1. ONGARD Modernization ONGARD Mainframe Stabilization Project Certification Request Energy, Minerals and Natural Resources Department State Land Office Taxation and Revenue Department April 18, 2012

2. 2 Funding History –FY08 request partially funded for $500k which was used for planning –FY09 request partially funded for $1M –FY10 all funds reverted ($1 million) –FY13 appropriation for $6 million At least two projects Mainframe Stabilization is first priority After successful stabilization, next project phase will focus on re-planning ONGARD Modernization

3. 3 Business Challenges Business critical legacy system with high risk of oil and gas revenue interruption ($1.3B FY11 revenue) –As 20 year old system ages, risk increases for disruption in revenue collection of 30% of NM revenues –No test and use cases exist since little testing has been required since the mainframe zOS was not updated ONGARD team has begun working on test and use cases with a price agreement vendor leading the effort. End user community buy-in has been strong Work on this effort was initially funded with FY12 operating budget savings from DoIT mainframe system charges Certification for potential extensions are recommended –Operating software upgrades now underway at DoIT zOS 1.1x (final zOS version still under discussion) software and z114 hardware upgrade in 2012 requires adequate testing of ONGARD system Schedule is still in flux—we are waiting for final DoIT implementation schedule Currently have five contractors on board to supplement ONGARD staff efforts. ONGARD is still two employees short off authorized headcount and recruiting efforts continue.

4. 4 Certification Request Detail Complete basic set of ONGARD test and use cases for authentication of operation in migration to new IBM z114 hardware: Ability to test ONGARD on new IBM hardware platform and validate proper operation of online and batch transactions on the new DoIT IBM z114 hardware platform Sign-off from business owners and tri-agency executive management after testing results are presented. $116,000 (TR12-34 was funded from FY12 operating budget). Contingency funding to avoid delivery problems if vendor for TR12-34 cannot meet the contract deliverable dates in FY12 due to lack of access to tri-agency SME resources during the three month contract period. : Ability to test ONGARD on new IBM hardware platform and validate proper operation of online and batch transactions on the new DoIT IBM z114 hardware platform Sign-off from business owners and tri-agency executive management after testing results are presented. $29,100. This amount is the sum total of the last two deliverables, both of which are due in June 2012. We hope to not have to use these funds but will do so if necessary to ensure the quality of the deliverables. If required, expand basic set of ONGARD test and use cases for authentication of operation in migration to new IBM z114 hardware: If the test and use case project team determines and validates the need for additional testing, a contract amendment will be prepared and added to contract TR12-34. This amount is a contingency allocation which will not be spent unless a contract modification is required to expand the project scope. $80,000.

5. 5 Certification Request Detail pg. 2 Contingency for payment of extension costs to keep zOS 1.09 running if necessary. This contingency amount is based on a DoIT estimate of $200,000 per month for software licenses to allow running two versions of zOS on the z114 hardware platform for a six month extension period. Anticipated hardware charges for this extension will not be incurred as DoIT found that the z114 hardware will support the current zOS version. : This contingency will be invoked only if there are issues when the conversion to the zOS (1.11 or 1.13) is completed and testing in the new environment proves that ONGARD will not run in that environment. This cost will not be invoked until 90 days after the official implementation of the new IBM operating system. The optimistic hope is that we will not have to spend this money and can utilize it in the ONGARD Platform Migration project.$1,200,000 Extend three contract programming resources for support of test, compilation, debug, conversion, programming, documentation and user training activity. There are now three contract programmers working in the ONGARD Service Center who will be extended through a contract with ACRO, a price agreement vendor. A statement of work is under development and will be submitted when the certified funds are available. : Completion of support work required to ensure successful conversion to the new z114 platform with upgraded zOS and database software. Sign-off from business owners and tri-agency executive management after testing results are presented. $215,000 (includes GRT)

