Companies join Arizona's team

Chris Cummiskey, Arizona's chief information officer

Creative partnerships help ease state's budget woes

When Arizona tax authorities first thought about creating an amnesty program to entice state residents to pay back taxes without the usual penalties, they decided to consult the contractor modernizing the state's tax system before proceeding.

Dave Ross, managing partner for the West Coast Client Group of Accenture Ltd., Hamilton, Bermuda, said the two parties are still examining the potential impact on the state's Business Re-engineering and Integrated Tax System project, for which Accenture is the prime contractor.

"They decided to discuss it with us instead of moving ahead on their own and letting all of [those dollars] drop out of the benefits pool," Ross said.

The high-level consultation between contractor and client is the type of public-private partnership that the Grand Canyon State has worked to achieve.

Over the past several years, Arizona has looked to launch large-scale IT or business process outsourcing projects that might show what the public and private sectors can achieve when they work together to improve government operations, said Chris Cummiskey, director of Arizona's Government Information Technology Agency and state chief information officer.

Some of the biggest names in the state and local government market have landed major projects with Arizona.

Affiliated Computers Services Inc. found a willing partner in the Arizona Supreme Court and Arizona Administrative Office. Accenture found one in the Arizona Department of Taxation. And IBM Corp. found one in the Arizona Department of Motor Vehicles.

The key to these partnerships is that the contractors' senior leadership and the state work together on strategy issues to maximize the financial benefits to both parties, Ross said.

"When you talk about public-private partnerships, there are [daily] working relationships, but even more critical is agreement on strategy at the top levels," he said.

Dallas-based ACS landed the most recent of these deals. The company announced in August that it won a five-year contract of undisclosed value from the Arizona Supreme Court and Arizona Administrative Office to provide compliance and collections services for the state's general and limited jurisdictions and municipal courts.

Under the contract, the company will enforce compliance with court fines, fees and restitution and improve services to constituents by offering convenient payment options. The contract requires no developmental or administrative costs to the courts, state officials said.

State and company officials connected with the contract were unavailable for comment for this story.

Accenture won its 10-year, $122 million shared-savings contract from the Arizona Department of Taxation last year to modernize the state's tax system and re-engineer its business processes.

A benefits-funded or shared-savings project is one where the contractor foots the bill for developing a new system, and then, after the system is functioning, the state pays the contractor with a portion of the revenue the project generates.

The shared-savings approach was necessary because the state could not afford to modernize its tax system, Ross said.

Accenture will develop and deploy the system during the first five years of the project, Ross said. Accenture's team includes AT&T Corp., Bull Information Systems Inc., Fair Isaacs Corp., Seisint Inc., Siebel Systems Inc., Teradata Inc. and Sand Technology Inc. The company began receiving its first payments in January, company officials said.

The Arizona Department of Motor Vehicles has a similar partnership with IBM of Armonk, N.Y., to provide a variety of e-government services as part of the Service Arizona project.

The company has been adding new applications steadily since the project began six years ago, said Brian Whitfield, IBM's vice president for state and local strategic outsourcing.

The contract "has allowed Arizona to bring on applications that they never would have been able to realize" without it, he said.

Through Service Arizona, the public can register vehicles and apply for duplicate registrations. At press time, IBM and department officials were testing an online permitting system for commercial vehicles, Whitfield said.

It costs three times as much to process a vehicle registration in person as it does online, Cummiskey said.

The upshot of Service Arizona is that it has produced substantial savings that have helped ease budget pressures, Whitfield said.

IBM, which receives a percentage of each transaction, has recovered its initial investment, Whitfield said. He declined to disclose the percentage or the project development costs.

Because of its size and scope, Accenture's tax modernization project is drawing the greatest attention at this time. If the shared-savings tax project provides hardware, software and services in a way that is economically feasible over the long haul, then it is likely to be replicated in Arizona and in other states, Cummiskey said.

"These days, there is keen eye by policymakers toward that kind of relationship, because Arizona, like other states, is facing tough economic times," he said.

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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