Business/Technology Level Set & Horizon Scan

1. Business/Technology Level Set& Horizon Scan Information Technology Investment Board June 1, 2004

2. Today’s Topics • Commonwealth Business Planning • The Vision That Drives Us • VITA’s Long-Term Goals • Scanning the Road Ahead • Plan for remainder of transition period • Financial goals • Short-term—”Quick Wins” • Long-term--Transformation • ITIB Strategic Discussions • “We’ll cover that at the planning session”

3. Commonwealth Business Planning • Historically focused at agency level • Council on Virginia’s Future • Established by 2003 General Assembly • Chaired by Governor; members from legislature, private sector, cabinet • Charges: • Develop Roadmap for Virginia’s Future • Establish scorecards to track progress

4. Council on Virginia’s Future--Vision • Be the best managed state • Outstanding financial management • Open and accountable government • Long-range planning/performance management • High quality workforce • Effective information systems management

5. Governor’s 2004-05 Objectives Virginia Excels—Best-Managed State Initiative

6. The Vision That Drives Us • Create value • Improve the Commonwealth's competitive position • Create accountability for how public funds are spent on technology • Grow our employees • Serve as the model for customer- & citizen-centric government

7. State/Local New IT Strategies

8. VITA’s Long-Term Goals • Ingrain the “build once, use many times” approach to service improvement. • Be the catalyst for customer & citizen-centric state business transformations. • Continually demonstrate improved service and savings benefits for citizens, customers, and taxpayers. • Achieve true “transparency” as the state’s IT utility. • Become the model of IT excellence in government.

9. Measuring VITA’s Success—Prospective Metrics • 90% state services available electronically • 75% citizen response--technology delivers services effectively • Top 10 ranking in Digital State Survey • 100% replacement of legacy administrative/finance systems --From the Council on Virginia’s Future Best Managed State Vision Team Draft Report

10. The Road Ahead--Transition • Short-term • July 1—Medium agencies/VDOT • “Quick Wins” process underway, organizing teams to pursue • Large agencies by January 1 • Long-term • PPEA process continues through 2004 • Published attributes frame initiatives & prospective partnerships • Posting June 1, 2004

11. The Road Ahead--Financial • Short-Term—Quick Wins • Process • Targets • Potential Value • Long-Term—Transformation • Process • Targets • Potential Value

12. FY05 Savings & Investment Analysis • Identified FY05 cost savings opportunities and candidate investment opportunities with long-term savings potential. • Analyzed opportunities using the following criteria: • Size and timing of savings • Contribution towards VITA’s goal to transform & integrate • Ease of execution • Selected and ranked opportunities

13. FY05 Savings & Investment Highlights • Cost savings are projected savings using currently available information. • Cost savings opportunity portfolio is dynamic and is managed on an ongoing basis. • Creation of VITA enabled 13 of 15 FY05 cost savings opportunities. • 75% of the cost savings projects are not hard to implement. • FY05 investment projects can provide significant long-term savings. • FY06 estimated savings can significantly exceed FY05 estimated savings.

14. Comparison of Selected Opportunities Mainframe Upgrades ImagePort Broadcast Fax Local Phone Service Consolidation Easy Small Server Consolidation Relocate 411 to Richmond Plaza Offsite Storage Contracts Consolidation Standard Core Desktop Bulk Licensing Operations Automation – Production Control Migrate Customers to CoVaNet Board of Elections Lines Consolidation Contractor Conversions Level of Difficulty Restructure Operations Shifts & Coverage Relocate/ Consolidate Mainframe Print Site VITA Host Web Based Business Licensing Applications Oracle Financials Application Consoli-dation Hard Achieves Consolidation & Future Positioning Low High

15. Savings Summary: FY05 Opportunities

16. Investments for Future Savings

17. FY04 FY05 FY06 FY07 FY08 Project Sequencing

18. Strategic Savings Opportunities • Major Re-engineering Initiatives • State-of-the-art Data Center with disaster backup • Enterprise Desktop Management • Enterprise Messaging • Enterprise Customer Care Center • Electronic Government & Business Transformation • Comprehensive Statewide Network Services • Enterprise Systems, Process, and Application Management • >estimated total $100M - $165M savings over 6 years<

19. Total Savings By Category & Year (Thousands) 6-Yr Baseline Benefit (Thousands)

20. Cumulative Savings By Year (Thousands) (Thousands) Note total includes both savings and cost avoidance.

21. ITIB Strategic Discussions • What is the Board’s thinking on strategic vs. operational roles? • What is the relationship of Board initiatives to Virginia’s Roadmap for the Future? • How can the Board be more proactive in setting the strategic direction for “enterprise systems”?

22. Strategic Issues for the ITIB (cont’d) • How can agencies’ business leadership (not just IT) be collaboratively engaged? • What solutions can be pursued for under-funded oversight responsibilities in project management and security?

23. “We’ll cover that at the planning session.” • Role/positioning of VITA internal auditor • No layoffs policy/implications • Facilitating funding for agency-specific IT projects (PPEAs, bonds, loans, etc.) • Board operations best practices • Frequency of Board meetings

24. Revised slides follow….. • Following are slides modified 6/8 per Lem’s request

25. Savings and Avoidance by Year (Thousands) (Thousands)

26. Total Savings By Category & Year (Thousands) 6-Yr Baseline Benefit (Thousands)

27. Cost Savings and Avoidance (Thousands) Savings 2,968 8,175 35,662 52,149 57,025 57,425 56,648 Avoidance 9,788 25,472 33,320 39,977 45,052 45,127 45,202 Total 12,756 33,647 68,982 92,126 102,077 102,552 101,850 Cumulative 12,756 46,403 115,385 207,511 309,588 412,140 513,990 (Thousands)