Andersen, Dade County To Form Revenue-Sharing Partnership
Andersen, Dade County To Form Revenue-Sharing Partnership<@VM>'It's A New World of Alliances'
Harvey Ruvin & David Wilkins
By Steve LeSueur, Staff Writer
Andersen Consulting and Dade County, Fla., will soon form a partnership that would give Andersen exclusive rights to market and implement nationwide a document management system that the company developed for the county's traffic court.
Company and county officials are still negotiating the terms of their revenue-sharing agreement for the new system, called Simultaneous Paperless Image Retrieval Information Technology.
Twenty to 30 counties already have expressed interest in the Web-based system that electronically processes traffic cases from the initial citation to final disposition by the Dade courts, county officials said.
"There's no courtroom in America that's not being flooded with paper," said Harvey Ruvin, Dade County clerk. "This eliminates the paper."
Officials said the county's traffic courtrooms are likely to serve as showcases for potential customers. Dade County courts handle about 500,000 traffic cases and 2 million documents annually. It is the fourth largest county in the nation.
The SPIRIT system was developed and implemented by Andersen over a three-year period for $18.5 million. Of that amount, Andersen received $6 million.
The system uses imaging technology to scan incoming traffic documents, which are stored and then channeled to the appropriate clerks, courtrooms and judges as the citations make their way through the system.
Dade's investment costs will be recouped in about five years thanks to reduced staff requirements and other efficiencies, said Ruvin.
Another county court would pay considerably less than Dade County for a SPIRIT system of its own and get it in less than one year, because much of the basic system can be transferred, said David Wilkens, a partner responsible for criminal justice and other IT projects in the Chicago company's state and local practice.
Andersen and Dade officials also are considering bringing in Public Technology Inc., a non-profit organization based in Washington, to help them market the system to other counties. PTI acts as the technical arm for the National League of Cities, the National Association of Counties and the International City/County Management Association.
PTI officials encourage business-government partnerships as a way to encourage technological innovation among the states and municipal governments.
"It benefits both industry and the government," said Costis Toregas, president of PTI.
Dade County, for example, will receive a share of the revenue generated by sales of the SPIRIT system, while Andersen will receive the assistance of Dade officials in demonstrating the system to potential customers.
And other county governments will get the SPIRIT system at a lower cost than a system built from the ground up.
"It's a win-win-win for everyone involved," said Ruvin.
Other companies that provide imaging and document management solutions include American Management Systems, DynCorp, IBM Corp., Northrop Grumman and Xerox, but it is uncertain how many might compete directly with the SPIRIT system, which is designed specifically for the courtroom.
"Andersen has deep experience in this area. It appears as if this is a solution that organizations should investigate," said Connie Moore, a vice president in research with the Giga Information Group, a Norwell, Mass., information technology consulting company.
Whether this type of revenue-sharing partnership will catch on is uncertain. "There are instances of it dating back 15 to 20 years, but it hasn't expanded much," said Thomas Davies, a senior vice president with Federal Sources Inc., a McLean, Va., market research firm.
The market for an information technology system that is custom built for one government can be much more limited than originally anticipated, he said. It also takes a lot of dedicated resources to market a particular system, and it is sometimes unclear whether the vendor or the government entity is responsible for marketing, he said.
"The concept is so powerful that it's always enticing, but there have been relatively few major successes," said Davies.
Dataquest's Lesley Kao agreed with his assessment. The partnership can be "a good way to go, because both sides are winners, but I haven't seen it as a widespread trend," said Kao, a senior public sector analyst with the Mountain View, Calif., market research company.
A company that does view these partnerships as a growing trend for its business is American Management Systems of Fairfax, Va. AMS has signed a number of agreements with state and local governments in the past and currently has revenue-sharing arrangements with the Kansas Department of Revenue, the Virginia Department of Taxation and the California Franchise Tax Board.
"It's becoming a way of doing business for us," said Michael Lynch, a vice president in AMS' tax and revenue practice.
In California, for example, AMS developed and implemented the Professional Audit Support System to streamline tax audits and improve collections. The company is now marketing the system to New York City and state, Florida, Iowa and other states.
The royalties AMS will pay California are more than offset by other benefits of the partnership, Lynch said.
"The partnership fosters a closer working relationship with our customer, thus ensuring more success in the immediate project, and it generates additional business for us," Lynch said. "It's well worth the cost."By Steve LeSueur
Costis Toregas is pushing for more partnerships like the revenue-sharing pact between Andersen Consulting and Dade County, Fla.
"Just because an organization is a government doesn't mean that it shouldn't recoup the investment it's made in developing and implementing new technology," said Toregas, president of Public Technology Inc., a non-profit organization that promotes the development and use of new technologies by state and local governments.
In the Andersen-Dade County partnership, the Chicago company will sell and implement an imaging and document management system it developed for Dade County's traffic courts. Dade will help in the marketing of the system and get a cut of the revenue.
PTI officials are trying to find corporate partners for other technologies developed by state and local governments. One of them is Smart Places, a decision support tool that was devised mainly in-house by local government officials to plan the redevelopment of Denver's Stapleton Airport.
Toregas' Washington-based organization is working with the city and county of Denver to commercialize Smart Places for widespread use by other government agencies involved in urban and regional planning.
By facilitating business-government partnerships, PTI officials hope to speed the adoption of innovative technologies and reduce costs to governments. "Sometimes you have a new system developed for one city and no one else is using it," said Cindy Kahan, a PTI vice president. The business-government partnership provides an avenue for transferring effective solutions, she said.
PTI serves as the technical arm for three major government associations: the National League of Cities, the National Association of Counties and the International City/County Management Association.
Not everyone in the IT industry is sold on the partnering concept.
"I've got members on both sides of this issue, philosophically," said Harris Miller, president of the Information Technology Association of America, Arlington, Va., which represents over 11,000 companies.
The problem is that public funds are used to develop software or a system that later will compete against private-sector solutions. "Some of my members are opposed to having taxpayers subsidize tools and products and then putting government entities into the marketplace as competitors," he said.
These types of business-government partnerships have existed for more than a decade but have had only limited success, largely because the market for particular solutions often is not as large as envisioned, analysts said.
Toregas, however, believes the momentum is shifting. "It's a new world of alliances," he said. "More market share will go to those companies who use the new model."