1. CIO Council Update on Vendor Management Initiative
January 9, 2017

2. Goals Agenda Recap of Initiative for context FY17 Focus
Vendor Management Approach for CIO Council
Top 10 FY16 Spend
Recommendations/Action Items

3. CIO Council Vendor Management Initiative
Vision for IT Procurement and Vendor Management (CIO Council)
Establish a University-wide set of practices and policies that provides useful guidance and tools for the procurement and management of IT services and products to ensure that Harvard obtains the highest value from its vendors.
Objectives
Guiding Principles
Key Performance Indicators
Establish University-wide process that defines uniform best practices and procedures for IT to engage with its customers and end users for complex IT solutions
Adopt lifecycle approach to IT procurement and vendor management
Vendor selection and contract negotiation
Centralize on single contract management system (Novatus)
Ongoing vendor management and relationship management
Establish a platform for simple, efficient commodity IT procurement (HCOM or other) – FAD submitting ITCRB proposal to replace HCOM.
Promote transparency for end users and for IT departments
Collaborate across and within IT departments
Integrate with other key stakeholders (Strategic Procurement and OGC)
Leverage economies of scale and avoid duplication of effort
Tie collected information and defined procedures to actionable business processes
KPIs for Objective #2:
2.A.
-- Frequency of use of approved-legal clauses for all HRCI contracts.
-- Office of General Council and CISO or CIO sign off of all HRCI contracts
-- Office of General Council and CISO or CIO sign off of all contracts with data-stored in the cloud
2.B.
-- Ability to report on disposition of contracts based on key attributes
-- Ability to report on number of agreements that were renegotiated to take advantage of economies of scale.
2.C.
-- All University vendors with $1,000,000 or identified as strategic will have a CIO Council approved strategy
KPIs for Objectives 1 & 3 TBD.
Red - in process Blue - complete

4. FY17 Focus: 2A and 2C
Vendor Selection and contract negotiation (Objective 2A)
Begin to document approach to vendor selection and negotiation strategies for managing the vendor
Finalize document outlining responsibilities between vendor management, strategic procurement, and office of general council (Appendix A)
Vendor and Relationship Management (Objective 2C)
Defined cost savings strategy for each IT vendor with over $1 million in University spend and those identified as strategic vendors (“Key Vendors”)
Define KPIs to be achieved FY2017 for each vendor
Report on ongoing management of above defined set of vendors

5. CIO Council Actions to Support 2C
CIO Council agreement on savings approach for each vendor
Amazon and AV Suppliers approach are 1st candidates
Will return to CIO Council in February with strategies for more Key Vendors to discuss with CIO’s
Read Quarterly VMO newsletter to ensure transparency and capture economies of scale
Distribution to begin February 2017 to all CIOs and HUIT SLT (people can be added as needed to distribution)
Will include:
Pricing for completed Key Vendor contracts
New vendors being considered/engaged
Schedule of quarterly Key Vendor meetings available so school IT staff can attend

6. Key IT Vendors (based on FY2016 spend)
Top 10 University Wide Spend
Top 10 HUIT Spend
VENDOR NAME
ATTRIBUTE
TOTAL
DELL
TECHNOLOGY
11,710,728
ACCUNET SOLUTIONS INC
NETWORK SECURITY
11,490,983
CISCO SYSTEMS INCORPORATED
11,368,896
HB COMMUNICATIONS INC
AV INTEGRATOR
8,153,886
SIERRA-CEDAR INC
CONSULTANT/TECHNOLOGY
6,515,268
VERIZON
TELECOMMUNICATION
6,358,727
MINDTREE LIMITED
6,155,060
ORACLE AMERICA INC (add'l spend with this vendor on p. 5 )
4,805,421
APPLE COMPUTER INC
4,312,166
SHI INTERNATIONAL CORP
3,925,819
VENDOR NAME
ATTRIBUTE
TOTAL
CISCO SYSTEMS INCORPORATED
TECHNOLOGY
6,910,439
SIERRA-CEDAR INC.
CONSULTANT/TECHNOLOGY
6,515,268
VERIZON
TELECOMMUNICATION
6,085,016
ORACLE AMERICA INC
4,468,077
SHI INTERNATIONAL INC
3,535,274
AMZON WEB SERVICES
2,853,206
VERIZON WIRELESS
TELECOMMUNICATIONS
1,957,478
LNC DIVISION OF EDWARD G SAWYER CO INC.
1,459,903
INTRASEE INC.
1,372,115
BANC OF AMERICA LEASINBG AND CAPITAL LLC
1,230,195
Additional university wide vendor who will be considered a Key Vendor but is not on this list because spending is not classified as IT - Siemens (spend of over $20M USD with the potential to double next year).

