slide1 l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Analysis Document PowerPoint Presentation
Download Presentation
Analysis Document

Loading in 2 Seconds...

play fullscreen
1 / 79

Analysis Document - PowerPoint PPT Presentation


  • 184 Views
  • Uploaded on

Analysis Document. Task 7 Recommendations to Assist Cost Recovery / ROI Strategies and Budget Planning. May 2, 2006. Table Of Contents. Introduction Methodology Sample Telework Program Business Cases BCA 1 – Home Office (In-Depth) BCA 2 – Services (High-Level)

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Analysis Document' - Thomas


Download Now An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Analysis Document

Task 7

Recommendations to Assist Cost Recovery / ROI Strategies and Budget Planning

May 2, 2006

table of contents

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide3
This report provides guidance for cost recovery, strategizing return on investment, and budget planning related to telework
  • This report on Recommendations to Assist Cost Recovery / ROI Strategies and Budget Planning is the seventh in a series of reports in the Telework Technology Cost Study
  • The overall study has three primary objectives
    • Describe the current telework technology environment
    • Estimate the costs of expanding telework supporting technologies so the infrastructure can support 25% to 50% of the federal workforce teleworking
    • Provide recommendations on how best to expand the telework supporting infrastructure
  • This report provides a strategic framework and methodology for identifying the value of telework investments, and thereby enhancing the cost justification and return on investment
  • The information in this report will help government executives develop business case analyses that fully consider the multiple benefits of telework for making investment decisions
slide4
For this study Booz Allen gathered information from 20 different federal organizations in 11 Departments and 5 Independent Agencies
  • The Booz Allen team conducted interviews, focus groups, and surveys of Chief Information Officer staff, Telework Program Coordinators, Teleworkers, and Managers of Teleworkers, respectively
  • Ten Departments and one Departmental Component participated in the study:
    • Department of Agriculture  Department of Interior
    • Department of Commerce  Department of Justice
    • Department of Education  Department of Transportation
    • Department of Health and Human Services  Department of the Treasury
    • Department of Housing and Urban Development  Department of Veterans Affairs
    • U. S. Coast Guard (component of Department of Homeland Security)
  • Five Independent Agencies also participated in the study:
    • Equal Employment Opportunity Commission  National Science Foundation
    • General Services Administration  Securities And Exchange Commission
    • National Aeronautics and Space Administration
slide5

This report presents three sample business case analyses that could be used in an agency’s investment process as project managers try to fund various telework initiatives

  • For this report, three sample business case analyses (BCAs) were developed
    • One in-depth BCA with detailed costs, benefits, and risks. It also included a cost justification and return on investment (ROI) analysis
    • Two high-level BCAs with detailed costs and high level benefits and risks
  • The Capital Planning and Investment Control (CPIC) process and Value Measuring Methodology (VMM) value factors were used to outline and develop the BCAs
  • Additionally, this report provides resources that project managers can use to develop their own telework-related BCAs
    • Cost data from deliverables two and five were consolidated for easy use by the reader, e.g. unit costs, web-based application development costs, server capacity guidelines
    • A guide explaining how to use the cost data to build a cost estimate for a telework BCA or telework funding requests is included
    • An inventory of risks and benefits typically associated with telework initiatives is provided in the Appendix
    • An explanation for how to tailor the example BCAs for their organization (e.g., an agency can add or subtract costs of components from sample BCAs as appropriate, if an agency provides more or less than is included in the BCA examples)
table of contents6

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide7

The information for this report was distilled from other data gathering and analysis that was previously performed for this study and from business case development best practices

High-Level Data Synthesis

Data Sources

Detailed Reports

Development of a Series of Reports on Telework Technology and Related Costs

Data Collection From Three Sources in 16 Government Organizations

Detailed Synthesis of Findings to Develop Sample Cost Recovery / ROI Strategies

  • Information about costs, benefits and risks associated with telework investments
  • Conducted discussion sessions with telework and technology experts to evaluate potential cost reduction and cost recovery / ROI strategies
  • Used frameworks of the Capital Planning and Investment Control (CPIC) process and Value Measuring Methodology (VMM) value factors to organize and develop sample business cases analysis (BCA)
  • Estimated costs and benefits associated with sample telework investments that bring agencies to the “basic” and / or “ideal” levels for Home Office, Services, and Enterprise solutions defined in Task 4
  • Developed one in-depth and two high-level sample BCAs that incorporated cost estimates, cost reduction and cost recovery / ROI strategies, and addressed risk
  • Several reports in this study have established the technologies, costs, and enhancement plans required for telework expansion
  • Task 2, Task 3, and Task 4 specify the technology components needed for scalability
  • Task 2 and Task 5 detail the costs required for recommended technology enhancements
  • Task 6 and Task 9 incorporate the technology and cost requirements from the other tasks and provide recommendations for initiating and implementing telework program enhancement and expansion plans
  • Administered surveys to teleworkers and managers of teleworkers to obtain information about telework technology availability, usage, and performance
  • Conducted focus groups with Telework Program Coordinators to obtain information abouttelework program history and current state, technology issues, policy issues, and plans for expansion
  • Conducted interviews with CIOs and other IT staff members to obtain information aboutthe current status of the telework infrastructure and plans for enhancement

Detailed Data Analysis

High-Level Data Synthesis

slide8
The sample BCAs were developed to bring agencies to the “basic” and / or “ideal” levels for Home Office, Services, and Enterprise solutions

Red text indicates the components included in the BCA calculations

  • Technology
  • Currently in Place*
  • BCA 1: Home Office
  • Reutilized PCs (no security software)
  • Limited peripherals (printer/copier/fax)
  • Network interface (broadband router)
  • Limited mobile telephone (exec staff only)
  • Security resources (including firewall and authentication devices)
  • BCA 2: Services
  • Enterprise connectivity,
  • Voice conferencing, mobile telephone access (exec staff only)
  • Help desk support
  • Technical training (general)
  • BCA 3: Enterprise
  • Secure network access, including VPN/ firewall solution
  • Remote email access, terminal emulation system, web interfaces (limited)
  • Additional
  • Technology Needed
  • for Basic Solution
  • BCA 1: Home Office
  • Laptop & docking station
  • Peripherals for all teleworkers (printer/copier / fax)
  • Mobile telephone for all teleworkers*
  • BCA 2: Services
  • Voice communications (calling card)
  • BCA 3: Enterprise
  • Basic solution is currently in place (no additional components necessary)

