1. PPPs in Practice Key Success Factors ICT Sector Week Chris Neff Vice President of Marketing March 28, 2011 www.nicusa.com

2. Overview NICs PPP approach Solutions provided Business models Governance & organization structures Risk management Supporting PPP growth 2

3. NICs PPP Approach About NIC Manage eGovernment services in 24 states Serve +3,000 federal, state & local government agencies 19 years of delivery through flexible PPP models Pilot-to-enterprise Start small & grow Expand through voluntary success vs. mandates Key fundamentals Government retains all controls – process, data, financial management Self-sustaining model supported by transaction fees Reinvestment focus Partnership – all sides need to benefit 3

4. PPP Partners 4

5. Scope of Solutions G2C / G2B / G2G Official government websites Digital government services Secure payment processing Emphasis on self-service solutions Constituent-facing services Adding value to existing solutions & adding new ones Generating wins for government partners +7,500 installed services Aligned by vertical / agency Mobile Point-of-purchase 5

6. Scope of Solutions Technology and process neutral Interface with hundreds of legacy backend systems Align with existing processes Focus on creating efficiencies and updating processes as a result of streamlined operations End-to-end life cycle Hosting & infrastructure Application development Marketing & promotion Customer service Security Billing & payment processing Enhancements & upgrades 6

7. Business Model 7 7 7 Self-sustaining model (self-funded) Used by the federal government, 24 states, and several hundred cities & counties Modest per-transaction fees applied to a select number of services Emphasis on business-facing services and commercially valuable datasets High volume business services create core revenue stream to support enterprise services Vast majority of services (+80%) are offered to constituents at no cost

8. Business Model 8 8 8 Self-sustaining model (self-funded) Key services that support self-sustaining eGovernment: - corporations filings- professional licensing - trucking/transportation- court case filings - vehicle titles & plates- driver history records - payment processing Industries value fast access to government and digital adoption does not suffer Fees set by government based on market research $0.50 - $3.00 typical range All agencies benefit – eliminates the have/have not problem

9. Business Model 9 9 9 Self-sustaining model (self-funded) Zero cost solution for government Supports long-term growth by eliminating reliance on the appropriations process Minimal risk when partnering with an experienced private sector provider Best practices for decentralized organizations: Focus on key industry verticals Remember that a small fee applied to a high volume transaction is far better than the reverse Fixed Cost Time & Materials Hybrid

10. Governance & Organization Structures 10 Range of governance models to oversee PPPs Governing board Public sector / key agency participation Some states include private sector representation from key industries Direct report to agency – usually IT or budget / administration office Direct report to individual – usually CIO or appointed agency leader Key success factors: Buy-in from the highest possible levels Governance empowered to make decisions Voluntary agency participation vs. mandates Some states have one person whose part-time role is eGovernment oversight

11. Contracts & Operations 11 Contracting basics Umbrella / enterprise contract outlines deliverables Based on voluntary agency participation (defined by separate service level agreements for individual projects) Flexible design for all agencies (including locals) Key elements customized to each government: flow of funds, reporting requirements, legal specifics Operating structure Local subsidiaries established in each market 100% dedicated to single governments operations Cloud-based solutions provide enterprise support (payment processing, hosting, CMS) Emphasis on local hiring to support economic development

12. Risk Management 12 Insurance & indemnity standard – specifics customized to each government Financial components also customized IP held in escrow and available to government after breakeven is reached (usually 1-2 years) Rigid security protocols Sarbanes-Oxley and PCI DSS compliant operations Third party validation (Verizon Business Security Management Program) includes annual on-site assessments

13. Supporting PPP Growth Build awareness of alternative approaches Procurement training is essential Benchmark successful engagements Pilot project-driven protocol Provide long-term support during engagements Take the time to understand the challenges & opportunities Get broad internal buy-in and executive-level support before issuing a tender Recognize that PPPs are evolutionary and being first is not easy 13

14. 14 Chris Neff Vice President of Marketing chris@nicusa.com 435-655-3614