Managing the Next Recession€¦ · Recession reality: Projected state budget shortfalls States must balance their budgets every year, even in recessions. Without additional, substantial

Managing the Next Recession:What are states doing now to maximize revenues, decrease costs and minimize the impact to constituents?

Wednesday, August 26, 2020

© 2020 CGI Inc. Internal© 2020 CGI Inc. Internal 2

John HicksBudget Director

Kentucky

Bob JarosControllerColorado

Ann UrlingDeputy Chief of Staff

Office of the GovernorWest Virginia

Howard DryverVice President

CGI

© 2020 CGI Inc. Internal

COVID-19 Impact

3

© 2020 CGI Inc. Internal 4

Recession reality: Projected state budget shortfalls

States must balance their budgets every year, even in recessions. Without additional, substantial federal help, they likely will deeply cut critical program areas such as education and health care, lay off teachers and other workers in even greater numbers, and cancel contracts with many businesses.

Source: Center on Budget and Policy Priorities: https://www.cbpp.org/research/state-budget-and-tax/states-continue-to-face-large-shortfalls-due-to-covid-19-effects

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State and Local Government Industry Insights

CGI Voice of Our Client 78% of state and local governments reported budget constraints are the most significant blocker in allowing them to achieve their business priorities


Grants

6


CGI | NASACT Survey Results What best describes your grants management operation?

7

69% 12%20%25%28%

We have a decentralized state agency approach to grants application

and grants issuance without a statewide

view

We need a system for comprehensive

grants issuance management

We need a system for comprehensive

grants management – from grants identification,

through applications to reimbursement

management

We have a comprehensive view of the grants applied

for and grants received across all

state agencies

We need more grant managers and grant

specialists in our organization to

increase the state’s revenues


CASE IN POINT | State of West Virginia

8

West Virginia delivers

CARES Act grant

application portal in 10 days

THE SOLUTIONPriority One was to streamline the sub-recipient request and management processes. • As a Grantor, the state is now:

• Accepting sub-recipient applications for Coronavirus Relief Fund through grants.wv.gov

• Has automated grant application review and approval processes.

• As a Grantee, the state is now:• Expanding access across agencies to the native grant

management capabilities for pursuing CARES Act funds and managing the application, award, eligibility and reporting requirements

THE CHALLENGE• The state needed help collecting and verifying applications

from local governments for reimbursable COVID-19 expenses

• The state needed to pursue, manage, analyze, and audit eligible CARES funds opportunities


Attendance Check

9


State Reciprocal Program & Offsets

10


CGI | NASACT Survey ResultsWhat offset programs does your state presently participate in?

11

61% 22%

Internal Offsets: against existing

state debts

External Offsets: Collecting fees for

performing external debts on behalf of

local governments or universities


An effective tool available to collect delinquent eligible federal and state debts.

Revenue Maximization | State Reciprocal Program

12

In fiscal year 2019, $91.9. million in delinquent debts for 12 states and the District of Columbia

A centralized process that matches federal payments against non-tax debts owed to state governments.

The reciprocal part of the process allows for federal non-tax debts to be offset against state payment.

Source: https://www.transparency.treasury.gov/dataset/treasury-offset-program/state-programs-participation

https://www.transparency.treasury.gov/dataset/treasury-offset-program/state-programs-participation


CASE IN POINT | Commonwealth of Kentucky

13

2019 $17.1

2015 $11.7

2014 $8.4

2013 $8.6

2012 $6.9

2011 $18.7

2018 $11.7

2017 $10.5

2016 $12.4Total: $106 M

2019: $17.1 M$106M

total revenue

$17.1M realized in

2019

Participating since 2011

Source: https://www.transparency.treasury.gov/dataset/treasury-offset-program/state-programs-participation

https://www.transparency.treasury.gov/dataset/treasury-offset-program/state-programs-participation


CASE IN POINT | Commonwealth of Massachusetts

14

Needed a common centralized solution for a diverse set of entities to

facilitate revenue recovery across the Commonwealth

THE CHALLENGE

Solution unified with the ERP to provide Internal and External Offsets for

all types of debts inclusive of vendors, student loans, child

support

THE SOLUTION

Offset $200M+ERP is leveraged as the ‘Revenue Recovery Hub’ for the Commonwealth

VALUE DELIVERED

External debts with local entities inclusive of fees collected by the Commonwealth for performing offsets

THE FUTURE

Source: http://www.macomptroller.info/comptroller/docs/press-releases/19-50-Intercept-FINAL.pdf

`

Collected $700k in the initial week. Inception to date for this one debt type is $3.3M

Not offsetting against any benefits inclusive of COVID-19 related payments

© 2020 CGI Inc.

Attendance Check

15


Decreasing Costs

16


CGI | NASACT Survey ResultsIs your state presently pursuing any of the following?

