NOT FOR PUBLIC DISTRIBUTION State of Minnesota Technology Summary February 24, 2011

NOT FOR PUBLIC DISTRIBUTION Enterprise Assessment The evaluation of the opportunity to provide a centrally managed with locally delivered technology for the State of Minnesota

3 NOT FOR PUBLIC DISTRIBUTION Enterprise Assessment Definition Minnesota Law 2009, Chapter 101, Article 2, Section 105 directed the Office of Enterprise Technology to undertake an analysis aimed at managing executive branch information technology for greatest impact and efficiency. “The chief information officer of the Office of Enterprise Technology, in consultation with heads of other executive agencies, must report…. on a plan to transfer from other state agencies to the Office of Enterprise Technology state employees whose work primarily relates to development, upgrading, replacement, help desk, problem resolution, or maintenance of state data centers, system software, data networks, servers, workstations and office systems. “The report must include an estimate of the number of employees who would be transferred, an estimate of enterprise costs savings, an analysis of potential improvements in operations and agency-required service levels, a cost comparison of alternatives to the transfer plan including in-sourcing, shared services, outsourcing, and co-sourcing, and a proposed transition plan and schedule. “State agencies must participate and provide information necessary for the Office of Enterprise Technology to comply with this section.”

4 NOT FOR PUBLIC DISTRIBUTION Enterprise Assessment Financials State of Minnesota Total Annual IT Spend - $361M

5 NOT FOR PUBLIC DISTRIBUTION Centrally Managed Critical Success Factors

6 NOT FOR PUBLIC DISTRIBUTION The following are required for government to realize the benefits of the technology opportunities: Central Management and control of all Enterprise IT FTE’s, Budgets and Contracts A mandate for Centralized Management Legislative support for the Centralization The ability to capture some of the cost reductions (savings) for reinvestment into additional opportunities Key Opportunity Requirements

7 NOT FOR PUBLIC DISTRIBUTION 226 Extra FTE’s in a Decentralized Structure IT Resources

8 NOT FOR PUBLIC DISTRIBUTION Server Virtualization Opportunity Approximately 16% of the servers are virtualized (21% Wintel versus 7% UNIX). Best practices suggest the target should be 40% - 60%, representing a significant opportunity to reduce hardware costs and data center requirements. There is a significant opportunity to increase server virtualization, other States have seen average costs reductions from 15 to 20% utilizing virtualization over physical server replacement. Current annual spend is $9.6M for Windows and $4.1M for Unix servers

9 NOT FOR PUBLIC DISTRIBUTION Storage Management Opportunity Storage represents a significant consolidation opportunity that could be achieved through leveraging large centralized and shared SAN storage platforms. The current distributed storage would have to be migrated to the centralized storage over time as servers were consolidated to a central data center(s). The decentralized environment has created an excess amount of extra storage in the environment (45% or a little more than 1.2 petabytes), due to each agency maintaining separate storage and excess capacity. Currently Storage costs $6.9M annually

10 NOT FOR PUBLIC DISTRIBUTION Service Desk Opportunity Consolidation of multiple Service Desks allows for greater service levels with reduced costs. Current Decentralized Service Desks cost $6.5M annually

11 NOT FOR PUBLIC DISTRIBUTION Desktop Management Opportunity It should be noted there are just over 32,000 PC users, yet there are a total of 37,000+ Desktops and Laptops. This shows the State is over purchased by 5,000+ devices, and also likely includes excess software licensing, maintenance and other support costs. Currently PC’s costs $21M annually There is a lack of centralized asset management through the decentralized environment, which has lead to multiple issues. Some of these include inaccurate monitor counts, and excess PC’s which should be retired.

NOT FOR PUBLIC DISTRIBUTION Shared Service Catalog The Shared Service Catalog allows for the allocation and recovery of the appropriate IT funds from a centralized organization

13 NOT FOR PUBLIC DISTRIBUTION The Office of Enterprise Technology has been using an service catalog methodology for several years. The current catalog has recently been updated and has the capabilities to address a shared services centralized environment. The goals of the Shared Service Catalog are: Centrally managed locally delivered technology services Continue progress toward a central IT model Recover service costs on a break-even basis Provide quality service at competitive rates Conduct an open, transparent and inclusive process Service Catalog Initiative

14 NOT FOR PUBLIC DISTRIBUTION Financial Benefits of Centralization Financial Benefit of Enterprise Consolidation Centralized Net cost savings range from $25M to $41M annually in a functioning production mode