Transcript Slide 1

State of Minnesota
Technology Summary
February 24, 2011
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Enterprise Assessment
The evaluation of the opportunity to provide a
centrally managed with locally delivered
technology for the State of Minnesota
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Enterprise Assessment Definition
Minnesota Law 2009, Chapter 101, Article 2, Section 105 directed
the Office of Enterprise Technology to undertake an analysis aimed
at managing executive branch information technology for greatest
impact and efficiency.
“The chief information officer of the Office of Enterprise Technology, in consultation
with heads of other executive agencies, must report…. on a plan to transfer from
other state agencies to the Office of Enterprise Technology state employees whose
work primarily relates to development, upgrading, replacement, help desk, problem
resolution, or maintenance of state data centers, system software, data networks,
servers, workstations and office systems.
“The report must include an estimate of the number of employees who would be
transferred, an estimate of enterprise costs savings, an analysis of potential
improvements in operations and agency-required service levels, a cost comparison of
alternatives to the transfer plan including in-sourcing, shared services, outsourcing,
and co-sourcing, and a proposed transition plan and schedule.
“State agencies must participate and provide information necessary for the Office of
Enterprise Technology to comply with this section.”
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Enterprise Assessment Financials
State of Minnesota Total Annual IT Spend - $361M
Category
People (State FTEs)*
Contractors
Hardware
Software
Professional Services (projectbased contracts)
Supplies and Other
Data Center Rent and Utilities
Subtotal
Telecommunications Contract
Spend**
State IT Spending Summary, 2008-2009
Operations
Applications
$ 78,733,323
$ 87,285,806
$ 1,626,702
$1,606,123
$38,851,541
$ 10,779,414
$ 54,170,263
Software
$45,135,253
Total
$ 166,019,129
$ 3,232,825
$ 38,851,541
$ 45,135,253
$64,949,677
$ 13,325,451
$ 4,767,750
$148,084,181
$15,884,890
$ 9,237,348
$152,299,540
-
$ 45,135,253
-
$22,562,799
$4,767,750
$361,403,865
$15,884,890
$163,969,072
$152,299,540
$45,135,253
$361,403,865
*Management and administrative staff have been proportionally divided between Operations and Applications; does not include HR and general
administrative functions.
**Pass-through dollars for telecommunications contracts with third-party vendors only; telecommunications contract management is included in “People”,
above
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Centrally Managed
Critical Success Factors
Critical Success Factors and Other Recommendations
Category
Critical Success Factors (Musts)
Other Recommendations
Clear mandate for centralization
Commitment to long term strategy
Engage additional expertise
Overall All Options
Strong leadership
Consider changing practice of expensing
hardware and software to leasing option to free
up funding for transition costs
Execution of Legal/HR related changes
Implementation of effective governance
process between IT and agencies
100% Outsource
100% In-source
Effective outsourcer selection and
contracting process
Implementation of prescribed
management practices and labor related
changes
Effective outsourcer selection and
contracting process
Hybrid
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Drop requirement for vendor to retain State staff,
but require vendor to maintain positions in
Minnesota to save transition costs and maintain
jobs in Minnesota
Implementation of labor related changes
for retained mainframe and security teams
Drop requirement for vendor to retain State staff,
but require vendor to maintain positions in
Minnesota to save transition costs and maintain
jobs in Minnesota
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Key Opportunity Requirements
The following are required for government to
realize the benefits of the technology
opportunities:
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•
Central Management and control of all Enterprise IT
FTE’s, Budgets and Contracts
•
A mandate for Centralized Management
•
Legislative support for the Centralization
•
The ability to capture some of the cost reductions
(savings) for reinvestment into additional
opportunities
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IT Resources
Role
A&E - Applications
Excipio Category
Staffed
Shifts
Administrative
1
A&E - Operations
Administrative
Administration - Asset Management
Administrative
Administration - Finance
Administrative
Administration - Other
Administrative
Administration - Procurement
Administrative
Administration - Product Analysts
Administrative
Administration - Sales / Customer RelationsAdministrative
Application Development
Application
Application Support
Application
