Selecting a Core System

AASCIF IT 2013

Steve Dyer Steve Flowers

Selecting a Core System

• CompSource Project

• Approach & Considerations

• Request for Proposal

• Selection Process

• Implementation

Compsource Project

• Implemented July 1986

• Policy + Claims + Billing

• Developed in-house

• Mainframe CICS Cobol DL/I

• 3270 terminal interface

WORCS

CompSource Project

CompSource Project

• Design predates email & web

• Database constraints

• Aging infrastructure

• Minimal image/workflow interface

• Difficult to modernize

System Limitations

CompSource Project

• Implemented in Claims 1993

• Expanded to Policy 2002

• AS/400

• Unusual customization

• Software support end of life

Imaging System

CompSource Project

• Current commercial applications

• Enhanced functionality

• Streamline business processes

• Graphic user interface

• Expand web services

Goals

CompSource Project

• Relational database

• Reporting - data warehousing – BI

• Simplify data exchanges

• Updated infrastructure

• Modern language framework

Goals

CompSource Project

• Policy, Claims and Billing

• Document Management / Imaging

• Document generation

• Reporting software

• Data warehousing - BI

System Replacement - Scope

Approach

Exec Steering Committee

• President/CEO, CFO, CIO/VP IT, VP Business Operations, VP Claims, VP Admin Services, Counsel, Controller, Internal Audit

• Actively engaged in all major areas of the project – scope, selection, contracting, team staffing, change process

• Meets regularly with internal and external project managers for status review and issue resolution

Approach

• Representatives from principal departments • Key personnel with extensive business and

operations knowledge • Product owners with authority to make

decisions • Participate in RFP creation, vendor demos and

scoring

Project Team

Approach

Oversee the selection and implementation of the workers’ compensation insurance processing system • Industry expertise to facilitate the

selection process

• Technical expertise to manage implementations with multiple vendors and systems

Consulting Services

Approach

There is a faster and easier way…

RFP

RFP

• Instructions to Vendors

• About CompSource Oklahoma

• Submission Requirements

• System Requirements

• Additional Contract Terms

Request for Proposal

RFP

• Vendor Information Form

• Cost of Proposed Solution

• Appendix (requirements detail, NDA,

etc. )

• Reports, forms and data transfer

master lists

Request for Proposal

RFP

• Client Mgmt

• Underwriting

• Agency

• Billing

• Claims

Functional Requirements

• Accounting

• Reinsurance

• IT

• Reporting

• Risk Prevention

RFP

• 2400+ requirements

• Tremendous effort by the business areas

• Important not only for product comparison but also development and implementation.

Requirements Document

RFP

• Vendor questions and clarifications – amendments distributed to vendors

• Proposals submitted

• Phase 1 - Review proposals for compliance, completeness. Select finalists

• Phase 2 – product demonstrations from finalists

Initial Steps

Demo

• Two or three day on-site engagement for vendor to demonstrate system design, functionality, integration and answer any questions.

• One or more series of finalist demos.

Process

Demo Date: Time: 8:00 am to 5:00pm CST 8:00 – 8:15 Executive Summary 8:15 – 8:30 Management Reporting / Business Intelligence for Policy Administration

•Management Reporting •Dashboards/Charts

8:30 – 9:00 Technology Overview •Architecture •Administration and Configuration •Security •Hosting •Support •Help Screens

9:00 – 10:00 Agency/Insured Self-Service Portal •Agency Inquiry •Agency Application Processing & Quoting •Additional Agency Portal Features (i.e. Issuance of COI) •Insured Online Payments •Insured Payroll Reporting •Insured Application Processing & Quoting

Demo

• Consistent demo scripting and presentation is important

• Broad participant representation across organization functional areas

• Vendor walk-through of business areas prior to formal demo.

• Beneficial not only for specific applications functionality, but look, feel and general ease of use.

Process

Demo

• Illustrate gaps between requirements and proposed system functionality

• Which functions are out of the box?

• Which ones must be customized? Is the customizing minor or major?

• How is custom code managed? Unique version of base code?

Process

Demo

• Vendor business focus and philosophy • Get to know principals, implementation and

support team

• Outline product support structure

• Upgrade release and patch schedules

• Review system architecture

Process

Demo

• High level overview during general demo sessions

• Specific infrastructure and data conversion discussions held separately with IT staff.

