G@IT 2010: Agency and GTA Transition Alignment

1. G@IT 2010:Agency and GTA Transition Alignment “Establishing the new interoperability model” August 25, 2008

2. Agenda • Managing Change • Service Levels • Finance • GTA Structure

3. Why Are We Here? • G@IT 2010 contract signing occurs in 52 days • Transition of IT infrastructure to selected providers begins in October

4. State will acquire services, not equipment GTA will manage delivery of services (What), not hardware and software (How) GTA manages service providers through: Service levels Governance through active management Processes will change − procurement, billing, budgeting Service delivery improved through processes What Will Be Different?

5. Where We Are in the Process • Phase 1: Assessment • Completed December 2007 • Phase 2: Procurement • Managed Network Services: October 2008 • Infrastructure Services: November 2008 • Phase 3: Transition • October 2008 – April 2009 • Phase 4: Transformation • Ongoing throughout life of the contract

6. Why We Must Change • All agencies face similar risks • Aging infrastructure • Not meeting minimum standards • Weak security and disaster recovery • Assessment validated… • Good people but thinly staffed • Absence of processes • Little measurement • Duplicate spend but critical initiatives are under funded • Disaster recovery gaps The capabilities within the state to fix the problem have deteriorated to such an extent that only an enterprise-wide initiative that draws services and skills from the market has the opportunity to make timely repairs. TPI Sourcing Assessment, December 2007

7. Why Start Process Work Now? • Waiting until the start of transition to identify change requirements risks degrading sourcing program momentum • Alerting agencies to change that will be required, while important, is insufficient for successful implementation of the sourcing program • Coordinated process development essential for success

8. Transition Intended performance with change Performance gap created By unmanaged change Performance Current Performance Typical performance with unmanaged change Change Implementation Complete Time Governance Key to Successful Transformation Current Performance Source: Technology Partners International, April 2008

9. Responsibilities • GTA • Maintain the cornerstone (infrastructure) of your technology through the diligent management of the providers • Provide and drive the forums and decisions (governance) necessary to align the providers to agency needs • Agency • Business systems (software) you use to run your business • Processes and methods you use to define, prioritize, communicate and manage your (business − technology) workload

10. Right work, done right Validate and manage costs Performance Financial Management Management Invoice management. Performance analysis and serviceand delivery management Performance credits,earnbacks and criticalmilestones Service requests, authorization Security, architecture and standardsmanagement Financial analysis and planning Risk management Procurement Strategy & Contract pricing adjustments Asset management Objectives Value leakage mitigation Incident, problem, escalation,change management Chargeback Satisfaction, direction setting Ensure compliance Relationship Contract Management Administration Governance Contract administration Forecasting and demandmanagement Contract change management Perspective on Governance includes both state- and provider-facing activities Contract issue management Regulatory and tax compliance Dispute resolution Workplace services Service provider audit Customer satisfaction surveymanagement Governance library Communications management Project spend pool management SMO Disciplines Are Built on Process

11. These Processes Have Benefits • Links agencies, provider and GTA together • Increases the stability and reliability of the state’s infrastructure • Enables variable capacity and capability • Reduces risks through increased visibility • Ensures the state’s security and disaster recovery profiles improve • Helps quantify operational impacts… • Of your decisions and state mandates • For accelerating and delaying projects

12. What Will GTA Do to Help You Get Ready? • Establish enterprise standards • We all have to eat the same cooking • Lead an “Interoperability Project” • Evaluate top 3 integration points • Recommend approach for agencies to prepare • Offer process templates • Suggest GTA support models • Train • Technology management through service levels • Forecasting and demand management • Process orientation

13. Rate and speed of adoption • Resistance • Staff skills and proficiency • Governance Recognize that Georgia’s success will be defined by how well we manage change together:

14. Three Concepts • Service levels are expressions of your expectations • State and provider agree to service levels and quality • They measure the service provider’s actual performance • Your bills will be based on your consumption • Provider sets base charge tied to specific service volumes • Volumes can be increased or decreased • GTA will change to enable this transformation • GTA’s new structure provides a disciplined approach to managing service providers • State has adopted an international standard called ITIL • GTA will assist agencies in preparing key processes to link into the provider

15. Service Level Agreements (SLA) are expressions of your expectations • What’s Different About Our SLA's • We Want Performance − Not Money • Examples of Service Levels • We Have Flexibility in Our Metrics • Service Levels Are Not Penalties

