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Information Technology

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  • 1. Information Technology Asset Management Plan 2003/04 through to 2012/13 Stephanie Mardell Strategic Architect Information Technology “Delivering Information Technology Services Version 1.0 with Excellence” July 2003
  • 2. Asset Management Plan – Information Technology Table of Contents 1 EXECUTIVE SUMMARY .............................................................................................................................. 1 1.1 ISSUES AND CONCLUSIONS ......................................................................................................................... 1 2 INTRODUCTION ............................................................................................................................................ 3 2.1 PURPOSE OF THE DOCUMENT ...................................................................................................................... 3 2.2 RELATIONSHIP WITH OTHER COUNCIL DOCUMENTS ................................................................................... 3 3 ASSETS.............................................................................................................................................................. 5 3.1 CONDITION AND STATUS OF INDIVIDUAL ASSET GROUPS ............................................................................ 5 4 LEVELS OF SERVICE ................................................................................................................................... 8 4.1 CUSTOMERS’ NEEDS AND EXPECTATIONS ................................................................................................... 8 4.2 STRATEGIC DIRECTION AND OBJECTIVES .................................................................................................... 9 4.3 CURRENT LEVELS OF SERVICE .................................................................................................................. 10 5 FUTURE DEMAND ....................................................................................................................................... 12 5.1 DEMAND FORECAST ................................................................................................................................. 12 5.1.1 Computerisation of business processes and procedures .................................................................... 12 5.1.2 New business opportunities and initiatives......................................................................................... 12 5.1.3 Vendor certification ............................................................................................................................ 13 5.1.4 Operating system and application roadmaps ..................................................................................... 13 5.1.5 Support lifecycle ................................................................................................................................. 13 5.1.6 New technologies ................................................................................................................................ 13 5.1.7 Disaster recovery requirements.......................................................................................................... 14 5.2 DEMAND MANAGEMENT PLAN .................................................................................................................. 14 6 ASSET MANAGEMENT PRACTICES....................................................................................................... 17 6.1 DATA AND INFORMATION SYSTEMS .......................................................................................................... 17 6.2 FUTURE INFORMATION SYSTEMS .............................................................................................................. 18 6.3 RISK MANAGEMENT ................................................................................................................................. 18 Information Technology Page i Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 3. Asset Management Plan – Information Technology 6.4 ASSET MANAGEMENT IMPROVEMENT ....................................................................................................... 18 7 FINANCIAL SUMMARY ............................................................................................................................. 21 7.1 FUNDING POLICY ...................................................................................................................................... 21 7.2 REVENUE.................................................................................................................................................. 21 7.3 HISTORICAL EXPENDITURE ....................................................................................................................... 21 7.4 DEPRECIATION ......................................................................................................................................... 22 7.5 2003/04 BUDGET ...................................................................................................................................... 23 7.6 TEN YEAR FINANCIAL PROJECTIONS ......................................................................................................... 23 7.7 SUMMARY DISCUSSION OF TEN YEAR FINANCIAL PROJECTIONS ................................................................ 24 7.8 DETAILED TEN YEAR FINANCIAL PROJECTIONS ......................................................................................... 27 8 LIFECYCLE MANAGEMENT PLAN ........................................................................................................ 32 8.1 ACQUISITION AND REPLACEMENT ............................................................................................................ 33 8.2 MAINTENANCE ......................................................................................................................................... 33 8.3 AUGMENTATION....................................................................................................................................... 34 8.4 DISPOSAL ................................................................................................................................................. 34 APPENDIX A ........................................................................................................................................................... 