Business & Enterprise Systems

Transcription

1 Business & Enterprise Systems I n t e g r i t y - S e r v i c e - E x c e l l e n c e AF IT Business Analytics Office Bending the IT Cost Curve through Evidence-based Analysis Mr. William Butch Luckie Chief, IT Acq Support Branch The views expressed in this presentation are those of the author and do not necessarily reflect the official policy or position of the Air Force, the Department of Defense, or the U.S. Government. 1

2 Overview IT BAO Background Establishing the IT Cost Curve Baseline Following the Money AF IT Category Management (Hardware, Software, Services) Initiatives Findings to Date Sharing Our Data Summary 2

3 AF Information Technology Business Analytics Office The Hon. Deborah Lee James, Secretary of the US Air Force, gave an Atlantic Council Defense-Industrial Policy address entitled "Bending the Cost Curve" on Wednesday, 14 January 2015 and officially stood up the IT Business Analytics Office 3

4 Establishing the Cost Curve Targeted Spend Areas to Date Hardware Done! 98% Software Done! Services Happening Now! GOTS Development End User IT Desktops Laptops Monitors Infrastructure Servers Routers Switches Etc. COTS Microsoft Adobe Oracle Cisco Etc. GOTS Development App Rationalization Infrastructure Cloud 4

5 Establishing the Cost Curve AF IT Execution Spend Data GPC (Citibank) GPC [Yes/No] Fund Cite, Date, $ Amount CRIS Date, Description, Vendor, $ Amount Contract #, Date, FY, Funding Type, $ Amount FPDS-NG Contract #, Date, Description, Vendor, $ Amount AFWay (ITCC PMO) Contract #, Date Fund Cite, Date, $ Amount, Funding Type Contract #, Contract Agency, MAJCOM, Order #, Date, Description, Vendor, FY, $ Amount Contract #, Date Other FM Systems? NETCENTS-2 PMO AFEMS-AIM (HW Only) NOTE: Arrows represent conceptual data relationships ONLY, not system interfaces

6 Establishing the Cost Curve Data Sources FPDS-NG (Federal Procurement Data System Next Generation) AFEMS-AIM (Air Force Equipment Management System-Asset Inventory System CRIS (Commander s Resource Integration System) CBIS (Contracting Business Intelligence Service) Master IT Contract List Creation DISA, AF, Army, GSA, NASA SEWP, NETCENTS, etc. Excludes weapon systems spend Over 1,170 IT contracts Caveats Not all bases use AFEMS-AIM; some hardware data is missing Data Quality Issues Data tagged to incorrect Product Service Codes 6

7 IT Cost Curve Baseline Based on IT Contract Vehicle Spend FY17 ~ $4.7B (Excludes Weapon System Spend) $5,000,000,000 $4,500,000,000 $4,000,000,000 $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $ Data from FPDS-NG as of 1 Mar 18, reflecting FY11 through FY17 7

8 Following the Money Who spent it? $1,600,000,000 $1,400,000,000 Top 10 MAJCOM Total Spend $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $- AFMC AETC AMC ACC AFDW AFSPC USAFE PACAF AFRC AFSOC USAFA AFGSC AFCENT FY16 Total Spend = $3.6B FY17 Total Spend = $4.4B Top 10 MAJCOMs account for 92% of the total IT spend. Data from FPDS-NG as of 1 Mar 18, reflecting FY16 through FY17 8

9 Following the Money Where did it go? $1,200,000,000 Top 10 Contract Vehicles $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $- NETCENTS-2 PRODUCTS GSA ALLIANT GSA Schedule 70 GSA ALLIANT SB NETCENTS-2 NOSB NETCENTS-2 ASSB NASA SEWP V ITCC CCS CONTRACT ITCC CCS2 CONTRACT GSA 8(a) STARS II FY16 Total Spend = $3.2B FY17 Total Spend = $3.8B Spend to Top 10 contract vehicles Data from FPDS-NG as of 1 Mar 18 9

10 FY17 Spend to outside vehicles funded by AF & order placed by external contract office $1,400,000,000 Following the Money Where did it go? $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $- GSA DISA DEPT OF THE ARMY DEPT OF THE NAVY USTRANSCOM Data from FPDS-NG as of 1 Mar 18, reflecting FY17 10

