Lemuel C. Stewart, Jr.

1
CIO Status Report
Lemuel C. Stewart, Jr. CIO of the
Commonwealth Information Technology Investment
Board June 20, 2005
2
Quarterly Highlights

• Held VITA Dialogue meeting April 26 on
  Transformation
• Presented update on VITA to the Joint Commission
  on Technology and Science May 4
• Participated in NASCIO Fly-in and met with
  Congressmen to promote data sharing on May 4
• Launched customer satisfaction program in May
• Independent customer satisfaction survey
• Customer Service Basics course for all VITA
  employees by May 15 advance training in late
  summer
• Initiated customer satisfaction charter with
  initial focus on internal customer satisfaction

3
Quarterly Highlights

• Received Greater Richmond Technology Council 2005
  Leadership Award on May 11
• Issued Agency IT investment guidance to help
  agencies complete IT portion of their strategic
  plans on May 13
• Presented rates to JLARC Subcommittee on May 26
  with action by full commission on June 13

4
Transformation Update

• Infrastructure PPEA Status
• Briefing to Governor on April 15
• Detailed proposals due June 20
• On schedule for potential comprehensive agreement
  by October 12
• Enterprise Applications PPEA Status
• Formed EA Steering Committee
• Launched Due Diligence on May 2
• On schedule for potential comprehensive agreement
  by October 12

5
Infrastructure Current Status
Milestone Start Date End Date Status Comments
Program Planning 1/10/2005 1/27/2005 Develop plan for the detailed review of the VITA PPEA infrastructure proposals. Conduct initial planning meetings. Establish Infrastructure PPEA Steering and Finance Review Committees.
Due Diligence 1/27/2005 4/15/2005 Establish the base case/current processes and automated systems which support them. This task has been COMPLETED.
Draft SOW/SLA/Ts Cs 3/28/2005 4/28/2005 Develop Statements of Work (SOW), Service Level Agreement (SLA) expectations and draft terms and conditions. Provide to proposers for completion of detailed proposals. COMPLETED
Develop Detailed Proposals 4/29/2005 6/20/2005 Proposers develop detailed proposals in response to base case, SOW/SLA and Terms Conditions
Review Detailed Proposals 6/21/2005 7/25/2005 Commonwealth team reviews detailed proposals
Negotiate Comprehensive Agreement 7/26/2005 10/15/2005 Negotiate Comprehensive Agreement (CA) for infrastructure services.
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Enterprise Applications Current Status
Milestone Start Date End Date Status Comments
Start-up 3/22/05 4/11/04   Develop Plan for the detailed review of the PPEA Enterprise Applications proposals. COMPLETED
Due Diligence 4/11/05 6/23/05   Establish the base case, including current processes and the automated systems which support them.
Draft SOW/Ts Cs 4/11/05 6/23/05   Develop Statements of Work (SOW) and draft terms and conditions, to define the services that the Commonwealth envisions obtaining from the offerors.
Release Proposal Package to Offerors 6/23/05 6/23/05 The Proposal Package, consisting of the Due Diligence Data, Draft SOWs and Draft Terms and Conditions is released to the offerors
Develop Detailed Proposals 6/23/05 8/4/05   Proposers develop proposals in response to base case, SOW/SLA and Terms Conditions.
Evaluate Detailed Proposals 8/4/05 9/16/05   Commonwealth team evaluates proposals.
Negotiate Comprehensive Agreement 9/16/05 10/15/05   Negotiate the Comprehensive Agreement for Enterprise Applications and obtain senior management approval.
Executive Approval 10/15/05 10/15/05 The Comprehensive Agreement is signed by the Governor.
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Interim Leadership Team (June 21- July 22)
CIO and Deputy CIO Leslie Carter
Chief Financial Officer Karen Robinson
Budget Analysis Planning Marvin Simms
Dir. of Business Systems Services Paul Hendricks
Dir. of Computer Services Linda Crenshaw
Dir. of Customer Services (Relationships) Loyd Lane
Dir. of Customer Services (Operations) Barry Condrey
Dir. of Human Resources Cindy O'Connor
Dir. of Strategic Management Services Paul Lubic
Dir. of Supply Chain Management Phil Pippert
Dir. of Telecommunications Network Services Doug Wilson
ESD for Commerce/Agriculture Lee Tinsley
Communications Julie Rogers
8
Local Outreach Update

• New Customers since April 2005
• Appomattox County
• City of Petersburg
• Crater Youth Center
• Dinwiddie School Board
• Mathews County
• Prince William County Schools
• Rappahannock Area Community Services Board
• Virginia Outdoor Foundation
• Winchester Public Schools

9
Audit Activity

• NEW 2005 APA Performance Audit Report was issued
  June, 2005.
• Audit was for the period 7/1/2002 6/30/2004
  and found
• Revenue and expenses are properly reported in
  the Commonwealth Accounting and Reporting System
• Compliance with all applicable laws and
  regulations
• Management has established and maintained
  internal controls except for one finding.
• The one finding is Develop Policies and
  Procedures for Granting, Evaluating, and
  Terminating Employees in PeopleSoft.
• Status The Policy and Procedure has been
  developed.

