Best Practice in IT Consolidation

1. Office of the Chief Information Officer For Official Use Only, Limited Distribution Best Practice in IT Consolidation

2. Agenda Does anyone have an update on who is leading the Masters?????

3. Topics Change Nuggets Drivers to consolidation My 4 Opportunities What I�ve Learned Why John�s Strategic Planning Assumption is so skewed (why do we fail?)

4. If you want to make enemies � try to change something!

5. It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.

6. In times of change, learners inherit the Earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists. Eric Hoffer (July 25, 1902 (or 1898) � May 21, 1983) was an American social writer. He produced ten books and was awarded the Presidential Medal of Freedom in February 1983 by President of the United States Ronald Reagan. His first book, The True Believer, published in 1951, was widely recognized as a classic, receiving critical acclaim from both scholars and laymen. Eric Hoffer (July 25, 1902 (or 1898) � May 21, 1983) was an American social writer. He produced ten books and was awarded the Presidential Medal of Freedom in February 1983 by President of the United States Ronald Reagan. His first book, The True Believer, published in 1951, was widely recognized as a classic, receiving critical acclaim from both scholars and laymen.

7. If you don't like change, you're going to like irrelevance even less.

8. I cannot say whether things will get better if we change; what I can say is they must change if they are to get better. Georg Christoph Lichtenberg (1 July 1742 � 24 February 1799) was a German scientist, satirist and Anglophile. As a scientist, he was the first to hold a professorship explicitly dedicated to experimental physics in Germany. Today, he is remembered for his notebooks published posthumously, which he himself called "waste books", using the English bookkeeping term.Georg Christoph Lichtenberg (1 July 1742 � 24 February 1799) was a German scientist, satirist and Anglophile. As a scientist, he was the first to hold a professorship explicitly dedicated to experimental physics in Germany. Today, he is remembered for his notebooks published posthumously, which he himself called "waste books", using the English bookkeeping term.

9. Change is the law of life. And those who look only to the past or present are certain to miss the future.

10. You can judge your age by the amount of pain you feel when you come in contact with a new idea. Pearl Sydenstricker Buck, most familiarly known as Pearl S. Buck (birth name Pearl Comfort Sydenstricker; Chinese: ???; pinyin: S�i Zhenzhu) (June 26, 1892�March 6, 1973), was a prolific American writer who won a Nobel Prize in Literature and a Pulitzer Prize.Pearl Sydenstricker Buck, most familiarly known as Pearl S. Buck (birth name Pearl Comfort Sydenstricker; Chinese: ???; pinyin: S�i Zhenzhu) (June 26, 1892�March 6, 1973), was a prolific American writer who won a Nobel Prize in Literature and a Pulitzer Prize.

11. We are not to expect to be translated from despotism to liberty in a featherbed.

12. Drivers to Consolidation Generally by Executive Fiat Perception that there is money to be saved IO Budget 70% of enterprise IT budget Pressure to reduce costs Agility, Flexibility Standardization in products, services, process, security Promise of the Future � Virtualization, Utility Computing Benefit mission by consolidating and realizing economies of scale Empire building

13. Is the Road Smooth? Gartner Strategic Planning Assumption � Through 2010 fewer than 20% of governments pursuing major consolidations or shared services initiatives will achieve their intended benefits *��. *Government Consolidation and Shared Service Efforts Will Continue to Struggle � John Kost and Richard G. Harris Jan 2, 2008

14. What Kind of Problem is IT anyway? Is the consolidation of IT a technical problem or an adaptive one? the process or state of changing to fit a new environment or different conditions, or the resulting change

15. My Experience in Leading IT Consolidation 4 Opportunities Small Army business entity with decentralized IT control Army Tenant Installation with 70 tenants most providing their own IT support (potential for 15,000 seats) Large (8000+ seats) civilian agency with geographically dispersed user population Large (6000-12000) civilian agency, with HQ centralized in a single building and environment and regions currently outside Tobyhanna VERY resistant to change � whole region NOT a change culture Aberdeen not much better (Army tradition!) and the region (rural)Tobyhanna VERY resistant to change � whole region NOT a change culture Aberdeen not much better (Army tradition!) and the region (rural)

16. Opportunity #1Small Army business entity with decentralized IT control Challenge: Bring all IT within the business entity under central control Factors bearing on challenge: Perception that �they� were better than �we� No cost baseline exists No performance baseline exists Transition from dumb-terminals to client-server Unique Executive sponsorship Tobyhanna Army Depot Consolidation by Executive Fiat Driver: Trust or lack thereof�..leadership wanted performance data Value proposition � PCs in exchange for dumb terminals and cool productivity software with Windows including e-mail Treated as a technical problem, not a change/adaptive one. Didn�t even know there WAS a political dimension back then (I was the �boy boss�) Unique sponsorship, while not engaged, feared by everyone which ultimately had the same effect�..threaten the dissenters with the leadership! Results: succeeded in consolidating because folks sort of were ready to see what a PC looked like, and were REALLY afraid I�d rat them out to the bossTobyhanna Army Depot Consolidation by Executive Fiat Driver: Trust or lack thereof�..leadership wanted performance data Value proposition � PCs in exchange for dumb terminals and cool productivity software with Windows including e-mail Treated as a technical problem, not a change/adaptive one. Didn�t even know there WAS a political dimension back then (I was the �boy boss�) Unique sponsorship, while not engaged, feared by everyone which ultimately had the same effect�..threaten the dissenters with the leadership! Results: succeeded in consolidating because folks sort of were ready to see what a PC looked like, and were REALLY afraid I�d rat them out to the boss

