1. City of Minneapolis IT Outsourcing Why We Outsource &
How We Measure Success
Karl Kaiser, CIO

2. City of Minneapolis IS Vision
Business Information Services (BIS)
will transform City government to be more
integrated, customer centric, efficient,
accountable and accessible
Our Mission: Drive Effective Management of City Government
Lead change and improving business outcome
Implement business needs-driven IT solutions
Improve City results and operations
Implement a results-based culture and management system
Provide cost-effective, efficient & reliable information services

3. Pre-Outsourcing Environment
Approximately 4,500 employees
150+ servers (Sun, IBM, Unisys, Compaq)
More than half of installed technology had reached obsolescence
Funding sources for technology refresh were scarce
No 24/7 support which is critical for public safety and Internet/Web support
No disaster recovery/back-up data center facility
Space lease expiration required relocation of city’s data center

4. Reasons to Outsource Management Issues
Installing & maintaining computers is no longer a core function of internal IS departments
Nearly 60% of IT budget and considerable management energy focused on keeping IT infrastructure operational
IT Management and staff distracted from their core mission of providing information services required to run the City’s business
Because of salary constraints more than 1/3 of IT operations staff were expensive contractors
Inefficient customer service delivery

5. Key Business Drivers Cost Savings One-time Cost Avoidance Issues
Reduction in the use of high cost contract employees
Predictable cost for hardware and systems software maintenance software leases and licensing fees
Reduced operating costs
One-time Cost Avoidance Issues
Public Works Merger - $1.5M
Disaster Recovery - $4.5M
Data Center Relocation - $3.5M
Operating Cost Issues
Providing 24x7 support – cost increase of $1.6M per year
Technology Refresh/Upgrades – about $6M per year
Strategic
Focus away from technology to business needs

6. Our Approach to Outsourcing
Transfer of all IT assets
PDAs, PCs, laptops, routers, switches, servers, printers
Purchased by outsourcing vendor (Unisys) at Fair Market Value
Physical migration of all servers
Migrated to outsourcer’s data center
Outsourcer to assume all support functions:
Desktop/laptop/PDA “break/fix” support
LAN/WAN, Systems Monitoring and Administration – 24x7
Software License Administration
Physical Database Administration (MS SQL, Oracle)
Data Center Hosting (100+ Servers)
Technology Planning and Refresh Strategy
Disaster Recovery
911/ECC Technology Upgrade
Help Desk functions

7. The Importance of Partnership in Vendor Selection
Outsourcing is like a marriage
A divorce can be very expensive
This is a relationship contract
This is not so much about technology;
it is mostly about people and collaboration

8. How To Measure Success Service Level Agreements (SLAs)
Necessary, but not the primary indicator for success
Use SLAs like the Dashboard of your car… If a warning light comes on, work with your service company to fix the problem
Customer Satisfaction
Best indicator for Success
Frequent Customer Satisfaction Surveys
Solicit feedback after service call completion
City/Vendor Relationship
This is about excellence in Customer Service
Customer Service is about Peoples’ Attitudes
Focus on the Relationship
Be collaborative; work hard to
avoid finger pointing

9. Benefits Dramatically Increased Service Level Agreements
$20+ Million Cost Savings
Most Importantly: a Shift in Focus away from technology for its own sake… to services that add value for the business

10. Questions
Questions?