16. What’s Different About Our SLA’s? • G@IT 2010 SLA’s will have financial implications • They are built to influence behavior • They have more options than voiding the contract • They allow us to change our focus • We don’t want the money

17. We Want Performance − Not Money • State will receive performance credits from the supplier for not providing the contracted (“expected”) service • Supplier can earn back performance credits each year • Key concepts • Expected Service Level • Constantly missing these will cost the provider • Minimum Service Level Default • Don’t make the big mistake; it will cost the provider • Annual Earnback • Allowing them to earn back penalties changes behavior

18. Examples of Service Levels • System availability • System up time • System response time • Problem management • Problem response time • Problem resolution time • Customer satisfaction • Transactions completed without complaint • Helpdesk • Number of calls resolved on first call • Number of abandoned calls

19. We have the right to select and change which metrics we want to elevate Flexible Measure to Adjust All CriticalMetrics SLA • 5 • 4 • 4 • 3 • 5 • 5 • 5 • 4 • 1 • == • 36 avg. is 4.0 • 5 • 3 • 5 • 4 • 1 • == • 18 avg. is 3.0 Using all metrics to manage the provider can obscure the errors By focusing on a limited number of metrics we can get attention to weak areas Agencies can influence these through participation in governance meetings

20. Service Levels Are Not Penalties • SLA’s were written to allow the provider to earn back penalties if: • They avoid future failures • They can demonstrate it wasn’t their mistake • They are willing to make investments that would lead to an acceptable and sustained performance • SLA’s are written to notice one-time events but only penalize for inconsistent delivery • Failures require more than just one clean month to resolve • A scorecard is maintained throughout the year

21. Your bills will be based on your consumption • GTA Coordination With OPB • What Is An RU (ARC/RRC)? • Need to Manage Your Consumption • What Level of Detail Is Available

22. IT Budgeting For FY 09 and FY 10:What’s Been Done • GTA worked with OPB and agency budget directors… • To calculate FY 2009 budget amendments for the “stub period” (March – June 2009) • Using agency base case data… • GTA and OPB calculated amounts for FY 09 and FY 10 to be “held harmless” from the 6%, 8% and 10% budget reductions • Both of the above used base case data because vendor pricing was not available at the time • “Stub period” was an estimated time frame • Actual implementation could be a bit earlier or later depending on negotiation with the vendors

23. IT Budgeting for FY 09 and FY 10:“To Do” List • When contracts are signed in October and November: • Work with each agency and OPB to evaluate needs/demand for services and compare against each agency’s level of funding • Determine which agencies need additional funding and which need less • Evaluate fund source impact • Reallocate funds between agencies (OPB function) and reflect in the AFY 09 and FY 10 Governor’s Recommended Budget

24. Need to Manage Your Consumption • Virtually unlimited capacity • Service provider will supply and charge for as many resource units as you can consume • Validation of invoices for accuracy is a must • Agencies should always be conscious of consumption trends • Project activity • Provider resources have a lower price if you can prioritize within the capacity of the contract • Little projects (Little “p”) are projects that can be accomplished with the same type and capacity of resources we have today and the cost is included • Big Projects (Big “P”) are projects that expand beyond our current capacity and require the vendor to add resources • Better planning can lower cost • Disaster Recovery and Security will now be required to be priced into new projects

25. Example of Network/Voice Resource Units • WAN • Site connection to the state network (WAN site) • 3 tiers based on site attributes • Use of the connection (Transport) • LAN • Maintenance of a person’s connection to the Local Area Network (LAN) • Wireless access point • Move, add and change of a connection (IMAC) • Voice • Upcharge per call center seat • Interactive Voice Response (IVR) per user • Changes to phone setups (IMAC) • Per user: includes maintenance, hardware and carrier • Video conference per room and call

26. Examples of Mainframe Resource Units • IBM • Application CPU hour • Automated application tape storage GBs • Manual application tape mounts • Unisys • Standard units of processing (SUPs) • Application tapes in storage (active rotation) • IBM and Unisys • Allocated disk space (DASD) • Application tapes in storage • Print (standard and custom) • Mainframe output print images

27. Examples of Application ServersResource Units • Defined as business applications, middleware, database or web • Priced per operating system instance • By operating system type (Windows or UNIX) • By complexity • Hardware and hardware maintenance priced via a separate monthly hardware charge • Application utility software priced via separate monthly software charge • Compilers, database, development tools, middleware, etc.

