Evaluating Efficient and Effective Delivery of IT Services

Page A-iv

IT LeaderPath Capstone Project

“Evaluating Efficient and Effective Delivery of IT Services”

Contents

1 Introduction 2

1.1 Project Topic 2

1.2 The Leadership Challenge 2

2 Objective/Goals 2

3 Strategy 3

3.1 A Phased Approach 3

3.2 Assumptions 3

3.3 Unknowns 3

3.4 Approaches Rejected 4

4 Methods and Techniques 4

4.1 Incorporated Methods and Techniques 4

4.2 Considered but Not-Incorporated Methods and Techniques 5

5 Process 5

5.1 Agreement on a Common Understanding of the Topic 6

5.2 Identification of Resources and Information Gathering 6

5.3 Agreement on How to Proceed with Topic 6

5.4 Preparation of Written Report and Final Presentation 7

6 Results 7

6.1 Return on Investment (ROI) 7

6.2 Economies of Scale 8

6.3 Accuracy in Budget Numbers 9

6.4 Agency Feedback 10

6.5 DIS’ Role 14

7 Lessons Learned 15

Appendices

Appendix A IT Report Executive Summaries A-i

Tables

Table 71 Leadership Lessons Learned Table 15

Table 72 Subject Matter Lessons Learned Table 16

1 Introduction

1.1 Project Topic

Budget and policy decision makers at the State level do not know the cost of IT services or functions at a level needed to evaluate options and make choices for the delivery of those services. They do not know how much each agency spends on storage, servers, help desk, security, networks, etc. and 1) Whether that service is effective, 2) Whether there are cheaper alternatives and 3) Are there economies of scale apparent when considering the sharing the service. How can the State consistently gather this type of information to make informed choices and then track the impact of strategic decisions over time based on this information for cost per employee, service and/or function?”

1.2 The Leadership Challenge

The fundamental leadership challenge is how we as a State find common ground to solve this problem. There is a communication gap between the Legislature and agency leaders in how IT is managed at the enterprise level. It’s deep-rooted at agency level processes that are not shared until they are presented to law makers. We must find a way to open up that line of communication, indentify a path of approach and foster an environment of mutual understanding before we can address a root cause.

2 Objective/Goals

To describe how the State should provide efficient and effective delivery of IT services at the enterprise requires a thorough understanding of the current mechanism of how IT is delivered throughout the State. None of the team members of this project are experts of this process nor have the breadth of knowledge that can capture this accurately, however, we as IT Managers and experts in our own IT fields know enough within our own agencies and deal with IT costs on a ongoing daily basis to provide ideas and recommendations. Combined with our research, interviews with resident experts/key stakeholders and our assessment of studies of the same topic, we are in a unique position to provide a point of view that could be insightful to those decision makers at top.

The goal of this project is to provide our perspective of the issue. This report documents how we would go about tackling the problem if left for our devices to solve. Additionally, we offer this document to those in executive management as avenues of approach that may not have been considered.

3 Strategy

The strategy developed by the team was to take this large topic and break it into phases.

3.1 A Phased Approach

During the first phase we decided we needed a common understanding of what this capstone project was about. A number of team meetings were set up to discuss this topic in order to come to a general understanding of its purpose. We sought out studies, legislative bills and any existing laws pertaining to this topic to get a more detailed understanding of the issue, the players involved, and potential solutions and pitfalls. By first reading what we could about the topic our hope was that we could, as a group, ask more intelligent questions during our interview phase.

The second phase was to discuss the topic with others outside our group. We discussed our broader understanding of the project topic with our Steward (Allen Schmidt, OFM) in an effort to get his input on the topic purpose, understand the project definition in finer detail, and discuss the current direction of the team to ensure we were headed in the right direction.

At this point we agreed that interviewing several key decision makers and stakeholders at managerial and policy-making levels would round out the key pieces we needed to provide quality recommendations for our project. We interviewed individuals who had a much deeper understanding of this issue and could explain in their own words what they saw as the direction this state should be headed, and why.

