Indiana May Turn Over Welfare System To IBM Under $1.6 Billion Outsourcing Deal

Indiana May Turn Over Welfare System To IBM Under $1.6 Billion Outsourcing Deal

IBM would provide Indiana with intake processing services and set up an automated welfare eligibility application system that will be accessible online 24 hours a day.

By Paul McDougall
InformationWeek

Nov 29, 2006 03:00 PM

The state of Indiana is close to outsourcing the technology and back-office operations that support its welfare system under a contract that, if approved by the governor, would be worth $1.6 billion to IBM and a handful of partners, including ACS and Phoenix Data Corp.

The 10-year deal requires the final approval of Indiana governor Mitch Daniels, who, in a statement released Wednesday, said it would make "America's worst welfare system better for the people it serves." Daniels said he will wait until the outcome of a Dec. 8 public hearing before signing off on the agreement.

Sources familiar with the negotiations say IBM prevailed over technology outsourcer Accenture.

Under the deal, IBM would provide Indiana with intake processing services and technology support for its Family and Social Services Administration. Among other things, IBM will set up an automated welfare eligibility application system that will be accessible online 24 hours a day.
http://www.informationweek.com/outsourcing/showArticle.jhtml?articleID=196600307

Mitch Daniels, a Republican I presume? :grr:

What could possibly go wrong?

Actually this could be a good thing, we'll see.

Didn't IBM just start sending jobs over there?

Just one of many articles:

IBM to hire 3,000 employees in India
11-02 21:14:34


NEW DELHI, Nov. 2 (Xinhua) -- IBM India set up its fourth facility in Chennai, capital of south Indian state Tamil Nadu, on Thursday adding 3,000 employees to its total staff in India, Indo-Asian News Service reported.

The new facility is part of the IT giant's 6-billion-U.S. dollar investment that it plans to spend in India in the next two to three years.

The facility will employ 3,000 workers, increasing the company's total staff in India to 46,000.

"The new facility will cater to IBM's publications management services and global delivery services," said Stanley S. Litow, IBM vice president for corporate community relations and president, at a press conference held in Chennai.
http://news.xinhuanet.com/english/2006-11/02/content_5282804.htm

at least it isn't based out of Bangalore...or is it? Hard to say from what's presented.

What is a for profit firm doing getting into the middle of a welfare program? Every single government program that is contracted out ends up costing more, becoming inefficient and full of errors, is given very minimal oversight and is rife with corruption and overcharges. Just look at how well Haliburton, Prison firms and Diebold are doing. Another give away to big business.

:thumbsdown: It's exactly as you say. Keep it in-house, I say. These privatization schemes have been costly failures at every level. Does the failure rate have to go to 110% before America will realize this? Sadly, though, if you ask ten average Americans how they feel about privatization, probably seven of them won't have any idea what you're talking about :(

Bankrupt the nation and then privatize everything.

Except the enumeration system they set up for the Nazis wasn't intended to surveil the poor, it was designed to identify and surveil Jews. Such a rich historical tradition.

See http://www.amazon.com/IBM-Holocaust-Strategic-Americas-Corporation/dp/0609607995

- B

I'm all for outsourcing innefficient processes that allow the state to save money and expedite payments recipients. I'll give IBM and Indiana the benefit of the doubt that they aren't going to use the data for nefarious purposes, and it's merely IBM monetizing their scale and excess capacity to provide a less expensive, more efficient alternative to whichever way Indiana currently operates their system.

Because privatizing the electric company has worked so well?

they are merely having IBM provide processing infrastructure instead of the state gov's archaic infrastructure.

From that noted radical publication, The Waco Tribune.

John Young: Texas's privatization disaster

Sunday, May 14, 2006

AUSTIN — It’s one of Texas’ biggest stories in years. Too bad few Texans know about it....

It came with an understated announcement last week: that 1,000 employees that the Texas Commission on Health and Human Services said it wouldn’t need are needed still.