11 Following the Money Linking Contracts to PECs 72% of FPDS-NG IT contract data discoverable within CRIS by IT BAO Key Finding: IT spend executed from a wide variety of sources PEC distribution for Cyber, E-IT, and Non-Cyber Data: 473 PECs identified with obligated funds against IT contracts Total PECs % of Total % of Spend % 4.86% 35.64% 52.75% 431 Non-Cyber/E-IT Cyber E-IT 91.12% Non-Cyber/E-IT Cyber E-IT 42.07% Non-Cyber/E-IT Cyber E-IT Source: CRIS, 28 Feb 2018; FPDS-NG, 1 Jan

12 AF IT Category Management OMB Category Management Established 6 categories for IT - Hardware, Software, Telecommunications, Security, Consulting, and Outsourcing Relies upon Product Service Codes to populate spend AF IT BAO Category Management Builds upon OMB s Tier 2 high level categories Categorizes data down to Tier 4 (i.e., IT, Hardware, Desktop, Tower) Populates spend extracted from AFEMS-AIM How we created product categories: Identified categories by mutually exclusive properties Ensured spend had at least 3 or 4 common models within a product category General Categories may need more than 3 tiers to properly segregate systems 12

13 AF IT Category Management 1.2 Hardware Accessory CAC Reader Camcorder Docking Station External DVD Drive External Hard Drive Internal Hard Drive Mobile SIPRNet Case Network Management Card Plug Computer Radio Charger Signature Pad Desktop All-in-one Compact Computer Thin Client Tower Workstation Infrastructure KVM Load Balancer Media Gateway Mobility Controller Set Top Box (Vbrick) Wireless Access Point Wireless Network Adapter Monitor CCFL - LCD CRT LED Organic LED Plasma Retina Display Touchscreen Notebook Convertible Rugged Rugged/Convertible Standard Printer Barcode Fax Machine Mobile Multifunctional Device Plotter Standard Projector CRT DLP LCD Opaque Overhead Router ADSL Aggregation Services Integrated Services Modular Access Multifunction Satellite Universal Edge Wireless Scanner Barcode Film Flatbed Handheld Sheet-fed Server Blade Communications Console Rack-Mountable/1U Rack-Mountable/12U Network Time Tower Supercomputer Smart Technologies Smart Accessories Smart Board Smart Podium Smart Projector Smart Room Storage Backup Chassis Disk/Drive Enclosure Expansion Enclosure NAS Tape Library Unified Switch Fibre Channel Managed/Cross Stackable Managed/Rack-Mountable Managed/Stackable Managed/Standalone Modular SONET Unmanaged Tablet Android Android/Cellular Apple Apple/Cellular Network Analysis Windows Windows/Cellular Windows/Rugged Some items under tier 3 are commoditized. More opportunities possible. Data from AFEMS-AIM as of 1 Mar 16 13

14 Spend by Category 1.2 Hardware $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- FY13 FY14 FY15 FY16 FY17 FY18 Desktop Monitor Notebook Phone Printer Radio Server Storage Switch Tablet Data Source: AFEMS-AIM 1 Mar 18 14

15 Spend by Category Desktops $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $- FY13 FY14 FY15 FY16 FY17 Data Source: AFEMS-AIM 1 Mar 18 15

16 Spend by Category Workstations $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- FY13 FY14 FY15 FY16 FY17 Data Source: AFEMS-AIM 1 Mar 18 16

17 Desktops & Notebooks FY08 FY17, In-Use Inventory Analysis What is the AF Desktop & Notebook Requirement? Size of Inventory: 1,366,493 Cost of Inventory: $1.25B Avg. Age of Inventory: 4.6 Years Inventory Over 4 Years Old: 629,925 * Data Source; AFEMS-AIM 1 Mar 18 17