35 Information Technology Page ii Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 4. Asset Management Plan – Information Technology 1 Executive Summary The Wellington City Council has an obligation to ratepayers to manage Council assets to provide acceptable standards of service in a cost-effective manner. Changes to legislation governing the purpose of local authorities requires that the Council, in order to support its financial plans and funding decisions, develop Asset Management Plans which will provide the framework for the Council to manage its resources. This Asset Management Plan covers the portfolio of Information Technology assets. Information Technology assets can be grouped under three categories: • Desktop –assets deployed to the user desktop, e.g. desktop computers, printers. • Application delivery –assets providing application hosting services to one or more business units, e.g. servers providing access to PeopleSoft Financials, Storage-Area- Network (SAN), centralised data storage solutions. • Network and communications –assets providing network connectivity, e.g. routers and switches, PABX infrastructure. A key objective of asset management planning is to define and clarify the levels of service required of the assets and identify the cost of operation, maintenance, renewal or replacement and capital expenditure required to provide the levels of service over a ten year timeframe. The levels of service are based on customer’s needs and Information technology’s strategic direction and objectives. The current levels of service are outlined in Section 4. Another key objective of this Asset Management Plan is to identify future demand. Information Technology, in partnership with business application owners, will assess the future demand of an asset and implement initiatives and programmes to ensure optimum use of the asset. Information Technology has direct responsibility for all information technology asset acquisition, maintenance, augmentation, replacement, and disposal including planning for major capital expenditure. The majority of asset related expenditure is managed through a formal asset management process. A small percentage of asset expenditure remains ad-hoc or reactive in manner to allow Information Technology to remain responsive to demand. The financial implications of the Asset Management Plan are detailed in Section 7 and include ten year financial projections. Section 8 contains the lifecycle management plans and provides strategies, standards and procedures for the acquisition or replacement, maintenance, augmentation and disposal of an asset. 1.1 Issues and Conclusions • Generally information technology assets are well managed and are meeting target service levels. • The latest Customer Satisfaction survey, undertaken in December 2002, indicates there has been an improvement in overall satisfaction. 78% customer satisfaction was reported representing a 3% increase from the previous year. Information Technology Page 1 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 5. Asset Management Plan – Information Technology • New customer driven business initiatives and emerging technologies are creating demand for new and extended information technology services and solutions. • Demand forecasting and management will be achieved through quarterly relationship management meetings, development of operating system and application roadmaps in partnership with the business, evaluation of new technologies and through the adoption of new business initiatives. • There remains a disconnect over ownership and accountabilities in regard to asset lifecycle management responsibilities for information technology assets not under the direct control of Information Technology, e.g. assets related to PeopleSoft Financials, and assets under the control of City Information. • From the 1st July 2003 all lifecycle management responsibilities related to information technology assets will become the primary responsibility of Information Technology as asset manager. • The Asset Management Plan (this document) will be reviewed in its entirety each year, during the Annual Plan process. Once amendments have been made, it will be recommended to the Finance and Corporate Committee for adoption by Council. • The asset management framework used by application delivery infrastructure assets will be extended to include network and communications infrastructure assets. • An annual review of the target service levels is required to ensure that Information Technology is continuing to improve its efforts to meet customer expectations. • Procedures are required to enable future needs to be more accurately identified and managed. Similarly, a formal strategy for demand needs to be developed. This will include: • operating system and application roadmaps • centralisation of all information technology asset management processes • single repository of all information related to information technology assets • implementation of ITIL, internationally recognised best practice service management standards • Forward and detailed planning will be undertaken to ensure all capital expenditure, programmed maintenance and service life cycles are accurately identified, planned and accounted for. Information Technology Page 2 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 6. Asset Management Plan – Information Technology 2 Introduction 2.1 Purpose of the document The Wellington City Council has an obligation to ratepayers to manage Council assets to provide acceptable standards of service in a cost-effective manner. Changes to legislation governing the purpose of local authorities requires that the Council, in order to support its financial plans and funding decisions, develop Asset Management Plans which will provide the framework for the Council to manage its resources. Asset management plans are guidebooks the Council uses to manage its assets in a cost- effective manner, while also providing a quality of service. While some assets require little maintenance, others are more expensive to maintain, and this can mean the risk of problems occurring with the assets is greater. The Council has asset management plans for buildings, sewerage, solid waste, storm-water, roads, footpaths, parks, swimming pools, recreation centres, the Zoo, libraries, water supply assets and so on. It is a legislative requirement to have asset management plans and, under the Local Government Act 1974, asset management plans must be subject to regular peer review and independent audit. This Asset Management Plan outlines how the Council will, with respect to Information Technology assets: • ensure assets are managed to deliver the Council’s strategic outcomes • ensure assets provide a specified level of service in