FCR(1999-2000)29

For discussion
on 2 July 1999

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Legal Aid Department
Subhead A009YP Implementation of information systems strategy study

Members are invited to approve a new commitment of $44,366,000 for implementing an Information Systems Strategy in the Legal Aid Department.

PROBLEM

1. The existing computer systems of the Legal Aid Department (LAD) are outdated and insufficient to support its business needs.

PROPOSAL

2. The Director of Legal Aid (DLA), with the support of the Director of Information Technology Services, proposes to implement an Information Systems Strategy in LAD with a commitment of $44,366,000.

JUSTIFICATION

3. The existing computer systems of LAD were developed some ten years ago and do not have the processing capability to handle the current workload efficiently and effectively. Apart from the inadequacy of individual systems, the lack of integration among major systems also leads to replication of processes, duplication of data-input efforts, lack of sharing of useful information, and unsatisfactory reporting of management information. More importantly, these systems cannot support the business needs of the Department as identified in a consultancy study in 1995, including -

1. efficient and effective case management;

2. effective cost control;

3. ease and speed of internal communication;

4. comprehensive management information; and

5. effective liaison with outsiders.

The inadequacies of LAD's existing computer systems are set out in more detail at Enclosure 1.

4. The current systems are also too costly to maintain and too outdated to allow meaningful upgrading. Excluding possible costs for large scale enhancement, annual maintenance and minor enhancement of the systems are estimated to cost about $3 million in 1999-2000. This figure has not yet included the annual staff costs of $638,000 on the part of the Information Technology Services Department (ITSD) and the Treasury for providing technical support and advice.

Proposed Integrated Information System

5. Following the recommendations of a feasibility study on the Information Systems Strategy completed in April 1999, DLA proposes to replace the current systems with an integrated information system comprising -

1. Case management system - This is an integrated system covering application processing, case assignment, case monitoring, case costing as well as maintenance of service providers details.

2. Cost and resource management systems - The proposed systems cover case accounting, personnel management and assets management. The case accounting system supports receipt and payment in legal aid cases. It will integrate with the case management system. The personnel and assets management system will maintain details of human resources and assets of LAD.

3. Infrastructure applications - These applications provide the technical architecture required for supporting systems in (a) and (b) above including office automation, hardware and network facilities.

Detailed functions of the proposed systems/applications are set out at Enclosure 2.

Benefits of the Proposed Integrated Information System

6. The proposed integrated information system will bring about the following benefits -

1. Speedier response to enquiries

   Annually LAD handles over 30 000 enquiries on the progress of individual cases. With case information being available on-line, the time taken to respond to complex questions can be reduced from 15 to five minutes. Over 90% of the enquiries could be handled at first call without having to locate the files.

2. Speedier processing of application

   LAD received over 30 000 legal aid applications in 1998. The new system which processes applications electronically will shorten the time taken for means testing. The new system will provide automatic search of records and connected cases and will eliminate the time and effort required for locating files. Together with automatic document generation capability, we expect that the system can effectively reduce the target processing time by two weeks.

3. Strengthen case management

   At present, LAD has to manage over 20 000 active cases at any one time. The new system captures major events for each case such as court dates, and keeps track of the progress of cases and the costs incurred. The system will enable LAD to manage these cases more effectively.

4. Speedier processing of payment

   The Accounts Section of LAD handles over 200 000 transactions a year. Electronic transmission of instructions can expedite processing of receipt and payment. With an integrated system, re-entry of payment information will no longer be required. Together with automatic calculations and computerised accounting records, we anticipate that the processing time for payment to legal aid clients can be shortened by two weeks.

5. Comprehensive management information

   With the availability of detailed information on the work of all sections of LAD, the system can provide comprehensive and timely information to facilitate management, cost control and strategic planning.

Cost Savings

7. Upon implementation of the proposed system, we expect to achieve realisable savings of $14,322,000 a year. The major savings to be achieved will come from the anticipated staff reduction in LAD because of improved efficiency and the elimination of duplicated work processes. We estimate that a total of 36 posts can be deleted from LAD's establishment, resulting in an annual realisable savings of $11,535,000 in staff costs. We set out at Enclosure 3 details of the posts to be saved. As ITSD staff will no longer be required to support the current systems, we expect to realise an additional staff cost of $518,000 per annum on their part. Furthermore, the existing annual expenditure of $2,269,000 for the maintenance and operation of the current systems can also be saved after their decommissioning in 2001.

