Managed Services Breakout Session # 1406 Linda Y. Cureton, Chief Information Officer, NASA Goddard Space Flight Center Robert J. Guerra, Executive Vice President, Guerra Kiviat, Inc. Rehana L. Thomas, Analyst, Acquisition Solutions, Inc. Tuesday, April 15, 2008 3:20pm-4:20pm
Agenda • Introduction of Panel Members Rehana Thomas 3:20pm-3:25pm • Overview of Managed Services Rehana Thomas 3:25pm-3:30pm • Panel Discussion Linda Y. Cureton & 3:30pm-3:50pm Robert J. Guerra • Open Discussion All presenters and 3:50pm-4:20pm audience
Defining Managed Services • “Managed Services” Generally: Delivery of a function as a service • Examples: facilities maintenance, transportation, physical and cyber security, call center services • IT: A mechanism that enables industry to perform a function in support of customer’s information technology operations1 • IT: Network Managed Services: sourced management and operation of IT infrastructure and applications through a centralized network operation center (NOC) • Typical elements: monitoring change management and configuration software management 2 • 1 Acquisition Solutions Advisory, “Managed Services: Solution-Based Information Technology Acquisitions,” May 2006 • 2 Gartner Research Services, 2008
Varying Interpretations of Managed Services Source: Gartner Research Services; Acquisition Solutions, Inc.
Categories of Managed Services Data Storage DISASTERRECOVERY Server Management Desktop Computing Services Seat Management Application Development & Maintenance NETWORK OPERATIONS Remote Access, Teleworking Help Desk Services Systems & Data Center Support Security & Privacy Operations MessagingServices Hardware Deployment & Support Call Center Services
Advantages of Managed Services • Better use of staff: allows agencies to focus human resources on strategic planning and core mission support • Cost savings: choose not to build and support IT and network infrastructure available in the commercial sector; use limited capital to purchase needed service levels and reduce total cost of ownership • Ability to use optimal technologies: adjust types and mix of hardware, software, skilled labor, capital investment and technology to support changes in mission needs • Rapid response to mission changes: supplier is measured by ability to produce solutions
Open Discussion TopicsPerformance Based Acquisition : Major Themes Lessons Learned from Managed Services Acquisitions • Identifying the Functional Need • Focus on Outcomes (Metrics and Measures) • Alignment with Objectives and Mission • The right approach to SLAs and OLAs; Pros and Cons • Communications (Visibility, Transparency, Trust)
Panel Discussion • Linda Y. Cureton, Chief Information Officer, NASA Goddard Space Flight Center • Robert J. Guerra, Executive Vice President, Guerra Kiviat, Inc.
Managed Services Are Hard To Define and Even Harder To Do • Range of Definitions Spans Broad Scope • AKO Phase I – Product Lease and T&M Labor • Seat Management • IT Infrastructure Outsourcing Is NOT Leasing • We Can’t Achieve What We Can’t Define • Vendor and Customer Have to Agree On Mission Need • Market Research and Due Diligence are at the Heart of it All • Look to Private Sector Approaches • Outsource The Infrastructure • Shared Goals & Accountability • Measure What We Need Not What We Always Did • Must Base Managed Service On TRUST & Common Goals
Adapt leading practices to the constraints and context of the organization to maximize value • Vendor Owns the Infrastructure • Government History is to BUY the IT • Moore's Law is True – So is J. Paul Getty’s • “If it Appreciates Buy It If It Depreciates Lease It” Just Don’t own It • Customer Owns the Mission and Solution • It’s The Customer’s Assets – Receivables – Personnel • IT Supports the Mission - It Is Not THE Mission • Successful Groups Measure What They Need Not Want • There Are Success Stories On Large Scale • Public Sector DoD • Private Sector Managed Services Is a Standard • Large and Small Companies Succeed
Let’s Measure What We Need Not What We Want • Private Sector • Reduced Costs of O&M • Improved Efficiency • Improved Productivity • Improved Morale • Reduced Turnover • Improved Service Delivery • Improved NOP • They Measure These Things • Public Sector • Business Needs are The Same • Mission Is Different • VHA – HUD – PBS Examples • But Measure • Timeliness of Delivery • Compliance with Standards • Small Business Content • ISO/CMM/SEI Certifications • CDRL’s On Time • Illusory “Evaluated” Price