the most cost-effective manner • provide assurance to stakeholders that the asset is being managed appropriately • anticipate, plan and prioritise spending on the asset • optimise the life of the asset at the most economic cost over time • ensure the smooth operation and continued sustainability of the asset • provide a basis for monitoring the performance of the asset • identify and minimise environmental risk and liability resulting from the disposal of the asset 2.2 Relationship with other Council documents Asset Management Plans are a key component of the Council planning process linking with the following documents: • Strategic Plan: Long term plan which sets out the broad strategic direction for the long term development of the city. The Strategic Plan is regularly updated. To give additional impetus in some areas, key priorities have been selected along with specific objectives that contribute to them and separate strategy documents prepared. • Long Term Financial Strategy: The Long Term Financial Strategy (LTFS) determines how the Council will manage its finances for the next ten years. The LTFS covers: Information Technology Page 3 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 7. Asset Management Plan – Information Technology • projects and programmes for the next 10 years that will enable the Council to achieve its strategic vision • what this will cost • how these costs will be funded • how the Council will be financially managed The LTFS consolidates income and expenditure projections identified in each Asset Management Plan and states how the expenditure will be funded. • Council Plan: Every financial year the Council publishes a Draft Council Plan, followed by an approved Council Plan. The Council’s success in meeting the specified service levels and in controlling the costs of its assets is evaluated in the Draft Council Plan consultation process. The results of the consultation process are reflected in the type of projects and funding priorities listed in the Council Plan. These projects will work towards achieving the objectives outlined in the Strategic Plan. • Business Plan: The projects funded in the Annual Plan provide the basis for the Business Plans that guide the activities of the Council’s business units. The service levels and budgets defined in the Asset Management Plans are translated into performance measures and projects in the business plans. Information Technology Page 4 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 8. Asset Management Plan – Information Technology 3 Assets The following asset groups make up the portfolio of Information Technology assets covered under this Asset Management Plan: Information Technology assets can be grouped under three categories: • Desktop –assets deployed to the user desktop, e.g. desktop computers, printers. • Application delivery –assets providing application hosting services to one or more business units, e.g. servers providing access to PeopleSoft Financials, and assets providing centralised services to Council as a whole, e.g. electronic mail and scheduling (Outlook), file serving, internet connectivity, Storage-Area-Network (SAN), centralised data storage solutions, etc. • Network and communications –assets providing network connectivity, e.g. routers and switches, PABX infrastructure. Applications owned by individual business units, e.g. PeopleSoft Financials, are excluded from the IT Asset Management Plan. However, Information Technology will be working with business units in partnership to develop application roadmaps which will be an input into demand forecasting and lifecycle management. Generally information technology assets are well managed and are meeting target service levels. Two areas of concern exist. Firstly, the remote network and PABX infrastructures will require significant investment over the next 3-5 years. Secondly, approximately a third of the networked printer assets are classified as non-performing against service levels and are being replaced this year. 3.1 Condition and status of individual asset groups The following is a brief commentary on the condition and status of the individual asset groups: Desktop Desktop assets are managed through the Desktop Asset Management Plan (September 2000). Under the plan desktop assets are managed through a central pool of standardised assets leased to business units and managed by Information Technology on a three year rolling replacement programme. For the purposes of this document it is assumed that Wellington City Council will be renewing the Microsoft Enterprise Agreement (G2003). Wellington City Council gains a number of benefits under this agreement one of which is the ability to upgrade to new releases of Microsoft products when available. The overall cost per desktop has reduced significantly under the current agreement. Costs related to core Microsoft desktop products (Windows operating system and the Office suite of products) have reduced from approximately $400 per annum per desktop to approximately $280 per annum per desktop – less than a dollar per desktop per business day. One component of the desktop assets that has not been as well maintained is desktop printing. Information Technology manages approximately 150 printers of which 50 could be classified as non-performing against target service levels. These assets are currently being replaced under the 3 year rolling replacement cycle schedule. Information Technology Page 5 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 9. Asset Management Plan – Information Technology Application delivery Information Technology has developed a framework for dealing with application delivery assets. The framework provides an overview of the current condition of all application delivery assets. The framework details a process by which information systems assets owned by Wellington City Council can be assessed in terms of lifecycle and suitability for purpose. The asset management framework is designed principally to assess server assets but will be adapted for other computing assets such as the network and communications infrastructure. The framework ensures a standard and consistent process of assigning applications and tasks to server assets and assessing the server lifetimes. It produces a roadmap for each server asset such that the process of procurement, upgrade, rationalisation and decommissioning is structured and cost efficient. The Windows 2000 Infrastructure Upgrade project both replaced, rationalised, and disposed of a number of Intel-based servers. A further $80K has been allocated in the 2003/04 financial year for replacing server infrastructure as per the application delivery