10
Audit Activity

• 2005 APA Performance Audit Actions Update
• 3 of 15 actions completed
• 3 actions have revised dates
• 1 IT Strategic Plan 3/31/06
• 4 VITA Sys. Dev. Project Ranking 7/15/05
• 13 Security Audit Program Dev. 12/31/05
• Remaining 9 reported to be on schedule
• 2004 APA SAS 70 Audit Actions Update
• 3 of 4 actions are completed
• Remaining 1 reported to be on schedule
• Internal Audit Small Purchase Charge Card Audit
  with Action Plan completed
• 7 results with 16 recommendations

11
VITA Collaborative Programs

• VITA values and encourages broad participation of
  stakeholders
• Formal Groups
• Council on Technology Services
• Finance Council
• Information Security Officers
• Community of Interest Groups (CoIns)
• Business Development
• Centers of Excellence
• Geographic Information Systems

12
CIO Major IT Project and Procurement
ActionsSince Last ITIB Meeting

• Project Planning Approval
• None
• Project Development Approval
• Department of Game and Inland Fisheries
  Automated License Delivery System
• Contract Approval
• None
• Project Suspension or Resumption Approval
• None

NOTE See the June ITIB Major IT Project Status
Report (provided separately) for a complete
status of the Commonwealth major IT project
portfolio
13
New Internal Service Fund Requirements
New Requirement Program Management Database Risk
Assessment/Incident Management TOTALS
Total Request
1,650,000 3,271,000 4,921,000
Projected Agency Impact FY 2006 4,900,000
FY 2007 4,300,000 FY 2008 4,300,000
14
Financial Results
As of April 2005
FY05 Adjusted Budget April 2005 Actual Results
Operating Revenues 263,520,186 188,317,636
Expenses, including transfers 267,286,832 182,317,795
Net change (3,766,646) 5,999,841
Ending, retained earnings 51,267,070

15
Cash Flow Update

• VITA cash flow showing significant improvement
• February 2005 ( 1.5M)
• April 2005 ( 0.4M)
• Resulting from change of customer payment terms
  from 30 days to 10 days
• Prepared internal services fund cash flow
  analysis for submission to DOA and DPB for
  discussion of options
• Treasury Loan
• Line of Credit
• Slight shortfall (less than 500K) projected for
  fiscal year end

16
Proposed Meeting Schedule for ITIB
Purpose Date
Special Board meeting Closed session to review approve the recommendations of the Infrastructure PPEA Steering Committee to proceed (or not) into negotiation phase July 25 1 4 p.m.
Regular Board meeting PPEA updates August 101 4 p.m.
Special Board meeting Closed session to review and approve the recommend-ations of the Enterprise Applications PPEA Steering Committee to proceed (or not) into negotiation phase September 81 4 p.m.
Reschedule Regular Board meeting from 10/12 Potential closed session to review and approve Comprehensive Agreements for both tracks October 51 4 p.m.
17
FY06 Proposed Operating Budget

• VITA Financial Management Services
• June 6, 2005

expect the best
www.vita.virginia.gov
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Budget Summary

• Budgets for discretionary spending cut 3.8 to
  cover legislated salary increases in FY 2005 and
  2006
• Budget reprioritizes operating initiatives and
  objectives to fully support transformation

19
Expenditure Focus
20
Significant Budget Adjustments

• Lower priority activities are scaled back or
  eliminated
• Budgeted activities relate to enhancing customer
  service
• Budget grows VITAs business (including local
  outreach) and advances transformation of the
  states IT infrastructure

21
Budget Development Challenges

• Less than a full year of revenue and expenditure
  history with transitioned agencies exists
• New rates being developed will be completed in
  September
• Legislative policy guidance causes increased
  reliance on rates and may require budget
  adjustments during FY 2006

22
ITIB Budget Development Timelines

• June 2005FY 2006 VITA operating budget approval
  for fiscal year 2006 beginning July 1, 2005
• October 20052006-08 biennial budget approval for
  submission to DPB for FY 2007 and FY 2008 budget
  years
• Jan Mar 2006 General Assembly2006-08 biennial
  budget approval FY 2006 caboose bill

23
Proposed FY06 Operating Budget

• All Funds
• Operating Revenues 249,176,872
• Operating Expenses 248,458,316
• Net Change 718,556

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Shared Service Rates Methodology
expect the best
www.vita.virginia.gov
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Shared Services Rates Methodology

• Current Environment
• An interim direct bill chargeback methodology was
  implemented July 1, 2004 for transitioned
  agencies
• Agencies pay for requested and approved services
  based on the direct expenses plus a 5.52
  administrative fee
• This method restricts VITAs ability to utilize
  staff across its customer base

26
Shared Services Rates Methodology

• Proposed Environment
• Establish a Service Matrix to cover the cost of
  personnel
• Basic (Time-based)
• Standard (700AM-600 PM, Monday-Friday)
• Enhanced (Standard 800AM-500PM Weekends and
  Holidays)
• Comprehensive (24 X 7 X 365)
• Hardware, software, contracts, maintenance remain
  in direct bill

27
Shared Services Rates Scope

• Applies only to in-scope agencies
• Legacy chargeback remains in effect for VITA
  Central expenses
• Interim step to get to full shared services rates

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Initiatives Benefits Methodology
expect the best
www.vita.virginia.gov
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Initiatives Benefits Methodology

• Provides detailed methodology to capture benefits
  of VITA initiatives
• Savings
• Cost Avoidance
• Productivity Gains
• Required by Code and APA audit
• Requires Secretary of Finance approval

30
Initiatives Benefits Methodology

• Documents baseline compared to new environment in
  order to determine benefits
• Provides standard templates to capture
  information
• Identifies participants, initiatives, time
  periods and dollar thresholds for use of
  methodology

31
Initiatives Benefits Methodology

• Sample template included in member packets
• Provides an example of savings, cost avoidance
  and productivity gains calculated for a licensing
  initiative
• Illustrates savings associated with a change in
  contract terms resulting from a negotiated
  discount term

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Initiatives Benefits Methodology

• Next step
• Provide to Secretary of Finance for approval