P&P August 2016

Chart 2: Sample KERA BV/TQ Analysis for Child Welfare Transformation

Step 2: Perform a Gap Analysis

Once the vision and guiding prin- ciples have been established, the next step is to identify what specific functional and technical capabilities need to be changed in order to achieve the vision. The most efficient way to perform this analysis is to use a refer- ence architecture as a starting point. The federal architectures such as the Medicaid IT Architecture, the Centers for Medicare and Medicaid Services Exchange Reference Architecture, or the National Human Services Interoperability Architecture can all serve as baselines depending on which programs are in-scope for the transformation. That said, most states planning transformation efforts today, and looking to leverage the A-87 cost allocation waiver, will need to consider more than one set of federal guidelines and regulations. The KPMG Enterprise Reference Architecture (KERA) for health and human services integrates all three and is the tool we use for such efforts. It provides a foundation for a highly repeatable process that integrates lessons learned from our prior work and research into leading practice. That said, with a little bit of extra effort, a state can create its own reference architecture to use as a starting point. The key at this stage is to stay firmly focused on the future. It is important to resist the temptation to reflexively look at the current state, which will limit thinking and constrain innova- tion. The whole idea is to identify the functional and technical capabilities needed to achieve the vision and to determine how they must interact to effectively achieve the vision in light of the guiding principles (see Chart 1). Once the target architecture has been identified and the needed functional and technical capabilities isolated, the next step is to perform a gap analysis between the target architecture and the current state. The goal is to identify where capabilities may exist somewhere within the enterprise that could be leveraged in the future state. Where existing capabilities are found, a business value/technical quality (BV/ TQ) assessment should be conducted to

“score” the viability of that capability to support the future vision. The result of the gap analysis and BV/TQ is a list of all the capabilities that are required for achieving the future vision categorized into one of the following groups: � Capability does not exist; build or buy is required � Capability does exist and can be used as is � Capability does exist with simple configuration changes � Capability does exist and can be used with more than minor configuration changes � Capability does exist but must be completely rebuilt or replaced The result of this step is a set of ini- tiatives that serves as the first input toward an agile roadmap for modern- ization (see Chart 2). Step 3: Perform Options Analysis for Needed Modernization Initiatives For each discreet initiative identi- fied in Step 2, options must be assessed for achieving the needed change. This analysis should include: � A close examination of where reusing design, software (code), or other arti- facts may be possible to accelerate an implementation—either fromwithin the enterprise or from another similar initiative elsewhere in the country � Research to identify where capabili- ties might be purchased off the shelf

� Analysis to estimate the level of effort and risks associated with building or customizing to meet state needs For each option, a high-level cost estimate for development and total cost of ownership should be developed so agency leadership can have a sense of the full cost of achieving the future vision. Once all options have been established and the requisite infor- mation summarized, the executive sponsor(s) must make decisions about which options to use and an indication of their potential priority. This will serve as a key input to the roadmap. Step 4: Develop a Roadmap The final step in this recommended planning process is to develop a clear roadmap for achieving the vision. The roadmap should be incremental and establish clear initiatives to be under- taken with a specific timeline. The timeline should allow for “quick wins” that will help achieve early successes and build momentum and enthusiasm for the transformation effort. The roadmap should be developed consid- ering the guiding principles established in Step 1 as well as other factors, such as: � Funding: Deadlines and allow- ances for federal funding and the state’s available budget are primary inputs. Crucial funding dimensions to consider include maximizing use of enhanced FFP, the cost allocation

See Modernization on page 50

August 2016   Policy&Practice 29