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Copyright © 2004 TietoEnator Corporation IT outsourcing – City of Stockholm 2006-04-06 Rolf S Lindkvist Lennart Larsson
Copyright © 2004 TietoEnator CorporationPage 2 2005-11-19 History In 1994 the City of Stockholm sold their IT company to WM-data, who took over everything, including personnel. A procurement of operations and administration was undertaken in 1999- 2000. TE won the contract. The agreement will expire in 2006
Copyright © 2004 TietoEnator CorporationPage 3 2005-11-19 Procurement Procurement decision taken in 2004-06-07 regarding IT and telephony and a total solution. Decision taken 2005-11-23 Agreement signed 2005-12-06
Copyright © 2004 TietoEnator CorporationPage 4 2005-11-19 Business deal content Server operations Ergo group Telephony Telia System administration TE Service centre TE System operations TE TietoEnator is the overall provider Agreement period: 4 + 2 + 2 = 8 years
Copyright © 2004 TietoEnator CorporationPage 5 2005-11-19 Evaluation model Based on the so-called professors model Prices are not graded Points are awarded for Quality criteria A penalty of 3 kronor is added to the price offered if they do not achieve 3 points in the evaluation Price offered Question 1 Penalty point Question 2 Penalty point Question n Penalty point Adjusted comparative figure
Copyright © 2004 TietoEnator CorporationPage 6 2005-11-19 Procurement method The City chose a negotiated procurement It gives the opportunity for dialogue, clarification and explanation, etc. The suppliers then have the opportunity to adapt the prices Many public procurers choose open or restricted procurement –Your cards are on the table –The possibilities for dialogue are slim –Formal and bureaucratic Negotiated procurement allows for –Better results for both parties –The prices will, in most cases, be more favourable to the supplier
Copyright © 2004 TietoEnator CorporationPage 7 2005-11-19 The business deal – distinctive features (1) The largest Public sector IT procurement ever Total solution – Prime Contractor –Both IT and telephony –The City was the first within the Public sector Joint procurement for IT and telephony –First in the Public sector –Based on ITIL standards –Focus on what is to be delivered –Hardware, manufacturer, capacity etc of no interest –Delivery quality controlled through SLAs –All services and functions documented in a Services catalogue.
Copyright © 2004 TietoEnator CorporationPage 8 2005-11-19 The business deal – distinctive features(2) Agreement-related benchmarking. Can include: –Price –Customer satisfaction –TCO costs –Collaboration capability –Participate in the Citys development work Evaluation model –Based on the so-called professors model –The price is not graded –Points are awarded for Quality criteria
Copyright © 2004 TietoEnator CorporationPage 9 2005-11-19 The role of Prime contractor One uniting supplier to the City Integration of server operations and system operations Telephony integration; fixed, mobile, IP etc. Integration assignments for IT, telephony and mobile solutions One common Service centre for both IT and telephony Actively participate in developing the Citys IT and core business Procure new services when required
Copyright © 2004 TietoEnator CorporationPage 10 2005-11-19 Service centre – focal point for IT and telephony Stokab Telia TietoEnator Servicecentrum Ementor Telia Stokab TietoEnator Service centre The Citys IT and telephony users Ementor Other eventual interested parties
Copyright © 2004 TietoEnator CorporationPage 11 2005-11-19 How much does the City gain by the procurement ? Present costs 204 million 169 million Annual saving = 35 million SEK, -17,2% During agreement period 35x8 =280 million SEK in total Running a medium-sized school, approx. 500 pupils 350 nursery school places 55 000 hours of home-help Costs with the new agreement
Copyright © 2004 TietoEnator CorporationPage 12 2005-11-19 Governance model Operations and administration meetings Area meetings Cooperation meeting Business meetings Business level 1 per year Strategic level 4 per year Functional level 2 per year Operative level 1 per month
Copyright © 2004 TietoEnator CorporationPage 13 2005-11-19 Clear division of responsibilities Ordering, delivery and follow-up of the agreed services Marketing and sales Framework agreement manager Delivery etc.Marketing
Copyright © 2004 TietoEnator Corporation Any questions…
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