General Committee

 

TO:

Mayor and Members of Council

 

 

FROM:

James Allen, Chief Information Officer

 

 

PREPARED BY:

Nasir Kenea, Manager, Applications & GIS

 

 

DATE OF MEETING:

May 2, 2005

 

 

SUBJECT:

CARe Partnership opportunity 

 

 

RECOMMENDATIONS:

 

THAT the Mayor and Clerk be authorized to execute an agreement with The Active Network, Ltd. in a form satisfactory to the Town Solicitor and Commissioner of Corporate Services or Chief Information Officer regarding continued support and maintenance for the CARe system

 

AND THAT staff provide the following assets/assistance to  The Active Network, Ltd.: CARe-Hansen integration package, report layouts, service request types, CARe documentations and reviews, and commitment to test and transition to CARe v2.0 in exchange for the following assets: CARe v1.5 enhancement, free implementation and support services, enhancements requested by Markham, CARe v2.0 site license, data loading tool, Payment Server site license, 40% discount on Payment Manager license, and discount on maintenance fee over four years.

 

AND THAT a confidentiality agreement be prepared to ensure the protection of confidential information supplied from time to time.

 

 

PURPOSE:

 

The purpose of this report is to recommend that the agreement which has been negotiated with The Active Network, Ltd. be executed. This will ensure a future for CARe and protects the Town’s investment in this important business solution.

 

 

EXECUTIVE SUMMARY:

 

The Town of Markham has been using the CARe system for two years to track customer requests and provide improved services to its citizens. The system was initially developed in agreement with Orion Technologies Inc. in 2002, who then sold it to Class Software Solutions Ltd. (Class) in early 2004. Class currently provides the Town with the on-line Recreation Registration system.  Class was acquired by The Active Network, Ltd. (Active) in late 2004.  Active will continue to support the CARe v1.5 application at the Town until the end of 2005.  Active is in the process of redeveloping the CARe v1.5 application to include current and enhanced functionalities that will position CARe v2.0 for a larger market.

 

During the past two years Markham has built and developed several assets and business processes for CARe. Active is interested in these resources for its business strategy and has been negotiating with Town staff on a partnership agreement.  The agreement includes a swap of Markham’s assets for products and services provided by Active and favours Markham by an estimated net value of $144,250 (see Appendix A).  This report recommends that the agreement be executed by the Mayor and Clerk.

 

 

BACKGROUND:

 

The CARe system was developed as part of the QSQP initiative to enhance the level of customer service by enabling the Town of Markham to submit and manage service requests at the corporate level. The system was developed to achieve the following objectives:

 

  1. Provide a centralized database to process all requests for service, information and complaints
  2. Ensure prompt response to the requests by forwarding them to the relevant departments immediately and using electronic escalation techniques to make sure that requests are serviced within defined time frames
  3. Enable staff, senior management, and council to track the status of requests
  4. Enhance the service levels and performance of departments and sub-contractors
  5. Enhance the level of customer service

 

The system was developed by Orion Technologies in 2002 based on requirements from the Town of Markham, City of Kitchener, and the Town of Oakville. CARe is currently one of the key software applications used to manage customer service requests within the Contact Centre at the Town of Markham.  Approximately 40,000 service requests have been processed by CARe since April 2003.

 

In early 2004, due to a shift in their business strategy, Orion Technologies sold the CARe software to Class.  Class has been a dominant force in the recreation software market space and has over 600 clients across North America, including the Town of Markham. With the large customer base Class decided to grow their business by providing more software solutions to governments.  One of the opportunities they identified was to provide a customer request/complaint management system. After a thorough review of products in the marketplace, Class identified CARe as the best candidate that met their requirements. After the acquisition of the CARe software from Orion, Class approached Markham to form a partnership in which Markham would share its knowledge and assets created during the implementation of CARe in exchange for products and services. The objective for Class was to get into the market quickly by leveraging Markham’s expertise in CARe implementation.

In the fall of 2004, Class was acquired by one of its competitors, Active.  Active has been serving local governments by providing software management solutions that streamline business processes, increase efficiencies, and help them become more customer-centric.  Active has over 1,000 customers, the majority of which are cities and counties throughout North America, with some clients in Australia and New Zealand. The annual revenue of Active is approximately $25M US and it was named North America's 15th fastest-growing technology company in the 2004 Deloitte Technology Fast 500 program.

