March 14, 2019

Pat West, Patty Miller, Anthony Snowball

Benchmarking Solutions for State Governments

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EFFE

CTI

VENE

SSHI

GH

World-classEFFECTIVENESS

World-classEFFICIENCY

1D

1Q

LOW HIGH1D1QEFFICIENCY

World-class

A

B

34

21

5

We have defined world-class performance on an empirical levelThe Hackett Group Difference

Leading Organizations

93%of Dow Jones

Industrials

89%of Fortune 100

20 of the US States

The major Higher Education conferences represented – ACC, Big

10, Ivy League,

Performance metrics35,000Benchmarking studies16,500Best practices2,000Process maps700+Implementation andconfiguration guides330Best practices scorecards30+

Hackett Value Grid™

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State of Wisconsin – G&A Benchmark to optimize recent Finance and HR Upgrades and determine opportunities for Shared Services

State of Indiana – Business Case development for System Upgrade or purchase. Identified Process improvement opportunities

State of Ohio – G&A Benchmark to Optimize ERP implementation and build a business case for Shared Services Implementation

State of Oklahoma – Finance Benchmark to identify inefficient Agencies for consolidation into Shared Services Center.

State of California – G&A Benchmark to build a business case for legislature to identify lack of Technology leverage to build the case for ERP implementation.

State of Georgia – Payroll Benchmark to document performance to convince more agencies to move into Shared Services Center

State of Wyoming – Finance and HR Benchmark to demonstrate the need for ERP upgrade.

We are the selected provider for state governments State Benchmarking Engagements

We understand the states and the public sector, and offer the largest database of state back office performance information

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Cash Disbursements– Accounts Payable– Travel and Expenses

Revenue Cycle– Credit– Customer billing– Collections– Cash Application– Dispute Management

Accounting and External Reporting– Fixed Assets– Intercompany accounting– General ledger accounting– Cost Accounting– External Reporting

Treasury Management– Cash Management– Capital & Risk Management

Compliance Management Planning & Performance Management Business Analysis Function Management

A structured approach to ensure consistency in data collection and comparison

Procurement Information Technology Human ResourcesFinance

The Hackett Group’s taxonomy of our potential scope

Supply Data Management Requisition and PO Processing Supplier Scheduling Receipt Processing Compliance Management Customer Management Sourcing Execution Supplier Management and

Development Function Strategy

and Performance Management Sourcing & Supply Base Strategy Function Strategy

and PerformanceManagement

Function Management

Plan– IT Business Planning– Enterprise Architecture Planning– Emerging Technologies

Build– Application Development &

Implement.– Infrastructure Development– Quality Assurance

Run– Infrastructure Management– End-User Support– Application Maintenance– Risk Management

Manage– Function Management

Total Rewards Administration– Health and Welfare– Pension and Savings– Compensation

Data Mgmt., Reporting & Compliance– Employee Data Management and

HR Reporting– Compliance Management

Payroll Services– Time and Attendance– Payroll Administration

Staffing Services Labor Relations Workforce Development Services Organizational Effectiveness Total Rewards Planning Strategic Workforce Planning Function Management

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Our current research on State performance points to key opportunities

Finance Transformation Opportunities

Budget Simplification and Timeframe

Reduction

Greater Technology Investment Returns

Supplier Management Optimization

5X the cost of finance

transactions

3X as long to complete budget

2X higher technology

cost

3X as many suppliers

A decentralized model impacts the

cost of finance transactions

Focus on transactions, lack of

automation, and rework impact completion of

budgets

Lack of automation and self-service

contribute to technology spend

Investments are directed to non-

value transactional work rather than sourcing strategy

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Two NASACT State Measurement Options

States Determine the Approach that is the Best Fit

Simple measurement in Finance and Payroll (less than a day)

Conducted as a Group Study with multiple states participating at the same time

State study insights shared with the group in August 2019

Analysis and Individual results will be provided to each participating state

Benchmark across the State including work performed inside agencies to assess case for change

State-wide or by Functional level (e.g., Finance, HR, IT, Procurement) to analyse complete opportunity

Detailed analysis for process refinement/ consolidation, Shared Services optimization or ERP implementation.

