Rethinking federal desktop computing

When the General Services Administration awards its seat management contract this spring, federal agencies finally will be able to evaluate if handing off responsibility for the management of the desktop environment can work.

NASA and the Bureau of Alcohol, Tobacco and Firearms (ATF) already have forged ahead with seat management programs, each awarding contracts last year for work within their agencies. But GSA's program is seen as the first program broad enough for all federal agencies to use as a vehicle for outsourcing desktop management.

What GSA, NASA and ATF are trying to discover is whether seat management can provide a way to focus on core objectives and pare down the size— and even the budgets— of government organizations. NASA's Jet Propulsion Laboratory, for example, expects to save several million dollars via the fixed-price, five-year contract it signed with Greenbelt, Md.-based OAO Corp. last December.

JPL's seat management agreement covers 8,600 PC and Apple Computer Inc. Macintosh systems. Richard R. Green, program manager for desktop and network services at JPL, said he expects costs to decline and quality to improve over the next five years because "OAO is more efficient at purchasing, can get better deals and effectively removes responsibility from JPL for owning systems."

A Services Buy

Seat management encompasses more than offloading PC ownership. It is not a leasing contract, although the monthly per-seat rate does include a leasing cost for each system. Instead, contractors and government officials said federal agencies must view seat management as a service— "Much like in the old days before users could buy their own phones," said Carleton Jones, president of Vanstar Government Systems Inc., Fairfax, Va.

In fact, seat management combines a number of existing information technology services, including hardware and software acquisition, asset management, desktop and network management, operations management, support services and technology refreshment, among others.

"Seat management is structured to provide users with improved IT performance and the ability to accurately predict their IT costs," said Terry Weipert, director of the network and desktop practice for Unisys Federal Systems Division, McLean, Va.

Analysts said the trend toward seat management is driven more by resource limitation, than by simple cost-cutting. "Seat management will allow federal agencies to save money, but perhaps not immediately," said Bob Dornan, senior vice president, Federal Sources Inc., McLean, Va.

However, agencies may see some immediate benefits. For example, at JPL, OAO has brought innovative management approaches, such as remote network management and systems administration, which would have been difficult for JPL to implement but are relatively easy for the contractor to add.

The contract has made it possible for JPL to reduce its head count by 130 employees and contractors, many of whom moved to OAO to perform systems administration and services.

Training, start-up costs and systems upgrades can make the transition to seat management expensive. The real justification for moving to a seat management contract comes when an agency loses 10 percent of its budget and must fire either a program manager or a network administrator, Dornan explained. "While [local-area network] management can be purchased, program management expertise is difficult to come by," he said.

Increasingly, federal agencies claim the goal of focusing on core responsibilities; relinquishing the duties related to acquiring and maintaining desktop systems is becoming an attractive alternative to managing it themselves, Dornan said.

A Slew of Options

The slate of services provided in a typical seat management contract generally include some combination of each of the following services:

* Hardware and software acquisition.

* Asset management of hardware and software.

* Hardware maintenance, including fixes and upgrades.

* Software deployment, which covers upgrades and the building of new applications, whether they are developed in-house or shrink-wrapped programs.

* Software support, including help-desk service.

* Training.

* Network monitoring and testing.

Part of what differentiates a seat management contract from just leasing or support services contracts is the need to buy the complete menu of services, vendors said. While federal agencies can read the GSA schedule and purchase "seat-like" services such as a help desk from a vendor, seat management offers more than help-desk services or systems leasing alone, vendors said. It is a pre-packaged group of services that covers all technology related to desktop computing, Unisys' Weipert said.

In a typical seat management contract, users buy levels of service that vary by department and the critical nature of a particular job, said Elaine Dauphin, vice president of marketing for the Systems Sciences Division of Computer Sciences Corp.

"For instance, if an agency wants 99.6 percent network availability, and a two-hour response time on hardware and software problems, they will pay more per seat than a contract that allows for 98.4 percent availability and four-hour or 12-hour response times for repairs," she said.

The level of service will vary from agency to agency, as will some of the contract's features, such as the inclusion of more expensive network management services. However, federal suppliers maintain that it is only through the economies of scale created by offloading much of the work associated with desktop computing that federal organizations can realize cost savings over time, said Dion Rudicki, client executive for sales and business development for IBM Corp.

