Higher EdHigher EdExemption StudyExemption Study

10-11-201110-11-2011

Higher Ed Exemptions Higher Ed Exemptions

from Modernization Reformsfrom Modernization Reforms

http://hd31.org/164

Exemptions Exemptions

• Financial ServicesFinancial Services• PurchasingPurchasing• Information Technology Information Technology

ConsolidationConsolidation• OneNetOneNet

Financial Services Financial Services HB 1207 – SB 541HB 1207 – SB 541

• In 2007, The Hackett Group In 2007, The Hackett Group conducted a study of Oklahoma conducted a study of Oklahoma financial processes. The study financial processes. The study included two Higher Ed institutions.included two Higher Ed institutions.

• Hackett Group – 2007: “State of Hackett Group – 2007: “State of Oklahoma has significantly higher Oklahoma has significantly higher FTEs than NASACT peer group.”FTEs than NASACT peer group.”

PurchasingPurchasing

• IBM – 2006: “52% of state spending is IBM – 2006: “52% of state spending is exempt from CPA because of Higher Ed exempt from CPA because of Higher Ed exemption.”exemption.”

• IBM – 2006: “By adopting legislation that IBM – 2006: “By adopting legislation that ensures all state entities work together to ensures all state entities work together to combine purchasing power, the state can combine purchasing power, the state can reap tremendous ongoing savings for reap tremendous ongoing savings for years to come.”years to come.”

PurchasingPurchasing

• Treya – 2008: “State spends 3.5 billion / Higher-Treya – 2008: “State spends 3.5 billion / Higher-Ed spends 2.3 billion.”Ed spends 2.3 billion.”

• Treya – 2008: “There is no searchable online Treya – 2008: “There is no searchable online catalog of products/services provided by state catalog of products/services provided by state use vendors.”use vendors.”

• Develop an online catalog to facilitate the Develop an online catalog to facilitate the process of identifying mandatory items. process of identifying mandatory items.

• OSU and DCS develop separate catalogs.OSU and DCS develop separate catalogs.

Information Technology / Information Technology / OneNet OneNet

• Capgemini – 2011: State has limited shared IT services. Capgemini – 2011: State has limited shared IT services. Reform would “result in significant cost reductions by Reform would “result in significant cost reductions by removing duplicated services and administration.”removing duplicated services and administration.”

• Oklahoma spends 40 million each year that comparable Oklahoma spends 40 million each year that comparable states do not spend.states do not spend.

• ““The state owns a significant fiber plant . . . However, The state owns a significant fiber plant . . . However, packets of responsibility and ownership exist (ODOT, packets of responsibility and ownership exist (ODOT, OnetNet, OSF) through the state for the laid fiber, with OnetNet, OSF) through the state for the laid fiber, with no single owner and/or authority in place for state-no single owner and/or authority in place for state-owned fiber. This enables additional purchases of owned fiber. This enables additional purchases of capacity and creates an inefficient use of state-owned capacity and creates an inefficient use of state-owned capacity.”capacity.”

Information Technology / Information Technology / OneNetOneNet

• Capgemini - 2011: “Establish a single Capgemini - 2011: “Establish a single statewide optical backbone using state-statewide optical backbone using state-owned fiber. The existing OneNet owned fiber. The existing OneNet environment should be the basis of this environment should be the basis of this single network. Onenet should be rolled single network. Onenet should be rolled under ISD as a statewide IT service under ISD as a statewide IT service provider for telecommunications.”provider for telecommunications.”

• Capgemini – 2011: “It is recommended Capgemini – 2011: “It is recommended that the use of OneNet by state agencies that the use of OneNet by state agencies be mandatory for all networking services.”be mandatory for all networking services.”

ResultsResults

• State and local governments State and local governments experience $20 M savings as a result experience $20 M savings as a result of purchasing system reforms.of purchasing system reforms.

• Department of Education set to Department of Education set to experience $600,000 of savings each experience $600,000 of savings each year from IT consolidation. year from IT consolidation.

Not ExemptNot Exempt

• Payroll – House Bill 1086 – “The Director Payroll – House Bill 1086 – “The Director of the Office of State Finance shall of the Office of State Finance shall promulgate procedures by which state promulgate procedures by which state agencies shall enter into a shared-services agencies shall enter into a shared-services arrangement with the Office of State arrangement with the Office of State Finance for the provision of payroll Finance for the provision of payroll processing services.”processing services.”

• Open Books – Purchase Card DataOpen Books – Purchase Card Data

Reasons for ExemptionsReasons for Exemptions

•Lobbying Power / Political Lobbying Power / Political SupportSupport

•Constitutional ProvisionsConstitutional Provisions•OtherOther

Recommendations - Recommendations - PurchasingPurchasing

• Purchasing savings have been documented Purchasing savings have been documented and the time is right to include Higher Ed.and the time is right to include Higher Ed.

• State should work with Higher Ed to State should work with Higher Ed to develop integrated purchasing catalog develop integrated purchasing catalog which allows Higher Ed purchasing officers which allows Higher Ed purchasing officers to order from statewide contracts. to order from statewide contracts.

• If state and Higher Ed fail to cooperate, If state and Higher Ed fail to cooperate, the time is right to consider policy the time is right to consider policy changes. changes.

RecommendationsRecommendationsFinancial Services / ITFinancial Services / IT

• If consolidation processes result in If consolidation processes result in savings to state agencies, they should savings to state agencies, they should either be expanded to include Higher either be expanded to include Higher Ed, or duplicated within the Higher Ed Ed, or duplicated within the Higher Ed system.system.

• OneNet should be consolidated into the OneNet should be consolidated into the state’s IT infrastructure as soon as state’s IT infrastructure as soon as possible.possible.