City of Minneapolis IT Outsourcing Why We Outsource & How We Measure Success Karl Kaiser, CIO

City of Minneapolis IS Vision Business Information Services (BIS) will transform City government to be more integrated, customer centric, efficient, accountable and accessible Our Mission: Drive Effective Management of City Government Lead change and improving business outcome Implement business needs-driven IT solutions Improve City results and operations Implement a results-based culture and management system Provide cost-effective, efficient & reliable information services

Pre-Outsourcing Environment Approximately 4,500 employees 150+ servers (Sun, IBM, Unisys, Compaq) More than half of installed technology had reached obsolescence Funding sources for technology refresh were scarce No 24/7 support which is critical for public safety and Internet/Web support No disaster recovery/back-up data center facility Space lease expiration required relocation of city’s data center

Reasons to Outsource Management Issues Installing & maintaining computers is no longer a core function of internal IS departments Nearly 60% of IT budget and considerable management energy focused on keeping IT infrastructure operational IT Management and staff distracted from their core mission of providing information services required to run the City’s business Because of salary constraints more than 1/3 of IT operations staff were expensive contractors Inefficient customer service delivery

Key Business Drivers Cost Savings One-time Cost Avoidance Issues Reduction in the use of high cost contract employees Predictable cost for hardware and systems software maintenance software leases and licensing fees Reduced operating costs One-time Cost Avoidance Issues Public Works Merger - $1.5M Disaster Recovery - $4.5M Data Center Relocation - $3.5M Operating Cost Issues Providing 24x7 support – cost increase of $1.6M per year Technology Refresh/Upgrades – about $6M per year Strategic Focus away from technology to business needs

Our Approach to Outsourcing Transfer of all IT assets PDAs, PCs, laptops, routers, switches, servers, printers Purchased by outsourcing vendor (Unisys) at Fair Market Value Physical migration of all servers Migrated to outsourcer’s data center Outsourcer to assume all support functions: Desktop/laptop/PDA “break/fix” support LAN/WAN, Systems Monitoring and Administration – 24x7 Software License Administration Physical Database Administration (MS SQL, Oracle) Data Center Hosting (100+ Servers) Technology Planning and Refresh Strategy Disaster Recovery 911/ECC Technology Upgrade Help Desk functions

The Importance of Partnership in Vendor Selection Outsourcing is like a marriage A divorce can be very expensive This is a relationship contract This is not so much about technology; it is mostly about people and collaboration

How To Measure Success Service Level Agreements (SLAs) Necessary, but not the primary indicator for success Use SLAs like the Dashboard of your car… If a warning light comes on, work with your service company to fix the problem Customer Satisfaction Best indicator for Success Frequent Customer Satisfaction Surveys Solicit feedback after service call completion City/Vendor Relationship This is about excellence in Customer Service Customer Service is about Peoples’ Attitudes Focus on the Relationship Be collaborative; work hard to avoid finger pointing

Benefits Dramatically Increased Service Level Agreements $20+ Million Cost Savings Most Importantly: a Shift in Focus away from technology for its own sake… to services that add value for the business

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