"This agreement marks the largest effort in the country to improve business processes and consolidate technology for better business management," said Governor Warner. "We owe it to our citizens to help government perform more effectively and more productively. When complete, this project could save taxpayers millions of dollars annually, and allow Virginia to strengthen collections and federal cost reimbursements."
Many state agencies conduct their business processes -- such as accounting, payroll, budgeting, personnel management, and travel -- through different information systems, leading to inefficiencies, excessive manual input and duplication. For example, only 11 percent of financial transactions made by state agencies originate in the Commonwealth's central accounting system, with many agencies using systems that they have acquired or developed in-house over time to suit their specific needs. This has led to fractured processes, multiple systems, time-consuming reconciliation of data, and reduced central oversight. Many of these systems are old, obsolete and inflexible, manned by a dwindling number of people, in both the public and private sectors, that know how to operate and service them.
This agreement is focused on fixing these situations by creating streamlined, integrated processes and systems that allow the Commonwealth to function as an efficient enterprise in accordance with modern best business practices.
The agreement executed with CGI-AMS is designed for implementation in three distinct phases, each of which includes clear performance-driven benchmarks and is subject to review, approval and appropriation by the General Assembly under the laws and policies of the Commonwealth.
The first phase of the agreement will include $30.5 million that has been included in the Governor's budget recommendations. This phase also contains provisions for enhanced revenue collections and cost recoveries for the Commonwealth. Going forward, based on performance and General Assembly approval, the contract could total $300 million over seven years.
A due diligence survey and analysis conducted jointly by the Commonwealth and the competing vendor organizations in May of 2005 found that the Commonwealth currently spends $308 million each year for 26 business processes conducted through 250 distinct systems across 46 agencies. When these costs are extrapolated to include the rest of the Executive Branch (excluding higher education), they are estimated at $441 million annually. CGI-AMS Inc. has estimated a potential for $125 million in staffing and license/maintenance fee efficiencies over the seven-year agreement.
"This project will be a model for any public sector organization seeking to create more effective ways to get the job done," said Donna Morea, president, CGI-AMS. "CGI-AMS's strengths as a business partner lie in its understanding of the business of government and technology, and our experience working with the Commonwealth on other transformational projects that have delivered measurable benefits to Virginia's citizens."