The state was prepared to send the jobs through a corporate shredder. It was part of a massive privatized effort to change how Texas grants food stamps, Medicaid, Temporary Assistance for Needy Families and the Children’s Health Insurance Program (CHIP).....

The big winner from all of this was Bermuda-based Accenture LLP.

Having won contracts elsewhere, including a voter-purge list in Florida used in the 2000 presidential elections, Accenture led a consortium which won an $899 million contract to replace Texas’ system of determining eligibility for state services.

Last week, after massive backlogs and interminable waits for people needing help at pilot sites in Travis and Hays counties, state Health and Human Service Commissioner Albert Hawkins told Accenture to clean up its act. Meanwhile, affected eligibility centers were returning to pre-Accenture procedures. Under privatization, applications routed through a clearinghouse in Midland were backing things up like hair down a drain.

www.wacotrib.com/opin/content/news/opinion/stories/2006/05/14/05142006wacyoung.html

Privatization is usually a scam.

Unfortunately, I live in IN that he "governs". Fortunately , we took back the Indiana House this past November 7. The sad part is he will have this done before we take over in January.

common good instead of government?

Privatization is one thing (and I'm vehemently against it, btw, in pretty much all cases), but I'm seeing a further trend. And I'm uncomfortable with it.

I think it's another form of fascism. Or an extension of fascism. Or something. It's definitely not democracy, where the people have control over their government (every so number of years, at least. Sorta).

""Fascism should more properly be called corporatism because it is the merger of state and corporate power."

~An anonymous analysis of Benito Mussolini's fascism in Italy.

government responsibility then it is very close to fascism. The government must keep the control of the oversight, the established outcomes and the setting of payment for services. Then we the people still have a say. I give you the example of the foster home that my daughter lives in. They own the business but the government inspects the home/family/procedures that they use and tells them what they can charge for her care. This type of private contracting works.

Yes, I would bet Mitch Daniels is another Extreme RightWingNut. This Country is going to Hell. :grr:

undereducated, will be able to fill out the forms by themselves online. Do they think that most welfare applicants can just take their laptop to the local wi-fi cafe and sip lattes all day while they fill in the forms?

What will happen to them? Will they have to go on Welfare too?


I just hate this stuff.

Are taken away here. This is bullshit. When are we going to take this country back?

Mitch Daniels is now going to be around for a second term.

Having had some experience working on an outsourced government account, I can see the benefit of turning over control of IT operations to an outsource provider. In my experience, IT was not an area of expertise for government. With a model of adding fundtionality based on results of a lowest bidder contract system, what you wind up with are several non-interoperable systems that require even higher labor costs to integrate, maintain and upgrade.

The harsh reality is that in providing any IT solution, there's the possibility that with the efficiencies gained by effective automation, some administrative jobs are eliminated. Those are jobs paid for with tax dollars, with the goal being to reduce government spending.

Without a profit motive, there's no incentive for a government IT organization to revamp its operations or reduce it's cost structure, so the solution is to raise taxes to pay for the increased costs.

The objective here is to reduce the operating cost to the state over the life of the contract. So, they talk about the value of the contract to IBM being $1.6B, what was the expected cost to the state to continue running it's IT operations as is? It would have to be greater than the cost of the outsourcing contract to make it worthwhile for the state, wouldn't it?

the company wants more money from the taxpayers. The state isn't beholden to shareholders who think about nothing but profits.

There are considerations other than the bottom line.

while they're reducing the cost to government of running their operations?

Indiana officials say the deal will result in $500 million in administrative savings over the life of the contract.

I'm just sayin...

How do you know they won't find some excuse to tack on extra costs, or that you won't find IBM executives charging goodies for themselves to the state?

Central to IBM's system for managing the company is every employee's annual review of and commitment to our Business Conduct Guidelines.

