Annex
CMS RELEASE SCHEDULE AND FUNCTIONALITY
CMS RELEASE 1
CMS R1.0 first went live in Livingston Jobcentre
Plus on 14 July 2003 as the first major system component of the
modernisation of Jobcentre Plus. It provided:
— claim gathering for Income Support,
Jobseeker's Allowance, Incapacity Benefit, Housing Benefit, Council
Tax Benefit, Child Support Agency;
— determined eligibility for associated
benefits;
— electronic interfaces with the
Personal Details Computer System, the Departmental Central Index,
the Income Support Computer System, JSA Payment System, Pensions
Strategy Computer System (Incap) to obtain the most up to date
personal details;
— electronic interface to the
Labour Market System to undertake job searches and to book Financial
Assessor/Personal Adviser appointments; and
— a full range of customer specific
notifications.
Following the pilot, national rollout commenced
from 27 October 2003 in line with the Jobcentre Plus 2003-04 rollout
schedule.
CMS RELEASE 1.8
Release 1.8 was initiated in recognition of some
early application performance problems. This was implemented over
four separate weekends from 17 May 2004 to 2 August 2004.
An ongoing Programme of minor releases between August
and November 2004 introduced further improvements to CMS performance.
CMS RELEASE 2
CMS Release 2 was delivered on 13 December 2004.
All sites live with CMS Release 1 on 10 December 2004 were successfully
migrated to CMS Release 2 over the migration weekend Friday 10
December to Sunday 12 December 2004.
National rollout of Release 2 continues as part of
the wider Jobcentre Plus Implementation to the remaining Legacy
Jobcentres and Social Security Office sites and Contact Centres.
The key change with the introduction of CMS Release
2 was the electronic transfer of claim data recorded on CMS to
ISCS and JSAPS to support benefit processing.
CMS RELEASE 2.1
CMS Maintenance Release 2.1 was implemented on 24
January 2005. The primary purpose of this release was to fix those
defects identified during Release 2 System Integration Test, Product
Assurance Test and Model Office testing that had not previously
been cleared.
CMS RELEASE 2.2
CMS Maintenance Release 2.2 was implemented in April
2005. This Release fixed some of the problems identified in live
running following implementation of CMS Release 2 in December
2004.
CMS RELEASE 3
CMS Release 3 went live on 31 October 2005. This
Release enhances previously delivered releases of CMS; it consists
of several improvements to the system, that significantly reduce
the reliance on clerical products, supports new functionality,
are easier for staff to use and ensure that appropriate support
for customers is maintained.
A. EXECUTIVE
SUMMARY
1. Introduction
1.1 This summary business case has been
prepared and updated primarily to set out the critical financial
considerations as they stand at 22 March 2004 in order to secure
internal DWP approval from a Gated Review and to seek agreement
from HM Treasury to the business case. Previous iterations of
the business case set out the history of the project, the details
of the selection of software package and the planned development
of the system. This background is not repeated here.
1.2 This business case is written in the
context of the creation of the Department of Work and Pensions
and the Jobcentre Plus business. The Jobcentre Plus vision of
service delivery, introducing a work focused element for all our
customers, has had a marked effect on the original requirements
and functionality of a Customer Management System (CMS). The previous
business case envisaged three planning used CMS releases 1.0,
1.1 and 2.0. Due to a number of factors but predominantly cost
containment this has been reduced to two releases R1.0 and R2.0.
1.3 CMS release 1.0 was an enabler for the
deployment of the Jobcentre Plus service delivery vision and as
such do not in themselves generate significant savings but rather
lay the foundations for future savings as the system becomes the
normal interface between customers and Jobcentre Plus staff prior
to the Work Focused Meeting. Release 2.0 should attract comparatively
marginal costs and generate comparatively significant savings.