3.2 Assumptions

Since we had a limited amount of time to develop this capstone project certain assumptions had to be made, namely; we would not be able to interview everyone we would like to regarding this topic; interviews we did obtain would most likely not be able to be followed-up by a second interview. We needed to do what we could to develop the best set of questions ahead of time, and prioritize them, since we had a very limited amount of time with each of the interviewees.

Other acknowledgements included knowing that certain individuals may not be as forthcoming as others in divulging information due to the political climate and/or other agendas. Care needed to be taken to validate certain pronouncements against a known set of base information that we already had.

3.3 Unknowns

One of the several unknowns regarding this capstone project was the current Identification/Standardization/Consolidation process other states have already undertaken in previous years, and the results they have seen regarding reduced state expenditures on Information Technology. If we are to continue down this path as a state, this team feels that it would be beneficial to identify those states that have been performing this exercise longer than we have and to make an honest assessment whether those states are seeing the cost savings that were promised.

3.4 Approaches Rejected

Due to the time constraints of this project the team continually had to prioritize what work would be done. In doing so, certain items along the way had to be left behind: individuals that could have been interviewed, surveys that could have been created seeking additional information from a broader group of individuals, and studies that other states have undergone when faced with similar budgetary issues.

4 Methods and Techniques

Our team incorporated product research and interviews into our approach to evaluate our Capstone Project topic.

4.1 Incorporated Methods and Techniques

4.1.1 Product Research

Numerous documents were collected by team members to evaluate. These included:

· House Bill 3178: Creating Efficiencies in the Use of Technology in State Government, Washington State Legislative Session, 2010 Regular Session.

· Senate Bill 6579: Maximizing the Efficient Investment In and Application of Technology, Washington State Legislative Session, 2010 Regular Session.

· State Administrative & Accounting Manual - Attachment 1: Information Technology Coding Proposal for IT Expenditures, Washington State Office of Financial Management, March 2010.

· State Administrative & Accounting Manual - Attachment 2: Information Technology Questions Being Asked Today, Washington State Office of Financial Management, March 2010.

· State Administrative & Accounting Manual - Attachment 3: Common Enterprise Information Technology (IT) Definitions, Washington State Office of Financial Management, March 2010.

· Moving Washington’s Information Technology Forward: 2009 – 2011 Strategic Plan, Washington State Department of Information Services, June 2008.

· State of Washington, 2008 – 2014 State Strategic IT Plan, Washington State Department of Information Services, February 2008, Revised November 2008.

· Washington State Shared Services Model, Washington State Department of Information Services, October 15, 2009.

· 2009 Data Center Assessment, UNISYS & Excipio Consulting under contact with Washington State Department of Information Services, December 15, 2009.

· IT Services and Costs Study, Technology Partners International, Inc. under contract with Washington State Auditor’s Office, December 8, 2009.

· State Government Performance Review: Opportunities for Washington, Washington State Auditor’s Office, Reissued January 2010, Report No. 1002726.

· Information Technology Work Group Report, Information Technology Work Group, November 30, 2007.

· An Evaluation of Washington State’s Approach to Information Technology, Pacific Technologies, Inc. under contract with Information Technology Work Group, July 10, 2009.

· The Connection, Washington State Office of Fiscal Management, Spring 2010.

4.1.2 Interviews

Team members either together or individually conducted interviews with the following individuals to gather information for our Capstone topic:

· Tony Tortorice, Director, Department of Information Services (DIS)

· Mike Ricchio, Assistant Director, Management and Oversight of Strategic Technologies Division for DIS

· Allen Schmidt, Statewide Financial Systems Manager, Accounting Division, Office of Fiscal Management (OFM)

· Tim Crabb, Infrastructure Services Manager, Washington State Department of Transportation (WSDOT), Office of Information Technology (OIT)

· Lyle Tillett, Information Technology Services Manager, Department of Retirement Systems (DRS)

· John Daane, IT Operations Manager, Department of Natural Resources (DNR)

4.2 Considered but Not-Incorporated Methods and Techniques

4.2.1 Surveys

Our team discussed and producing a survey to solicit additional feedback from parties who participated in select studies we focused on. The broad topic led us to have difficulty in determining which topics we would want to focus on for a survey. In the end, we determined that time did not permit us to solicit the feedback we desired, so in turn, we conducted more interviews.

