Enterprise Hosting. Why INL Did Not Outsource. Carl Fennen. Deputy Chief Information Officer
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1 Why INL Did Not Outsource Enterprise Hosting Carl Fennen Deputy Chief Information Officer National Laboratories Information Technology Conference May 5, 2015 Seattle, Washington
2 Background: The Business Case/Model Transitioning to an agile business model 2
3 Background: Moving to Commercial Suppliers Greatly Improves our Efficiency Streamline Optimize IT system portfolio to divest of lower value or high risk assets Consolidate systems and services Identify opportunities for selfservice Rationalize IM services and service levels to mission needs Retain in house value added services Outsource Messaging & Collaboration Telecommunications Emergency Radio Services Technical Support Services Document & Records Support Publication Services Managed Print Services Plant Mail The INL managed service model employs commodity services at competitive prices creating a flexible and agile service delivery model, incorporates commercial best practices and benefit from technology advances 3
4 Background: Achieving Results Outsourced $9M of Information Management service budget Positioned to scale the volume based on demand and funding Shifting from capital to operating expense Accommodating operating cost challenges Realizing benefits of service technology advancement Managed Services = Agility 4
5 This is a story about Failure... and Success 5
6 The Vision 6
7 The Decision Service Business Criteria Met Enterprise Hosting Sensitivity of Data Specialization Coupling with Business Processes Measuring Performance Market Availability Differentiating Frequency Ease of Execution Employee impact Bargaining unit Risk Cost 7
8 The Plan Step 1: Manage the Effort as a Project Step 2: Expression of Interest (EOI) Initial requirements Input on additional requirements Identify potential players Over 80 respondents Narrowed to 20 realistic participants Step 3: Review Statement of Work with participants Step 4: Request for Proposal 8
9 Statement of Work: Salient Points Fully managed service FedRAMP or FISMA Moderate ATO Combination of onsite and off-site (hybrid) Phased migration Backup and disaster recovery included 9
10 Request for Proposal #1 Small set aside Three Bidders Costs 3X higher than in-house Data call and B&F to bring price down Unsuccessful, closed the RFP 10
11 11
12 Plan B Learn and Adapt Performed lessons learned activity & refactored approach to better understand and attract the right market players Met with vendors Consulted Gartner Refined SOW Refactored Pricing Re-examined procurement strategy 12
13 Revised Statement of Work: Salient Points Fully managed service FedRAMP or FISMA Moderate ATO Off-site only (government cloud) Phased migration Backup and disaster recovery included Insurance Incentives and Penalties 13
14 Request for Proposal #2 Remove the small business requirement Three Bidders Costs 2X higher than in-house Performed analysis Unsuccessful, closed the RFP 14
15 The Analysis Bids were twice INL expectations INL an early adopter in the market The market for FedRAMP/government cloud hosting not mature Bidders recovering the sunken costs of FedRAMP certification Price to partner and optimize BEA's infrastructure high Security, disaster recovery and contingency planning requirements drove price 15
16 16
17 Moving Forward Reinvestment in human capital, processes and tools. Optimize infrastructure, platforms and applications Consolidate and modernize on-site data centers Implement other mature technologies in the Oracle, storage and VM Farm spaces (e.g. SDX) Continue to work with industry to gauge the right time to proceed with managed hosting 17
18 Takeaways 18
19 Takeaways Don t quit too early There is no such thing as failure because you learn The past does not equal the future However... Certified security in the cloud is still a challenge Risk associated with downstream vendors is high Disaster Recovery and backup is expensive Optimize your business processes, virtualize, hybridize Keep your core infrastructure in-house 19
20 The National Nuclear Laboratory 20
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