The partnership discussions continued after the acquisition of Class by Active over the past 5 months. The objective has been to reach a win-win situation for both Active and Markham. As the discussion progressed, the Innovation Synergy Centre in Markham (ISCM) was involved in the validation and discussion regarding the terms and conditions of the partnership.  This partnership opportunity with Active was presented at the IT sub Committee of Council on Feb. 22, 2005.  Doug McIntyre from ISCM was present to answer questions in addition to Town staff.  Active recently implemented CARe v1.5 at the Town and is currently working on an enhanced version 2.0 of CARe.

 

PARTNERSHIP DETAILS:

The partnership agreement with Active is split into two major components (see Appendix A): (1) A swap of Markham assets, and (2) a commitment on part of Markham to move to CARe v2.0.  The latter also requires that Markham shares its CARe implementation expertise and knowledge in an effort to help Active be successful in the market place.  The assets will be provided in “as is” condition.  

 

The assets and support that Markham will provide to Active as part of this agreement are:

 

  1. System integration module – a database integration package developed by Markham that enables information to be transferred between the CARe and Hansen systems seamlessly (value: $26,500).
  2. Service Request Types & documentation – all documentation relating to business processes that were configured into CARe (value: $99,450).
  3. Reports – all existing CARe report layouts and definition for future CARe reports (value: $33,000).
  4. CARe database – a copy of the existing CARe database excluding personal information that will be used by Active for internal testing and that will conform to all privacy regulations. Active will assist in this process. In addition, ongoing services provide an opportunity for The Active Network, Ltd. to view personal information.  A confidentiality agreement will be entered into between the parties to protect all personal information from improper disclosure. (value: $26,000).
  5. Requirements Reviews – Markham will review the requirements for CARe v2.0 and provide feedback to Active in an effort to enhance the product (value: $15,000).
  6. Software testing– Markham will commit to test CARe v2.0 and provide feedback, such that identified issues can be resolved by Active (value: $60,000).
  7. Software implementation – Markham will implement CARe v2.0, find bugs and report to Active (value: $26,000).
  8. Prospect support – Markham will serve as a reference site for Active (value: $7,800).

 

The total value of the assets Markham provides to Active under this agreement is approximately $293,750 (see Appendix A).  In exchange for the above listed items Active will provide Markham with the followings:

 

  1. Deliver the requested enhancements at no cost to Markham including installation related to CARe v.1.5 in February of 2005 (see Appendix B, value: $32,000).
  2. Provide support for CARe v1.5 from April 1, 2005 until Markham goes live with CARe v2.0 (value: $30,000).
  3. Provide Payment Server (allows instant credit and debit card authorizations for payments for services) site license at no cost to Markham (value: $3,000).
  4. Provide Payment Manager (POS – includes kiosks and agents for merchandising and payment services) at 40% discount from current list price plus consulting fees for installation at regular rate (value: $48,000).
  5. Provide a site license for CARe v2.0 at no cost. This includes the web component for citizen self-service (value: $140,000).
  6. Include the features requested by Markham, which would enhance the use of the product, in CARe v2.0 (see Appendix C, value: $78,750).
  7. Provide an upgrade utility so that the existing CARe data can be easily loaded into CARe v2.0, and the transition will be easier for Markham (value: $12,500).
  8. Provide on-site consulting services  to assist in the upgrade to CARe v2.0 (value: $6,250)
  9. Discount on CARe maintenance fee over the next 4 years (see Appendix D, value: $87,500).

 

The total value of product and services provided by Active is approximately $438,000 (see Appendix A).Each of the partnership elements listed above was assigned an estimated dollar value based on the efforts made or required. In summary, this partnership agreement favours Markham by an estimated net value of $144,250 (see Appendix A).

This partnership with Active will enable the Town to implement the new CARe v2.0 to ensure that the original CARe project goals are met and Markham receives the expected benefits for council, staff and citizens by the end of 2006.  Furthermore, Active is anticipating to add 25 new CARe customers by the end of 2006, ensuring a secure future for CARe and therefore protecting the Town’s investment in this important business solution.

