Consolidation Trends in Government A Review of Current Initiatives

Transcription

1 Consolidation Trends in Government A Review of Current Initiatives Robert L. Womack Director, State and Local Government April 26, 2005

2 Why Consolidate? Selected Case Studies

3 Why Consider Consolidation? Texas state government currently offers an insufficient level of shared IT infrastructure for agencies to leverage. When a business need arises, agencies fill the gap with independent solutions, resulting in overlapping and redundant technology assets. The potential for multi-agency solutions that effectively respond to those business needs is lost. Through targeted and realistic consolidation of commodity IT services and resources, the state can develop a shared technology infrastructure that maximizes its investment in three distinct areas: - Increased Cost Effectiveness The state can spread the cost of service over multiple agencies, fully leveraging the state s purchasing power. - Improved Service Delivery A shared IT infrastructure allows for development of deeper IT skills and provides better services and lower cost to the end user - Greater Focus on Core Missions When agencies are relieved of the burden of managing tactical IT issues, they will be better positioned to quickly act on opportunities that directly accelerate the agency mission and service to citizens. Source: A Foundation for Change: Leveraging a Statewide Technology Infrastructure, Texas Department of Information Resources (DIR), May 28, 2004, p Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

4 Cross-Sector Trends Business decision makers demanding IT transparency - Spending accountability - Mapping IT initiatives to business initiatives - A better way of allocating IT costs to Business Units Insource/outsource analysis for all IT services - Service cost benchmarking Changing industry regulations - Business Software Alliance (BSA) - Environmental Protection Agency (EPA) Increased recognition of IT s criticality to the business - Increased responsiveness - Consistent service-level delivery Increased utility computing offerings from vendors Adoption of IT Infrastructure Library (ITIL) best practices Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

5 Federal Consolidation Initiatives In June 1998, the National Aeronautics and Space Administration (NASA) awarded seat management contracts to seven prime contractors under its Outsourcing Desktop Initiative for NASA (ODIN) government wide contract. In July of that same year, the General Services Administration (GSA) awarded contracts to eight prime vendors under its own government wide seat management contract. As reported in a 2002 General Accounting Office (GAO) report [4] on desktop outsourcing, the six agencies that had implemented seat management under these contracts reported that the use of seat management contracts allowed them to: - Improve information technology management by standardizing hardware and software; - Improve end user support; - Enhance mission support by freeing up staff time that was previously dedicated to desktop management functions; and - Upgrade their desktop technology on a more timely basis Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

6 California s IT Consolidation - Goals More efficient, standardized systems capable of supporting multiple agencies; Reduced redundancy and variation within the state s technology infrastructure; Reduction in cost for common infrastructure services; Enhanced ability for data sharing; Improved ability to successfully leveraged IT procurements; Enhanced security and privacy measures for the storage and distribution of electronic data; Improved core technology support for all state agencies and departments; and More effective utilization and management of technology personnel Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

7 California s IT Consolidation - Specifics Proposed (March, 2005) creation of a Department of Technology Services (DTS) to manage: - the state s consolidated general purpose data center - consolidated voice and data network operations. Proposed DTS Organization - Division of Engineering - Division of Operations - Division of Business Development - Division of Administration - Division of Security - Office of Network Services Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

8 Other California Consolidation Initiatives The California Performance Review (CPR) that was completed in August 2004 includes recommendations for several initiatives related to consolidation of IT support services. In recommendation SO31 the CPR recommends that state agencies move to virtual desktops as a means of saving money on PC client hardware and support services. The virtual desktop solution would provide Internet browser-based access to applications that run on server computers, thus reducing the total cost of ownership for each virtual seat managed desktop from about $5,000/year to $1,000/year Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

9 Other Consolidation Initiatives In addition to the recommendation to move to a virtual desktop, the CPR recommended in SO/30 that a statewide information technology Help Desk be created. Other states like New York, Florida and Wisconsin have used statewide help desks as a means of consolidating some IT services. In June 2001 the New York Office of Technology created a help desk to provide services to 4 state agencies and a number of local government agencies, educational institutions and not-for-profit organizations Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

10 Texas Foundation Vision Infrastructure components under consideration for consolidation under Texas Foundation Vision 1. Data Center Consolidation 2. Statewide Network 3. Enterprise Applications 4. IT Support Services A. Facilities B. Mainframes C. Servers D. Storage A. Network Systems B. Network Circuits and Equipment C. New Network Technologies A. Messaging and Collaboration B. Financial Systems A. User Support B. Processes and Procedures Source: A Foundation for Change: Leveraging a State Technology Infrastructure, State of Texas DIR, May 28, Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

