff key pertinent data into the permit system, which issues a bar-coded slip containing a unique identifying number. This slip is attached to the document. At the same time, the system adds the number and other data into an Oracle database. Every evening a courier picks up the day's documents and takes them to Crowe Chizek's service bureau for scanning.

The bureau converts the documents into images, checks for quality, creates an index file from the bar-coded slips and then stores the images on a removable hard drive, which can hold up to 2,000 document images. The next day, the courier drops off the disk, which a DMD operator inserts into a Small Computer Standard Interface (SCSI) drive and runs a program that links the document index to the Oracle database. The documents end up in optical storage. The entire application was developed using FileNet's FileNet:WorkGroup document imaging/ workflow software, running on a Hewlett-Packard server.

With no previous system for comparison, Swenson pointed out that cutting costs was not the purpose of outsourcing most of the imaging application. Instead, it has allowed the staff to continue doing roughly the same work they were doing before -- only better. One example of how outsourcing allows the staff to stay focused occurred when the original scanning service bureau went into Chapter 11 for bankruptcy. "It was up to Crowe to find another vendor," said Swenson. "I didn't have to figure the solution to that problem."

Another time, a problem cropped up in the FileNet software. Ordinarily, DMD's staff would have needed both experience with some of the latest in software programming and certification from FileNet to resolve the problem. Instead, the entire problem was handled by the outsourcer. DMD has a three-year contract with Crowe Chizek, worth approximately $900,000, covering document scanning, systems management and software development. The scanning fee is based on expected volume of documents.

Currently, DMD has scanned about 12,000 documents since the system went operational in May. Eventually, the system will be handling as many as 500,000 documents per year. One issue that DMD must resolve is the scanning of large engineering drawings. Currently, they are sent out, microfilmed and then scanned. The process only costs about 70 cents per document, but it takes up to 10 days to complete. That kind of lag time will limit the use of workflow, which is a critical aspect of the project.

Right now, it's not an issue because the system is only being used for storage and retrieval. "We could pay $35 per document for fast turnaround," said Swenson, "but you lose the economy of outsourcing if you pay top dollar for scanning." One solution is to have building developers submit the large drawings as image files. With more drafting work done on computers these days, that may be a viable alternative.

Despite the challenges, Swenson is happy with how outsourcing has turned out for DMD. The staff is focusing on the core business, while the outsourcer handles the technology. The key to making it work, according to Swenson, is hiring a good integrator and outsourcer. "In these days of market volatility and complex technology," he said, "it's a must to have just one vendor to go to for problems, issues and services."