Group Study Detailed Benchmark1 2

INVITING YOUR PARTICIPATION NOW… FOR YOUR INFORMATION…

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Compare your performance to other States

Create a common framework to communicate and collaborate with other states on performance challenges and solutions

Consider shared services and other solutions proven to deliver results in other states

Understand digital technology opportunities; build the case for change

Develop an improvement plan for the back-office

Simple update to check progress (less than a day) – Using improved and simple tools– Summary level metric collection

State level data gathering – agencies not needed

Quickly determine improvement progress

Less than 40 critical KPIs

Value for All States Value for States Benchmarked Previously

Handful of the right measures (40) to understand investment levels/ progress, innovation and practice usageThe Group Study is valuable for new and previous benchmark participants …

Group Study cost: ~ $20,000

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The Hackett Group’s quick assessment will offer valuable insight on…

Costs & Headcount

Digital Technology

Investment and resource staffing levels

Where to invest, automation & cloud migration readiness

Organization Models

Aging Workforce

COE Setup and Work Consolidation

Preparing for the “silver wave”, succession planning

Shared Service Maturity

Talent Management

Maturity placement and candidate processes

Attracting and retaining millennials

Group Ideas!

Best Practices

Desired topics from the group participants…

Degree of leading practice adoption and innovation

?

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And few proposed points of analysis in Finance and Payroll

Finance Resources/ FTEs

Finance cost as percent

Wage rates

Finance staff profiles (e.g., tenure, turnover)

Enterprise spans

Aging Workforce Digital Automation Service EffectivenessInvestments & Headcount

Forecasted turnover changes

Workforce demographics

Talent acquisition timeframes

Knowledge transfer plans

Strategies and planning

Attracting and retaining millennials

Digital capabilities

Estimated automation levels (e.g., AP/ T&E, Remittances, Payroll)

Cloud migration plans and costs (SaaS leverage)

Self-service deployment (e.g., in budgeting, reporting, etc.)

Analytics / Robotics/ Emerging technologies

Standard Policy and procedure adoption

% Reports proactive & predictive

Receivables 90+ days past due and collection effectiveness

% of work / transactions centralized

Sample Metrics / KPIs

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NASACT Group Insights Study – Timing

Kickoff: NASC ConferenceMarch 14, 2019

Study launch: May 13,2019 Study Closed June 6, 2019

State presentations: August - September

Group Results PresentationAugust

Option Track and Monitor Results

Mobilize & Recruit Collect Data Share Performance Results

Share State Findings & Solutions

Consider Next Steps coming out of Study

Recruit participants

Design the study

Start data collection

Quick data capture data through Hackett’s new Quantum Leap platform

Present Results to each individual State Comptrollers

Hackett will analyze key themes, trends, recommend World Class actions

Hackett will analyze State Metrics and Practices to Identify areas of success and challenges across States – sharing the results in a knowledge session

States may choose to utilize Quantum Leap to track initiatives and key measures via QL platform for easy metric setup and visualization

*The Hackett Group reserves the right to cancel the study should there be less than 15 participants

**The Hackett Group will shift the onsite Summit to a Webinar if there are less than 10 participants

Critical dates

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Benchmark

Not just benchmarking, we enable continuous improvementOur process uses our digital solution, Quantum Leap to measure and improve

Improvement

6

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Quantum Leap facilitates design, discovery and improvement

Description

Continuous review of KPIs to track progress of initiatives Monitor select KPI progress with scorecards Measure ROI and communicate improvement progress

Simple data collection at the State level – minimal effort Digital workflow to expedite data collection Automated set up, validation and presentment

Determine high-impact initiatives Assign accountability and set goals Track initiative progress and return on investment

PLAY Digital Platform

Initiative Tracking

Monitoring Dashboards

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This document contains trade secrets and information that is sensitive, proprietary, and confidential to The Hackett Group the disclosure of which would provide a competitive advantage to others. As a result, the information contained herein, including, information relating to The Hackett Group’s data, equipment, apparatus, programs, software, security keys, specifications, drawings, business information, pricing, tools, taxonomy, questionnaires, deliverables, including without limitation any benchmark reports, and the data and calculations contained therein,

may not be duplicated or otherwise distributed without The Hackett Group Inc.’s express written approval.

www.thehackettgroup.com

Reproduction of this document or any portion thereof without prior written consent is prohibited.