11 Foundation Savings Areas Initiative Initiative Name Savings Results Savings Potential Complexity Timeframe 1A DCC - Facilities $74 Excellent Average Medium 1B DCC - Mainframes $32 Good Difficult Long 1C DCC - Servers $196 Excellent Difficult Medium 1D DCC - Storage $37 Superior Average Short 2A Network $29 Good Basic Short 2B Network Circuits and Equipment $29 Good Basic Medium 2C New Network Technologies $235 Good Average Medium 3A Messaging and Collaboration Systems $7 Good Basic Short 3B Financial Systems $38 Good Difficult Long 4A User Support $85 Excellent Difficult Long 4B Processes and Procedures?? Good Basic Short Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

12 The Transformation in IT HIGH Capacity Dynamically Sourced Transformation Consolidation / Standardization Service-oriented architectures Virtualization and Provisioning Asset optimization Management as a discipline LOW Remove Waste, Reclaim Capacity, Manage Demand Today Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

13 Today s Challenges with IT Too much complexity Lots of labor Under-utilized capital Vulnerable infrastructure Hard to set service levels Un-gated demand Inefficient, Unresponsive, Unaligned Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

14 Consolidation Value Proposition Reduce cost - Asset optimization - Operating costs - Capital expense Manage risk - Security -Data Cost Risk Availability - Corporate compliance and IT governance 50%.001% % Ensure infrastructure is always on, never seen Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

15 Reduce Cost: Operating Costs 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 81% of IT Spending is Non-Discretionary IT Budget Allocation Source: Gartner, Management Update: Enterprises Should Assess How Their IT Spending Stacks Up, Barbara Gomolski, Aug Strategic Projects Maintenance and Admin Shift investment towards strategic projects Customer Results JPMorgan Retirement Plan Services Save $3M annually due to business process automation Intelligent Finance (Halifax plc) Save over $3M annually due to application life cycle change management Sallie Mae Over 300% increase in PC admin productivity in 2 years Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

16 Reduce Cost: Capital Expense Industry Avg. IT Capital Budget % of Revenue Avg. IT Capital Budget Customer Results Communications ,300,054 Retail 0.63 Wholesale 0.93 Education 0.96 Financial Services 1.65 Government ,902,155 6,894, ,470 16,952,752 31,510,743 Aliant Reclaimed 73% of storage capacity Healthcare Manufacturing (Discrete) ,792,565 5,624,114 Petroleum ,493,014 Services ,165,879 Transportation 0.7 1,618,624 Utilities ,338,984 All Industries ,453,198 Fortune 50 Global Financial Services Firm Saved $6.7M in 2 years due to better IT asset management Source: Gartner 2003 IT Spending and Staffing Survey Results, Oct Reducing capital expense by 10% saves $6 million over 3 years Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

17 Manage Risk: Security 160, , , ,000 80,000 60,000 40,000 20,000 0 Security Incidents Have Reached an All-Time High (number of security incidents as reported to CERT/CC) Source: Carnegie Mellon Software Engineering Institute / CERT Coordination Center 2004 (website). Customer Results MSFT TechEd 2004 Zero viruses, zero successful intrusions, and 99.92% network up-time despite over 98,000 intrusion attempts Walter Reed Saved $1.8M over 3 years by automatically identifying vulnerable IT assets and deploying security patches Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

18 Manage Risk: Data Data Growth Exceeds Management Capacity Data grows 50-70% annually Storage admin capabilities improve 20-30% annually Backup/Recovery Failures Common 5-20% B/R jobs fail nightly Addressing B/R failures consumes 2/3 of storage management resources Customer Results Arizona Electric Cut backup time by 50% while volume of data under management grew by 100% Southern Wine Zero storage-related downtime in past year Source: META Group, Proactive Data Protection: The Best Defense Is a Good Offense, Phil Goodwin, Apr The Storage Manifesto, Fred Moore, Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

19 Ensure Infrastructure Availability Potential Revenue Loss Due to Downtime Industry Sector Revenue/Hour Customer Results Energy $2,817,846 Telecommunications $2,066,245 Manufacturing $1,610,645 Financial Institutions $1,495,134 Information Technology $1,344,461 Insurance $1,202,444 Retail $1,107,274 Pharmaceuticals $1,082,252 Banking $996,802 Food/Beverage Processing $804,192 Consumer Products $785,719 Chemicals $704,101 Transportation $668,586 Utilities $643,250 Healthcare $636,030 Electronics $477,366 Multi-Industry Average $1,010,536 Source: META Group, How Safe Is the Business? Perception/Reality Disconnect, Rob Schafer, Feb 02. One day of down time costs $24 million Sol Meliá (world s largest resort chain) 200% increase in online sales due to highly available web-based system Dexia-Banque International de Luxembourg 250% performance increase with 99.8% uptime Large Global Mining / Manufacturing Company Saved $3.7M in one year due to avoided system downtime Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