28. Examples of Utility ServersResource Units • Defined as e-mail, file/print, enterprise gateways, presentation and terminal • Resource units • E-mail accounts • LAN-attached devices • Application utility software priced via separate monthly software charge • Infrastructure servers are not a separate resource unit and are not priced discretely • Domain services, enterprise security, enterprise backup, enterprise scheduling and software distribution

29. Example of Infrastructure Resource Units • Server storage • Enterprise storage vs. local storage • Replication and backup • End-user computing • By device type • By central/remote location • Requesting service provider best practice: Premium service and non-standards devices • Service desk • Authorized user

30. Competitive Pricing Of Additional Volume • No exclusivity • Extraordinary events • Benchmarking with automatic adjustment Protection For Reduced Volume • No minimum commitments • Extraordinary events • Full and Partial Termination Rights • Benchmarking with automatic adjustment Thresholds Above and below the Resource Thresholds pricing rates will be renegotiated within defined parameters What Is An ARC and RRC?(Variable Pricing and Terminology) Base Charge covers the Resource Baseline ARC Resou r ce Un I t Vo l ume 2,500 Each Resource addition over the Baseline is charged as an Additional Resource Charge (ARCs) Baseline 2,000 Each Resource removed under the Baseline is credited as a Reduced Resource Credit (RRCs) RRC 1,500 0 Year 1 Year 5

31. GTA will change to enable this transformation • How Will GTA Change? Operations Becomes SMO • What is ITIL? New Standard • GTA to Help Agencies Link Into the Providers • Change From the Agency Seat • What Happens Next

32. We will have a consultant assigned to your agency We will actively manage the contract GTA Delivery Consultant GTA: • Contracts • Finance • Governance - Escalation GTA Tech SME We will retain a few high end technical experts How Does This All Fit Together? Agency New GTA Organization Will Provide the Governance To enable this new Relationship Service Provider Service Desk Agency IT Staff

33. Components of GTA’s New Structure • Statewide layer (Enterprise) • Budgeting and finance • Enterprise technology • IT strategic planning • IT policies, standards and guidelines • IT project assurance • Information security • Service Management Organization (Operations) • Managing a collection of providers • Accountable for the delivery of services

34. What is an SMO?

35. Typical Industry Problems and GTA’s Solutions SDO:Service Delivery Organization Damaged relationships between firms VMO: Vendor Management Organization Weak strategy and planning 37% 52% 11% ASO:Administrative Service Organization Inadequate legal and financial terms and conditions GTA has created new organizations that align to resolve typical sourcing issues

36. ITIL is the objective standard that we will require of our providers and our processes What is the ITIL Standard? • ITIL (IT Infrastructure Library) provides a framework of best practice guidance for IT service management • ITIL has grown to become the most widely accepted approach to IT service management in the world:www.itil-officialsite.com • This standard drives processes that control cost and drive stability into the infrastructure

37. Interoperability Project to Reduce Confusion • GTA has launched an “Interoperability Project” with the following deliverables: • Identify and coordinate linkages between agencies and GTA’s Service Management Organization • Provide agency interoperability roadmaps • Project will focus on the following key process areas: • Service request management • Change management • Demand and forecast management

38. Interoperability Project Timeline • Project start-up: Aug. 11– 14 • Review, assemble interoperability profiles: Aug. 15 – 20 • Interview agency leads, validate profiles: Aug. 21 – Sept. 12 • Define linkages between agencies and SMO: Sept. 13 – 19 • Develop, deliver agency roadmaps Sept. 20 – Oct. 3

39. What Happens Next… • Communicate, communicate, communicate • Agencies make GAIT 2010 transition a top 5 project • Providers come in for due diligence • GTA runs Interoperability Project • Agency agreements are coming • We will schedule another meeting

40. Transition Intended performance with change Performance gap created By unmanaged change Performance Current Performance Typical performance with unmanaged change Change Implementation Complete Time Governance Key to Successful Transformation Current Performance Source: Technology Partners International, April 2008

41. Questions Processes are the foundations for consistency Service levelsare the expression of requirements Metrics are the transparency of performance