Public sector organizations face continued challenges in funding new IT initiatives. Without the necessary funds to begin or sustain these projects, many organizations will continue to be constrained by the limits of their outdated systems in their efforts to improve citizen service, transparency, collaboration and decision making.
A proven approach to help government mitigate these factors is benefits funding, where new or modernized systems essentially cover their own costs from the measurable, incremental financial benefits they generate. Prime candidates include modernization initiatives to increase revenue by improving debt collection, centralizing debt management and recovering improper payments, as well as initiatives to generate savings by reducing the cost of goods and services, automating processes, improving decision making, and reducing intensive staff intervention.
In benefits-funded contracts, the IT partner provides the upfront capital investment along with the staffing and technology to implement and operate the solution. Compensation is made only after measureable benefits are realized and certified by the client. Payments are deferred, and the IT solution provider is incented highly to deliver results. Additional advantages include:
- No negative budget impact in any fiscal year
- Less financial risk to government
- Ability to implement new programs without hiring new staff
In the area of tax and collections modernization, CGI benefits-funded projects have recovered more than $3.7 billion in revenues for government clients. The State of California’s tax modernization program is funded from benefits generated by the new Enterprise Data to Revenue system that increased their delinquent debt collections by more than $1.6 billion.
Centralizing the tax and non-tax debt management function presents an outstanding opportunity for governments to increase collections by as much as 45 percent by creating an “Obligation Recovery Center” supported by automation and decision analytics – and pay for such initiatives using a benefits funding approach. Read more in our viewpoint papers on benefits funding and centralized collections.