Gaining perspective on seat management

Every summer it seems one issue crops up and takes the information technology community by storm. A few years ago, discussions centered on the new procurement rules: Were the new rules too radical? Could industry compete effectively under these rules? Would prices increase? Over time, reason prevailed; we now understand the new rules and how government as well as the IT vendor community can collectively benefit from them. Last year, the debate circled around the issue of blanket purchase agreements. Did the new rules concerning BPAs go too far? Were there too many BPA contracts or too few? Would prices increase? Once again, confusion yielded to logic and reason; the IT industry has used BPAs effectively, prices have decreased, and the initial worry has subsided.

The current debate revolves around the effectiveness of "seat management" as a procurement vehicle for government agencies. Should the IT community use seat management in order to provide its customers with more efficient and state-of-the-art technology? What are its benefits? What will happen to prices?

As with the nascent disorientation concerning procurement rules and BPAs, the current debate has yet to arrive at a proper definition and understanding of seat management. Technically, Seat Management is nothing more than a contract awarded by the Office of Information Technology Integration in the General Services Administration's Federal Technology Service. Seat Management is not a type of IT solution. Furthermore, if the IT industry fails to understand and convey what Seat Management (as a contract) can do for federal agencies, its incredible potential will remain untapped.

The focus under Seat Management should be Information Technology Infrastructure and Services Outsourcing, or ITISO, to create a new acronym. The real issue we ought to be discussing is whether an agency should outsource its IT infrastructure and services, not whether an agency should or should not use Seat Management. By outsourcing this key function, agencies will be able to save on in-house developmental, service and support costs. Thus, while the overall price for IT products may increase after outsourcing, cost savings to government agencies would accrue after accounting for reductions of other expenditures. Furthermore, with ITISO, an agency could obtain more effective, efficient, interoperable IT products and services that support the agency's mission. Finally, an agency could secure state-of-the-art expertise from the private sector at a reduced overall Total Cost of Ownership (TCO).

Recent estimates for the costs of infrastructure and services vary from $5,000 per user, per year to $20,000 per user, per year. The Army estimates its infrastructure and services costs at about $13,184 per user, per year. The potential for better services, with lowered TCO, exists with outsourcing. Through outsourcing, an agency has the potential to reduce its TCO by up to 10 percent or by $500 to $2,000 per user, per year. So even if outsourcing increases IT procurement costs of products and services by a one-time direct cost, TCO actually decreases over time. The agency wins: Outsourcing reduces the overall TCO, and the agency capitalizes on private-sector expertise. This financial benefit is in addition to the expertise gained and the smooth upgrade path to emerging technological solutions.

Even more important than the finances and the technology migration of an IT restructuring approach is the "works better" aspect of our new procurement goals: "a government that works better but costs less." By outsourcing, an agency can redirect its IT and chief information officer resources to maximize its mission effectiveness. Companies such as Xerox Corp., Eastman Kodak Co. and General Motors Corp. realized years ago that IT infrastructure management is a demanding and intricate function; they decided to leave this burden to the experts in the field.

While directing internal IT resources to support their respective missions, these companies were able to maximize each dollar spent on developing and maintaining effective IT capabilities.

As a final note, outsourcing is not a panacea for all federal agencies. There is no single IT action that stands alone in its potential to solve our productivity issues. There are agencies that can and do manage this function superbly. The correct analytical approach an agency should use to determine whether Seat Management is the best avenue to support its mission is to answer the following questions:

Can our agency reduce TCO by outsourcing its IT infrastructure management? Can our agency improve its use of available IT resources to support its mission through ITISO? Does this action free up resources that can be more effectively used in a mission-focused manner?

Even if the answers are not immediately clear, an agency should determine what is the best approach for maximizing dollars for IT infrastructure and service. In other words, whether an agency should rely on Seat Management, the GSA schedule, the Outsourcing Desktop Initiative for NASA or outsource through its own bid is the last question to ask, not the first.

-- Guerra is a 30-year veteran of the federal IT community and is president of Robert J. Guerra & Associates, Fairfax, Va. He can be reached at rguerra@govstrategy.com.

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