Additional

Technology Needed

for Ideal Solution

BCA 1: Home Office

Ideal solution is not covered in BCA 1; these components are not calculated**

Advanced authentication devices

Collaboration tools (web cam)

PDA devices for all teleworkers

BCA 2: Services

Residential broadband service

BCA 3: Enterprise

Web interfaces (all admin functions)

Basic Solution

Ideal Solution

* The Task 4 Report listed cell phone, calling card, or additional telephone line as three voice communication options in the basic solution; in this sample BCA series, a calling card was selected to meet teleworker voice communication requirements

** BCA 1 focuses on funding a “basic” solution only.

slide9

Context for Sample BCAs

The Capital Planning and Investment Control (CPIC) process provides the context for the development of BCAs in the federal government
  • Regardless of the dollar size and ultimate recipient of a BCA (i.e., bureau Office of Chief Information Officer (OCIO), department OCIO, or Office of Management and Budget (OMB)), each BCA must step through the process outlined in the graphic to the right
  • Each of the sample BCAs in this report are assumed to be in the “Select” phase, which is where investments are developed, submitted and scored
  • “Select” phases across government require each BCA to analyze the potential value, cost and risk for the investment in question
slide10

VALUE

Value Factors

Priority

Quantified Benefits

Value Measures

Metric,

Target,

Scale

Priority

RISK

Risk Inventory

% - impact on costs

% - impact on value (benefits)

Risk Tolerance Boundary

EXAMPLE

Degree of Caution Required

Direct Costs (Dollar Figures)

COST

Pre-Risk Total

FY07 Sub Total:

FY08 Sub Total:

FY09 Sub Total:

The Value Measuring Methodology (VMM) is a structured approach for investment analysis that can be used to evaluate potential telework infrastructure enhancements…

Sample VMM Outputs:

Sample VMM Framework

Used to Structure the BCAs in this Section:

…including the evaluation of the three essential factors of decision making in a structured, quantifiable and repeatable manner

for the purposes of these sample bcas an abridged version of vmm s methodology was employed
For the purposes of these sample BCAs, an abridged version of VMM’s methodology was employed

Overview of VMM Methodology*

  • Step 1. Develop a Decision-Framework
    • Identify & Define the Value Structure
    • Identify & Define the Risk Structure
    • Identify & Define the Cost Element Structure
    • Begin Documentation
  • Step 2. Alternatives Analysis (estimate value, cost, & risk)
    • Identify & Define Alternatives
    • Estimate Value and Cost
    • Conduct a Risk Analysis
    • On-going Documentation
  • Step 3: Pull Together the Information
    • Aggregate the Cost Estimate
    • Calculate the Return-on-Investment
    • Calculate the Value Score
    • Calculate the Cost and Value Risk Scores
    • Compare Value, Risk and Cost
  • Step 4: Communicate and Document
  • Cost, value and risk are estimated for one alternative, instead of the three that OMB’s Circular A-11 requires for business cases
  • Value definition is confined to the “government financial” value factor only
    • One of VMM’s key strengths, the quantification of qualitative benefits (i.e., the other four value factors), requires a prioritization process that is most effective when completed in an interactive session using an appropriate automated tool
    • This process should be done at the highest appropriate level of agency management
  • Risk inventory and possible risk mitigation strategies were defined in lieu of detailed risk analysis
    • Assessment of probability and impact would need to be done in collaborative sessions with technical and policy staff or representatives of partner agencies
    • Only then could its impact on the value and risk scores be determined

* Only the actions in “bold” were performed in sample BCAs

slide12
The five VMM value factors help identify, define, and quantify the financial and non-financial benefits of telework investments
table of contents13

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide14

This section provides three sample BCAs that seek funding required to close the gap between the organization’s current infrastructure and the “basic” or “ideal” telework infrastructure

Assumptions

  • Each sample agency’s current level of infrastructure is assumed to be consistent with Scenario B (see Appendix)
  • Agency objective is to close the gap between their current infrastructure to the ‘basic” and / or “ideal” level of telework support
  • Agencies are scaling up to 50 percent of the agency teleworking
table of contents15

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide16

Implementing a “Basic” Teleworker-at-Home solution for 50,000 employees at an agency with 100,000 staff can yield over $36 million of benefits in a 3-year period

  • Teleworker-at-Home Components in this BCA:
  • Laptop with Docking Station
  • Combination printer/ copier/fax machine
slide17

An investment of approximately $16 million over 3 years is required to provide a “Basic” Teleworker-at-Home solution for 50,000 staff at an agency with 100,000 staff

  • A 3-year implementation allows for phased approach over multiple budget cycles and allows all desktops to be refreshed with laptops
    • All estimates are in FY07 dollars
  • The acquisition cost of a laptop can be offset by the current cost of acquiring a desktop
    • The approximate annualized cost of a desktop, including maintenance, is $326
  • Since Telework frequency per OPM is one day per week (or 20%), only 20% of the laptop expense was charged to the telework initiative
    • The remaining 80% of the expense can be shared by agency cost categories, such as annual infrastructure and COOP compliance
  • The laptop and printer / copier / fax unit costs are annualized and include refresh and annual maintenance expense
    • Please refer to Appendix B for further detail on costs
slide18
This approximate $16 million investment can be offset with a benefits realization of over $36 million over the same 3-year period
  • Return on Investment (ROI): 232%
  • Cumulative Net Present Value (NPV): $20.2 million
  • Payback is achieved in Year 1
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance
slide19

The total amount of financial benefits that could be realized from implementing the “basic” teleworker-at-home solution is derived from a number of sources

  • Each type of savings and benefits are based on prior industry research which are referred to in Appendix A
    • The improved productivity calculation is based on a recent study that found teleworkers work on average 1 additional hour on days they telework
    • The increased employee productivity is the largest benefit since it accounts for 50 hours per year per teleworker, while the reduction of 3 missed work days per year per teleworker accounts for just 24 hrs per employee per yr
  • Several of these benefits, such as employee retention, correspond to more than one value factor