CMS will then be superseded by CAM (Citizen Account Management)
from April 2006. CAM will deploy the same electronic data capture
methodology but using a Siebel software package. It is envisaged
therefore that the savings introduced by moving to a CMS type
"system" will continue even though CMS per se may
no longer be the actual system deployed. Such savings are therefore
scored in this business case and are not repeated in the CAM business
case.
1.4 There will also be significant benefits
derived from CMS in terms of delivering an efficient, consistent
and better service to customers, and in delivering an electronic
communications service, consistent with the Government's modernisation
agenda, in a particularly visible area of contact with large numbers
of the public. It would be difficult to ascribe a monetary value
to these benefits ahead of the system actually being deployed
and observed in live conditions. It is planned therefore to revisit
the benefits realisation plan once R1.0 is up and working and
has had chance to settle down. A similar approach will be adopted
for R2.0.
1.5 CMS is the necessary IT system which
will enable Jobcentre Plus to arrange and accommodate the extra
2,200,000 work focused meetings required each year to meet the
new policy of work focused meetings for all customers claiming
benefit.
1.6 The deployment of CMS enables DWP to
make progress towards meeting PSA targets and takes the Department
significantly closer to meeting the aims of e-Government.
2. Background to the Business Case
2.1 The changes to requirements needed to
meet the Jobcentre Plus vision have been considered and the assumptions
surrounding business processes have been re-visited and tested.
In addition, savings in previous business cases were dependant
on the re-platforming of ISCS/JSA, which has been cancelled. These
factors have lead to some significant changes to the financial
data previously presented.
2.2 This business case uses the most recent
financial data available and incorporates the contractual situation
as envisaged at 22 March 2004. Discounted Cash Flow schedules
are attached at annex 1 to 3 that covers three possible scenarios
relating to the costing of CMS.
2.3 These three scenarios cover CMS costs
and savings from 2000-01 to 2012-13 because the original project
commenced in 2000 but the current contractual arrangements are
based around a series of fixed price packages plus some ongoing
"system fixes" which may still be contained within a
long term service contract beginning in 2003-04 covering the following
10 years. The actual contractual arrangements are those which
deliver best value for money:
(i) Annex 1—shows the total costs with
the pre April 2002 costs being incorporated but without the re-platforming
of ISCS/JSA;
(ii) Annex 2—excludes costs incurred
prior to April 2002; the proposition being that these should be
regarded as sunk costs since the new Agency led to a totally different
work focussed specification of requirements; and
(iii) Annex 3—reflects the latest financials
as at March 2004.
14 November 2005. These annexes have been taken
out as they contain details of the commercial contacts with the
suppliers of the software, the IT implementation costs and the
IT live running contracts.
3. Business Case Objectives
3.1 The objectives are to present the latest
financial information and set out the continued justification
for the CMS project, gain gated approval to roll out R1.0 nationally
and continued HMT approval to release the appropriate Welfare
Modernisation Funds to fund the changes proposed by this project.
3.2 14 November 2005—all figures in
£'s millions.
|
| | 2002-3
| 2003-04 | 2004-05
| 2005-06 | 2006-07
| 2007-08 | Then five years at
| Total |
| Costs: | | |
| | |
| | |
|
| Project | 8.7
| 5.7 | 7.0
| 3.15 | 0.0
| 0.0 | 0.0
| 24.6 |
| IT | 17.9 |
95.96 | 57.76
| 7.8 | 16.13
| 9.235 | 7.0
| 260 |
| Implementation | 0
| 3.5 | 9.6
| 9.5 | 7.4
| 7.9 | 7.9
| 77.4 |
| Total | 26.6
| 105.2 | 74.4
| 40.4 | 23.5
| 17.14 | 14.9
| 361.989 |
| Savings: | |
| | | |
| | |
| DEL | 0 |
0 | 0
| 18.125 | 25.375
| 31.0 | 31.0
| 229.5 |
| AME | 0 |
0 | 0
| 17.439 | 30.061
| 30.513 | 30.513
| 230.578 |
| Total | 0 |
0 | 0
| 35.564 | 55.436
| 61.5 | 61.5
| 460.078 |
| Net Cashflow1 | -26.6
| -105.2 | -74.374
| -4.849 | 31.9
| 44.375 | 46.388
| 98.089 |
| Net Present Value of Savings over 10 years up to 2012-13 is
| £40.135 million |
|
| 4.Benefits and Savings
|
4.1 These have been calculated on the basis of release
1.0 being available in September 2003 and Release 2.0 in November
2004.
