0. DoD IT Enterprise Strategy and Roadmap: What’s Ahead with the DoD ESI
Floyd Groce, DON CIO ESI Co-Chair
Jim Clausen, DoD CIO ESI Co-Chair
Jim Cecil, Consultant to DoD CIO & ESI
DON East Coast IT Conference – 11 May 2011

1. SECDEF & Federal CIO Agendas ESI Overview ESI Projects Summary

2. Top-Level Objectives and Guidance are Driving Change in IT
SECDEF Robert Gates 8/9/2010 briefing:
Reduce $100 billion overhead to redirect to programs and warfighting
Improve efficiencies in contracting
Reduce duplication in overhead functions
Fewer, flatter and more agile and responsive structures
Centralize IT processes to achieve economies of scale
Consolidate IT infrastructure
U.S. CIO Vivek Kundra, “25 Point Implementation Plan to Reform Federal Information Technology Management” (12/9/2010):
Achieve Operational Efficiencies
Shift to “cloud first” policy
Leverage shared services of commodity applications
Adopt modular implementation approaches
Effectively Manage Large Scale IT Programs
Develop IT acquisition professionals
Use Working Capital Funds (WCF) and pool funds
Increase transparency in use of IT funds
Consolidate IT spending
Adopt strategic sourcing solutions 2

3. What is DoD ESI?
Summary: Joint initiative to save time and money on acquisition of commercial software, IT hardware and services
Executive sponsor: DoD CIO
Team composition: Army, DON, Air Force, DLA, DISA, NGA, OSD
Goals:
Save time and money on commercial IT acquisition
IT Asset Management
Operations:
Award enterprise agreements for IT products and services
Implement unified vendor and contract management strategy
Results:
Over 80 enterprise software agreements
Over $4 billion cost avoidance since inception
IT asset visibility for DoD ESI suppliers
More efficient acquisition processes for ESA users 3

4. DoD ESI Foundation: Target DoD Customer Needs & Efficiencies
Lead implementation of DoD enterprise agreements for Commercial Off the Shelf Information Technology (COTS IT), enterprise IT asset management (ITAM), and IT acquisition policy to lower the total cost of IT ownership for the DoD enterprise
Establish and maintain enterprise strategic sourcing relationships with leading IT vendors
Operate using an agile, low overhead model executed through Software Product Managers (SPMs) in five DoD Components
Work closely with the OMB/GSA SmartBUY Program to optimize IT acquisition policy and implement SmartBUY within DoD

5. DoD ESI & GSA SmartBUY Smartbuy …
Federal government strategic sourcing for software
Administered by the General Services Administration (GSA)
Aligned under the Federal Strategic Sourcing Initiative (FSSI)
Implemented within DoD through DoD ESI
Advised SmartBUY at start-up
Manage 21 GSA SmartBUY agreements
Consideration is mandatory, where requirements match offerings
DoD buyers must check DoD ESI website ( for COTS software 5 5

6. DoD ESI IT Strategic Sourcing
DoD CIO Enterprise Perspective at Federal Level
Represent DoD under Federal Strategic Sourcing Initiative's new IT Commodity Team
FAR Sub-committee for IT
Enterprise agreements and acquisition vehicles
Software licenses, maintenance and technical services
Enterprise access: All DoD Components, Intelligence Community (IC), NATO, Auth. Contractors
Enterprise licenses
Enterprise licenses for core infrastructure and common products
Shared acquisition and license management processes
Economies of scale
Aggregate demand & volume discounts
Leverage DoD buying power in vendor negotiations
Establish special contract terms and conditions for enterprise needs
Streamlined acquisition processes
Central contract negotiation and administration by ESI SPMs and Contracting Officers
Standard, streamlined enterprise-wide ordering processes
Expertise in software licensing: ESI SPMs and Contracting Officers
Over $4B in cost avoidance since 1999

7. DoD ESI Model: Lean & Agile
Lean enterprise governance & management structure
Recognized in FAR/DFARs, DoD 5000, and CIO policy & guidance
Aligned under Enterprise Governance Board (EGB)
Matrixed team structure
Agile operations
Empowered Working Group with minimal decision points
Flexible framework for selecting target technologies
Small team footprint embedded in OSD
Minimal dedicated staff
Execution through five Components 7

8. DoD ESI Vendors & Product Lines

9. DoD ESI Strategic Projects
Enterprise licensing
Compass systems integration agreements
Consolidate DoD IT hardware buying
DoD Unified Master Gold Disk Standard
Enterprise standards for ITAM
Each project is summarized in the pages that follow …

10. Project #1: Enterprise licensing for core software
Approach: * Establish enterprise specifications
* Consolidate requirements and ordering across DoD
* Leverage ESI SPMs as PMOs for centralized license management.
Impact: * Lower licensing costs
* Reduce duplicative acquisition efforts
* Enhance interoperability and security through common configurations
* Increase leverage to drive product requirements
Alignment: * Improve the efficiency and reduce costs in the contracting arena
* Adopt strategic sourcing solutions
* Economies of scale
* Consolidate commodity IT spending
* More effectively negotiate for volume discounts and improved service 10