See Appendix A for details on how the value of benefits were calculated

slide20
VMM requires that the probability and impact of each risk factor on both cost and value be considered. This provides analysts with information necessary to determine the interaction between impact and probability and predict how that interaction will change the value and cost of the investment under consideration

Examples of risk that could affect the “teleworker-at-home” solution are:

Technology Issues (e.g., connectivity, performance of legacy client-server applications remotely, and security)

Access to / availability of IT support

Difficulties working and communicating with co-workers in the office

Inflexible agency-based operating procedures

Too few at-home days utilized for program to be effective

Participants in telework program are not well suited for working at an alternative work site

In order to illustrate the impact of risk on cost and value, this BCA assumes that a detailed risk analysis has been performed with the following outcomes:

There is a 5% impact (increase) on the total costs: $16.0 million  $16.8 million

There is a 15% impact (decrease) on total value: $36.2 million  $30.8 million

Narrative Risk Level

Probability

Cost Impact

Value Impact

High

50%

25%

-25%

NOTIONAL

Medium

30%

15%

-15%

Low

25%

5%

-5%

Likelihood of

Likelihood of

Causes Cost to

Causes Cost to

Causes Value to

Causes Value to

Occurring

Occurring

Increase

Increase

Decrease

Decrease

While an actual risk analysis was not performed, this sample BCA assumes that risk could have a more noticeable impact on the realization of financial benefits

table of contents21

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide22

Implementing an “Ideal” Telecommunication Services solution for 25,000 employees at an agency with 50,000 staff can yield over $31 million of benefits in a 3-year period

  • Telecommunications Services Components in this BCA:
  • Residential Broadband Service
  • Calling Card (for long distance calls)

*In this BCA, potential risks were identified but their impact on value and cost were not calculated

slide23

Cost analysis shows that approximately $15.6 million over 3 years is required for implementation of a “Basic” telecommunication services solution

  • A calling card was selected as the best telecommunication option for several reasons
    • Provides practical, inexpensive way for agencies to pay for teleworkers’ long distance charges
    • Cell phones may be more appropriate for some teleworkers who work from multiple locations, but calling cards meet the needs of a typical home-based teleworker
  • Broadband access is widely viewed as critical to the success of telework
    • Provides faster data communication and enables timely transfer of larger data files
    • Provides for both data communications and voice communications, so teleworkers are able to conduct telephone calls while transferring data
    • Allows use of collaboration tools, video conferencing, etc., which can be difficult if not impossible to use over dial-up

*Annual costs are inflated per the difference between OMB Circular A-94's Nominal and Real 3-Year Treasury Interest Rates; costs are discounted per OMB A-94's Nominal 3-Year Rate on Treasury Notes and Bonds

  • As detailed in the table at right, the per user cost of $634 is based on the agency providing a calling card and broadband access to each teleworker
slide24
Value analysis shows that the $15.6 million investment can be offset by over $31 million in benefits from a variety of sources
  • Nearly $13 million of benefit in time savings related to broadband, which nearly pays for the investment itself
    • Estimates are based on technical performance superiority of broadband, as compared to dial-up
  • Over $101 million in financial benefits can be earned by this investment – four-fifths of which is assumed to be shared agency-wide
    • 20 percent to telework
    • 80 percent to agency initiatives, such as infrastructure upgrades / maintenance and COOP compliance
  • The potential benefits of this investment all map to one or more of VMM’s value factors, including
    • Government Operational/Foundational Value
    • Government Financial Value
    • Direct User (Customer) Value

See Appendix A for details on how the value of benefits were calculated

slide25
There are a variety of risks to be considered which could impact the “telecommunications services” investment

Potential Risks

Potential Mitigation Strategies

  • Technology Issues (e.g., connectivity, performance of legacy client-server applications remotely, security, data security)
  • Access to / availability of IT support
  • Operational impacts
  • Difficulty working/communicating with office workers
  • Inflexible agency-based operating procedures
  • Too few telework days used for program to be effective
  • Supervisor resistance to telework
  • Appropriate selection of participants for telework
  • Inadequate preparation
  • Creation of burden on non-participating employees
  • Staff culture / existing expectations
  • Resistance by organizational support functions (e.g., HR, IT)
  • Historical resistance by smaller Federal agencies
  • Difficulty in measuring results
  • Senior management leadership
  • Comprehensive security planning
  • Telework-specific training
  • Organize Telework Advisory Group or Program Management Office
  • Assessing the impact Telework has on timekeeping, compensation, and other issues
  • Preparing a written Telework agreement for employees and managers
  • Regularly re-evaluating and modifying the program, when necessary, to meet changing circumstances
  • Designation of appropriate telework coordinator
table of contents26

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide27

Implementing an “Ideal” Enterprise solution for 5,000 employees at an agency with 10,000 staff results in $3.4 million of benefits over a 3-year period based on this study’s analysis

  • Enterprise Components in this BCA:
  • Web-based application
  • (Multi-tier Unix-based architecture)

*In this BCA, potential risks were identified but their impact on value and cost were not calculated

slide28
Cost analysis shows that $219,000 over 12 months is required to provide an “Ideal” web-based application solution
  • Since the development is assumed to take place over a 12-month period, all labor costs and hardware purchases are for FY07
  • Because of the multiple uses of these investments, only a portion of the development costs were charged to the telework initiative
    • Since telework’s frequency per OPM is 1 day a week (or 20%), only 20% of the development costs were charged to the telework initiative
    • For example, 20 percent may be associated with telework
    • The remaining 80 percent of the expense can be shared by agency costs such as infrastructure and COOP compliance
  • Software and System Administration costs are not included in the total, because the costs can vary widely due to a number of factors
  • Further detail on assumptions and industry guidelines regarding web application development solutions is provided in Appendix B

* Annual costs are not inflated since all BCA costs are provided in FY07 dollars

slide29
Value analysis shows that the $219,000 investment can yield substantial financial benefits of $3.4 million
  • Each type of savings and benefits are based on prior industry research which are referred to in Appendix A
    • The improved productivity calculation is based on a recent study that found teleworkers work on average 1 additional hour on days they telework
    • The increased employee productivity is the largest benefit since it accounts for 50 hours per year per teleworker, while the reduction of 3 missed work days per year per teleworker accounts for just 24 hrs per employee per yr
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • For example, 20 percent may be associated with telework
    • The remaining 80 percent of the expense can be shared by agency costs such as infrastructure and COOP compliance
  • The potential benefits of the enterprise investment all map to one or more of VMM’s value factors, including
    • Government Operational/Foundational Value
    • Government Financial Value
    • Direct User (Customer) Value

