Reforms spur IT cost analyses
- By Diane Frank
- Nov 01, 1998
Information technology reforms and the availability of contracts that allow agencies to outsource the desktop are forcing agencies to assess how much they spend on computer systems.
Two recently awarded desktop outsourcing contracts— Outsourcing Desktop Initiative for NASA (ODIN) and the General Services Administration's Seat Management— as well as requirements in the Government Performance and Results Act (GPRA) and the Clinger-Cohen Act are pushing agencies to determine how much money they spend each year on IT.
GSA is the latest agency to tally how much it spends on its computer systems— figuring total cost of ownership. TCO includes the cost of buying a system and the cost of maintenance, upgrades and fixes. GSA undertook the TCO study with Harris Corp. and recently issued a draft statement of work on a seat management contract.
The study was key because GSA designed the contract not only to handle hardware and software management issues but also to manage the cost of ownership, said Wanda Smith, Seat Management program director. To do that, however, an agency must know what systems it has and what it is spending on those systems.
"Most agencies do not know what their TCO is...and most of them don't want to know," said Charles Self, assistant commissioner of the Office of Information Technology Integration, the GSA office that holds the Seat Management contract. "It's a tough first step."
But determining what an agency spends on IT is important whether or not the agency is deciding to use seat management, said Jerry Slaymaker, senior adviser to the Environmental Protection Agency's chief information officer.
ODIN and Seat Management are the most obvious thrust for new IT implementations, and thus they are the two areas in which TCO is being discussed the most, Slaymaker said. But, in addition, "GPRA is out there and is as serious as a heart attack," he said. "Clinger-Cohen, [President Clinton's] site license executive order.... There's a tremendous number or pressures for an organization to get on with this."
GPRA requires agencies to link the amount of money they spend on IT to their ability to carry out their missions. Clinger-Cohen requires, among other things, that agencies adopt more businesslike practices for IT use and acquisition. President Clinton last month issued an executive order requiring every agency to establish a method of tracking software licenses to ensure compliance with copyright laws.
Slaymaker is putting together the framework for determining TCO continuously at the EPA. "What we're really trying to do at EPA is establish a base where we can make business-based IT decisions," he said.
NASA is using its ODIN contract to switch many centers to desktop outsourcing contracts. But to convince the space agency to accept outsourcing, CIO Lee Holcomb put together case studies demonstrating its benefits. The first case study was thrown out because his office had not included a TCO study, he said.
Before the Bureau of Alcohol, Tobacco and Firearms undertook a major outsourcing project last year, determining what was needed and how much to spend was the most important part of the effort, said Patrick Schambach, assistant director of the Office of Science and Technology and CIO at ATF.
ATF, which had practically no IT infrastructure, worked with Unisys Corp. to put in place a network with standardized software for more than 4,000 employees at 188 locations. "I cannot say enough about taking the time to define what your requirements are," Schambach said.
Harris, through the Seat Management Program Office, is working with federal organizations in the Air Force, the Navy and law enforcement to determine TCO.
The first step for the Distributed Computing Environment Improvement Services division at Harris is to provide an assessment of an organization's IT structure from the viewpoint of architecture, acquisition, support, management and end users. A determination of the TCO follows, and only then does Harris evaluate whether GSA's Seat Management contract is the best vehicle for the agency's IT needs.
"We're not going to push Seat Management," said Jeff DePasquale, practice manager and managing consultant at Harris DCE. "If it turns out to be a crummy deal for the agency, we're going to say that."