Business Analysts
Application
DBA's
Application
Management - IS Executive
Management
Management - IS Supervisor
Management
Project/Program Management
Management
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Project/Program Management
Management
1
Backup and restore
Change Management/Scheduler
Data Center Facility resources
DBA's
Operations
Operations
Operations
Operations
1
1
1
1
Desktop Support
Operations
1
Desktop Support - Printers
Operations
1
Mainframe support
Operations
1
Production Control
Operations
4
Security
Operations
1
Server support
Operations
1
Service Desk
Operations
1
Storage Management
System Monitoring
Telecom - IPT Telephony
Telecom - LAN/WAN
Operations
Operations
Operations
Operations
1
4
1
1
Telecom - voice/video conferencing
Operations
1
Grand Total
Ratio
Varies my number of applications, complexity, and
environment dynamics
FTEs as a percent of the total FTEs
Based on staffing from similar clients
Based on staffing from similar clients
# of FTEs per Admin
% of Total Purchases
Typically performed by the operational team managers
Accounts per Rep
Out of scope
Out of scope
App programmers/analysts per BSA
# App Dev per DBA (custom dev >50%)
Direct reports per manager
Direct reports per manager
Developers per PM
Varies basedon the number of projects, the complexity, and
the stability of the environment - based on consultant
observations, a minimum 20% reduction is possible
Backup FTEs per Client
No metric available, but is reasonable
2 FTEs per major facility
Insufficient data on DB images
PC Users per FTE - includes hardware break/fix, imaging,
deployment, disposition, and printer support
Number of printers per Admin
Environment specific - 4 OS, 2 comms, 2 CICS/MQ, 2 capacity
and performance
Monthly batch jobs per FTE per shift
Vendors all projected minimal changes, thus Excipio
assumed 10% through consolidation based on current
services in place today
Server instances per FTE
Call per agent per month
(based on 20,000 calls per month)
Total Storage TB per Storage FTE (748TB)
9 FTEs for day shift, 5 FTEs for 2nd & 3rd shift
IPT Telephony Users per FTE
Active ports per FTE
Vendors all projected a 40%-60% decrease, thus Excipio used
30%
Total FTEs
Typical
Client
Ratios
Current
Ratios
Optimal
FTEs
Delta
13.82
13.82
-
11.78
23.00
85.05
6.46
7.00
10.00
350.08
296.98
42.78
40.89
44.51
117.01
54.84
3.00
6.00
15.00
45.30
7.00
10.00
350.08
296.98
42.78
40.89
35.00
117.00
54.84
(8.78)
6.00
(8.00)
(39.75)
0.54
(7.00)
(9.51)
(0.00)
-
46.00
(12.34)
150:1
9.00
14.50
7.70
37.00
(3.91)
0.03
0.04
(9.11)
35:1 - 40:1
2% - 3%
1.8:1
1.8%
40:1
2.0%
5:1
5.0:1
5:1
2.6:1
-0.6:1
1.6:1
3.3:1
14:1
15:1 - 20:1
10:1 - 15:1
3:1 - 8:1
58.34
12.91 150:1 - 200:1
14.47
7.66
46.11 15:1 - 20:1
98:1
131.03 250:1-500:1
285:1
400:1
94.00
(37.03)
516:1
1,200:1
9.00
(10.37)
10.00
(12.09)
7.00
(6.00)
60.00
(7.03)
19.37
1,500:1
22.09
13.00
100,000:1
67.03
88.72
50:1 - 60:1
56:1
60:1
82.00
(6.72)
91.03
450:1
220:1
400:1
75.00
(16.03)
55:1
150:1
2,254:1
1,298:1
2,500:1
2,000:1
9.00
19.00
7.00
40.00
(13.84)
6.00
(0.10)
(22.45)
22.84 150:1 - 200:1
13.00
7.10
2,500:1
62.45
2,500:1
30.65
22.00
(8.65)
1,812.00
1,585.90
(226.10)
226 Extra FTE’s in a Decentralized Structure
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Target
Ratio
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Server Virtualization Opportunity
There is a significant opportunity to increase server virtualization, other
States have seen average costs reductions from 15 to 20% utilizing
virtualization over physical server replacement.
Server Type
Phyiscal Virtual
Servers Servers
Total
% Virtualization
Servers
Wintel
2,720
724
3,444
21%
UNIX
946
68
1,014
7%
Other
466
14
480
3%
Total
4,132
806
4,938
16%
Current annual spend is $9.6M for Windows
and $4.1M for Unix servers
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Approximately 16% of
the servers are
virtualized (21% Wintel
versus 7% UNIX). Best
practices suggest the
target should be 40% 60%, representing a
significant opportunity to
reduce hardware costs
and data center
requirements.
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Storage Management Opportunity
Storage represents a significant consolidation opportunity that could be
achieved through leveraging large centralized and shared SAN storage
platforms.
The current distributed storage would have to be migrated to the
centralized storage over time as servers were consolidated to a central
data center(s).
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The decentralized
Available
Capacity In
Storage
Type
Total
Capacity
Utilization
environment has
Capacity
Use
created an excess
SAN
1,152
404
748
65%
amount of extra
NAS
233
139
94
40%
storage in the
DASD
906
484
422
47%
environment (45% or
Totals
2,291
1,027
1,263
55%
a little more than 1.2
petabytes), due to
each agency
Currently Storage costs $6.9M annually
maintaining separate
storage and excess
capacity.