18 Opportunities for Commoditization (Should Cost) General Category Model Total Cost Should Cost Cost Avoidance Switch Cisco Catalyst 3750 $ 77,846,337 $ 64,612,460 $ 13,233,877 Radio Motorola XTS-5000 (Mod 2 - VHF) $ 56,001,235 $ 46,481,025 $ 9,520,210 Radio Motorola XTS-5000 (Mod 2 - UHF Range 2) $ 45,679,295 $ 37,913,815 $ 7,765,480 Radio Motorola XTS-5000 (Mod 1 - UHF Range 2) $ 38,451,459 $ 31,914,711 $ 6,536,748 Radio Motorola APX-6000 (Mod 2.5) $ 28,971,514 $ 24,046,357 $ 4,925,157 Desktop HP Compaq dc5850 $ 28,888,100 $ 23,977,123 $ 4,910,977 Switch Cisco Catalyst 3560 $ 28,802,071 $ 23,905,719 $ 4,896,352 Radio Motorola XTS-5000 (Mod 3 - UHF Range 1) $ 19,629,531 $ 16,292,511 $ 3,337,020 Switch Cisco Catalyst 3850 $ 19,060,360 $ 15,820,099 $ 3,240,261 Radio Motorola XTS-2500 (Mod 2 - VHF) $ 15,463,175 $ 12,834,435 $ 2,628,740 Total Potential Avoidance $ 60,994,823 *Spend data depicts all spend data across all FY s for any product that was still being purchased within the last 2 fiscal years **Used ITCC FY08-15 Avg Discount Rate of 17% As of 1 Mar 18 18

19 AF IT Category Management 1.1 Software SYSTEM Device Drivers Operating System NETWORK Cyber Security Patch/Config Mgmt Middleware Virtualization Access Control/Mgmt END USER Aircraft/Airfield Audio/Visual Business/Productivity Communications Information Management Educational Environmental/Safety Geospatial Logistics Medical Modeling/Simulation/CAD Navigation Security Software Development Training Weather Other 19

20 AF IT Category Management 1.1 Software (FY13-FY17 ) Potential Cost Avoidance = $235.7M Publisher # Contracts # Contracting Actions Total Cost Unmanaged Cost Potential Avoidance Usage $398.4M $256.8M $51.4M Unknown $265.6M $136.6M $27.3M Unknown $137.8M $137.8M $27.6M Unknown $85.8M $85.8M $17.2M Unknown $65.9M $1.6M $0.3M Unknown $54.0M $54.0M $10.8M Unknown 3 27 $27.8M $27.8M $5.6M Unknown All Others - - $750.0M $478.0M $95.6M Unknown Totals: $1.79B $1.46B $235.7M Data from FPDS-NG as of 10 Oct 2017

21 AF IT Category Management 1.3 Services Cloud Platform As A Service Infrastructure As A Service Software As A Service (e.g., Office 365) Consulting Management Services Professional Services Engineering/Technical Services Studies Evaluations Analytics Training Data Entry / Digitizing (Place Holder) Help Desk/ Support Help Desk Network administration Installation Hardware Software Maintenance / Repair / Rebuild Simulator Support (IT Spend?) Server Backup Services IT Hardware Maintenance Software Maintenance Continuity of Operations (COOP) Modification / Upgrade Hardware Software Plans Annual Hardware Maintenance Service Plans Annual Software Maintenance Service Plans Software License Renewal Subscription Warranty Print as a Service (PaaS) Development Software Development Script Development Simulator Development NOTE: Categories derived from IT spend and analyst research 21

22 Initiatives Spend Moratorium 15 September 2015 Desktops Laptops Tablets Tech Refresh Computers Printers Data from AFEMS-AIM 22

23 Spend Moratorium Impact Desktop Acquisition Trend 54% Compared same post moratorium period across 2 years 16 Sep Sep Sep Sep ,324 units: $98.8M 64,475 units: $49.6M Reduction of 75.8K Units: ($49.2M) *Note: Sep 16 th October represents FY14 for the FY15 line and FY15 for the FY16 line respectively The overall number of desktops labeled installed, in use, warehoused, and received but not installed increased (488,743 to 571,412 equaling 16.91%) Recommendation: Continue to monitor the inventory to determine the impact of the moratorium *Data Source: AFEMS-AIM 1 Jan 17 23