4.2 DEL savings are calculated to be £31 million
per year. AME savings are calculated to be £30.5 million
per year.
(i) The take up of savings assumes no savings will be
taken in 2004-05 even though Release 2 will be deployed from November
04.
(ii) 55% of steady state savings will be taken in 2005-06,
85% in 2006-07 and 100% in 2007-08.
(iii) This take up pattern recognises that an entirely
new way of processing customer data is being used and will take
some time to bed in.
4.3 This profile has been agreed with the project and
the business and is consistent with the Integrated Modernisation
Business Case and the assumptions around a continuous rollout
of Jobcentre Plus.
5. Costs
5.1 The IT costs reflect a cost of £260 million
maximum plus related finance charges.
5.2 Project costs, IT costs and Implementation costs
up to 2012-13 are estimated at £24.6 million. Contact centres
form the infrastructure for the delivery of the customer focused
business processes supported by CMS. The costs are not included
in the DCF schedules as they form part of the Integrated Modernisation
Business Case and specifically the Jobcentre Plus Implementation
Business Case. They are therefore not funded through the CMS project.
Total undiscounted costs of CMS are £362 million.
6. Financial implications
6.1 The three scenarios outlined in section 2.3 above
show a net present value of savings from CMS for each as being;
(i) The base case (Annex 1) £XX.
(ii) Excluding pre April 2002 costs (Annex 2) £XX.
(iii) Current cost indications prior to revisiting the
benefits realisation plan (Annex 3) £XX.
6.2 A discount factor of 3.5% has been used in line with
current policy and guidance. However the previous iterations of
the Business case were based on the then Treasury rate of 6%.
If we apply the old rate on the base case, the final Net present
Value would decrease to £8.8 million, still positive but
clearly showing a worse return on the investment.
6.3 The Internal rate of Return for the base case is
6.83% based on the revised base case.
7 Contractual arrangements
7.1 The arrangements set out below are still subject
to final contractual signing between EDS, IBM and DWP but are
based on verbally accepted proposals as at this date.
7.2 CMS will be developed by IBM but delivered and supported
by EDS via a series of fixed price packaged contracts.
7.3 The fixed price packaged contracts are interlinked
and include explicit deliverable products or key milestones against
which progress is being tracked, monitored and reported to the
appropriate governance arrangements. An appropriate sum or sums
will be retained should the specific deliverables or key milestone
targets not be met. There is the intention, via the commercials,
to formalise the rectification risks as belonging to IBM
7.4 More detailed particulars of the work packages and
the payment conditions relating to them are set out in section
G below.
B. STRATEGIC CONTEXT
8. Introduction
8.1 The Integrated Modernisation Business Case (IMBC)
written to cover the deployment of the Jobcentre Plus service
delivery vision, described CMS as an enabling project. Enabling
projects are central to the development of Jobcentre Plus and
were brought together in the IMBC to demonstrate how they support
the delivery of the vision.
8.2 CMS was described as follows; CMS is the means by
which we plan to enable telephone based initial contact for our
customers. This project will start delivery of its functionality
from September 2003 and is linked to the planned rollout of Jobcentre
Plus. CMS will collect the relevant data on each customer to populate
the legacy systems, which in turn enables the work-focused interview
and the electronic calculation of benefits, via ISCS/JSA.
The two main benefits to Jobcentre Plus will be that information
will be collected once only and be accurate, thereby saving time
in future work focused meetings and the considerable clerical
rework currently required. In addition, and to some degree more
important than the above, it will improve customer service and
introduce the concept of job broking at a much earlier stage in
the client contact process.