6. 6 Certification Request Detail pg. 3 Overtime for TRD business SMEs to support testing of the migration to the z114 with upgraded software. The TRD Oil and Gas bureau does not have adequate bandwidth to support the development of test and use cases. Their plan is to work overtime as required to support the effort. The plan is to pay out this overtime to encourage participation. No operating budget funds are available to support this effort: Sign-off from business owners and tri-agency executive management after testing results are presented. $40,000 IV&V contract for first year of project. : IV&V vendor will provide regular reporting on project progress per standard IV&V agreements. Because project activity is still being defined, we will proceed with IV&V vendor selection in the June 2012 timeframe. This slight lag will allow us to more clearly define the scope of the IV&V engagement prior to contracting for the service. Although the project budget might possibly be in the $1,550,000 range, most of that funding is related to software fees that must be paid in the worst case scenario in which the ONGARD and DoIT teams cannot certify successful operation of the ONGARD system in the final DoIT mainframe configuration after upgrades to hardware and software are completed. The IV&V effort is budgeted based on the totals less the software fees ($1,200,000). Amount for IV&V estimate is bases on remaining $350,000 project budget. IV&V is complete when regular reports are delivered and accepted. $20,000

7. $1,700,100 includes $116k for retro certification on contract #14628 that has already been approved 7 Certification Request Budget Summary Mainframe Stabilization B UDGET R EQUEST FOR PCC C ERTIFICATION DescriptionFY12FY13FY14FY15FY16&After Staff - Internal $25,000$15,000 Consulting Services Contract Services for IV&V, programming and business analysis support. $143,100$217,000 Hardware SoftwareSoftware mainframe platform contingency fees if zOS 1.09 is extended (the monthly estimate of $200k was provided by DoIT Operations) $1,200,000 T OTAL $1,700,100$168,100$1,532,000

8. 8 ONGARD Mainframe Stabilization Risk Summary –Undefined process based on appropriation language may lead to delays Final appropriation language mirrors PCC certification Must have definition of additional steps required otherwise project may be delayed –DoIT mainframe upgrade timeline not finalized Schedule for mainframe upgrade under development Timeline for test window is not defined Current work on test and use cases can proceed until point at which testing is to begin If mainframe platform upgrades are not completed by June 2012, potential schedule impact for ONGARD stabilization –Worst Case Scenario Preliminary ONGARD testing with object code unsuccessful This scenario may require recompilation of all code If three month test window expires and new zOS 1.1x is moved to production, ONGARD contingency charges of $200k per month would begin for software payments to IBM & CA If worst case is experienced, additional expenditures will be required to correct situation and migrate to upgraded zOS as quickly as possible If problem is not solved for six months after new zOS moves to production, additional funds would need to be allocated

9. 9 ONGARD Mainframe Stabilization DoIT Impact –Mainframe DoIT is in charge—we are dependent on DoIT –Telecom No known impact—must be tested on new z114 –Security DoIT will ensure no impact—assume testing will be done –Disaster Recovery/Business Continuity New hardware and software configuration will greatly enhance DoIT capability to create DR/BC solutions because hardware and software will be within vendor support again Experience gained in implementing hardware and software upgrades will assist in building and enhancing DR/BC plans for DoIT mainframe enterprise services

10. 10 ONGARD Mainframe Stabilization Summary –Highest priority is to keep ONGARD running Must continue to collect the revenue Must minimize process disruption to end users At the same time, test and use cases must be developed and executed Business owners must define processes in writing Final authorization to move to new DoIT mainframe hardware/software platform will be signed off by four agency heads (DoIT, EMNRD, SLO, TRD) when deemed ready by IT and business units for each agency If worst case scenario develops (cannot move to new zOS when all other systems are ok to go), must begin to spend contingency funds to keep zOS 1.09 running –Mainframe Stabilization must be completed before starting next project Until Stabilization efforts are completed, timelines and activities for next project phase are uncertain Best case outcome would involve successful stabilization with object code on new zOS platform and would provide most opportunity (dollars available) to begin next phase.