City of Minneapolis
RCA Provision of IT Services Committee of the Whole – February 11, 2015
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Background
• IT Services contract with Unisys signed 12/2002
• Unisys contract renegotiated in 2007
– Reducedcost,addedservicelevelsandservices
• Unisys contract renegotiated in 2010
– Reducedcost,outsourcedmoreservices
• Council informed IT the Unisys contract would not be
renewed in 2015 and an RFP would be required.
– Provide time for thoughtful process and potential transition to new supplier
2
Process: Phased Approach
??• Organization assessment • Make-or-buy decisions
• Core competencies
• Market analysis
• Risk analysis • Alignment
• Describe current environment
• Articulate principles and
objectives
• Identify limitations
• Request solution
• Transition
• Relationship
• Goals: Reach business objectives
• Performance assessment
Phase 1
Sourcing Strategy, RFP Creation
Phase 4
Vendor Management
Phase 2
Evaluation and Selection
Phase 3
Contract Negotiations
• Partnership opportunities • Criteria development • Selection process • Organization fit • Identification • Selection fit
??????????• Metrics • Payment models • Governance model • Provision for changes • Terms and conditions
3
2013 2014
We spent the time to do it right
2015
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
????Phase 1
? Delivery Strategy ? To Be Scope
Model
? Sourcing Strategy ? RFP Package ?BaseCaseStart
February 27, 2014 RFP Released
???Phase 2
??Phase 3
??Phase 4
??Pre-proposal conference
? Q&A
? Receive Responses
? Review & 1st
Evaluation
? Select Top Vendors
? Oral Presentations
? Workshop
(optional)
? Due Diligence ?2nd Evaluationand
Downselection
August 1, 2014 Downselect
? Term Sheet Negotiations ? Due Diligence
? Select Preferred Vendor ? Contract Negotiations
• Approvals
• Start Transition Planning
February 13, 2015 Council Action
??December 1, 2015 Transition Complete
??• Transition • Training
?We are here
4
Sourcing Principles
Elicited from Steering Committee & Working Group
• No offshoring
– Employee-facing support to be U.S. based – City data top reside in U.S.
• 24×7 support—especially for Public Safety
• High availability of systems for Public Safety and key line of business
systems
• Agile, quick IT solutions
• Innovation
– IT is forward thinking
– Ability to adopt new technology
• Flexibility—IT services are adaptive to changing needs
5
Key Sourcing Objectives
• Operational costs are in line with industry
• Minimal business disruption and business risk
• Keep barriers to exit low
• Contract levers for responding to budget reductions
• Vendor management is a core competency
• Increase infrastructure and security automation
• Suppliers are accountable for performance
• Improve quality of services as measured by client satisfaction
• Solutions evolve with industry innovations
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Evaluation Criteria
• Supplier Profile
• Relationship Management and Resourcing
• Apparent Level of Understanding
• Solution
• Fit with Sourcing Objectives and Principles
• Scope
• Transition
• Transformation
• Pricing
• Compliance and Agreement
• Terms and Conditions
• Performance
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Service Provider Changes
????Unisys
????Computing Services
Network Services
Transport (Century link)
Security Services
Service Desk & Desktop Services
????????Computing Services
Network Services
?Transport (Century link)
Security
Services (Solutionary)
Service Desk & Desktop Services
?OneNeck
City of Minneapolis
????????????8
OneNeck – Key Benefits
• Flexible, fast provisioning of new services
– ITresourceprovisioningreducedfromdays/weekstohours
• Competitive pricing relative to market and more favorable than competitors
– Noterminationfeeschedule
– Nobaselineexpenses—trueconsumptionmethodology – NoIMAC(installs,adds,movesandchanges)fees
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OneNeck – Key Benefits
• Service levels and credit methodology more favorable than competitors
– SomeSLAsat100%
– Noearnbackcapability
– Financialremediesforcriticalservicelevels – Citycanestablishnewservicelevels
• Avoids supplier lock-in through favorable termination clauses
– Terminationforcause
– Terminationforconvenience(includingpartial)
– Terminationforchangeincontrol
– Termination for lack of funds
10
OneNeck – Key Benefits
• Exit flexibility achieved through use of third party for security services, and City control of standardized equipment and tools
– IfweterminateOneNeck,wecanstilluseSolutionaryforsecurity
– CitydefinedscopemodeldrivesuseofCitydeterminedITstandards
• Local data center, close proximity of secondary data center
– EdenPrairiedatacenterbackedupbyDesMoines,Iowadisaster recover center
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Insourcing – Key Benefits
• Agility and flexibility require IT to be able to respond to changing business needs.
• Embrace consumerization of IT and advocate for department solutions.
• Provide a pipeline of employees for advanced IT positions.
• Creates jobs and aligns with City’s racial equity goals.
• Easier transition to new outsourcing suppliers.
• Cost savings long-term.
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Insourcing Structure
• IT Service Desk
– 17 FTEs help employees 24×7 with IT service needs, installs, changes and problems
• (3) Service desk supervisors
• (10) Service desk agents
• (1) Configuration management coordinator
• (3) Business analysts
• Employee Computing: Desk-side Support
– 13 FTEs install and maintain IT hardware and software
• (1) Supervisor
• (9) Support technicians
• (1) Windows engineer
• (2) COTS application support and packaging technicians
• IT Service Management (ITSM) software
– 2 FTEs structure and automate workflow for tightly integrated delivery and management of IT services
• (1) ServiceNow administrator
• (1) Business analyst
• Support position
– 1 FTE to negotiate, support and manage outsource provider to provide oversight and compliance auditing
• (1) Contract administrator
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?Financial Information Managed Services Transition In Thousands
?????Year 1
Year 2
??Year 3
????Year 4
Year 5
???????TOTAL
Annual Cost – Unisys (Existing Model)
13,309




??13,309
??New Managed Services Contract
3,884
4,628
4,606
4,502
4,402
??22,022
??City Insource Staffing
3,499
2,874
3,101
3,337
3,414
16,226
Other City Managed Costs*
188
2,123
2,123
2,123
2,123
??8,680
Contingency**
2,280
630
630
630
630
??4,800
Annual Cost – New Model
9,851
10,255
10,460
10,592
10,569
??51,728
????Total Projected Annual Cost
23,161
10,255
10,460
10,592
10,569
65,037
* Network Hardware, Licensing, Desktop Refresh
????**Pillsbury, Projects, Transport, OEM Maintenance, Unisys
????2010
2011
2012
2013
Est 2014
Proj 2015
??Information Technology/Intergovernmental Services Fund Balance History ( in thousands)
?16,900
??22,200
27,400
?37,400
??45,800
35,800
????????????????????????????????????????????????????????????????????????????????????14
Request for Council Action
• OneNeck IT Solutions LLC 5 year contract with three 1 year options to renew, total contract value not to exceed $22,025,000.
• Increase Pillsbury Winthrop Shaw Pitman contract by $642,000 for a dedicated transition resource.
• Execute all necessary documents for transferring assets from Unisys to the City.
• Approve 2015 budget amendment for IT to provide for: – 33FTEsforServiceDeskandDesksideservices
– Costsassociatedwithtransitiontonewserviceprovider
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City of Minneapolis
RCA Provision of IT Services Questions?
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