8.3 CMS will gather information electronically by enabling
initial contact by telephone to dedicated contact centre staff.
While it is technically possible to deploy the required systems
and telephony to staff wherever they are based, it is clear that
significant savings and efficiencies will be achieved by brigading
staff together in contact centres. It is demonstrable from the
experience of other similar organisations that such centres enable
best practices to be shared and worst practices to be eliminated,
as well as providing a standard and professional customer service.
C. REQUIREMENTS
9. Need for the electronic capture of data
9.1 Research conducted at workshops with field colleagues
confirmed that on average claims for benefits require more that
just the initial handling process. For IS and JSA claims there
are two additional handlings and for IB claims, one. Furthermore
all change of circumstances notifications require additional handling.
Staff at workshops confirmed that these were "normal"
parameters for re-working on claims. Therefore on average all
claims are re-processed and a significant amount of staff time
in benefit processing offices is spent correcting errors or gathering
additional information.
9.2 Incorrectly completed forms result in benefits often
being paid unjustifiably or for incorrect amounts. This contributes
significantly to the £2 billion per annum lost to official
and customer error. Considerable staff resources are then utilised
trying to collect erroneous overpayments of benefit from those
members of society least likely to be able to repay.
9.3 Benefits payments to the most vulnerable members
of society are often delayed while errors are corrected, placing
these people in an unnecessarily precarious financial position.
Furthermore job seekers will be more concerned about what amount
of benefit they will be receiving rather than finding a new job.
9.4 The department, recognising these issues, established
the project to consider and pursue a means to resolve them in
an efficient and cost effective manner. The result of this work
was the creation of the CMS project.
9.5 CMS will prevent these problems occurring in most
cases because of the more efficient information gathering process
driven by the scripts which use expertise derived from the latest
contact centre industry standards. Furthermore Jobcentre Plus
staff in contact centres will have sufficient knowledge of benefit
processing to ensure that the correct information is gathered
once and used properly. This will result in less staff resources
being needed to correct errors and chase debts. It will also mean
that the correct benefit will be paid more rapidly to those members
of society who need financial assistance.
9.6 A speedy and accurate confirmation of benefit should
lead to a reduction in the number of, and difficulty of, aggressive
confrontations with customers thereby enabling the Jobcentre Plus
ethos of a professional office atmosphere to develop with the
consequent alleviation of Health and Safety concerns. At present
there is not sufficient evidence in order to place metrics on
such benefit, however a very brief initial study post go live
in Livingston indicated that additional savings could be garnered
and a more detailed study is planned for June/July 04 once the
staff using the system have become familiar with it ie in live
and "normal"running.
9.7 All Jobcentre Plus customers will be directing their
effort into seeking work more quickly as they will have confirmation
of the fact that they will receive benefit, and be informed of
the amount, in four days at maximum and are introduced to the
concept of job seeking during the course of their initial contact
with us.
D. OPTIONS
10. The four possible methods of data collection
10.1 Option 1. Continue with the customer completing
forms that are complex and lengthy. This is the do nothing option
and would not address the need to prevent/reduce the numerous
errors occurring, which are leading to excessive staff time spent
correcting those errors and to incorrect amounts of benefit being
paid. The policy decision taken which requires all customers who
claim benefit to attend a work focused meeting, obligates Jobcentre
Plus to arrange and conduct 2,200,000 extra interviews each year.
Without CMS the extra clerical costs that would fall on Jobcentre
Plus would be in the region of 2,000 staff unit years or £30
million for the additional work focused interviews and clerical
claims handling. It is estimated that the pre CMS benefit processing
cost is £47.5 million that compares to a post CMS cost of
£16.9 million per annum. Added to this would be the extra
estates and IT costs needed to accommodate and support the extra
2,000 staff.