20 A Theoretical Basis for Shared Services IT On-Demand

21 The ITIL Process Model Business, Customers, Users Incident Management Service Desk Service Level Management Problem Management Change Management Release Management Configuration Management Service Support Availability Management Capacity Management Service Delivery Financial Management IT Service Continuity Management Security Management Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

22 On-Demand Computing Maturity Model 4 - Business-Driven 3 - Responsive 2 - Efficient 1 - Active Manual and fragmented management across infrastructure components Automated but fragmented management systems Integrated management systems; ability to manage by fact IT managed as a business; capacity sourced dynamically - Deliver - Support - Monitor -Self-Service -Define - Commit - Monitor - Measure Usage - Financial Mgmt. - Chargeback Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

23 Level One Active Management In level one, IT management is largely piecemeal and manual across various applications and infrastructure components. IT reacts to problems, but is largely unable to proactively prevent them. Organizations in level one should focus on the following capabilities to advance their maturity: - Standardize IT management processes - Integrate management functionality across silos - Automate system monitoring and management Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

24 Level Two Efficient Management In level two, data capture and analysis capabilities reach across the enterprise. Root cause analysis enables fast problem identification. However, automated system responses are not enabled and workflows are not defined thus, problem fixes and changes must still be executed manually. Organizations in level two should focus on the following capabilities to advance their maturity: - Automate problem resolution and define workflows for automated system actions - Implement technologies to automatically map IT to the business - Implement virtualization and provisioning functionality to enable resource-sharing - Automate metering and measurement of IT usage to support chargeback Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

25 Level Three Responsive Management In level three, system actions are automated. Workflows for problem fixes and changes are defined throughout the IT infrastructure. However, administrative approval is required to initiate any action. Organizations in level three should focus on the following capabilities to advance their maturity: - Fully automate all IT processes based on business policies - Address organizational alignment supporting IT automation - Financially and strategically optimize use of IT for business advantage Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

26 Level Four Business-Driven Management In level four, automated actions and problem fixes are initiated without human intervention, based on business policies and SLAs. Infrastructure management is fully automated, self-healing and self-managing. Reporting tracks system responses for informational and analytical purposes, and people are involved only at the policy setting level. Level four is characterized by several organizational and technological changes: - Policies impacting management of the IT infrastructure are set by the business staff, not the IT staff - Costs of the IT services required by all business processes are fully understood and transparent - The IT infrastructure has complete self-monitoring capabilities, including policy auditing - Resources are shared automatically among all areas of the organization (IT silos now extinct) - Integrated management of all aspects of the IT infrastructure is achieved through standards-based, open solutions Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

27 IT Service Management and Shared Services

28 Asset Repository: Job 1 Centrally manage all management information - Discover and inventory all hardware, all software - Administer people (users, rights, privileges) - Define and manage policies - Map assets to business processes - and a whole lot more Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

29 Asset Optimization Solving Business Problems The benefits of asset optimization are large: - Ensuring software license compliance - Contract and lease management - Procurement optimization - Asset retirement - Vendor auditing and risk management - Correct allocation of assets And once you know what you own, you can manage it by: - Improving operational efficiencies - Proving data protection - Securing it - Understanding its life cycle - Setting service levels and financial controls Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

30 IT Service Management Manage IT Like a Business Service support and delivery - Help desks and knowledge bases - Service catalogs Manage by business process - Auto discovery and correlation - Service-level management Define, monitor, measure Financial administration of IT - Budget and planning - Cost allocation and reconciliation - Billing and chargeback - Integrated into ERP Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

31 IT Service Management The Result IT Service Management lets you manage IT like a business Companies today take cost divided by employees!!! Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

32 Intelligence Do you know? How many assets you have? License exposure / audit risk? What databases are not backed up? Underutilized storage? Consolidation opportunity? What assets are vulnerable? Risks based on a business process? Machines that have the most incidents? And a whole lot more Intelligence Products Asset Intelligence Service Intelligence Storage Intelligence Life Cycle Intelligence Network Intelligence Mainframe Systems Intelligence Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

33 Asset Intelligence Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

34 Summary Consolidation initiatives a response to both IT costs and perceived lack of alignment with enterprise goals. IT planners benefit greatly by considering the ITIL framework in thinking through the how of IT consolidation. Given continuing demands for driving efficiencies in government through both use of IT and reduction in IT costs, consolidation and similar initiatives will be a continuing theme across the states Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.

35 Contacts Contacts for more information: - Erin Sullivan VP, State and Local Government Matt Mullinix Account Director, Comm. of Kentucky Bob Womack Business Development Director HLS Computer Associates International, Inc. (CA). All trademarks, trade names, services marks and logos referenced herein belong to their respective companies.