17. Opportunity #2Army Tenant Installation with 70 tenants most providing their own IT support Challenge: Consolidate IT on the installation under central control Factors bearing on challenge: Perception that �they� were better than �we� Track record as the IT Mafia No cost baselines exist No performance baselines exist Installation faced with public/private competition No Executive sponsorship Aberdeen Proving Ground Driver � put organized crime out of business and improve communications on the installation About this time I went to SEF at KSG � and learned about adaptive problems, the political dimension and productive disequilibrium! IT Mafia � very real�..provisioning by �favors� � kiss the �Don�s� ring. Indictments! Appealed to the workforce (adaptive approach) � field of dreams � customer would come willingly to us. A/76 Public Private competition as an opportunity � consolidated installation level functions to achieve synergy and to lock in an unalterable course of action � recognizing the shelf life of the leadership. (not exactly unalterable was it??!!) Engaged fellow IT leaders through establishment of a governance entity explicitly chartered to leverage resources through cooperation and co-production Results - Succeeded in establishing a consolidated centralized management center and organization, and consolidated network infrastructure. Doubled number of supported seats via field of dreams approach and good marketing � here�s our number, do better, AND join for 6 months and if you are not satisfied, we will help you revert. Aberdeen Proving Ground Driver � put organized crime out of business and improve communications on the installation About this time I went to SEF at KSG � and learned about adaptive problems, the political dimension and productive disequilibrium! IT Mafia � very real�..provisioning by �favors� � kiss the �Don�s� ring. Indictments! Appealed to the workforce (adaptive approach) � field of dreams � customer would come willingly to us. A/76 Public Private competition as an opportunity � consolidated installation level functions to achieve synergy and to lock in an unalterable course of action � recognizing the shelf life of the leadership. (not exactly unalterable was it??!!) Engaged fellow IT leaders through establishment of a governance entity explicitly chartered to leverage resources through cooperation and co-production Results - Succeeded in establishing a consolidated centralized management center and organization, and consolidated network infrastructure. Doubled number of supported seats via field of dreams approach and good marketing � here�s our number, do better, AND join for 6 months and if you are not satisfied, we will help you revert.

18. Opportunity #3Large (8000+ seats) civilian agency with geographically dispersed user population Challenge: Bring all IT except for Largest Divisions under central control Factors bearing on challenge: Perception that �they� were better than �we� No cost baseline exists No performance baseline exists Services contract already in place � wrong deal Executive sponsorship transitions out HHS Mean, mean constituency! Walked into a deal that was in infancy, wrong deal for the consolidation initiative. (cost reimbursement, mix of fed and contractors in infrastructure, no performance requirements) Executive sponsor elevated in organization, new role player did not have same level of engagement Had to stabilize and improve services while transitioning to a new deal and extending the consolidation to include regional sites. Unwilling staff Poor contract support Under-resourced Unwilling constituency Could succeed if any one of the 4 was strong Handed consolidation of CIOs to go with challenge! Responsibility without authority � surefire way to fail. The COCO story � metrics proving that while there was no baseline for comparison, we pushed the bar up for performance via SLAs, and had industry leading seat costs �BUT despite overwhelming evidence (measurement) to the contrary, it was better in the olden days! HHS Mean, mean constituency! Walked into a deal that was in infancy, wrong deal for the consolidation initiative. (cost reimbursement, mix of fed and contractors in infrastructure, no performance requirements) Executive sponsor elevated in organization, new role player did not have same level of engagement Had to stabilize and improve services while transitioning to a new deal and extending the consolidation to include regional sites. Unwilling staff Poor contract support Under-resourced Unwilling constituency Could succeed if any one of the 4 was strong Handed consolidation of CIOs to go with challenge! Responsibility without authority � surefire way to fail. The COCO story � metrics proving that while there was no baseline for comparison, we pushed the bar up for performance via SLAs, and had industry leading seat costs �BUT despite overwhelming evidence (measurement) to the contrary, it was better in the olden days!