24 Spend Moratorium Impact Notebook Acquisition Trend 59% Compared same post moratorium period across 2 years 16 Sep Sep Sep Sep ,752 units: $99.5M 33,564 units: $41.7M Reduction of 48.2K Units: ($57.8M) *Note: Sep 16 th October represents FY14 for the FY15 line and FY15 for the FY16 line respectively The overall number of notebooks labeled installed, in use, warehoused, and received but not installed increased (230,970 to 290,102 equaling 25.6%) Recommendation: Continue to monitor the inventory to determine the impact of the moratorium *Data Source: AFEMS-AIM 1 Jan 17 24

25 Spend Moratorium Impact Tablet Acquisition Trend % FY 2015 FY 2016 Compared same post moratorium period across 2 years 16 Sep Sep Sep Sep ,365 units ($21.3M) 17,273 units ($17M) Reduction of 10.1 K Units ($4.3M) *Note: Sep 16 th October represents FY14 for the FY15 line and FY15 for the FY16 line respectively The overall number of tablets labeled installed, in use, warehoused, and received but not installed increased (68,442 to 82,557 equaling 20.62%) Recommendation: Continue to monitor the inventory to determine the impact of the moratorium *Data Source: AFEMS-AIM 1 Jan 17 25

26 IT Tech Refresh Initiative Objective: Provide alternatives that allow the Air Force to drive down costs by taking advantage of contract cost efficiencies and a better overall IT asset management process Today s approach: IT assets purchased using end of year (fall out) money Mindset is to come in at budget to avoid losing future budget dollars IT assets acquired at FY end not necessarily put into service Multiple, disparate contract vehicles (or GPC) used Goal: Centralized IT asset requirements and dollars for IT asset purchase Centralized contract vehicle for best possible (lowest) price Provide greater visibility, oversight and control over asset procurements Normalize refresh cycle based on bona fide need Federal CIO Wants New Policy for Refreshing Aging Federal IT Systems 26

27 IT Tech Refresh Initiative Policies Needed End User Device (EUD) Refresh Policy Standard rate for replacement of laptops, desktops, monitors, and printers must be established to change end of year buying culture Desktops/Laptops 4 years and 25% annually Monitors 8 years and 12.5% annually Printer 4 years and 25% annually, establish 1-to-12 ratio Spares Policy Must define spare quantities to prevent IT stockpile and streamline disposition AFMAN : Excess = Assets above required + spares If spares are not defined, excess is subjective Consolidate Tech Refresh ITCC / 4 year refresh for laptops/desktops $158M savings per year 27

28 Findings to Date Total Potential Cost Avoidance: $634.3M 13.5% of $4.7B Cost Curve Potential Savings Identified: $36.5M standardize refresh cycle (no early disposal) $61M commoditize top 10 models $125M enforce mandatory use policies $158M annually consolidate IT tech refreshes $46.7M Teamcenter ELA Total Potential Savings: $427.2M Wins: $133M use warehoused assets to refresh EOL assets $1.5M AFLCMC/EN ELA $36.3M Cisco SmartNet JELA, $109M over 3 years $4.5M USAFE LMR Contract $31.8M SEAMLS Oracle ULA, $159M over 5 years Total Wins: $207.1M 28

29 Sharing Our Data SAF/A6 MAJCOM A6s Boston Consulting Group McKinsey Air Force Audit Agency Enterprise Services Division 38 CYRS AFIT OMB Montgomery Chamber of Commerce Data from AFEMS-AIM 29

30 Summary Started with an idea and very little resources Built confidence in our analysis with senior leadership Went down a few rabbit holes, still do Didn t look for the perfect answer Remained flexible Documented our processes 30

31 Questions Data from AFEMS-AIM 31

32 E-IT Portfolio Spend FY13-FY18 FY13-FY17 FY18 Total spend for the E-IT Portfolios from FY13-FY17 was $5.26B with End User Devices comprising a majority of the spend at $2.26B for the period Connect and Compute/Store portfolios combined, consisted of only $0.4B of the overall spend Total portfolio spend for FY17 was $1.34B or 23% of the $4.7B FY17 Cost Curve To date, End User Devices has seen spend totaling $17.9M for FY18 Connect comprised the second largest spend to date at $1.19M for FY18 Actual spend for FY13-FY17 of $814.52M is duplicated across multiple portfolios, resulting in excess reporting by $1.93B Source: FPDS-NG, 31 Dec 17; CRIS, 31 Jan 18 32