4.2.2 Balanced Scorecard

An attempt was made to develop a balanced Scorecard for our project, but we determined that because of the broad topic, it was difficult to use this tool in a manner that effectively brought benefit to our project. The result set for this project, as we were able to develop it, was at a high, conceptual level. The Balanced Scorecard tool is most useful for weighing the pros and cons to specific objectives.

5 Process

The process used evolved naturally through frequent communication, discussion and collaboration among team members. All team members were comfortable voicing their opinions and contributions, and team meetings were focused and productive. At the outset the team met monthly, and then established a schedule of regular bi-weekly meetings with additional meetings scheduled as needed for interviews.

5.1 Agreement on a Common Understanding of the Topic

Much discussion was held around what, exactly, our topic — “Evaluating Efficient and Effective Delivery of IT Services” — was addressing, and what response was expected of us as a team. The team analyzed the topic paragraph repeatedly and in great detail. It was agreed that the topic is very broad, and that the issues it raises are being actively addressed at the state level as mandated by the Governor and House Bill 3178. It was decided to proceed with information gathering as a first step.

5.2 Identification of Resources and Information Gathering

Because our topic essentially addresses an effort already actively underway at the state level, there is a great deal of published information available. The team also recognized the importance of more qualitative data; information that could be collected through interviews and less formal discussions with agency CIOs and others key stakeholders.

5.2.1 Review of Published Documents

Because of the volume of information available, the team agreed on a collection of key documents for review and analysis, and the individual documents were assigned to team members. Each team member was responsible for reviewing their assigned document(s) and developing a kind of “Executive Summary” for the group. The documents reviewed by the team are noted in section 4.1.1 above.

5.2.2 Gathering Qualitative Data

Team members scheduled formal interviews with the Director of DIS and one of the Assistant Directors of DIS. Less formal discussions or interviews were held with several agency CIOs or IT managers. We also discussed the topic at length with our assigned steward.

5.3 Agreement on How to Proceed with Topic

Following the initial learning phase, the team held what could be considered a milestone meeting to review data and brainstorm how to proceed with the topic. During this meeting we concluded that it was not possible to fully address every issue raised in the topic paragraph, and that we needed to narrow our focus. As a group, we determined that we would focus on five key subject areas that repeatedly came up in the research materials, interviews, and in our own brainstorming sessions. The five key subject areas are:

1) Return on Investment

2) Economies of Scale

3) Accuracy in Budget Numbers

4) Agency Feedback

5) The Role of DIS

5.4 Preparation of Written Report and Final Presentation

Each team member was assigned one of the five subject areas to cover for the written report and final presentation. The subject area results are covered below in Section 6. During this final step of the process, the team met frequently to review and critique the document as it evolved. We also reviewed the materials presented during the IT LeaderPath series to see how they might apply to preparation of the final documents.

6 Results

6.1 Return on Investment (ROI)

There has been discussion of the best ways to cut IT costs; although, through interviews and reviewing the numerous studies on the issue we have determined that the discussion is more accurately about perceived Return on Investment (ROI). There is a perception that the state is not receiving as high an ROI on their IT expenditures as other states and that, through more centralized control, consolidation and shared services efforts we could increase the efficiency of IT spending.

The results of our research and interviews shows that there is no ‘silver bullet’; no single endeavor that will substantially reduce the cost of providing the level of IT service that currently exists. Instead, in the words of DIS Director Tortorice, there are “a thousand leaky faucets”; many, but smaller, opportunities to reduce the level of IT spend in the state.