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Service Desk Opportunity
Consolidation of multiple Service Desks allows for
greater service levels with reduced costs.
Agency Name
Agriculture
Total
Calls per
location
Total
Calls per
FTE
Estimated Number of
Average
Number of Number of Number of Percent Average (%) Adherence
Number of
Self
Handle
Tickets
Password
"walk
(%) FTE
Percent
Per FTE,
calls per
Service
Time
Logged
Resets
ups"
Utilization Occupancy Utilization %
End-user
Calls
(seconds)
400
250
1.00
0
400
No Data
No Data
100%
No Data
No Data
No Data
Health
2,040
117
0.41
No Data
1,128
275
No Data
No Data
No Data
No Data
167
Human Services
2,683
298
0.09
0
2,923
29
10
19%
60%
80%
338
Human Services
373
No Data
1.00
0
No Data
No Data
No Data
3%
0
No Data
543
Human Services
838
No Data
1.00
0
No Data
No Data
No Data
18%
3%
No Data
565
Human Services
238
No Data
1.00
0
No Data
No Data
No Data
0%
0
No Data
558
Human Services
4,035
No Data
1.00
0
No Data
No Data
No Data
17%
7%
No Data
207
Labor and Industry
226
38
0.45
0
226
8
10
100%
No Data
No Data
No Data
Minnesota Management & Budget
530
133
1.80
0
250
30
250
65%
75%
90%
120
Natural Resources
554
46
0.20
0
554
No Data
30
No Data
No Data
No Data
No Data
Pollution Control
158
158
0.17
No Data
525
15
No Data
100%
No Data
No Data
No Data
Department of Revenue
600
150
No Data
0
No Data
150
No Data
No Data
No Data
No Data
No Data
MnDOT
300
100
1.10
5
0
10
90
No Data
No Data
No Data
No Data
MnDOT
100
100
0.80
1
0
5
60
No Data
No Data
No Data
No Data
MnDOT
300
50
1.00
5
200
5
100
No Data
No Data
No Data
No Data
MnDOT
721
120
0.72
0
2,432
106
300
No Data
No Data
No Data
No Data
4,400
250
No Data
20
5,400
100
20
80%
78%
75%
160
30
No Data
1.00
No Data
No Data
1
150
No Data
No Data
No Data
No Data
Office of Enterprise Technology
Animal Health Board
MN State Academies
Public Safety
Totals
400
100
1.00
No Data
400
50
30
No Data
No Data
No Data
No Data
1,038
259
2.90
No Data
639
115
15
No Data
No Data
No Data
No Data
19,964
144.6
0.64
2.1
15,077
899
1,065
50%
33%
82%
183
Current Decentralized Service Desks cost $6.5M annually
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Desktop Management Opportunity
There is a lack of centralized asset management through the decentralized
environment, which has lead to multiple issues. Some of these include
inaccurate monitor counts, and excess PC’s which should be retired.
Component
Desktops
Laptops
Monitors
Smartphones
Tablets
Cellular Phones
Aircards
Grand Total
Qty
% of Total
26,005
11,234
1,636
641
161
147
104
65.1%
28.1%
4.1%
1.6%
0.4%
0.4%
0.3%
39,928
100%
Average
Age
2006
2007
2007
2008
2006
2006
Currently PC’s costs $21M annually
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It should be noted there are
just over 32,000 PC users,
yet there are a total of
37,000+ Desktops and
Laptops. This shows the
State is over purchased by
5,000+ devices, and also
likely includes excess
software licensing,
maintenance and other
support costs.
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Shared Service Catalog
The Shared Service Catalog allows for the
allocation and recovery of the appropriate
IT funds from a centralized organization
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Service Catalog Initiative
The Office of Enterprise Technology has been using an service catalog
methodology for several years. The current catalog has recently been
updated and has the capabilities to address a shared services centralized
environment.
The goals of the Shared Service Catalog are:
• Centrally managed locally delivered technology services
• Continue progress toward a central IT model
• Recover service costs on a break-even basis
• Provide quality service at competitive rates
• Conduct an open, transparent and inclusive process
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Financial Benefits of Centralization
Financial Benefit of Enterprise Consolidation
Comparative Outcomes for Centralization of State IT Operations
Centralized to OET
Alternative 1*
Fully
Outsourced
Alternative 2*
Outsource/Insource
Annual Operational Savings
(compared to operational baseline
of $155M)
$35 Million
22%
$51 Million
33%
$58 Million
38%
Transition Costs (years 1 & 2)
$65 Million
$174.6 Million
$116 Million
Annual Net Savings (average
per year)
$25 Million
$26 Million
$41 Million
7-Year Net Savings
$177Million
16.3%
$185 Million
17%
$290 Million
26%
Centralized Net cost savings range from $25M to $41M annually
in a functioning production mode
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