11. Project #2: Compass systems integration agreements
Approach: * Seek highly qualified general & niche SI providers across the life-cycle
* Require modular approaches for conventional and net-centric/SOA solutions
* Provide a portal for SI best practices – including modular approaches
Impact: * Access to highly qualified niche and general providers across the SI life- cycle
* Planning and estimating tools
* Flexibility in contract structure – fixed price, cost reimbursable, T&M
Alignment: * Improve the efficiency and reduce costs in the contracting arena
* Reduce duplication, overhead
* Use specialized IT acquisition professionals
* Modular development – deploy working business functionality in release cycles no longer than 12 months
* Deliver large IT programs in a modular time-boxed manner
* Develop guidance on contracting for modular development
* Facilitate adoption of modular contracting practices 11

12. Project #3: Consolidate DoD IT hardware buying
Approach: * Target large volume items – PCs, laptops, printers, routers, etc.
* Leverage existing large volume processes/vehicles, like the Army Consolidated Buy (CB) & USAF Quantum Enterprise Buy (QEB)
* Drive all Components to a few optimal procurement vehicles
Impact: * Provide lowest prices for commodity IT hardware to all DoD agencies
* Increase asset acquisition visibility across DoD
* Drive down support costs through standardization
Alignment: * Economies of scale
* Consolidate [IT infrastructure] assets
* Creating savings in acquisition, sustainment and manpower costs
* Adopt strategic sourcing solutions
* Effectively negotiate for volume discounts and improved services levels 12

13. Project #4: DoD Unified Master Gold Disk Standard
Approach: * Provide common image for most common desktop platforms
* Provide core O/S, applications
* Leverage use of enterprise software licenses
* Leverage shared/reciprocal network certification
* Align hardware lifecycle management with unified golden master
Impact: * Increase IA by providing secure configurations for common applications
* Reduce costs of duplicative gold disk management & certification processes
* Drive adoption of enterprise licenses
* Increase interoperability and enable joint operations through common standards
Alignment: * Economies of scale
* Consolidate these assets [IT infrastructures, processes and application ware]
* Standardize approach -- address “the problem ... that too many parts of the department, especially in the information technology arena, cling to separate infrastructure and processes”
* Specialized IT acquisition teams … to develop a model to scale more broadly

14. Project #5: Enterprise standards for ITAM
Approach: * Incorporate ITAM into the Defense ITIL (DITIL) Service Asset Configuration Management (SACM) process guide
* Evaluate emerging ITAM industry standard(s) (ISO Software Tagging Standard, NIST Common Platform Enumerator (CPE) unique software identifiers)
* Establish DoD ITAM data standards for DPAS, WAWF and EDA
* Coordinate efforts with GSA Federal ITAM program & through DoD ITAM IPT
Impact: * Optimize management and use of assets by aligning disjointed ITAM processes across CIO, IA and Acquisition
* Provide enterprise-level visibility into IT assets
* Implement net-centric ITAM services to optimize acquisition and utilization
Alignment: * Reduce costs in the contracting arena
* Get better buying power
* Consolidate these assets [IT infrastructures, processes and application ware]
* Effective IT acquisition requires … deep understanding of the dynamic commercial IT marketplace
* Increasing transparency in the use of IT funds
* Effectively coordinate or consolidate the procurement of IT-related goods and services and demand is aggregated within agencies 14

15. DoD ESI promotes efficiencies and enterprise IT management
Provides economies of scale for IT acquisitions
Protects enterprise-level IT management interests in IT vendor negotiations
Returns significant cost avoidance to ordering agencies
Promotes enterprise-level visibility into IT asset inventories through ITAM
Promotes adoption of standards and COTS IT solutions

16. DoD ESI promotes efficiencies and enterprise IT management (cont.)
Streamlines access to net-centric technologies and services
Promotes partnering between DoD and DNI
Promotes cyber security – SCRM, SwA, software asset visibility
Ensures that unique DoD enterprise needs are recognized in Federal IT policy and initiatives

17. DoD ESI Working Group Members
DoD ESI Co-Chairs
DoD CIO: Jim Clausen
DON CIO (co-chair): Floyd Groce
DoD Component Representatives
Army: Dee Wardle
DLA: Katherine Patterson
(703)
DIA: Dwight Holmes
(301)
OSD: Paul Boyles
Air Force: Phil Douglas
DISA: Andrea Cabbagestalk
NGA: Wayne McCormick
ODNI: Cheri Benedict
DoD ITAM PM: Bob Smith (DoD CIO)
ext 124