8. There are other staff savings identified in LAD which cannot be realised because they comprise a fraction of the posts involved and are scattered over various grades and Divisions. These notional staff savings are estimated at $9,553,000 per annum upon completion of the project in June 2001. In addition, there will also be an annual notional staff savings of $120,000 in the Treasury as its staff will no longer be required to support the current systems.

9. The total annual savings will amount to $23,995,000, broken down as follows -

Savings	2000-01 $'000	2001-02 $'000	2002-03 onwards $'000
(a) Realisable savings
Expenditure on current systems	0	1,550	2,269
LAD staff savings	0	3,473	11,535
ITSD staff savings	0	259	518
	______	______	______
Sub-total	0	5,282	14,322
	______	______	______
(b) Notional savings
Notional staff savings in LAD	3,182	7,962	9,553
Notional staff savings in Treasury	0	60	120
	______	______	______
Sub-total	3,182	8,022	9,673
	______	______	______
Total annual savings	3,182	13,304	23,995

Cost and Benefit Analysis

10. A detailed cost and benefit analysis for the project is at Enclosure 4. The analysis shows that the proposed system will break even in 2004-05 i.e. three years after commissioning. Thereafter, the annual savings of $23,995,000 will exceed the annual cost of $4,981,000 by an amount of $19,014,000.

FINANCIAL IMPLICATIONS

Non-recurrent Expenditure

11. The estimated total non-recurrent cost of the integrated information system is $51,910,000, of which we are seeking a commitment for $44,366,000. A breakdown of costs is as follows -

	1999-2000 $'000	2000-01 $'000	2001-02 $'000	Total $'000
Non-recurrent expenditurefor which we are seeking a commitment
(a) Hardware and software	0	23,877	0	23,877
(b) Site preparation	0	5,357	0	5,357
(c) Training	0	949	0	949
(d) Consumables and miscellaneous	0	373	0	373
(e) Disaster recovery equipment and services	0	965	7	972
(f) Implementation services	1,264	5,456	2,085	8,805
(g) Contingency	126	3,698	209	4,033
	______	______	______	______
Sub-total	1,390	40,675	2,301	44,366
Other non-recurrent costs
(h) LAD staff costs	42	6,065	969	7,076
(i) ITSD staff costs	255	213	0	468
	______	______	______	______
Sub-total	297	6,278	969	7,544
	______	______	______	______
Total	1,687	46,953	3,270	51,910

12. As regards paragraph 11(a), the expenditure of $23,877,000 is for the acquisition of computer hardware, software and networking equipment, including 17 servers, 500 workstations, printers, data communication equipment and system and application software, in all the four offices of LAD.

13. As regards paragraph 11(b), the expenditure of $5,357,000 is for site preparation including installation of data ports, power points and datalines required.

14. As regards paragraph 11(c), the expenditure of $949,000 is for training of LAD staff in using the new system.

15. As regards paragraph 11(d), the expenditure of $373,000 is for the acquisition of start up consumables such as printer toners and tape cartridges.

16. As regards paragraph 11(e), the expenditure of $972,000 is for the acquisition of the disaster recovery equipment and services so that in the event of disaster at the production site, the operation can still be maintained by using a standby machine at a remote site.

17. As regards paragraph 11(f), the expenditure of $8,805,000 is for the hire of services for implementation of the new system, such as project administration, budget and schedule control, quality control over design quality of application data, functionality and infrastructure and data conversion.

18. As regards paragraph 11(g), the expenditure of $4,033,000 represents a 10% contingency on the cost items set out in paragraphs 11(a) to (f).

19. As regards paragraph 11(h), the expenditure of $7,076,000 represents the staff cost of 99.7 man-months of LAD's staff for overseeing the implementation of the project and the decommissioning of the existing computer systems. Of these requirements, LAD will absorb 84.7 man-months (at staff cost of $4,409,900) by internal redeployment. The balance of 15 man-months (at staff cost of $2,666,100) will be required for an additional supernumerary Assistant Principal Legal Aid Counsel (DL1) post as the Project Director. We will create this directorate post through the Establishment Subcommittee in the normal way.

20. As regards paragraph 11(i), the expenditure of $468,000 represents the staff cost of 3.3 man-months of Senior Systems Manager required by ITSD for providing technical advice to LAD on the tendering exercise and the decommissioning of the existing computer systems. ITSD will meet the staffing requirements from within its existing resources.