The guidelines outline IBM's legal requirements and provide guidance on the company's business values. All employees worldwide are periodically required to read the guidelines and to certify their compliance.

http://www.ibm.com/ibm/responsibility/company/management/bcg.shtml

You work for either IBM or a similar company.

Privatization of welfare operations was tried in Texas.

It is a giant fiasco.

I'll tell you; IBM.

"Business Conduct Guidelines" - IBM ...is to Repuke - "Culture of Corruption"

corporate welfare.

:grr:

to making IBM shareholders richer. What a great idea!

if the savings are not realized, the contractor loses, not the government.

by denying benefits. Privatized relief will worrk jut as well as privatized health insurance - i.e unmitigated disaster for those who are supposed to be served.

records. Most of us have trouble with understanding them when they talk. Also our experience with DSL was that the person in India did not understand that a zip code could cover urban/rural areas at the same time. So just because the town had DSL they kept promising that we had it also. They do not understand our way of life.

Second: Contracting out to private providers is not bad as long as the state maintains oversight of the programs. Here in MN social services contracts with all kinds of care providers who must follow state regulations and allow state inspections of their property and programs. It works pretty good. What I am very against is turning the programs totally over to private sources as they have with senior drugs. That is not working.

Waiting to hear what kind of backroom deal$ they've made w/ Gov goodhair and other TX repukes


http://www.statesman.com/search/content/gen/ap/TX_IT_Contract.html

Texas has signed a seven-year contract with IBM Corp. that aims to save the state money and enhance data security by consolidating the information technology infrastructure at 27 state agencies.

Under the $863 million deal announced Tuesday, IBM will consolidate 31 data centers from the state agencies into two facilities in San Angelo and Austin, and take responsibility for operating them.

After taking costs into account, the deal is projected to save Texas $25 million in 2008 and 2009 and $159 million over the base contract period, IBM and Texas Department of Information Resources said in a statement. The contract includes three optional one-year extensions.

The 31 data centers offer varying levels of service, security and disaster recovery preparation, the department said. The new contract, signed Nov. 22, calls for increased physical and information security, improved facilities and an expanded ability to prepare for and recover from a disaster. All affected state employees will be offered jobs from IBM or a subcontractor with at least a 5 percent pay raise. They will not be required to move to another city.

:sarcasm:

November 20, 2006
IBM, an Indian company?

One of my first stops in Bangalore was IBM, which has nearly 50,000 employees in India now and his growing so fast that it might soon have the largest employment level of any tech company in India. TCS has about 80,000, so IBM still has a ways to go, but, if it doesn't overtake TCS it won't be for lack of effort. In addition to stationing an army of people in Bangalore, IBM now has a bunch of people in Hyderabad, Delhi, Chennai, Pune, Kolkata, and Gurgaon. This way, it casts a wide net for talent and avoids the worst of the recruiting wars in Bangalore.

It's in the middle of a major HR push aimed at lowering costs and retaining top talent. On the cost side, it's moving from a 60/40 mix of hiring experienced people versus fresh graduates to something more like 50/50. On the retention side, it's giving Indian employees more opportunities to have overseas assignments, working with employees practically from day one to map career paths and line up the appropriate on-line and classroom skills training, and improving the abilities of employees to move around within the Indian business units. The HR bosses have even appointed a staff of a dozen or so "royal ambassadors" whose job it is to keep track of new hires and make sure they're assimilating well.

Person after person at IBM told me today that India's woeful infrastructure isn't their big problem; it's recruiting, training, and retaining employees. "India is the Wild West right now," says Harish Grama, vice president in charge of IBM's Software Lab in Bangalore. "There are young kids who are looking for a 20% raise a couple of years after they come on board. They're taking the short view, because they have so much opportunity. I can pay very competitively and more than most, but I'm faced with new multinationals coming in and cherry picking good people at two times what I pay."
http://www.businessweek.com/globalbiz/blog/bangaloretigers/archives/2006/11/ibm_an_indian_c.html


<snip> The IBM solution is to try to convince people that a career is more important than just money.