ETS Rate Model Development 2015/17

Agenda Brief History of ETS Rates Development Outcomes of Rate Development Processes Benefits of using proposed rate methodology Service Lines Process & Key Planning decisions Timeline Rate Elements Customer Input

Rate Development History Assessment Finance Committee FullCost Refining 2013 Rate Usage Lessons Learned Transparency

History – Lessons Learned Iterative Methodology Adjustments Defining Services Units Cost Allocations Resulted in continuous rate adjustments Rate Transparency requested

Today’s Rates Bringing forward learning from the past True Cost of Delivering a Service Eliminate subsidization

Process Compensation HW/SW Maintenance Overhead Forecast Costs Forecast Usage ÷ = Unit Rate Pricelist Customer Budget Estimates by Customer by Service line Trend Analysis Growth Projections Customer Feedback Forecast Usage × =

Outcomes & Benefits List of products and services Clearly defined Discrete products Stabilize rates Collaborative planning with customers Refine our usage and cost projections Investment vs. Refund

Outcomes & Benefits cont. Publish Rate & Pricelist Eliminate subsidization True cost of service delivery Budget predictability A-87 compliant rates Service Benchmarks Demonstrate value for services provided

Questions ?

Rate Sheet & Pricelist Example

CUB Responsibilities Review and approve methodology Key meetings to review work to date Transparency of rate model includes internal and external scrutiny Final layer of CUB scrutiny Final rate approval

ETS Rate Methodology Define services to meet business demand Unit descriptions Forecasted current customer usage & growth New customer projects New customers

ETS Rate Methodology cont. Pessimistic and optimistic forecasts Staffing assumptions Forecasted external Forecasted overhead costs

Service Rate Development Rate Development ETS Management Review Customer Review CUB Governance Review Pricelist & Rates

ETS Rate Model and Project Timeline

ETS Services Lines Application Services Application Delivery E-Government Data Network Services Local Area Network State Network Access Data Storage Services Backup Data Storage

ETS Services Lines cont. IT Professional Services Managed Computing Services Collocation Hosting Workplace Productivity Services Computer Lab Desktop Services Enterprise Phone

Example of a Computing Rate

ETS Rate Development - Common Terms FullCost ™ Tool Tool used to define services, develop business plan, budget planning and calculate rates Budget Units An aspect of our planning tool that allows the ETS budget to be segregated by services offered Internal Costs Buy and sell services within the organization

Common Terms cont. External Costs Expenses paid outside the organization Deliverables A service or product sold to the customer Cost Pools A collection of costs spread across more than one deliverable or allocated to a specific service

Key Messages CUB & ETS experience Value Collaborative Planning Thank you!!!