Hennepin County Human Services: IBM Filenet

THE BOTTOM LINE

Hennepin County Human Services and Public Health deployed IBM FileNet to replace paper-based document and client service processes. Nucleus analysts found that bringing files online and automating workflows improved communication across the department and enabled case workers to be more productive and proactive while in the field.

ROI: 61%
Payback: 1.9 years
Average annual benefit: $2,482,291

THE COMPANY
Hennepin County, Minnesota, is the largest of Minnesota’s 87 counties in budget, estimated market value, and population, with almost a quarter of the state’s citizens. The City of Minneapolis is its largest city and the county seat. Hennepin County’s Human Services and Public Health Department was created in 2004 by the merger of six different county departments. Its mission is to strengthen individuals, families, and communities by increasing safety and stability, promoting self-reliance and livable income, and improving the health of its communities. The department has 200,000 clients and had a 2010 operating budget of $476 million.

THE CHALLENGE
Hennepin County had merged its different health and welfare departments with the goal of streamlining the delivery of services and integrating those services across its client base. However, the different departments all retained their own record keeping systems when they merged, creating several barriers to the goal of integrated services:

• Case workers from different program areas were providing services to the same shared client without knowing it.
• Clients were often asked to provide the same documentation multiple times by different case workers.
• Case workers were working with an incomplete picture of the client’s involvement with the county agency and could be giving clients conflicting information.

Although one of the departments had an imaging system, most employees were still using paper-based files – resulting in administrative inefficiencies and HIPAA, data privacy, and records management risks. Additionally, case workers working remotely would have to travel to the central office to pick up mail or files or send out forms to clients.

In 2005, the department decided to consolidate file systems and move all departments into a single, shared system called the Enterprise Communications Framework (ECF).

THE STRATEGY
Because the department already had a FileNet imaging system, it chose to upgrade to FileNet P8 and provide everyone with access to content management. Hennepin County hired a consulting project manager and a FileNet architect to design the system, and also used IBM FileNet services to configure and install the software. The application was integrated with the different existing case management systems so users have a combined view of case data (such as client status and interactions with other departments) and case file content. Hennepin also
developed electronic forms for some internal and external business processes, so case workers can mail forms out to clients directly from the system.

The first phase of the project was rolled out in late 2007 to 300 child support case workers, and the second phase was rolled out to another 300 child protection and child welfare case management workers. Today, 600 case workers use the solution on a daily basis to manage mail and case files. When paper mail is received it is scanned and entered into the appropriate file; faxes are automatically captured in the appropriate files.

KEY BENEFIT AREAS
By integrating all its content into one electronic system and providing case workers and administrative staff with centralized access, Hennepin County has been able to improve service delivery and accountability while supporting its goal of becoming a Results-Only Work Environment (ROWE). Benefits of the project include:

• Increased productivity. Centralized access to information reduces the time spent searching for and filing documents and reduces the risk of lost files that must be recreated from court records.
• Greater flexibility. Because case workers can access their files and communications from laptops via a secure Web connection when they are out of the office, they can catch up on client work while waiting for their court hearings and other meetings. The availability of electronic forms also help case workers manage clients from anywhere at any time.
• Reduced expenses. Over time, Hennepin County will spend less on filing and office space as fewer case workers need full-time work stations and filing cabinets.
• Improved accountability. With all the data in one system, all users know which case workers are working with which clients and performance can be measured by results as recorded in the system.
• Improved client management. Because case workers are better informed about all their clients’ contact with the department and can coordinate their activities with other colleagues, they can more actively manage clients and reduce the need to gather information from clients more than once.
• Enhanced HIPAA and data practice compliance. Case file documents containing sensitive information are secured and access to them can be limited to authorized staff. Additionally, audit trails enable security administrators to determine who has viewed the contents of a client’s file.

Benefits
Direct: 4%
Indirect: 96%
Total: $7,446,872

KEY COST AREAS
Key cost areas for the deployment included personnel, software, consulting, and hardware.

Costs
Training: 2%
Software: 27%
Consulting: 13%
Hardware: 4%
Personnel: 54%
Total: $5,192,683


BEST PRACTICES
Although Hennepin County had already achieved some efficiencies from its existing imaging system, it recognized that providing case workers with access to client information from anywhere at any time would provide incremental additional productivity gains and a more engaged workforce. This investment will provide case workers with greater flexibility moving forward and the ability to more quickly act in client situations where they can have a greater impact.

CALCULATING THE ROI
Nucleus calculated the costs of software, hardware, consulting, personnel, and training over a 3-year period to quantify Hennepin County’s investment in IBM FileNet. Because the county already had existing FileNet licenses, the software upgrade cost required to move all users to Paragon 8 was the only software investment needed beyond the ongoing maintenance fees for licenses used for the project. Hennepin County’s investment in content management is an ongoing project and the personnel and consulting costs associated with future development
plans were not included in the cost calculations for this project because they were driven by other initiatives.

Although the county does not pay taxes, a standard 50 percent tax rate and a standard 5-year straight line depreciation schedule were used in the calculations, as is common in all Nucleus case studies, so the results can be compared to those expected by private sector organizations.

Nucleus quantified the increase in productivity of child support case workers and child welfare case workers based on the average time they saved per week by having remote access to files and forms and used a correction factor to account for the inefficient transfer of time between time saved and additional time worked. The calculations were made based on the average annual fully loaded cost of a case worker. Direct benefits quantified included the avoidance of additional staff needed to support imaging now that it is more automated and all documents are in
one system, and the reduced cost of forms. Not included in the ROI calculation were reductions in office and file room space Hennepin will likely experience in the future as case workers take full advantage of remote work opportunities or the additional benefits Hennepin will achieve as it extends content management to more departments and employees.

DETAILED FINANCIAL ANNALYSIS: Hennepin County Human Services

Summary
Project: IBM FileNet
Annual return on investment (ROI) 61%
Payback period (years) 1.88
Average annual benefit 2,482,291
Average annual total cost of ownership 1,730,894

Annual Benefits	Pre-start	Year 1	Year 2	Year 3
Direct	0	88,680	88,680	88,680
Indirect	0	1,803,851	2,688,490	2,688,490
Total Benefits Per Period	0	1,892,531	2,777,170	2,777,170

Depreciated Assets	Pre-start	Year 1	Year 2	Year 3
Software	500,000	0	0	0
Hardware	200,000	0	0	0
Total Per Period	700,000	0	0	0

Depreciated Schedule	Pre-start	Year 1	Year 2	Year 3
Software	0	100,000	100,000	100,000
Hardware	0	40,000	40,000	40,000
Total Per Period	0	140,000	140,000	140,000

Expensed Costs	Pre-start	Year 1	Year 2	Year 3
Software	0	300,000	300,000	300,000
Hardware	0	0	0	0
Consulting	210,000	150,000	150,000	150,000
Personnel	698,880	698,880	698,880	698,880
Training	75,000	62,163	0	0
Other	0	0	0	0
Total Per Period	983,880	1,211,043	1,148,880	1,148,880

Financial Analysis	Pre-start	Year 1	Year 2	Year 3
Net cash flow before taxes	(1,683,880)	681,488	1,628,290	1,628,290
Net cash flow after taxes	(1,191,940)	410,744	884,145	884,145
Annual ROI - direct & indirect benefits				61%
Annual ROI - direct benefits only				-39%
Net present value (NPV)				648,254
Payback (years)				1.88
Average annual cost of ownership				1,730,894
3-year IRR				33%

Financial Assumptions
All government taxes: 50%
Discount rate: 8%