Outsourcing - A Taxing Solution



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A Taxing Solution

hand holding out credit card In 1997 Hamilton County, Ohio (the home of Cincinnati) saw the real possibilities of the Internet. The Auditor's office, which assesses real estate values and then collects property taxes, is also the agency responsible for property ownership information. Its managers wanted to be able to deliver this information - which it must make available to the public -- online. In addition, the county wanted to be able to accept tax payments using credit cards over the Net.

Before the arrival of the Internet, citizens who needed to know this public information had to physically visit the Auditor's office during its business hours. More often than not, they needed help searching through the voluminous records to find the proper property record they needed.

On the payment front, taxpayers had only two choices: either deliver a check to the office or mail one.

Hamilton County turned to its outsourcing provider for help. Manatron Inc., a Miamisburg, Ohio company, has been writing applications and providing support for counties and municipalities for the last 31 years. The vendor, realizing the impact of the Internet, agreed to tackle the project. The Hamilton County web site went live in January 1998.

In February 2000 Manatron started a new division, GovernMax.com, to help governments move into egovernment. The new division provides Web site management services to its customer base. That includes the ability to provide secure ecommerce transactions.

Security is NOT an Inside Job

Bob Fry, managing director of GovernMax.com, realized that when GovernMax.com began to build ecommerce capabilities into its applications, security would be an issue for its buyers. "It became clear we had to make our sites secure and be able to monitor them 24/7," says Fry.

Fry was adamant about not having Internet security an inside job. The executive wanted a third party as his Web watch dog. "I wanted someone who was independent" to watch for suspicious activity and flag it, he says.

Second, he didn't want to hire an employee to do the job. "Someone at the level of expertise I needed would be extremely expensive," he says. So would be the on-going task of "investing" in that employee. Furthermore, an outsourcing supplier would assign a team of experts to work on his account. He would be limited to just one person if that person were on staff.

He turned to Evinci, a Grand Rapids, Michigan outsourcing supplier. Evinci had helped Manatron with an Internet marketing program in the past. But the vendor also specialized in online security. Trusting the vendor because of its past performance, GovernMax.com signed a six month contract for Web security.

The service level agreements (SLA), which do have penalties, cover various levels of intrusion. Level 1 is the least serious breach. If the breach reaches Level 2, Evinci must contact Manatron and ask for marching orders. The goal is to mitigate the problem before it reaches the red alert, Level 3.

Fry says if he had chosen to have Internet security in-house and there were a mistake, the blame would fall to him. He felt there would be fewer mistakes because "Evinci takes a more proactive approach to make sure there is not a serious level 3 breach," he reports. Fry was eager to avoid security mistakes because his clients are politicians. "They don't like bad publicity," he says.

Managing the Outsourcing Relationship

Manatron, being an outsourcing provider itself, realizes the importance of managing an outsourcing relationship. The company assigned an operations manager to work with Evinci's staff. Fry himself maintains a working relationship with both Evinci's sales staff and its executive team.

Every successful outsourcing relationship has to be based on trust, in Fry's opinion. "When you get into outsourcing, you have to trust the company you are working with," he says. Good will helps keep the relationship functioning. Manatron appreciates Evinci's "continual investment in supporting us," Fry continues.

Currently, Manatron references Evinci on its Web site. Evinci has provided material on the importance of secure ecommerce "to help us market ourselves." This is important because Fry says "some clients don't understand the seriousness of the problem."

There have been very few disputes, he reports. When a disagreement popped up, the two parties met face-to-face to work things out. He feels comfortable doing that because the principals of the two companies "have worked shoulder to shoulder."

Lessons from an Outsourcing Primer:

Buyers can suggest new business opportunities to vendors.
Buyers can ask their vendors to help them market their services when the two are synergistic.
Buyers must trust their vendors if the relationship is going to work.
Ecommerce security is a serious problem for buyers.
Outsourcing allows a team to work on your account versus a single employee in-house.
Outsourcing provides an independent watch dog in the ecommerce security department.

Publish Date: December 2000

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