DISA Computing Services Transformation Announcement DISA Computing Services Transformation Announcement 14 March 2003

2 What Are We Today? A professionally run data processing organization Tightly coupled with customers – particularly at some sites –Service provider and customer collocated Not as secure, available, efficient as we should be Too much process –Too hard to bring in new work –Too hard to acquire things –Not easily or quickly scalable

3 Must Remain Relevant Change – Speed – Velocity We have a lot of organizational friction –Too many SLAs –Too many bills –Too much process Need to be more scalable Transformation is a continuing journey – not an event Leads to Reduced agility

4 Assessing the Environment Changes driven by –The need to retain military control –Preservation/enhancement of security/availability –Understanding the criticality of the data processed –Pursuit of best practices Continuous comparison against commercial entities –Business-focused data processing SprintMCI WorldComBank of America NASDAQNYSE –Outsourcers EDSACS

5 Things to Remember… This is not about DISA Computing Services This is not about numbers and cost This is about combat support processing – and what is best for this country This is about stewardship of the taxpayers money Prudence and good judgment will prevail

6 Initiatives Consolidation of systems management Consolidation of mainframe processing and implementation of assured computing Consolidation of DFAS server processing Management restructuring Elimination of non-core work

7 Transformation Features Mainframe consolidation –5 IBM sites to 3 –3 Unisys sites to 2 DFAS server consolidation Systems management center (SMC) consolidation –15 sites to 4 –Enhances scalability Restructured management to centralize business and overhead functions Through technology and based upon best commercial practices Early 2003 start 30 months to complete Self-financed in DWCF

8 Transformation Results Transformation of combat support processing Saves substantial money – $416M FY03-06; $143M per year at end state Reduces civilian end strength –1200 billets Streamlines processes and management Enhances a trusted, continuously available environment for information –Applies assured computing concepts –Retains military control –Dramatically improves scalability Accommodate IC data processing Prepare to host net-centric enterprise services All reflected in POM

9 Computing Services The Bottom Line Computing Services The Bottom Line On-board September 30, 2002: 2,345 Projected by the end of FY 05: 1,173 (may vary as needed for actual implementation) On-board March 10, 2003: 2,229

10 Unisys Mainframe Processing SMART Phase I already selected the two Unisys mainframe sites –Ogden –Oklahoma City San Antonio workload to be gone in FY 2003 Consider all Unisys processing as legacy No further Unisys selection necessary Results: Designation of Ogden & Oklahoma City as Unisys mainframe processing sites

11 OS/390 Mainframe Consolidation Business case and risk analyses determined that existing five sites should be consolidated to three Rank sites using fair, objective, quantifiable and defendable criteria reflecting best military value –Facilities, Availability, Environment and Risk Top three sites will be selected from ranked list Results: Selected Mechanicsburg, St. Louis and Ogden as three OS/390 processing sites

12 DFAS Server Consolidation DFAS requested consolidation of server workload into two mainframe processing sites –DFAS workload scattered over many processing sites – consolidation makes DFAS consistent with other customers –DFAS consolidation saves $2.0M per year –Consolidation offers potential for rationalization of DFAS processing, fewer points of contact for DFAS HQ & CDAs –Consolidation increases DFAS efficiency and effectiveness, and positions them to implement the FMIP Rank sites using fair, objective, quantifiable and defendable criteria reflecting best military value –Facilities, Availability, Environment and Risk Top two sites will be selected from ranked list Results: Selected Ogden and Mechanicsburg as DFAS server sites

13 Management Restructuring Engineering and Architecture Business Management –Combines traditional overhead functions –Centralizes Resource Management, Business Management, Workforce Management, Logistics –Regional offices aligned by customers –Establishes senior customer reps at NCR Headquarters –Establishes liaison positions at SMCs

14 Programs and Systems Implementation Operations –Operational control and technical leadership of the SMCs –Processing Elements report to Operations –Central staging and configuration management site Lines of business Management Restructuring

15 Remote Management of Processing Elements Objectives: –All systems management will be consolidated into four SMCs Strategy: –Establish Processing Element sites with minimal staffing for facilities/physical security, touch labor –Utilize ESM/automation tools to remotely manage servers, mainframes, communications at Processing Elements –Transition application knowledge and customer support to SMC Operational Support Teams (OSTs)

16 Selection Approach Ultimate goal is timely, low risk, successful trans- formation of computing operations and organization Build on proven methodology Selection criteria should be objective, quantifiable, fair, defendable and consistent with previous usage Leverage existing capabilities to minimize implementation risk and maximize savings Consolidate and centralize to gain economies of scale, operating efficiency and reduced cost to DOD Maintain management flexibility by retaining lights- dim sites with optimal staffing Transformation planning must result in a single, integrated plan addressing operational functions, technology issues & reorganization

17 SMC Selection (1) Consolidating operational control and system admin functions into System Management Centers is the driving force behind computing Transformation Consolidate SMC functions now performed at 17 sites –Each architecture must be supported by at least two sites –Solution must meet implementation timeline – too few sites drag out the implementation timeline too long, delaying savings and increasing implementation risk –Leverage existing capabilities by selecting sites that have the largest workloads –Select minimum number of sites needed to ensure survivability, maximize probability of operational success and minimize cost –Minimum of three sites required to provide the redundancy necessary to guarantee high overall availability