Making SLAs and OLAs Work • Service Level Agreements and Operating Level Agreements should: • be developed with contractor • be measurable and achievable • align with the deal • align with the organization’s goals (relevant measures and metrics) • have effective incentives and disincentives to drive desired behavior • should be consistent with your strategic objectives • Effectiveness -- functional alignment with mission, committed delivery of service to stakeholders, leverages diversity in the marketplace, complies with regulatory mandates, and delivers outcome/impact within applicable constraints) • Enhancement – process and productivity improvement (claims processed, personnel productivity • Transformation – Business performance improvement (revenue growth, market growth) • Efficiency -- Cost improvement and cost control • Availability, response, resolution
There Are Successes To Assess and Duplicate • Xerox Corporation • Worldwide Operations and Manufacturing • Multiple Divisions and Mission Goals • Highly Integrated Design, Development and Manufacturing Integration • General Motors • One of World’s Largest Employers • Major Divisions Appealing to Varied Market Segments • Worldwide Acquisition Design Development and Communications Needs • US Navy NCDOCS Program • CERT Style Program • Vendors Own The Technology and Support • Government Owns The Mission • POC Is:Captain Steven Carder Commander, NCDOC See Video http://www.sas.com/apps/webnet/custSuccess1
Looking at some instructive examples . . . • Department of Anarchy • Jurassic Park • Easy Bake Oven, Inc.
Due Diligence and Market Research - Critical Leading Practices • What due diligence and market research should be all about • The courtship starts (Vendors need to listen, ask probing questions, and demonstrate a genuine interest in identifying needs) • Whatever time you think you need, double it, at least! • Partnership begins for understanding requirements • Leverage market knowledge to help shape requirements • Potholes to avoid while conducting due diligence and market research • Telling the service provider “how” to do the work • Due Diligence is not a marketing opportunity • Not focusing on business outcomes • Lack of service leadership • Service provider traditional level of effort orientation • Managing PBC should be a government core competency
Procurement Reform Performance Based Brooks Act How Did We Get To Where We Are? • Functional specs • Prescribe our technology • Define Needed Outcomes • Wire the spec and low price • Prove Your ability to deliver results • Speeds and feeds • Government Bears The Total Risk • Move to equitable risk allocation • Industry Bears IT Risk
Changing the Culture: Solutions & Objectives Are Hard The Philosophical Change We Need Performance Based Acquisition Brooks Act Strategy
What We Need To Change Analysis Planning Execution 1.) Establish an integrated solutions team 2.) Describe the problem that needs solving 3.) Examine private and public sector solutions 4.) Develop a PWS or SOO 5.) Decide how to measure and manage performance 6.) Select the right contractor 7.) Manage performance Program Office • What result do we want to create? • Defining “end state” or desired outcome. • Conducting market research to see who else has solved that problem, met that need. • Defining outcomes in writing is hard work. • Define how we measure performance to meet the desired outcome • Continually assess relevance of metrics • Maintain open lines of communication open Contract Office • Define the desired outcome well enough to structure an enforceable contract. • What contracting method will we likely use? • Which contract type? • Does the SOO sufficiently describe the desired outcomes? • Will the contracting method provide enough competition? • Is the contract type commensurate with risk? • Use effective QASP procedures to self assess quality as well as contractor quality • Base incentives and disincentives on clear relevant metrics that everyone understands Prime Contractor • Can we deliver the optimal outcome based on what we do best? • Great opportunity to reach informal understanding agreement on feasible outcomes. • Think in terms of outcomes! • Continually measure relevance of metrics to evolving missions • Make sure my definition of success the same as the customers! • Foster clear and consistent Executive and Programmatic communication with the government • Manage team or sub-contractor partners and manufacturers on customer goals and metrics