See Appendix A for details on how the value of benefits were calculated

there are variety of risks that could reduce the overall value of the enterprise investment
There are variety of risks that could reduce the overall value of the “Enterprise” investment

Potential Risks

Potential Mitigation Strategies

  • Technology Issues (e.g., connectivity, performance of legacy client-server applications accessed remotely, security, and data security)
  • Access to / availability of IT support
  • Efficacy of training
  • Operational impacts
  • Difficulty working and communicating with office workers
  • Inflexible agency-based operating procedures
  • Too few telework days utilized for program to be effective
  • Supervisor resistance to telework program
  • Appropriate selection of participants for telework
  • Timely coordination with unions
  • Creation of burden on non-participating employees
  • Staff culture / existing expectations
  • Resistance by organizational support functions (e.g., HR, IT)
  • Difficulty in measuring results
  • Senior management leadership
  • Broadband residential services
  • Comprehensive security planning
  • Telework-specific training
  • Organize Telework Advisory Group or Program Management Office
  • Assessing the impact telework has on timekeeping, compensation, and other issues
  • Developing a plan to address the equipment needs of your organization telework program
  • Preparing a written Telework agreement for employees and managers
  • Regularly re-evaluating and modifying the program, when necessary, to meet changing circumstances
  • Willingness of agency to participate
  • Designation of appropriate telework coordinator
  • Coordination with local unions (when applicable)
  • Increased IT support and allocation of resources
table of contents31

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

slide32

By clearly articulating the financial and non-financial benefits of telework, government leaders can make an effective business case for enhancing the infrastructure and services that support telework

  • Substantial financial benefits can be realized by implementing an effective telework program (see table)
    • Reduced absenteeism costs
    • Reduced real estate costs
    • Reduced recruitment and retention costs
    • Improved staff productivity
  • Telework IT enhancements do not just benefit teleworkers, they provide IT benefits to all staff
    • Improves contingency support
    • Increases organization flexibility and ability to adjust IT infrastructure and applications to meet changes in IT needs
    • Improves communication between staff and between staff and people in other organizations
    • Easier to use applications with a common interface
    • Automation of administrative processes
  • Other non-financial benefits of telework
    • Compliance with federal mandates
    • Increased workforce diversity
    • Reduced traffic congestion and pollution
table of contents33

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Appendix C: Resources for Developing Telework-related Business Cases

bca 1 telework programs can save organizations 63 of their absenteeism costs

Appendix A: Benefit Savings Calculations

BCA 1: Telework programs can save organizations 63% of their absenteeism costs
  • In a study released in 1999, the International Telework Association and Council (ITAC) concluded that healthy employees often miss work due to family or personal obligations that can only be met during the business day
    • Teleworkers are still able to get some work done, even on days when they have appointments to attend
    • Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per employee per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork
  • This calculation assumes that 3 sick days / snow days are saved annually per teleworker
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance
bca 1 substantial real estate savings can be gained through telework and hoteling programs

Appendix A: Benefit Savings Calculations

BCA 1: Substantial real estate savings can be gained through telework and hoteling programs
  • For the purposes of this example, it is assumed that in Year 3 (FY09), the agency’s lease is up for renewal
    • Because half of its staff now teleworks at least once a week, the agency can reduce its per person (and hence overall) square footage allocation by 10%
  • The cost per rentable square foot of Class B office space in Washington DC is $34 per year
    • Federal office space typically is classified as Class B
    • Class B office space definition: good location, professionally managed, fairly high-quality construction and tenancy; generally show very little functional obsolescence and deterioration
    • Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of Industrial and Office Real Estate Markets
  • To be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades/maintenance and COOP
slide36

Appendix A: Benefit Savings Calculations

BCA 1: Telework has proven to be a valuable employee recruitment and retention tool, saving employers staffing costs
  • According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total cost of recruiting one employee is $7000
    • While this figure would certainly vary from agency to agency, this study assumes that the variance would be minor
    • Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of Telework FINAL
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance
bca 1 studies have shown teleworkers are more productive than office workers

Appendix A: Benefit Savings Calculations

BCA 1: Studies have shown teleworkers are more productive than office workers
  • In a recent study of its extensive telework program, AT&T found that teleworkers report about one additional productive hour in each workday spent at home (about a 12.5% increase, approximately)
    • Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework Results
  • This calculation assumes that each participating employee teleworks one day per week annually, not including two weeks of paid vacation
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance
bca 2 reduced employee absence savings calculations

Appendix A: Benefit Savings Calculations

BCA 2: Reduced Employee Absence Savings Calculations
  • In a study released in 1999, the International Telework Association and Council (ITAC) concluded that healthy employees often miss work due to family and personal obligations that can only be met during the business day
    • Teleworkers are still able to get some work done, even on days when they have appointments to attend
    • Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per employee per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork
  • This calculation assumes that 3 sick days / snow days are saved annually per teleworker
  • In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner
    • i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance
bca 2 real estate footprint savings calculations
The cost per rentable square foot of Class B office space in Washington DC is $34 per year

Federal office space typically is classified as Class B

Class B office space definition: good location, professionally managed, fairly high-quality construction and tenancy; generally show very little functional obsolescence and deterioration

Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of Industrial and Office Real Estate Markets

To be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades/maintenance and COOP

Appendix A: Benefit Savings Calculations

BCA 2: Real Estate Footprint Savings Calculations
  • For the purposes of this example, it is assumed that in Year 3 (FY09), the agency’s lease is up for renewal
    • Because half of its staff now teleworks at least once a week, the agency can reduce its per person (and hence overall) square footage allocation by 10%
bca 2 employee retention savings calculations
According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total cost of recruiting one employee is $7000

While this figure would certainly vary from agency to agency, this study assumes that the variance would be minor

Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of Telework FINAL

In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance

Appendix A: Benefit Savings Calculations

BCA 2: Employee Retention Savings Calculations
bca 2 improved employee productivity calculations
In a recent study of its extensive telework program, AT&T found that teleworkers report about one additional productive hour in each workday spent at home (about a 12.5% increase, approximately)

Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework Results

This calculation assumes that each participating employee teleworks one day per week annually, not including two weeks of paid vacation

In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance

Appendix A: Benefit Savings Calculations

BCA 2: Improved Employee Productivity Calculations
slide42

Appendix A: Benefit Savings Calculations

BCA 2: Because staff spend less time waiting for data transmissions when they are provided broadband services, staff are more productive
  • These savings compare the technical performance of broadband Internet access to dial-up Internet access
  • The following assumptions about daily email traffic are based on a typical federal email account
    • average message size of 60 kilobytes
    • average of 25 messages per day
    • average total size of 1500 kilobytes (1.5 megabytes) per day
bca 3 reduced employee absence savings calculations
In a study released in 1999, the International Telework Association and Council (ITAC) concluded that healthy employees often miss work due to family and personal obligations that can only be met during the business day

Teleworkers are still able to get some work done, even on days when they have appointments to attend

Employers can save 63% of the cost of absenteeism per teleworking employee, or $2086 per employee per year. Source: Exploring Telework as a Business Continuity Strategy, 2005 WorldatWork

This calculation assumes that 3 sick days / snow days are saved annually per teleworker

In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance

Appendix A: Benefit Savings Calculations

BCA 3: Reduced Employee Absence Savings Calculations
bca 3 real estate footprint savings calculations
The cost per rentable square foot of Class B office space in Washington DC is $34 per year

Federal office space typically is classified as Class B

Class B office space definition: good location, professionally managed, fairly high-quality construction and tenancy; generally show very little functional obsolescence and deterioration

Source: Society of Industrial and Office Realtors (SIOR) 2005 Comparative Statistics of Industrial and Office Real Estate Markets

To be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades/maintenance and COOP

Appendix A: Benefit Savings Calculations

BCA 3: Real Estate Footprint Savings Calculations
  • For the purposes of this example, it is assumed that in Year 3 (FY09), the agency’s lease is up for renewal
    • Because half of its staff now teleworks at least once a week, the agency can reduce its per person (and hence overall) square footage allocation by 10%
bca 3 employee retention savings calculations
According to a 2003 telework study by the Equal Employment Opportunity Commission (EEOC), their total cost of recruiting one employee is $7000

While this figure would certainly vary from agency to agency, this study assumes that the variance would be minor

Source: OIG-01-13-AMR Assessment of Reducing Infrastructure Costs Through Increased Use of Telework FINAL

In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance

Appendix A: Benefit Savings Calculations

BCA 3: Employee Retention Savings Calculations
bca 3 improved employee productivity calculations
In a recent study of its extensive telework program, AT&T found that teleworkers report about one additional productive hour in each workday spent at home (about a 12.5% increase, approximately)

Source: Lessons Learned From The Network-Centric Organization: 2004 AT&T Employee Telework Results

This calculation assumes that each participating employee teleworks one day per week annually, not including two weeks of paid vacation

In order to be consistent with the cost calculation methodology, the savings are shared across the agency in the same manner

i.e., 20% to telework and 80% to agency initiatives such as annual infrastructure upgrades / maintenance and COOP compliance

Appendix A: Benefit Savings Calculations

BCA 3: Improved Employee Productivity Calculations
table of contents47

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology

“Basic” and “Ideal” Costs

Scenarios

Appendix C: Resources for Developing Telework-related Business Cases

slide48

Appendix B: Development of Telework Costs

A comprehensive set of standard cost elements was developed for estimating the costs of telework at 18 federal organizations
  • In line with established cost estimation methodologies, the Booz Allen team made assumptions and estimates to compensate for several data limitations
    • Lower-level organizational information was used for the cost estimates when overall organization’s information was not available – these estimates apply to the lower-level organization only
    • Information provided did not cover all the cost elements needed for analysis and the available information differed between organizations – cost assumptions were made to compensate for the missing information
  • Global and project-specific drivers and assumptions (i.e., assumptions about the current telework environment at each organization) were defined
    • Prior year (i.e., sunk) costs are not included in the estimates
    • All unit costs used in this report are assumed to be in FY 2005 dollars
    • All cost and benefits estimates in each of the three sample business cases analyses are provided in FY07 dollars
  • The cost elements were grouped into the three major categories: teleworker home office, services, and enterprise costs
slide49

Appendix B: Development of Telework Costs

The assumptions used to make the cost estimates were based on standard industry estimates of costs and equipment lifecycles
  • Hardware technology refresh cycle is based on government and industry standards and varies by product. The article “When to Upgrade” by John Dix, Network World, November 28, 2005 and professional experience were used to estimate the life-cycle of equipment
  • Each annualized per teleworker cost includes the following components, where applicable: 1) the annualized purchase price; 2) annual maintenance costs; 3) annual lifecycle refresh costs; 4) annual recurring fees; 5) annualized one-time fees
    • Since every organization interviewed has a telework program in place, these estimates are designed to capture the annualized costs of previously-made purchases
    • In order to provide an annualized estimate for acquisition costs, the initial purchase prices are divided by their respective product lifecycles
  • Calculation of Maintenance and Lifecycle Refresh Costs
    • Recurring (i.e., maintenance) annual costs are assumed to total 15% of the acquisition cost of hardware and 20% of the acquisition cost of software
    • Refresh costs are calculated by dividing the acquisition cost of each element by its respective product lifecycle
slide50

Appendix B: Development of Telework Costs

Appropriate methodologies were developed in order to estimate the per teleworker costs for enterprise components
  • The voice conferencing per teleworker estimate assumes that a teleworker uses an additional two hours a month of teleconferencing services as a result of their telework
  • The enterprise connectivity per teleworker estimate assumes that each agency’s Internet connection is a DS3, which has an annual recurring cost of $8,650 (per GSA’s Washington Interagency Telecommunications System pricing)
  • The server cost per teleworker estimate assumes that one server can support 6,000 staff
  • The help desk support per teleworker estimate assumes that a teleworker is responsible for a 20% increase per year in help desk support costs based on them teleworking 20% of the time (equivalent of 1 day per week of telework)
slide51