7. Contract Consolidation
What is contract consolidation?
Contract consolidation is the exercise of reviewing all like contracts from the same vendor, and combining them into one master agreement (if applicable). For instance, Harvard has 3 software license agreements from vendor X. Contract consolidation shall take all three contracts with different terms and conditions (and most likely pricing), and make one overarching master agreement with vendor X.
Contract consolidation is not terminating contracts and lowering Harvard’s vendor base.

8. Key Vendor #1 Amazon Web Services (AWS)
Current State- Contract Consolidation
Currently, Harvard has over 300 accounts with AWS, and University wide over $3.3 million in spend in FY2016. As with more movement to the cloud continues, this number will steadily increase. Any business owners and IT personnel can request a spin up of their own cloud, and can also accept the “click wrap” terms and conditions.
Potential Future State
With a guaranteed spend of over $1m per year, HUIT can immediately enter into an Enterprise Discount Pricing Program (EDP). A guaranteed $1m annual spend (broken into 3 payments throughout the year), will result in at least a 5% discount ($50,000).
Action
All CIO’s must agree to enter this EDP Program and filter all Amazon spend through the Enterprise Agreement.
All CIO’s must take this to their CFO’s for non CIO controlled funding.

9. Vendor Consolidation What is Vendor Consolidation?
Vendor consolidation is the practice of reviewing Harvard’s vendor base for like vendors, and choosing potentially one or two (or more depending on the exercise) to reduce redundancies and gain economies of scale. For instance, if Harvard had 4 contracts with different companies for storage service, Harvard would look at the need/relationship and decide to consolidate the vendor base.
Vendor consolidation is not forcing people to use vendors they aren’t comfortable with (within reason) or adding new vendors to the mix.

10. Key Vendor #2 Audio Visual Vendor Management
Current State:
Currently, there are 5 Audio Visual Integrators (McCann Communications, HB Communications, Adtech, DGI, B&H Photo) that have preferred status at Harvard with spend of approximately $12.7m. Each school and CIO’s have the discretion of picking their AV Integrator, and choosing whether to bid out a project or not.
Potential Future State:
Best practices tell us that 3 AV Integrators are more than enough to ensure adequate coverage within Harvard’s AV space. There is potential cost savings of 10% associated with consolidating this spend to no more than three vendors, and ensuring all projects are bid out (RFP, RFQ) for large projects ($ to be discussed) to those 3 vendors.
Action:
All CIO’s agree to choose 3 top integrators to flow AV work to. There will always be exceptions, but they shouldn’t be the rule. There will be an RFP issued to choose these top 3 integrators.
Create AV Vendor sub-group- A combination of CIO’s and CFO’s would assist in facilitating this group to select the three preferred vendors.

11. Recommendations Recommendation Status
Include SaaS and Cloud services for an accurate representation of IT spending.
Ongoing - with further outreach and education this will continuously improve.
Discuss with Ad Deans having a CIO review any HW, SW, or Cloud purchase for administrative needs to ensure correct contract protections and classification.
With Anne’s next meeting with the Ad Deans, this recommendation will move forward.
Prepare and propagate via HUIT VMO common definitions of object codes and recommends use of these codes across all Harvard schools and entities starting in FY17. VMO will periodically review and update. Schools can indicate alternate code.
Ongoing - VMO is continuing to engage and discuss. Central finance has been engaged and discussions are taking place surrounding the need for a new code versus propagating an old code.
Share entire data set of GL spending for IT with schools to promote transparency and collaboration. In time, as contract collection progresses. Visibility will be achieved via Novatus with more detail.
The VMO provided FY15 data and FY16 data shall be provided this week.

12. Appendix A VMO, Procurement and OGC Workflow
When to contact the VMO
Anytime you are:
Considering finding a vendor (new or existing) to provide a service or consolidate services
Negotiating with a vendor to obtain services
Having problems with a vendor and/or their deliverables
Preparing to switch to a new vendor
Would like assisting managing the relationship with a vendor (tiered approach)
When do I go to HUIT VMO and When to go to Strategic Procurement?
Always go to HUIT VMO – we’ll sort out the rest

13. Responsibilities Strategic Procurement RFPs Contract Repository
Vendor Risk Assessment
Market Intelligence
Contract Negotiation
Contract Review (including OGC review)
Harvard Spend Reports
HUIT VMO
Vendor Partnerships
Roadmap Alignment
Vendors Savings
Dispute Resolution