10.2 Option 2. Simplify the forms being used. This would
be problematic given that DWP must ensure that customers are aware
of their statutory rights and obligations and the number of IT
systems on which their details are stored. Proper scripting of
the electronic data collection process does ensure that statutory
requirements are met, customers are treated timeously and consistently,
data is available for transfer between systems minimising handling
and keying errors.
10.3 Option 3. Develop a Customer Management System incorporating
off the shelf package software and adopting a contact centre approach
to data gathering, modernising our interface with customers, gaining
the advantages of economies of scale and developing best practices.
10.4 The software package chosen is Curam, which has
been developed to process benefit payments as well as providing
a scripting facility for telephonic information gathering. Whilst
this benefit processing capability will not be utilised for releases
1.0 and 2.0, the fact that it could be made available, with further
work, was considered as part of the IS/IT strategy.
10.5 Option 4. Provide desktop computers in Jobcentre
Plus offices allowing customers to complete forms on line that
would be edited and validated in real time. This would involve
considerable expense as the large number of desktop computers
required would have to be vandal proof and the cost of educating
our customers unfamiliar with desk top computers would not be
cost effective or particularly efficient.
10.6 Option 3 has been selected as providing the most
viable solution to the problem. It also provides enabling technology,
improves customer service and reduces errors.
E. COSTS
11. Total costs 2002-03 to 2012-13
11.1 Total costs are estimated as;
(i) Project costs (internal) £24.6 million.
(ii) IT costs £260 million.
(iii) Implementation costs (internal) £77.4 million.
(iv) Contact Centre costs[2] £380.1
million.
11.2 The most significant assumptions incorporated in
the costs set out above are;
(i) The IT costs reflect the actual contractual arrangements
currently in place or subject to final ratification with IBM and
EDS. Financing charges have been reduced commensurate with the
reduced risk arising from the fixed price nature of the initial
part of the contractual arrangements.
(ii) That training costs will be £3.7 million, and
"backfill" costs will be £3.7 million. These costs
represent CMS specific training and not process (labour market
or benefit knowledge) or induction for new staff which is covered
by other sources including IMBC. The costs assume an average number
of days training per staff member and have been validated by training
experts;
(iii) The £X.Xm ongoing annual IT running costs cover
the continued operation, maintenance and provision of the CMS
service including costs to cover release 2.0.
(iv) That telephone charges will arise from two directions.
First the incoming call will last around 15 minutes and be at
a local rate for the customer. Jobcentre Plus will pay for the
difference between the local and the actual rate. This has been
estimated at £2 million per year. Second, the call back will
last around twenty-five minutes at the expense of Jobcentre Plus,
and this is estimated at £3.5 million per year.
(v) That volumetrics data is the most up to date forecast
of new, repeat claims and change of circumstances available from
Analytical Service colleagues.
12. Costs avoided
12.1 In addition we have avoided the costs of re-keying
change of circumstances information by continuing with the "as
is" process. CMS will not enable change of circumstances
information to be "pushed" to legacy systems. Instead
this functionality will now be developed as part of CAM. 14 November
2005—CAM was the Customer Account Management project, which
was not pursued. This process will continue to be done clerically,
as it is now, and therefore in the short run has a NIL cost impact.
These costs equate to £22 million per annum and will be avoided
when CAM is operational.
13. Release management
13.1 Release 1.0 went live in September 2003 and Release
2.0 is due to go live in November 2004 and the costs for both
are now contained within fixed price packages. The only remaining
contractual issue is around the live support costs, agreement
for which has now been reached and subject to gate approval will
be contractually documented.
F. SAVINGS
14. Total savings 2002-03 TO 2012-13
14.1 Total savings are calculated as;
(i) DEL (undiscounted) £229.5 million.
(ii) AME (undiscounted) £230.5million.
14.2 The DEL savings represent administrative processes
no longer required and savings in goods and services as a result
of the new ways of working the information gathering front-end
system brings. Less administrative costs will be incurred correcting
errors. Currently customers are unaware of all the evidence that
they are required to produce for a successful work focused meeting.