Appendix B: Development of Telework Costs

Access to broadband is important for teleworkers due to the increasing size of data files and the development of new applications that take advantage of telecommunications infrastructure

Comparison of Cable/DSL to Dial-Up Data Transfer *

  • Broadband access is much faster and more efficient than dial-up and is becoming increasingly available to residential users
  • Emails with attachments are frequently larger than a Megabyte, particularly if they contain graphical content, resulting in lengthy download times for teleworkers with dial-up access
  • Broadband circuits have the capacity to support new telecommunication capabilities such as VoIP, video streaming, and collaboration, which are inaccessible over dial-up access due to limited bandwidth
  • Study found most organizations do not reimburse staff for broadband access. If the government would contract directly with carriers for broadband service it would provide more efficient billing and providing teleworkers business class service

* Data transfer under ideal conditions, protocol overhead and other impairments can more than double transfer times

per teleworker cost build up methodology enterprise connectivity
It is estimated that, during traffic peaks, 20%* of the user base is actively using the enterprise Internet access connection

The peak traffic is then multiplied by 20%, based on the assumption that staff telework one day a week

See sample calculation below; this calculation resulted in a per person cost of approximately $1 for each organization

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: Enterprise Connectivity

*1 day per week of Telework = 20%

per teleworker cost build up methodology voice conferencing
Regardless of the number of teleworkers, this Per User Cost remains the same across each organization, illustrated by the following calculations which include dramatically different numbers of teleworkers

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: Voice Conferencing

*Source: The Office of Personnel Management’s (OPM) OPM’s 2005 Report “The Status of Telework in the Federal Government

per teleworker cost build up methodology standard and enhanced help desk support

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: Standard and Enhanced Help Desk Support
  • Standard Help Desk Support:The $100 per teleworker help desk support cost is based on the average annual per teleworker cost of a contractor-operated help desk that supports 15,000 staff at a large cabinet-level department
  • Enhanced Help Desk Support Costs: Per the basis of estimate above, a help desk provided solely for teleworkers would cost $100 per teleworker on an annual basis
per teleworker cost build up methodology basic web application development cost

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: “Basic” Web Application Development Cost
  • Basic Web-Based Application Development Solution: Total Cost of $256,500
    • Two-tier Microsoft-based architecture (less scaleable, more affordable)
    • 4 yr lifecycle
    • Tier 1: web front end =
      • 2 servers at $20,000 each  $40,000
      • 1 load balancer  $25,000
      • Software license  cost not included since it can vary widely due multiple vendor solutions available and due to an application’s specific requirements, e.g. business rules, data manipulation
    • Tier 2: web app =
      • Network switch  $25,000
      • 2 servers at $50,000 assumed) $100,000
    • Annualized cost of $64,125 ($256,500 / 4)
    • Annual 15% hardware maintenance  $28,500; Annual 20% software maintenance  $38,000
    • Supports up to 200 concurrent teleworkers which is scaleable to 5000 teleworkers who access it once a week on average
    • Per teleworker cost of $13 (not including software and labor costs)
per teleworker cost build up methodology basic web application development cost cont

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: “Basic” Web Application Development Cost (cont.)
  • Labor costs are not included here since they vary widely due to the scale and scope of development work, however some guidelines are below:
    • 2-8 staff per development is range, with 3-5 being the median
    • $110 per hour is typical outsource cost for web development work
    • Timeframe: small application = 2-3 months; large application = 6 months – 1 year
    • System Administrator is needed to manage each application
per teleworker cost build up methodology ideal web application development cost

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: “Ideal” Web Application Development Cost
  • Ideal Web-Based Application Development Solution: Total Cost of $526,500
    • Build 1 component (that uses a 3-tiered component-based architecture) that can used by multiple apps and can serve multiple requests simultaneously much more cost effective
    • Multi-tier Unix-based architecture (more scaleable and robust)
    • 4 year lifecycle
    • Tier 1: web front end =
      • 2 servers at $20,000 each  $40,000
      • 1 load balancer system  $25,000
      • Software license  cost not included since it can vary widely due multiple vendor solutions available and due to an application’s specific requirements, e.g. business rules, data manipulation
    • Tier 2: middle tier =
      • 2 servers at $100,000 each  $200,000
    • Tier 3: web application =
      • Network switch  $25,000
      • 2 servers at $50,000 $100,000
per teleworker cost build up methodology ideal web application development cost58

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: “Ideal” Web Application Development Cost
  • Ideal Web-Based Application Development Solution (cont.): Total Cost of $526,500
    • Annualized cost of $131,625 ($526,500 / 4 )
    • Annual 15% hardware maintenance  $58,500; Annual 20% software maintenance  $78,000
    • Supports up to 200 concurrent teleworkers which is scaleable to 5000 teleworkers who access it once a week on average
    • Per teleworker cost of $26 (not including software and labor costs)
    • This per teleworker cost must be doubled to $52 to account for redundancy (again, this does not include software and labor costs)
  • Labor costs are not included here since they vary widely due to the scale and scope of development work, however some guidelines are below:
    • 2-8 staff per development is range, with 3-5 being the median
    • $110 per hour is typical outsource cost for web development work
    • Timeframe: small application = 2-3 months; large application = 6 months – 1 year
    • System Administrator is needed to manage each application
slide59

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: Collaboration Resources, i.e., Live Communication Server 2005 Costs
  • Centrally managed and secured resources such as instant managing, document sharing, and virtual meeting tools are made available to teleworkers
  • Microsoft Live Communication Server (LCS) 2005: Total Cost of $251,000
    • This sample solution assumes a teleworker base of 20,000
    • 3.5 yr lifecycle
    • Annualized cost of ($251,000 / 3.5)  $72,000
    • 2 load balancers (for redundancy) at $25,000  $50,000 subtotal
    • Array of 4 servers at $30,000 each  $120,000 subtotal
    • $3150 LCS licensing cost per server  $12,600 (does not include federal government discount, which could result in significant savings)
    • Annual 15% hardware maintenance  $28,000
    • Annual 20% software maintenance  $37,000
    • Supports 4000 concurrent teleworkers, which is scaleable to 20,000 teleworkers teleworkers who access it once a week on average
    • Client Access License (CAL) if $31 but Microsoft does not charge this amount if the customer has valid MS Exchange licenses (which we assume each organization has)
    • Per teleworker cost of $4
per teleworker cost build up methodology remote email access costs

