Choosing an integrator means working with one contractor and one contract, even though a project might involve dozens of different kinds of hardware and software, as well as several systems. Good integrators develop systems based on the best mix of technology. They are also adept at redesigning business processes so that the new technology can be more effective. Systems integrators usually specialize in certain kinds of information solutions or in certain areas of government, so their level of experience and reliability can be high.
But simply hiring a systems integrator doesn't mean the job is going to be done right. Experts and experienced government officials agree that a successful systems integration project requires significant management on the part of the government agency. "Management of a systems integration project is a very intense process that requires a great deal of the state staff's time," said Glenda Sharon, director of AFDC (Aid for Families with Dependent Children) and Food Stamps for Tennessee's Department of Human Services.
The management that Sharon and others speak about includes everything from daily meetings with the systems integrator to ensure that the project stays focused on its objectives, to extensive contract management along with drafting a new kind of request for proposals to start the process. "With systems integration, the role of government is to select the proper technology partners and manage them in delivering a service rather than delivering it directly yourselves," explained Tom Carroll, project director for imaging systems at the Washington State Department of Labor and Industries.
BIG BUSINESS
The business of systems integration is big in state and local government, and it is getting bigger. In 1993, city, county and state governments spent $3.6 billion on systems integration, according to G2 Research Inc., a market research firm. With integration expected to continue growing at an annual rate of 22 percent, state and local governments will be spending $10 billion annually by 1998 - two times the federal spending rate.
Several factors are behind the growth in systems integration. Control of information technology has shifted away from central data processing departments to other departments and agencies. Agencies want to control their own systems and the information inside the system, but they don't have the expertise and skills to build the systems themselves, so they have turned to integrators.
This shift has occurred in part because of public demand for more services. The focus on crime is a perfect example. Local law enforcement agencies have felt little incentive to share criminal history data with other agencies, but public pressures to do something about the country's crime problems have served to highlight a number of shortcomings in law enforcement and criminal justice, including problems with data sharing among agencies and courts. The public now expects law enforcement and criminal justice agencies to do a better job, and most experts agree that systems integration is one way to solve the problem.
Child support programs present another example. Public sentiment has driven federal, state and local agencies to begin developing integrated information systems to track and enforce parental support of children. These systems are complex and need special skill sets that governments don't have in order to be built.
Federal funding has also served as a catalyst for systems integration growth. The funding for such complex welfare programs as FAMIS, child support and child welfare comes with strings attached, usually in the form of deadlines, according to John Gibbons, national director of health and human services practices at Deloitte Touche, a consulting firm. "What you don't want to do is go through the old process of getting federal approval, writing an RFP and selecting a vendor several times. That takes too much time," he said. "Instead, states are saying they need a way to put it all together once and try to get an uninterrupted provider for these systems."
The technology that drives the new kind of information systems has become too complex for even the best trained government to handle alone. Agencies are turning to systems integrators to develop distributed systems, create a networking architecture and install new technologies, such as GIS and imaging, to run their applications. Even where mainframes are still used, the complexity of the project often dictates new levels of storage and processing requirements, communications and application development, which often involves several departments and programs.
PROPOSALS AND CONTRACTS
The first key issue government agencies face with systems integration is drafting the request for proposals (RFP). State and local governments are used to specifying exacting technical requirements for vendors, but this focus on detail can create, rather than dispel problems, according to Carroll.
"Agencies need to focus less on the technology and more on the integration skills of the firm," he said, "because that is what you are really buying." Carroll advised agencies to write an RFP that determines whether the integrator has, in the past, done the type of work required by the agency, whether they have done projects of similar size and what their level of experience is with specific government agencies, technologies and solutions.
Carroll also warned that tightly written, highly-detailed RFPs for systems integration projects don't take into account their typical multi-year length. If the specifics about technology end up in the contract, it becomes harder to make changes later on. "Our project spanned three years and in that time we made many technological changes based on the industry," he said. "The focus should be on the systems integrator, not the dress they are wearing that day."
Contract management is another key area in systems integration that differs from more traditional IT projects. Experienced integrators and government agencies use words like "partnership" and "special relationship" to describe successful integration projects between government agencies and integrators that usually stretch over several years. Onerous contract negotiations can easily spoil that long-term relationship as well as the project itself.
"Selecting an integrator is more like a marriage," said Carroll. "You really ought not to write a pre-nuptial agreement and then see who can sign it." He referred to the clauses government typically use, such as performance bonds, hold-back percentages and liquidated damages, as problem areas in contract negotiations. While agreeing that some protective measures in a contract are important, Carroll believes that when government agencies insist on too many protective clauses for insurance purposes, vendors just fold their cost into the price of the contract, forcing government to pay more than they should.
Gibbons referred to them as "onerous clauses." Their net effect is to increase the risk of the project, which creates an imbalance and causes relationship problems. "Any time there is an imbalance in the contract, it makes the project more rigid than it needs to be and that can cause a bad working relationship," he said.
The best projects, according to Gibbons, are those where the contract is negotiated, signed and put away for the duration of the project. In the state of Washington, Carroll hired a private law firm, experienced in technology projects, to provide legal assistance in negotiating the contract. Carroll said the law firm provided his agency with much needed help in drawing up their first systems integration contract for imaging with Andersen Consulting.
But even good attorneys have to be told when to stop. "They don't put in systems," reminded Carroll, "and can get carried away with the game of negotiating the contract. Remember that the first thing you do when you pick a partner is negotiate the contract. If you spend three months arguing over third part indemnification, it moves the focus too far away from why you are buying the system in the first place. That can destroy the partnering relationship."