 

BUSINESS UNITS CONSULTED AND AFFECTED:

 

The following internal business units and external entities were contacted as part of validating the partnership agreement:

 

  1. Legal Services
  2. Contact Centre
  3. Synergy Centre
  4. Finance Department

 

All of the input and feedback they provided during this process has been included in the agreement in one form or another.

 

 

ENVIRONMENTAL CONSIDERATIONS:

CARe v2.0 will have the functionality required to provide access to the system on the Web.  This could reduce trips to the Town’s facility.

 

ACCESSIBILITY CONSIDERATIONS:

Give better access to the Town’s services, including complaints and status information for requests, through future availability on the Web.

 

 

ENGAGE 21ST CONSIDERATIONS:

Improve customer service by receiving and tracking request, as well as providing status information through the Web in the future.

 

 

ATTACHMENTS:

None

 

 

APPENDICES:

Appendix A

Appendix B

Appendix C

Appendix D

 

 

 

 

 

 

 

 

Signed:

 

Signed:

James Allen, CIO

 

Andy Taylor, Commissioner, Corporate Services

Appendix A: Financial values of asset swap, products and services

 

1. Asset swap

 

 

 

 

Markham to provide to Active

Estimated value

 

Active to provide to Markham

Estimated value

Connectors / System Integration Modules

$26,500

 

Enhancements requested by Markham (CARe v1.5)

$32,000

Service Request Types & documentation

$99,450

 

Ongoing support

(till v2.0 is live)

$30,000

Reports

$33,000

 

Site License

for Payment Server

$3,000

Existing CARe Database

$26,000

 

40% discount

for POS

$48,000

Sub Total (1a)

$184,950

 

Sub Total (1b)

$113,000

 

 

 

 

 

2. CARe v2.0

 

 

 

 

Markham to provide to Active

Estimated value

 

Active to provide to Markham

Estimated vale

Requirements review

$15,000

 

CARe v2.0 site license including web deployment

$140,000

Software testing

$60,000

 

Enhancements requested by Markham (for CARe v2.0)

$78,750

Implementation

$26,000

 

Upgrade utility tool

 

$12,500

Prospect support

$7,800

 

CARe v2.0 installation service

 

$6,250

 

 

 

Discount on support costs

 

$87,500

Sub Total (2a)

$108,800

 

Sub Total (2b)

$325,000

 

 

 

 

 

Total (1a and 2a)

$293,750

 

Total (1b and 2b)

$438,000

 

 

 

 

 

 

Net value to Markham

$144,250

 

 Appendix B: Requested Enhancements

 

The following enhancements were requested by the Town of Markham and were successfully delivered, and in good faith, by Active in February, 2005 (Approx. 23 days work).

 

1.      Changing CARe type: assignment of CARe to another department after it has been submitted.

2.      Closing CARe from the Operator screen with confirmation: ability to close a CARe item using an operator window, with prompt for confirmation, and comments.

3.      CARe closure with date/time and operator stamp: ability to close a CARe item with time/date stamp and additional comments and operator name.

4.      Document attachment to CARe: ability to attach documents to CARe item.
Appendix C:  New Features in CARe v2.0

 

The following features will be included as part of next CARe v2.0 release by Active (Approx. 62 days work).

 

1.      Pending functionality as a status in CARe: includes extensive functional requirements that permit the CARe items to be put in a pending state.

2.      Re-opening CARe: ability to reopen a closed CARe item with a new status.

3.      Expanding CARe searching options: ability to search CARe items based on other criteria.

4.      Other miscellaneous items: miscellaneous functional requirements identified.

Appendix D: Discounted CARe maintenance fees

 

 The following table shows the maintenance fee Markham will be paying for support and maintenance of the CARe system as part of this agreement. In the next four years the total saving for Markham will be $87,500 at an annual fee of $35,000.  The Town has been paying $44,000/year to Orion for CARe maintenance.

Year

Maintenance Fee ($)

Discount (%)

Saving ($)

2005

$0

100

$35,000

2006

$8,750

75

$26,250

2007

$17,500

50

$17,500

2008

$26,250

25

$8,750

2009

$35,000

0

0

2010

$35,000

0

0

 

 

TOTAL

$87,500