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: Remote Email Access Costs
  • Microsoft Outlook Web Access (OWA) Solution: Total Cost of $233,000
    • This sample solution assumes a teleworker base of 20,000
    • 3.5 yr lifecycle
    • Annualized cost of $67,000 ($232,500 / 3.5)
    • 2 load balancers (for redundancy) at $25,000  $50,000
    • Array of 4 ISA servers at $30,000 each  $120,000
    • $2000 - $4000 ISA total servers licensing cost (varies) $3000 assumed
    • Annual 15% hardware maintenance  $34,000
    • Annual 20% software maintenance  $26,000
    • Supports 4000 concurrent teleworkers, which is scaleable to 20,000 teleworkers who access it once a week on average
    • Per teleworker cost of $3
  • It is estimated that, during traffic peaks, 20%* of the teleworker base is actively using remote email
  • The peak traffic is then multiplied by 20%, based on the assumption that staff telework one day a week
per teleworker cost build up methodology vpn costs

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: VPN Costs
  • Standard VPN Solution: Total Cost of $25,000
    • 3 yr Lifecycle
    • Annualized Cost of $8300 ($25,000 / 3)
    • Cisco VPN concentrator
    • Includes end teleworker licenses
    • Supports 1500 concurrent teleworkers, which is scaleable to 37,500 teleworkers
    • Per teleworker cost of $6
  • Clientless SSL VPN Solution: Total Cost of $350,000
    • 3 yr Lifecycle
    • Annualized Cost of $117,000 ($350,000 / 3)
    • includes hardware and software and maintenance)
    • supports 5000 concurrent teleworkers, which is scaleable to a teleworker base of 125,000 teleworkers
    • Per teleworker cost of $1
  • It is estimated that, during traffic peaks, 20% of the teleworker base is actively using VPN
  • The peak traffic is then multiplied by 20%, based on the assumption that staff telework one day a week
per teleworker cost build up methodology limited vs full costs

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology: “Limited” vs. “Full Costs
  • To account for the fact that in each scenario, the current solution provides limited versions of the components we identified, we have reduced the per teleworker costs to appropriate percentages
  • Explanation of 10% PDA Access – provided for executive staff only
  • Explanation of 10% Mobile Phone - provided for executive staff only
  • Explanation of 10% Mobile Phone Access - provided for executive staff only
  • Explanation of 25% Peripherals – assumes printer only
  • Explanation of Web Interfaces – different architecture, redundant system
table of contents63

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology

“Basic” and “Ideal” Costs

Scenarios

Appendix C: Resources for Developing Telework-related Business Cases

basic and ideal costs home office

Appendix B: Development of Telework Costs

Basic and Ideal Costs – Home Office

The Annual Cost Per Teleworker Per Alternate Site Component Including Maintenance Costs

*Only one of the 2 options needs to be provided for remote telephone communications equipment

basic and ideal costs services

Appendix B: Development of Telework Costs

Basic and Ideal Costs – Services

The Annual Cost Per Teleworker Per Services Component Including Maintenance Costs

3 OPTIONS

*Only one of the 3 options needs to be provided for telephone communications access

basic and ideal costs enterprise

Appendix B: Development of Telework Costs

Basic and Ideal Costs - Enterprise

The Annual Cost Per Teleworker Per Enterprise Component Including Maintenance Costs

*Web Interface total does not include labor costs or software licensing costs. Please see Appendix for more detail.

table of contents67

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology

“Basic” and “Ideal” Costs

Scenarios

Appendix C: Resources for Developing Telework-related Business Cases

slide68

Appendix B: Development of Telework Costs

The organizations that participated in the study were grouped into 5 scenarios based on how much additional infrastructure was required to provide the basic and ideal telework IT environment

  • Scenario A organizations provide basic telework infrastructure including home office support, services, and enterprise access, but additional IT infrastructure is required to bring them up to the ideal environment
  • Scenario B organizations provide some basic telework infrastructure including some home office support and services and full enterprise access. However additional IT infrastructure is required to provide all basic and ideal telework technologies to teleworkers
  • Scenario C organizations provide some basic telework infrastructure including some home office support, services, and enterprise access. However additional IT infrastructure is required to provide all basic and ideal telework technologies to teleworkers
  • Scenario D organizations provide a few basic telework infrastructure components and services for the home office but limited if any enterprise access. Substantial IT infrastructure improvements are required to provide basic and ideal telework technologies to teleworkers
  • Scenario E organizations provide few if any basic telework infrastructure, so significant IT infrastructure improvements will be required to provide basic and ideal telework technologies to teleworkers
slide69

Appendix B: Development of Telework Costs

Ideal

Ideal

Ideal

Ideal

Ideal

All necessary Home Office, Services, and Enterprise components are provided to support teleworking, including some enhanced capabilities

Basic

Basic

Basic

Basic

Basic

Critical Home Office, Services, and Enterprise components available to support teleworking

LEVEL OF ADDITIONAL HOME OFFICE, SERVICES, AND ENTERPRISE COMPONENTS REQUIRED

Minimal Services and Enterprise components available to support teleworking ; No Home Office resources or support available

Scenario D

Scenario C

Scenario B

Scenario A

Scenario E

Network infrastructures and the ability to scale resources and support for expanded telework programs vary across the federal government

Per User Cost

*Cost varies depending on which voice communication option is chosen

**Cost of upgrading from basic solution to ideal solution

***Cost of upgrading from current to ideal solution

table of contents70

Table Of Contents

Introduction

Methodology

Sample Telework Program Business Cases

BCA 1 – Home Office (In-Depth)

BCA 2 – Services (High-Level)

BCA 3 – Enterprise (High-Level)

Findings and Conclusions

Appendix A: Benefit Savings Calculations

Appendix B: Development of Telework Costs

Per Teleworker Cost Build-Up Methodology

“Basic” and “Ideal” Costs

Scenarios

Appendix C: Resources for Developing Telework-related Business Cases

slide71

Appendix C: Resources for Developing Telework-related Business Cases

VMM Key Considerations

Government decision makers need information for comparing cost, benefit (both financial and non-financial) and risk that quantifies projected results in a meaningful and accurate manner