AGENCY COOPERATION
Inter-agency cooperation is another issue that involves government policymakers as well as management. For large-scale integration to succeed in government today, the system must cut across departmental and agency barriers. Problems, such as poverty and crime, are too complex to be solved by one agency, so state and local governments are trying to integrate systems to develop better solutions.
Yet when it comes time to integrate individual databases and information systems, agencies tend to find too many flaws in the plan and refuse to participate, or insist on too many controls to make the project feasible. Without some kind of executive level buy-in to ensure that entire departments and agencies cooperate, large-scale systems integration will continue to be a struggle.
That's what is happening in criminal justice. The public wants better results when it comes to fighting crime and serving justice, but the courts and law enforcement agencies have been acting on their own for so long they can't agree on how to integrate their separate systems.
"State law enforcement agencies take a dim view of sharing data with local agencies," observed Tom Wilson, an independent consultant specializing in criminal justice. What's needed, according to Wilson, are more mandates from executive levels for cooperation, followed by a serious dose of strategic planning on how best to integrate criminal justice information, not just more technology. "We're moving toward more cooperation, but it's going to be a struggle. Right now, there's little systems integration taking place in criminal justice," he said.
Given the organizational structure and political climate of criminal justice agencies, systems integration will likely occur in a distributed environment. That's because criminal justice agencies are too concerned about giving up power and the ownership of information to cooperate in building a centralized, monolithic system, said Wilson.
Similar problems have occurred with welfare integration projects involving state and county agencies. Gibbons said Deloitte Touche ran into problems when they tried to implement a statewide project administered at the county level. "Problems arise in these situations because each county has its own agenda and the state must negotiate with them separately. The county administrators are in a pretty powerful position to do things they want," observed Gibbons.
Another thorny issue is implementing the conversion of all individual county systems to state standards. "If you are trying to convert county systems and the data is different each time," pointed out Gibbons, "then you might have to deal with 50 or more different conversions. It can be a nightmare."
Yet by and large, agencies seem to be getting their act together for large scale systems integration projects. Gibbons said his overall experience has found that state agencies have done a good job in providing support and overall project management for systems integration. In Tennessee, where the state built the first fully operational integrated welfare eligibility system in the country, systems integration worked because of close staff involvement. "The constant communications between the integrators and the staff about our goals and objectives kept the project focused on the right priorities," recalled AFDC Director Glenda Sharon.
Success in systems integration comes down to partnerships, according to Carroll. It takes time to develop a good partnership, but once it occurs, the contract can be put away and progress can be made. "We basically agreed that the state wanted a world class imaging system and Andersen wanted a successful engagement," said Carroll. "We ran into problems - and you always will - but because of our partnership we had incentives to work them out to a win-win situation."
WASHINGTON:
"We're more like a big insurance firm rather than a government agency," said Tom Carroll, describing the Washington State Department of Labor and Industries. According to Carroll, who is the department's director for imaging systems, the state is only one of five that funds Workers Compensation insurance.
Each year the agency takes in $1 billion in premiums from 140,000 firms to insure 1.5 million workers. The agency also pays out more than $800 million annually in time-loss and medical payments to injured workers.
The business of workers insurance generates 30,000 pages of documents every day that must be filed, sorted and routed to 500 adjudicators, who handle caseloads of 350 or more at any one time. Each case can have as many as 200 to 300 pages of documents.
For years, the department tried to manage the paper using microfiche, but when documents began taking two weeks or more to be processed, slowing down the turnaround time for the average case, something drastic had to be done. Imaging technology, according to Carroll, was the answer.
Systems integrator Andersen Consulting won the bid to design and implement a 500-seat, $20 million imaging system. The work, spread over a three-year period, involved more than 65 subcontractors and technology from Hewlett-Packard, Recognition International, Dell and Kodak, to name a few.
With phase two of the project under way, the imaging system is on its way to helping the department achieve its goal of reducing document processing time to just 24 hours. As a result, cases are being processed faster, returning workers to their jobs quicker, all of which saves the Department of Labor and Industries $10 million annually.
TENNESSEE
The federal government is telling states to integrate their public assistance eligibility systems to cut waste, increase staff efficiency and ensure that clients receive all their entitled benefits. Many states have projects under way, some already have semi-automated systems, but only Tennessee has a statewide eligibility system in operation that is run entirely by computer.
Known as Accent, the integrated system went operational in the beginning of 1993, serving more than 1.3 million clients from 95 counties. Accent, which is run by the Department of Human Services, combines eligibility determination and benefits delivery for Food Stamps, Medicaid and Aid to Families with Dependent Children.
According to Glenda Sharon, director of the AFDC and Food Stamp programs, systems integrator SystemsHouse won the bid to transfer the core application from the state of Ohio and to convert to Tennessee's specifications. In explaining why the state turned to an integrator, Sharon said, "We realized the technical expertise required for the project was going to be significant, but our state resources were limited, so we really needed an outside source."
The project took several years to complete. Based on mainframe technology, the system includes more than 3,000 terminals which support a staff of almost equal number. The system cost $28.5 million to build. Sharon said she relied on the inhouse expertise of the state's Office of Information Resources to negotiate and manage the contract, while her staff became heavily involved in overall project management.
"As a policy person, I found my involvement was much greater than I expected," Sharon said. "However, I'm glad it happened that way, because now my understanding of the overall system is much greater."