17

74% 18%26%59%

We are automating

manual processes/efficiency

We are freezing all positions

and/or reducing/

furloughing staff

We are improving our

cash management

processes

We are renegotiating

prices with most large vendors

12%

We are reducing the number of

subcontractors

© 2020 CGI Inc. Internal| Source: CGI Voice of Our Clients (2020) 18

NASCIO | States are leveraging chatbots to respond to COVID-19 inquiriesCovid-19 pandemic is serving as catalyst to implement increased automation

Source: NASCIO, https://www.nascio.org/wp-content/uploads/2020/06/NASCIO_ChatbotsRespondtoCOVID-19.pdf

https://www.nascio.org/wp-content/uploads/2020/06/NASCIO_ChatbotsRespondtoCOVID-19.pdf


Multiple opportunities to take advantage of wider intelligent automation to support State goals

• Human triggered• Simple rules based• Single system• Screen scraping, Scripts,

Macros, Workflows

• Human or system-triggered

• Rules based, high-volume processes (business & IT)

• Front, middle, back office• Structured data• Multiple system

(swivel-chair operators)• Enterprise-level

• Supported by basic analytics / decision support

• Optical Character Recognition (OCR)

• Intelligent document processing

• Structured and unstructured data

• Simple web chatbotintegration (e.g. FAQ)

• Complex processes and decisions

• Supported by predictive / prescriptive analytics

• Machine learning, narrow intelligence, basic reasoning

• Unstructured & big data• IoT integration• Natural Language

Processing (NLP), chatbots

• Cognitive technology capable of emulating human capability inclempathy

• Full end-to-end autonomy, hypothesizing, reasoning

• Deep learning, deepneural networks, AI

• Full speech recognition and generation

• Fully capable virtual agents, omni-channel

• Augmented & virtual reality

Enhanced Process Automation

AlgorithmicAutomation

ArtificialIntelligence Algorithmic

AutomationEnhanced ProcessAutomationRobotic Process

AutomationBasic Automation


CASE IN POINT | State of ArizonaAutomation of loading standard work documentation for Travel Reimbursement Processing

20

Case Study: RPASolution Projected

Benefits• Repetitive tasks not performed

by high level staff• RPA can accomplish in 5

minutes what staff spent 2-3 hours on weekly

• Increased job satisfaction• Staff learning more about

automation

• Created Standard Work documentation

• Used RPA to automate the Standard Work


Attendance Check

21


Technology

22

© 2020 CGI Inc. Internal| Source: CGI Voice of Our Clients (2020)

+0%

+0%

+0%

+5%

+8%

+10%

23

Business priorities: leveraging digital to improve citizen services and optimizing for less comes into sharper focus post pandemic

* Reference date March 11 – World Health Organization declare Covid-19 a pandemic

Improve citizen services and experience

Collaborate across the boundaries of our organization

Harness the power of data analytics to improve insight

Protect the organization as cybersecurity risks mature

Optimize today's operations and do better for less

2020 trends ranked by importance

Post vs. Pre-pandemic declaration* importance variation

Improving the citizen experience remains the most important business priority

98%

1

34

2

5

© 2020 CGI Inc. Internal| Source: CGI Voice of Our Clients (2020) 24

IT Priorities: post pandemic views show a shift to governance and IT delivery models while digitize, automate, modernization and security decline in focus


Digitize and automate businessprocesses for better citizen service

Embrace new and agile IT delivery models

Establish effective IT roadmap, governance and management

Protect through cybersecurity

Drive IT modernization to improve efficiency

Post vs. Pre-pandemic declaration* importance variation

2020 trends ranked by importance

Digitizing and automating business processes remains the top IT priority, in fact is increasing in importance YoY over the last 3 years..

Digitization and automation of services to improve citizen services continues to increase in importance while IT modernization declines YoY.

92%

92%1

34

2

5

+9%

+15%

+5%

-2%

-6%

© 2020 CGI Inc. Internal© 2020 CGI Inc. Internal

Questions?

25

© 2020 CGI Inc. Internal© 2020 CGI Inc.

Thank you

26

Managing the Next Recession:What are States Doing Now to Increase Revenues, Decrease Costs and Minimize the Impact to Constituents?

© 2020 CGI Inc. Internal© 2020 CGI Inc.

Appendix

27


CGI | NASACT Survey ResultsAre you considering permanently moving to a more remote workforce to reduce facilities costs?

28

53% 47%

YES NO


CGI | NASACT Survey ResultsAs many states have moved to a remote workforce, what are the strategies and technologies you have deployed to make such a move successful?

29

44%67%

Deployed an Electronic Content

Management System

Deployed an Electronic

Signature Solution

85%

Deployed electronic

collaboration solution


Industry trends

Business priorities

IT priorities

| Source: CGI Voice of Our Clients (2020)

9%

15%

5%

0%

8%

10%

4%

24%

30

Trends / IT & business priorities summary overview story


Becoming digital organizations to meet increasing citizen expectations

Protect through cybersecurity

Drive IT modernization to improve efficiency

Digitize and automate business processes for better citizen service

Collaborate across the boundaries of our organization

Optimize today's operations and do better for less

Improve citizen services and experience

Protecting through cybersecurity

0%

0%

0%

-10%

0%

0%

0%

0%

© 2020 CGI Inc. Internal| Source: CGI Voice of Our Clients (2020)

0%

0%

0%

0%

0%

0%

+0%

+3%

+0%

+0%

+4%

+24%

Industry trends: Balanced focus on digital transformation and security


Becoming digital organizations to meet increasing citizen expectations

Aging workforce - challenge of attracting and retaining upcoming talent

Assuring regulatory compliance

Coping with budget pressure through IT consolidation and automation

Protecting through cybersecurity

2020 Industry trends ranked by impact

Post vs. Pre-pandemic declaration* impact variation

1

34

2

5

Balancing the pressures of IT consolidation and process automation against available budget is becoming increasingly difficult.

81%

Organizationslist cultural change and change managementas their top barrier to digital transformation.

.

87%

Documents

Managing the Next Recession€¦ · Recession reality: Projected state budget shortfalls States must balance their budgets every year, even in recessions. Without additional, substantial