Indianapolis

has outsourced

its imaging

operations in

order to reduce

the risk of

using complex

technology and

to allow staff

to focus on

their primary

responsibilities.

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.

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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."

IMPROVING SERVICE

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