Recurrent Expenditure

21. The estimated recurrent expenditure for maintaining and supporting the integrated system is as follows -

	2000-01 $'000	2001-02 $'000	2002-03 onwards $'000
(a) Hardware and software	0	813	1,795
(b) Rental of datalines	441	441	441
(c) Consumables and miscellaneous	0	357	357
(d) Disaster recovery equipment	0	14	14
(e) Operation support services	405	1,389	2,374
	______	______	______
Total	846	3,014	4,981

22. As regards paragraph 21(a), the annual expenditure of $1,795,000 is for maintenance of hardware and software licence fees.

23. As regards paragraph 21(b), the annual expenditure of $441,000 is for rental of datalines.

24. As regards paragraph 21(c), the annual expenditure of $357,000 is for the purchase of consumables such as tapes and printer toners.

25. As regards paragraph 21(d), the annual expenditure of $14,000 is for maintenance of disaster recovery equipment.

26. As regards paragraph 21(e), the annual expenditure of $2,374,000 is for outsourcing the on-going operation support services such as system, network and database administration.

Implementation Plan

27. We estimate that the project will complete by June 2001. The implementation plan is as follows -

BACKGROUND INFORMATION

28. In October 1998, a six-month feasibility study on the Information Systems Strategy of LAD was conducted to clearly define areas where the application of information technology can improve service and efficiency, to recommend an implementation strategy and to estimate the costs and benefits. The study recommends that the current systems of LAD be replaced with an integrated information system which comprises a case management system, cost and resource management systems and infrastructure applications.

29. We consulted the Legal Aid Services Council on 14 May 1999 of the proposed implementation of the Information Systems Strategy in LAD. Members were generally supportive of the proposal which would enhance the efficiency and effectiveness of the Department.

30. We also consulted the Legislative Council Panel on Administration of Justice and Legal Services on 27 May 1999. Members supported the proposal.

Administration Wing,
Offices of the Chief Secretary for Administration and the Financial Secretary
June 1999

Enclosure 1 to FCR(1999-2000)29

The major inadequacies of LAD's existing computer systems include -

1. Civil Processing Information System (CPIS)

The CPIS was developed in 1991 to maintain basic information of all civil legal aid applications. The system handles more than 27 000 new applications each year, in addition to cases culminated from previous years. The system is able to handle only primitive data, and does not provide sufficient support to the related business processes. One of its major deficiencies is the incapability to directly generate documents, such as standard letters to applicants or reminders to assigned lawyers. Substantial manpower resources and time are required to re-type the information already held by the system. The response rate is also unsatisfactory. An analysis on processing time of legal aid applications takes more than one hour to print. Its incapability to support Chinese also impedes the keeping of applicants' Chinese names in the system. Owing to limited capacity of the CPIS, a separate system on the Legal Aid Panel has to be developed for information of the lawyers on the Legal Aid Panel.

2. Litigation Unit Management Information System (LUMIS) and Local Area Network System for Costing (LANCOST)

LUMIS is developed in the early 90's for handling in-house litigation cases and LANCOST is a sub-system to capture billing information for taxation purpose. Owing to technical constraints, the system is not user-friendly and users have to memorise various commands in order to use them. The low end capacity of their workstations further impairs their efficiency. Although document generation function is available, the speed is far from satisfactory. In addition, the built-in word processing system is incompatible with the rest of the systems in LAD.

3. Legal Aided Persons Accounts System (LAPAS)

LAPAS is used by the Accounts and Supplies Section to manage the accounts related to legal aid cases, for processing receipts and payments and finalising accounts. It handles over 200 000 transactions a year. As the system was installed some ten years ago, it is now outdated and inadequate. It does not support a number of functionalities and manual processing and follow-up actions are required. Although legal aid costs are related to case application and litigation, LAPAS is not linked to either LUMIS or CPIS systems. Manual re-entry of common data is required.

4. Personal Computer (PC) Applications in the Criminal Section

The Criminal Section handles more than 4 300 criminal applications each year but has no computerised information system. It uses only an end user-developed standalone PC system to capture criminal case related information. As professional officers have no access to the system, it cannot serve as an enabling tool to facilitate in-case management. Owing to the deficiency of the limited system, supplementary PC systems were added on a piece-meal basis in order to support the daily operation of the Section. Under such circumstances, data are scattered and it is difficult to obtain comprehensive information.