The Caveats

If federal agencies are under the impression that outsourcing desktop and network services will bring immediate cost benefits, they are in for a rude awakening, according to analysts.

Costs vary greatly. The average cost per seat, per month to manage a desktop system is estimated at $225 to $290, according to Gartner Group, a Stamford, Conn. research and consulting firm. But the cost can escalate to $400 or more per seat, per month if an agency needs to have network and systems services available around the clock, seven days a week.

However, once the per-seat price is fixed, the agency will have a clear picture of its annual costs and will be able to plan for IT expenses. This is helpful, for example, if future downsizing efforts cut into the IT budget.

A seat management contract should make it relatively easy to alter service-level agreements to pay less per seat for help-desk services, for example, based on reports of activities over time, said Wanda Smith, acting director of the Seat Management Program Office for GSA's Federal Technology Service.

"The problem is that we can't sell a cookbook solution," said Ed Blanchard, vice president of desktop and network services for OAO. "We need to tailor our services to the needs of each user, which may make costs appear initially more expensive."

At JPL, for example, there are nine communities of users. OAO closely examined each group's needs and averaged out a cost per seat for the entire organization, Blanchard said.

The real savings are realized in the standardization and centralized control of IT, not necessarily in the acquisition of a seat management contract. Seat management providers maintain that federal agencies need only examine their cost of ownership to see that a well-managed PC environment can bring big savings.

The cost of owning a Microsoft Corp. Windows-based desktop system in a distributed network ranges from $9,869 to $10,786 per year, Gartner Group reported. Services account for more than 70 percent of the total, while desktop hardware makes up less than 25 percent. Services costs include technical support, system administration, networking support and end-user training costs, among others.

Bill Kirwin, an analyst with Gartner Group, said a well-managed distributed environment can reduce the total cost of ownership by up to 30 percent.

Making the Move

Agencies should consider several issues as they plan for migration to a seat management environment, observers said. Agencies need to assess the current environment: What is in place, what needs to be upgraded, what needs to be replaced and what level of service is needed for help-desk and network management functions?

GSA's Smith said federal agencies should look at operational and organization considerations when planning for seat management. Among them are building a common or standard architecture, fitting the systems into current lines of business and administering the contract.

Agencies also must define requirements for hardware, software, the level of networking and refresh rates, and they must define service levels for what the agency may need and currently cannot provide.

"Federal agencies must negotiate the level of service they are willing to pay for and make sure that their service level is at least as good or better than current service levels, or the organization will have many unhappy users," CSC's Dauphin said.

Federal agencies also must consider the fate of current systems' support personnel and the need to redefine their missions. "Most systems personnel are still needed to make strategic technical decisions, but not for the day-to-day operational control and support," Smith said.

Also key to the success of a contract is the relationship between the "outsourcer" and the "outsourcee." It must be seen as a team to help resolve issues of resistance. "Top-level management commitment is critical to building that team, because outsourcing is not popular among most government employees," OAO's Blanchard said.

Federal agencies will be able to measure the success of a seat management contract by carefully choosing service metrics, which can be measured by statistics gathered on the network and provided in reports to the agency.

Some of the metrics an agency may choose to measure include network response times, availability, the speed of resolving problems or downtime, and the speed of responding to requests for moves, adds and changes, said Gabriele Krivonak, project executive and manager of IBM's global service federal segment.

Contractors and federal personnel currently involved in seat management contracts did offer several tips for organizations considering such a transition. One tip is to limit hardware and software acquisitions to mission-critical only. Freezing existing configurations also is important for agencies evaluating if seat management will work for them.

To keep costs down, Blanchard recommended that federal agencies pick 10 to 15 metrics, such as availability and/or customer satisfaction, and measure those each month, based on the reports supplied by the contractors to monitor and better control their costs.

But most important, according to the experts, is that federal users must change their mindset from being owners to being users of equipment. "Think of desktop systems as a utility and seat management as a tool to better manage desktop costs and predict agency spending on desktop-related equipment and services," Smith said.

-- DePompa Reimers is a free-lance writer based in Germantown, Md. She can be reached at bdepompa@aol.com.

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