CMS will provide a short checklist for the customer and therefore
abortive meetings will be rare.
14.3 The AME savings represent the savings arising from
correct information being obtained during the initial telephone
call and the subsequent call back. They further depend on the
inclusion of risk profiling and trained operators being able to
address inconsistencies or referring them to Financial Assessors
for further consideration. CMS, Fraud Strategy Unit and Analytical
Services Division devised a method of determining the savings.
This entailed mapping the correct information against Quality
Support Team and Area Benefit Review error data sets and then
quantifying the result of eliminating those errors. All business
owners have signed off the AME savings claimed as an accurate
assessment.
14.4 No savings were ever included in this business case
relating to carrying out changes of circumstances electronically
as in effect the "process" does not change. Currently
we take change information from clients face-to-face or in writing
and then manually key in those changes to the legacy systems.
Were we to have developed an electronic system to handle change
of circumstance detail, we would still be taking the change information
from clients and keying it into our systems.
G. CONTRACTUAL ARRANGEMENTS
15. Contractual arrangements
15.1 The details set out below have been negotiated and
agreed with IBM and EDS but the live support costs are subject
to final ratification by the ORR gate prior to a contract being
signed.
15.2 Release 1.0 has been developed and successfully
delivered and went lie in September 2003.
15.3 Release 2.0 has been developed and is now undergoing
performance and systems testing prior to going live in November
2004.
15.4 Hardware for testing and Cúram licences.
There is a contractual commitment to pay, in part, for the necessary
production hardware and the software licences. These costs are
included in the total costs and the DCF schedules as a proper
cost of deploying CMS.
15.5 Live support contract from September 2003. The costs
are based on the fact that some transfer of development risk into
a long-term service contract has been achieved and represent value
for money. 14 November 2005—two sentences of commercially
confidential information deleted.
15.6 The future release strategy is now subsumed within
the IS/IT strategy and the associated commercial arrangements
will build on the existing agreements in place and be aligned
with priorities determined by policy changes and the needs of
the Jobcentre Plus business as they evolve. Future releases will
be able to build on the foundation of the contractual arrangements
agreed as part of the deployment of a customer management system
that utilises modern technology.
15.7 Key Risk:
(i) The key risk identified is that a substantial proportion
of the total cost for the commercial arrangements will have been
paid prior to full implementation.
15.8 Mitigation:
(i) It is the intention that the commercial arrangements
for the packages to November will measure progress against plan
by the project on a weekly basis, that any slippage or non-delivery
of agreed products or reaching milestones will be reported to
the Project Steering Committee and will result in payments being
withheld.
(ii) The most important product is for delivery of an
operational version of the R2.0 software product to the live estate
in November 2004 and introduced incrementally to other contact
centres as they go live. Should this not operate as required,
the contractor is committed to fixing errors to an acceptable
level at their own cost. The contractual negotiation sought and
was successful in embedding into the contract explicit references
to holding back payments and no charges incurred for fixing the
R2.0 product.
16. Next steps
16.1 A more detailed assumptions log underpins the costs
and savings information contained in this business case. This
business case will now be the subject of change control with changes
being impacted not only on costs and savings within this case
but also impacted on other relevant business cases.
16.2 The business case will also be updated as we confirm
in more detail the benefits to be realised but as yet un-scored
following the successful release of R1.0 and R2.0 functionality.
These will be measured by the Jobcentre Plus work study team who
are in the process of being commissioned to carry out a detailed
study of both R1.0 and subsequently R2.0 in a live operational
environment.
17. Sensitivity analyses
17.1 Annex 5 comprises six different sensitivity analyses,
any one of which will not seriously undermine the business case.
If, however, several of these were to be combined, the business
case would need to be revisited with Treasury colleagues.
2
The costs are outwith this business case and are contained within
the IMBC. They are shown for presentational purposes only in terms
of the full cost of CMS as requested by HM Treasury. Back
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