• This included limited demos of data extraction, mapping and integration.

Technical Review

Selection

Admin, business and IT areas will have different perspectives and opinions.

Selection

• Assemble questions and concerns best addressed by references

• Send list to participants well before the call

• Generous, honest participation from references

References

Selection CompSource Oklahoma Vendor System Selection

Reference Check Questions

Vendor: Client: Location:

1. Please explain what services the vendor provided and the dates that they provided the

services.

2. Do you have an overall favorable impression of the vendor? Explain.

3. Did the vendor do a proper job of explaining the scope and breadth of the system implementation?

4. Did the vendor do most of the work on-site or in their offices?

5. Did you or the vendor appoint an overall project manager? Was the project manager a

vendor resource or a third party resource?

6. Did the project manager maintain a project schedule?

7. Did the vendor provide you with written deliverables for the requirements, the detailed design, the test plan, etc?

Selection Document

Document Management System Reference Evaluation Form

Vendor: Client:

Location:

1. What business system do you use that integrates with the document management software?

__________________________________________________________________________

2. How would you rate vendor’s delivery of your requirements including design, test plan, etc?

Excellent ____ Good _____ Average _____ Below Average _____ Pts. ____

3. How well did the vendor meet the milestones for the project?

Excellent _____ Good ______ Average _____ Below Average ______ Pts. ____

4. How would you rate the training provided by the vendor?

Excellent _____ Good _____ Average ______ Below Average _____ Pts. ____

5. How would you rate the implementation of the software?

Excellent _____ Good ______ Average ______ Below Average _____ Pts. ____ 6. Did the vendor adequately explain the scope and breadth of the system implementation?

Excellent ______ Good ______ Average _____ Below Average _____ Pts. ____

Selection

• Scope of services, dates and project length • Vendor work performed on-site or off-site? • Project management - vendor, customer, third

party? • Defined deliverables, design, test plan • Extent of application modifications • Implementation - new & renewal, big bang? • Data conversion

Reference Questions

Selection

• Milestones met? If not, which ones? • Product stability during user testing • Configuration process standardized? • How was training performed? Successful? • User documentation – improvements? • Support agreements and experience

Reference Questions

Selection

• Opportunity to see application in production environment.

• End user experience and perspectives

• Different business processes in use? • Meet implementation & management team

Reference Site Visits

Scoring

• System Functionality

• Technical Approach

• Vendor stability

Scoring Criteria

• Vendor experience

• Implementation plan

• System costs

Scoring

• Initial license fees & software costs

• Hardware cost estimate

• Required third party applications

• Implementation/integration services

System Cost Detail

Scoring

• Source code modification

• Total up front cost to implement

• 7 yr average annual license & maint fees

• Total 7 year cost of ownership

• Custom support rates

System Cost Detail

Selection

• Post demo solution definition and pricing adjustments

• Project team scoring • Results sent to Steering Committee

Final Steps

Selection

• Each finalist proposal demonstrated positive, unique features.

• Prioritize features for best benefit to the organization

Scoring

• Vendor approach to customization vs. configuration

• Presentation vs. features of the application

• Mature, yet innovative products

Consider

Selection

• Demo time is limited – design your process for efficiency of demonstration

• Look down the road. The path of least resistance may not take your company where it wants to be five years from now

Consider

Selection

• Each selection step is individually important

• Blending all steps will provide a detailed comparison of the systems, history and direction of the vendor companies, and the ability to compare them with the strategic goals of your organization.

Bring it all together

Implementation

Implementation

• Incorporate requirements into specific project deliverables

• Independent audit review of implementation • Associate payment milestones with

demonstrated functionality • Reserve final amount payable following

successful go-live

Implementation

• Consider modifying business processes to match out of the box system functionality instead of customization.

• Establish visibility into process so that you have reliable information on completion rates and resource allocation.

• Emphasize core function delivery and defer some bells and whistles until staff has some experience with the new system.

Implementation

• Preplan your contract template and have a draft ready so you’re ready to finalize the contract once a vendor selection is made

• Entice vendor come to your terms using your contract template as a starting place for the negotiation process rather than their template

• Ensure all the agreed-to items are in writing

Questions? Comments?

Contacts

Steve Dyer CompSource Oklahoma Steve_D@compsourceok.com 405-962-3939 Steve Flowers State Accident Fund sflowers@saf.sc.gov 803-896-5848