  • In July 2001, Social Security Administration (SSA) and General Services Administration (GSA) engaged Booz Allen Hamilton and Harvard University’s Kennedy School of Government to develop an effective methodology to assess the value of electronic services (e-Services)
  • The resulting Value Measuring Methodology (VMM)* was developed to be flexible, scaleable, and customizable
    • Its guiding principles and consideration of risk, value and cost are universally applicable in the government environment
    • This methodology enables important insight into the true business value of many types of investments
  • The groundbreaking VMM approach provides a means to quantify financial and non-financial value using five factors
    • Direct User (Customer) Value
    • Social (Non-direct User/Public) Value
    • Government Operational/ Foundational Value
    • Government Financial Value
    • Strategic/Political Value
slide72

Appendix C: Resources for Developing Telework-related Business Cases

Disaster Preparedness & Continuity of Operations

Multi-use Tools and Capabilities

Additional Benefits

Enterprise Modernization

Telework Program

Shared Costs, Risks, and Benefits with Other Enterprise Initiatives

An enterprise-level capital planning process will help enhance telework program efficiencies, benefits, and overall strategic value

Direct Financial Benefits

  • Improved employee availability
  • Opportunities for real estate savings
  • Increased recruitment and retention potential
  • Potential for increased employee productivity while teleworking andduring office closures

Indirect Financial and Other Benefits

  • Enhanced organizational process efficiencies
  • Continuity of Operations (COOP) readiness for public health, weather, and other emergencies
  • Accessible, modernized applications that allow staff to perform their work regardless of location
  • Adaptable applications that support changing business needs of organizations
  • Legislative Compliance and alignment with ongoing Congressional interest
  • Coordinated standards for technology configuration
  • Reduction of traffic congestion and pollution
  • Compliance with OPM and GSA guidance
  • Enhanced public image (“employer of choice”)
  • Increased work opportunities for people with disabilities
slide73

Appendix C: Resources for Developing Telework-related Business Cases

The sample BCAs provided in this document can be customized to fit agencies’ changing business requirements and staff sizes
  • Adjust the benefits calculation assumptions to fit your agency’s particular operating environment, for example:
    • Increase the number of employees retained annually due to telework,
    • Decrease the percent reduction in real estate footprint
  • Add or subtract costs of components from sample BCAs as appropriate, by:
    • Adding applicable unit costs to cost estimate from the pages that follow
    • Increasing or decreasing the investment window, e.g. 1 year, 5 years
  • Customize the risk analysis as appropriate
    • More potential risks could be identified
    • Probability and impact of occurrence vary from agency to agency
slide74

Appendix C: Resources for Developing Telework-related Business Cases

Home Office

Services

Enterprise

In the course of this government-wide study, we have developed a comprehensive and current collection of the costs associated with a telework program

  • These costs can be leveraged when developing estimates for telework-related BCAs
  • The following three pagesprovide unit costs for each of the components that typically make up a telework program
    • These costs are grouped into three major categories: teleworker-at-home, services and enterprise
  • The Appendix provides additional detail on costs for:
    • Enterprise connectivity
    • Voice conferencing
    • Help Desk
    • Web application development
    • Collaboration resources
    • Remote email access
    • VPN
slide75

Appendix C: Resources for Developing Telework-related Business Cases

The cost of equipment to support a teleworker in the home office varies from $2,072 for a laptop to $42 for authentication equipment
slide77

Appendix C: Resources for Developing Telework-related Business Cases

The enterprise resources that most directly support the teleworker are access and security facilities, such as terminal/access servers and virtual private network systems

*Negligible additional cost due to telework because the enterprise systems are already in place to support each organization's existing operations

slide78

Appendix C: Resources for Developing Telework-related Business Cases

A composite General Schedule profile for teleworkers was developed in order to more accurately calculate the potential worker productivity gains

  • Step 5 is assumed for all GS levels
  • The % breakouts are based in part on the real GS distribution across government and in part on the survey data collected in the course of this study which indicates that very senior and junior employees are less likely to telework.
  • Employees in lower GS levels (7 and below) may not be afforded the opportunity to telework due to their junior status and/or short tenure, while employees in higher GS levels (13 and above) may not be allowed to or may choose not to telework due to managerial duties and/or office-based work demands
slide79

Appendix C: Resources for Developing Telework-related Business Cases

In addition to OMB’s 19 risk categories, there are a number of telework-specific risks that should be considered when developing a telework-related BCA

Telework Risks

Mitigation Strategies

  • Technology Issues (e.g., connectivity, performance of legacy client-server applications remotely, security, data security)
  • Space availability (at telecenters) in an emergency
  • Access to / availability of quality equipment
  • Access to / availability of IT support
  • Efficacy of training
  • Operational impacts
  • Reactions of co-workers
  • Inflexible agency-based operating procedures
  • Too few at-home days authorized for program to be effective
  • Supervisor behavior
  • Appropriate selection of participants for telework
  • Timely coordination with unions
  • Inadequate preparation
  • Coerced management participation
  • Automated monitoring of employee performance (e.g., monitoring an employee’s key strokes and time on/off a computer via electronic devices)
  • Creation of burden on non-participating employees
  • Potential for low utilization rate of telecenters
  • Staff culture / existing expectations
  • Resistance by organizational support functions (e.g., HR, IT)
  • Historical resistance by smaller Federal agencies
  • Difficulty in measuring results
  • Senior management leadership
  • Long-term IT and capital planning for telework
  • Broadband residential services
  • Comprehensive security planning
  • Telework-specific training
  • Organize Telework Advisory Group or Program Management Office
  • Assessing the impact Telework has on timekeeping, compensation, and other issues
  • Developing a plan to address the equipment needs of your organization Telework program
  • Preparing a written Telework agreement for employees and managers
  • Regularly re-evaluating and modifying the program, when necessary, to meet changing circumstances
  • Willingness of agency to participate
  • Designation of appropriate telework coordinator
  • Coordination with local unions (when applicable)
  • Increased IT support and allocation of resources