19. Opportunity #4Large (6000-12000) civilian agency, with HQ centralized in a single building and environment and regions currently outside  Challenge: Bring all IT except for Largest Divisions under central control Factors bearing on challenge: Perception that �they� were better than �we� No cost baseline exists No performance baseline exists Services contract already in place � wrong deal Executive sponsorship has known shelf life DOT - Current life. My political (exec sponsor) is hands off. Consolidation by fiat and with move to a new centralized building as driver Model infrastructure supporting all constituents (to some degree) Regions left to modal decision Perceptions that costs are too high, service too low (better in the good old days! � again despite measurement data to the contrary Have not realized full potential of economies of scale, as potential for 4000-6000 seats exist in regions. Too many exceptions to get costs to best in class exceptions = increased cost Alignment of vision for future with customer, followed by tiger teams for service silos to define WHAT (expectations, outcomes, objectives, requirements for a new model reducing exceptions and extending to the field) Working with Paula here! DOT - Current life. My political (exec sponsor) is hands off. Consolidation by fiat and with move to a new centralized building as driver Model infrastructure supporting all constituents (to some degree) Regions left to modal decision Perceptions that costs are too high, service too low (better in the good old days! � again despite measurement data to the contrary Have not realized full potential of economies of scale, as potential for 4000-6000 seats exist in regions. Too many exceptions to get costs to best in class exceptions = increased cost Alignment of vision for future with customer, followed by tiger teams for service silos to define WHAT (expectations, outcomes, objectives, requirements for a new model reducing exceptions and extending to the field) Working with Paula here!

20. Some Metrics (post consolidation) from the Real World

21. So what have I learned? Common threads in each opportunity Consolidation is not about the technical problem nor is it a technology issue � it is an adaptive problem or change issue Must understand and be comfortable operating in the political dimension Must articulate a value proposition that negates the impact of the fiat, or at least that you can repeat over and over Cannot over-emphasize the need for the executive sponsor to remain engaged throughout Revolution, not evolution (why prolong the pain?) To the extent that you can, hand the problem off to those who will be most effected by its outcomes, but don�t let them deviate from the agenda and objective Prove the results! So you see that there are commonalities in these little case vignettes � if you mistake the problem for a technical problem I think the likelihood of joining the 80% goes up significantly�..similarly I believe that when left without air cover, ultimately the forces of evil will prevail. Consolidations are all about people and changing culture (adaptive work)�..must play a number of roles : evangelist, politician, confidant, coach, visionary, salesman, even technologist (occasionally) Back at work, I have a customer that keeps saying �crawl, walk, run� and honestly I want to smack him. Be very aggressive in planning and corresponding timeline, and manage expectations accordingly. So you see that there are commonalities in these little case vignettes � if you mistake the problem for a technical problem I think the likelihood of joining the 80% goes up significantly�..similarly I believe that when left without air cover, ultimately the forces of evil will prevail. Consolidations are all about people and changing culture (adaptive work)�..must play a number of roles : evangelist, politician, confidant, coach, visionary, salesman, even technologist (occasionally) Back at work, I have a customer that keeps saying �crawl, walk, run� and honestly I want to smack him. Be very aggressive in planning and corresponding timeline, and manage expectations accordingly.

22. So what else have I learned? Clearly articulate a vivid vision for the future Responsibility, authority and accountability Communication Co-produce the plans, expectations and outcomes Consolidate blocking and tackling (seats) first Economies of Scale are real! Change is HARD! Much depends on how well you can articulate your vision of the future. Aligning that vision with the vision of the stakeholders will enhance the chances for success. Getting the stakeholders to own the problem is a great strategy � difficult, but effective In too many cases the program executive has responsibility but limited or no real authority�.and without strong and engaged executive sponsorship, this will ensure failure! IT LOB � big agencies that have consolidated have lower per user costs Economies of scale (not all contractors grasp this!) Leadership for the 21st Century � Harvard - 60 folks from everywhere, everyone with the same problem�..changing culture Change is HARD Much depends on how well you can articulate your vision of the future. Aligning that vision with the vision of the stakeholders will enhance the chances for success. Getting the stakeholders to own the problem is a great strategy � difficult, but effective In too many cases the program executive has responsibility but limited or no real authority�.and without strong and engaged executive sponsorship, this will ensure failure! IT LOB � big agencies that have consolidated have lower per user costs Economies of scale (not all contractors grasp this!) Leadership for the 21st Century � Harvard - 60 folks from everywhere, everyone with the same problem�..changing culture Change is HARD

23. The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.

24. Survey (Gartner) Says: These efforts fail because: Ineffective or non-existent governance Cost goals that are overly aggressive or unrealistic Disengaged leadership Lack of agreement/understanding on the driver/objectives Insufficient investment $$$ Poor project management Lack of internal capacity and skills Distrust of the host agency (HQ) Unwillingness to eliminate headcount for political reasons Insufficient buy-in Any one of these can be fatal ULTIMATELY however it is all about turf, politics and control � it is about changing cultureAny one of these can be fatal ULTIMATELY however it is all about turf, politics and control � it is about changing culture

25. Bottom lines 1. The reasons consolidation efforts fail tend to be common 2. Too often we mistake the problem for a technical one!!!!!! Show me the MONEY! Negate the sense of loss � Change management 101 Measure everything! Consolidation requires leadership � but BEWARE !

26. Change is inevitable������ ����.except from a vending machine !