18 SMC Selection (2) Leverage existing capabilities by selecting SMC sites using workload criteria: –Designate sites remaining that support all 3 architectures as SMCs –Designate largest (most MIPS) OS/390 site as an SMC –Designate largest (most total servers managed) Server site as an SMC –Designate largest (most SUPs) Unisys site as an SMC Results: Selected Ogden, Mechanicsburg, Montgomery and Oklahoma City as Systems Management Centers

19 Central Staging Site Central receipt and staging location for new server and comm equipment Objectives –Provide single technical and logistics entry point for receipt control –Centralize asset management and inventory control –Standardize configuration build Management approach –Located at Chambersburg to capitalize on Logistics, FSO, Processing Element co-location –Core of technical expertise, to be supplemented with contractors based on workload

20 Processing Elements All workload remotely managed from SMCs 24x7 touch labor –Comm devices –Storage media management Site overhead –Facilities management –Hardware support –Physical security Five government civilians and up to 10 contractors (2 per shift) Plus a few site uniques

21 Transformation Selections Selected Sites

22 Management Restructuring Centralize/consolidate management and overhead functions Retain non-mainframe, non-SMC sites as lights-dim operations with optimal staffing Results: SMCs: Montgomery, Oklahoma City, Mechanicsburg, Ogden Processing Elements: Huntsville, San Diego, Denver, Jacksonville, Warner Robins, Rock Island, St. Louis, Denver, Dayton, Chambersburg, San Antonio, Norfolk and Puget Sound Headquarters: Virtual HQS at multiple locations

23 Transition over the next 30 months DECC and detachment structure will be eliminated All business functions will be integrated and consolidated into a single, virtual management organization – located in several places Transition plan will be developed between each DECC and the new Business Management Office for the migration of specific functions Management Restructuring

24 Staffing Denver PE

25 Staffing Processing Element Columbus Baseline - 9/30/02 Civilian284 Contractor36 Current civilian on-board:269 End-state:SMC0 PE15 HQ0 Total15 Civilians5 Contractor10 Civilian loss from current:264

26 NOC Denver Restructuring NOC On-Board Strength as of 30 Sep Disestablish NOC (except DMS)- 83Establish Network Services NIC 26 Establish DISN Help Desk 14 TOTAL IMPACT - 43 Projected Strength (30 Sep 2005) 50

27 TOTAL TOTAL SITE START STAFF NET CHANGE END STAFF Alabama CSHQ Montgomery SMC Montgomery CSPE Huntsville California CSPE San Diego Colorado CSHQ Denver CSPE Denver Florida CSHQ Pensacola CSPE Jacksonville State-by-State Restructuring

28 TOTAL TOTAL SITE START STAFF NET CHANGE END STAFF Georgia CSPE Warner Robins Illinois CSPE Rock Island Missouri CSHQ St. Louis 0 33 CSPE St. Louis Ohio CSHQ Dayton CSPE Columbus CSPE Dayton NOC Columbus* * A total of 93 personnel are assigned to NOC Denver; however, 34 are resourced from Computing Services. The remaining 59 are resourced by the Telecommunications portion of the Defense Working Capital Fund. State-by-State Restructuring

29 TOTAL TOTAL SITE START STAFF NET CHANGE END STAFF Oklahoma CSHQ Oklahoma City 099 SMC Oklahoma City Pennsylvania CSHQ Chambersburg CSHQ Mechanicsburg SMC Mechanicburg CSPE Chambersburg Texas CSPE San Antonio Utah CSHQ Ogden SMD Ogden State-by-State Restructuring

30 TOTAL TOTAL SITE START STAFF NET CHANGE END STAFF Virginia CSHQ Fall Church CSPE Norfolk Washington CSPE Puget Sound OCONUS State-by-State Restructuring

31 Computing Services Processing Element Denver

32 Planned Transformation Actions MIGRATION INITIATIVEFROMTO COMPLETE SMC Consolidation Remote Network MgmtDenverOk CityMay 03 Remote Server MgmtDenverOk CityJul 03 Management RestructuringJul 03 Non-Core/LegacyApr 04

33 Human Resources Timeline Announce CSD Transformation 14 Mar 03 Open DISA Referral Program14 Mar 03 Conduct Town Hall MeetingsApr - May 03 Conduct DFAS RIF BriefingsApr - May 03 Review of OPFs by Employees31 Mar – 4 Apr 03 Update Resumes (Employees)7 Apr – 15 Apr 03 Open VSIP/VERA Window14 Apr – 2 May 03 Conduct Mock RIF 2 Jun – 6 Jun 03 Issue Mock RIF Notices9 Jun – 13 Jun 03 Review Need to Open Add’l V/V Window 23 Jun – 31 Dec 03 Issue Final RIF Notices/Mandatory PPP Registration9 Feb – 13 Feb 04 Affect RIF8 Jun – 11 Jun 04

34 Human Resources Support DOD Priority Placement Program DISA Referral Program Relocation Bonuses Retention Allowances Spouse Placement Permanent Change of Station Voluntary Early Retirement Authorization (VERA) Voluntary Separation Incentive Pay (VSIP) Expanded VSIP Phase II Reduction In Force (RIF)