18. Backup

19. ESI & IT Asset Management (ITAM)
What is ITAM?
IT Asset Management (ITAM) is the set of business practices that join financial, contractual and inventory functions to support life cycle management and strategic decision making for the IT environment.
The DoD CIO Community needs better visibility into enterprise IT assets!
Track & Manage IT Assets
Data
DoD ITAM COI
An ITAM Community of Interest (COI) governs and directs ITAM within DoD. A COI Data Working Group will define an end-to-end DoD ITAM process and the COI is working with AT&L to enhance DPAS’ capabilities for IT accounting.
Tools
Processes
Standards
DoD ESI & ITAM
The DoD ITAM program is aligned with DoD ESI to clearly link enterprise ITAM objectives with enterprise IT strategic sourcing.
Governance

20. Increasing Efficiencies through Enterprise Behaviors excerpts from Secretary Gates’ Aug. 9, 2010 speech:
“…the task before us … is significantly to reduce [the department’s] excess overhead costs and apply the savings to force structure and modernization”
“… this year the military services were assigned the task of finding more than $100 billion in overhead savings over the next five years. Unlike budget cutting efforts of the past, the services will be able to keep the savings they generate to reinvest in higher-priority warfighting needs and modernization programs”
“… [USD AT&L] has launched an initiative to improve the efficiency and reduce costs in the contracting arena, the goal being to get better buying power for the taxpayer and warfighter in defense goods and services”
“… I am announcing an initial set of decisions designed to reduce duplication, overhead and excess in the defense enterprise and over time instill a culture of savings and restraint in this department”

21. Increasing Efficiencies through Enterprise Behaviors excerpts from Secretary Gates’ Aug. 9, 2010 speech (cont.):
“We need to create a system of fewer, flatter and more agile and responsive structures”
“…there are great benefits to be gained in cost and efficiency from taking advantage of economies of scale. The problem is that too many parts of the department, especially in the information technology arena, cling to separate infrastructure and processes …This decentralization approach results in large cumulative costs and a patchwork of capabilities that create cyber vulnerabilities and limit our ability to capitalize on the promise of information technology.”
“I'm directing an effort to consolidate these assets [IT infrastructures, processes and application ware] to take advantage of the department's significant economies of scale, thereby creating savings in acquisition, sustainment and manpower costs. This action will allow the increased use by the department of common functions and improve our ability to defend Defense networks against growing cyber threats.”

22. U.S. CIO: IT Management Reform
The 9 Dec 2010 plan for IT management reform seeks to deliver more value to taxpayers for IT spend:
Shift to “Cloud First” policy. Each agency will identify 3 “must move” services within 3 months and move one of those services to the cloud within 12 months and the remaining 2 within 18 months
Reduce number of Federal data centers by at least 800 by 2015
Only approve funding of major IT programs that use specialized IT acquisition professionals
Work with Congress to consolidate commodity IT funding under the Agency CIOs
“Cloud technologies and infrastructure-as-a-service enable IT services to efficiently share demand across infrastructure assets”
Leveraging shared services of “commodity” applications such as across functional organizations allows organizations to redirect management attention and resources towards value-added activities
Modular development delivers functionality in shorter timeframes and has long been considered best practice in the private sector and in some areas of government
Moving forward, Federal IT programs must be structured to deploy working business functionality in release cycles no longer than 12 months (ideally less than six months)

23. U.S. CIO: IT Management Reform (cont.):
Effective IT acquisition requires a combination of thorough knowledge of the Federal acquisition system, including the tools available, deep understanding of the dynamic commercial IT marketplace, and the unique challenges inherent to successfully delivering large IT programs in a modular time-boxed manner.
OFPP will lead an effort over the next 6 months to study the experience of these agencies that have already created specialized IT acquisition teams, to develop a model to scale more broadly.
OFPP will work with the acquisition and IT communities to develop guidance on contracting for modular development …OFPPO will develop templates and samples, and will create communities of practice to facilitate adoption of modular contracting practices.
Analyze existing working capital funds and other vehicles for pooling funds and extending availability of funding. These accounts add flexibility by pooling bureau-level funds to serve agency-wide purposes.
The Federal CFO and CIO Councils will create a set of guidelines for increasing transparency in the use of IT funds.

24. U.S. CIO: IT Management Reform (cont.):
Agencies … and even programs currently design, build and operate independent systems for “commodity” IT services (e.g., , data centers, content management systems, web infrastructure) … [which] are often duplicative and sub-scale … [and] draw resources away from IT programs that deliver value … On an annual basis, the Agency CIOS and the Federal CIO Council will identify “commodity” services to be included in this [inter- and intra- agency IT services] funding model [for “commodity” IT services]. A benefit of consolidate commodity IT spending is the ability to move more readily to adopt strategic sourcing solutions. Once agencies with common business needs can effectively coordinate or consolidate the procurement of IT-related goods and services and demand is aggregated within agencies, it will be easier for the government to more effectively negotiate for volume discounts and improved services levels.