Enclosure 2 to FCR(1999-2000)29

The major functions of the Integrated Information System include -

(a) Case Management System

• provide and maintain on-line information of application;

• provide on-line means test assessment and contribution calculation, automatic and flexible searches for connected cases and parties involved and templates for on-line statement taking;

• provide on-line information for allocation of work among Legal Aid Department (LAD) officers and record their assignment history;

• provide on-line information of lawyers on the Legal Aid Panel to facilitate assignment and monitoring of their performance;

• provide mechanism for bringing up files to facilitate monitoring of assigned-out cases;

• specify the chargeable indicator on the list of events, consolidate the cost incurred from the events of a case and generate a bill of costs;

• generate court documents and correspondences to relevant parties;

• provide a bar-code system for file tracking;

• provide management information and statistics.

(b) Case Accounting System

• support accounts of cases;

• maintain cashbooks electronically;

• allow for receipt and payment instructions and transactions;

• provide instalment schedules and reminders to debtors;

• assist preparation of summary of accounts;

• generate reports, cheques and official receipts;

• integrate with case management system and provide an interface with the computer system of the Treasury.

(c) Personnel Management System

• manage staff particulars including posting history, training records, and performance records;

• generate reports on staff profiles and training needs.

(d) Assets Management System

• maintain details of equipment including computer-related ones;

• manage the details of maintenance contracts and payment;

• assist monitoring of purchase orders for computer equipment.

(e) Infrastructure Applications

• provide a networked environment for 600 users to facilitate access to corporate applications, e-mail facilities and Internet;

• store policy guidelines, procedures, announcement, standard forms electronically on the servers and provide on-line search;

• provide access to the Government e-mail network;

• allow remote dial-in to the network from notebook for statement taking or use in court;

• centrally manage all the standard templates for memos, letters and other documents used throughout LAD;

• provide disaster recovery facilities in the Kowloon Branch Office. The application server will be switched over to the standby system in case of any system failure. During normal operation, the standby system can be used for development / testing / training of the corporate applications.

Enclosure 3 to FCR(1999-2000)29

Enclosure 4 to FCR(1999-2000)29

	Cashflow
	1999-2000 ($'000)	2000-01 ($'000)	2001-02 ($'000)	2002-03 ($'000)	2003-04 ($'000)	2004-05 ($'000)	2005-06 ($'000)	2006-07 ($'000)	Total ($'000)
Costs
Non-Recurrent
Expenditure	1,390	40,675	2,301	0	0	0	0	0	44,366
Staff costs	297	6,278	969	0	0	0	0	0	7,544
	______	______	______	______	______	______	______	______	______
Sub-total	1,687	46,953	3,270	0	0	0	0	0	51,910
Recurrent
Expenditure	0	846	3,014	4,981	4,981	4,981	4,981	4,981	28,765
Staff costs	0	0	0	0	0	0	0	0	0
	______	______	______	______	______	______	______	______	______
Sub-total	0	846	3,014	4,981	4,981	4,981	4,981	4,981	28,765
	______	______	______	______	______	______	______	______	______
Total Costs	1,687	47,799	6,284	4,981	4,981	4,981	4,981	4,981	80,675
Savings
Realisable
Expenditure on current systems	0	0	1,550	2,269	2,269	2,269	2,269	2,269	12,895
LAD staff savings	0	0	3,473	11,535	11,535	11,535	11,535	11,535	61,148
Information Technology Services Department staff savings	0	0	259	518	518	518	518	518	2,849
	______	______	______	______	______	______	______	______	______
Sub-total	0	0	5,282	14,322	14,322	14,322	14,322	14,322	76,892
Notional
LAD staff savings	0	3,182	7,962	9,553	9,553	9,553	9,553	9,553	58,909
Treasury staff savings	0	0	60	120	120	120	120	120	660
	______	______	______	______	______	______	______	______	______
Sub-total	0	3,182	8,022	9,673	9,673	9,673	9,673	9,673	59,569
	______	______	______	______	______	______	______	______	______
Total Savings	0	3,182	13,304	23,995	23,995	23,995	23,995	23,995	136,461
Net Savings	(1,687)	(44,617)	7,020	19,014	19,014	19,014	19,014	19,014	55,786
Net Cumulative Savings	(1,687)	(46,304)	(39,284)	(20,270)	(1,256)	17,758	36,772	55,786