framework. During 2002/03 approximately $300K was allocated for upgrading data storage. This expenditure was concentrated on extending the current storage-area-network (SAN). A further $160K has been allocated in 2003/04 for replacing the UNIX storage with a consolidated storage infrastructure. Storage continues to expand exponentially; Information Technology is working with Information Management to develop an information lifecycle management position paper to describe storage issues and develop recommendations for future management and expenditure. Network and communications During 2002/03 $360K was allocated for upgrading the network infrastructure. This expenditure was concentrated on upgrading the computer room network infrastructure. A further $186K has been allocated in 2003/04 for upgrading the “network edge” infrastructure. $200K has been allocated every year for the next four financial years for upgrading the horizontal cabling – cabling to the desktop. Two components of the network and communications infrastructure require significant upgrade but have yet to have major capital expenditure identified. These are: • Remote site networks With the continued computerisation of business processes the need for high- speed communication between the Wellington City Council campus and remote sites is critical. Information Technology will be undertaking a review of the remote network infrastructure to identify the most cost-effective manner for the delivery of services to remote sites. • PABX infrastructure and desktop telephony Information Technology Page 6 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 10. Asset Management Plan – Information Technology Current capital expenditure on the telecommunications infrastructure remains static with no major capital development planned in the near future. Information Technology will be developing a strategic positioning paper in regard to PABX infrastructure and desktop telephony to identify a 3 -5 year technology plan. Information Technology Page 7 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 11. Asset Management Plan – Information Technology 4 Levels of Service Levels of service are attributes the Wellington City Council expects of its assets. These can be determined by the Wellington City Council’s strategic direction, industry standards, legislative requirements and customer expectations. A key objective of this Asset Management Plan is to clarify and define the levels of service for Information Technology assets. This Asset Management Plan identifies and costs the future operations, maintenance, renewal and development required to reach the target levels of service. Levels of service are defined by identifying critical success factors and setting levels of service that will contribute to their achievement. Performance measures are then developed to assess the performance of the asset against the service levels. Levels of service and performance measures are established from: • customers’ needs and expectations • Information Technology’s business strategy and objectives 4.1 Customers’ needs and expectations Information Technology’s knowledge of customers’ needs and expectations is gathered through information from customer satisfaction surveys and through feedback gathered as part of relationship management. Customer Satisfaction Survey The customer satisfaction survey is used to measure performance. Although Information Technology does not have any specific performance targets related to customer satisfaction, Information Technology seeks: • continuous improvement over previous results • to close the gap between customer expectation and perception The survey is undertaken on an annual basis and targets a cross section of Information Technology’s customers to measure satisfaction levels with all services. The survey asks randomly selected customers to rate services and facilities. Results are used to measure Information Technology’s performance against the agreed targets. The latest survey, undertaken in December 2002, indicates there has been an improvement in overall satisfaction. 78% customer satisfaction was reported representing a 3% increase from the previous year. Relationship Management Strategy New customer driven business initiatives and emerging technologies are creating demand for new and extended information technology services and solutions. Information Technology has four key customer segments (management, large system owners, small system owners, and desktop users), each with their own particular characteristics and requirements. Each customer segment requires a different type of relationship management. The table below outlines the different strategies to be applied: Information Technology Page 8 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 12. Asset Management Plan – Information Technology Customer segment Management strategy Management • Relationship managed at business level rather than an IT level • Focused at a strategic and enterprise–wide level • Relationship based on the principle of no–surprises • Ad hoc consultation for issues management Large System Owners • Relationship managed on a formal partnership basis • Support requirements managed through specific Service Level Agreements • Changes managed on a project basis • Greater emphasis of enterprise view of IT • Communication managed through formal targeted process Small System Owners • Relationship managed on a more formal basis with IT taking a greater leadership role • Greater emphasis on education and mentoring of IT and its impact on their business • Communication to be based on consistent and easy to understand messages Desktop Users • Standardisation of equipment and services. (e.g. standard desktop computers, printers, software etc) • Fast reactive support in line with service levels • Seamless support (end to end fault/query resolution) • Communication managed at enterprise level 4.2 Strategic direction and objectives Alignment with City vision and outcomes To ensure it successfully delivers its outcomes and is aligned with the city’s vision of Creative Wellington – Innovation Capital Information Technology operates under six key principles. • Position Information Technology in support of the vision – ensure the Council is positioned to actually deliver the vision through the use of technology. • Proactive customer management – proactively engage with customers in support of their technology needs • Manage technology delivery – ensure technology supports current and future customer requirements • Deliver customer service - deliver seamless, cost effective customer service • Support decision making – provide solutions and technologies that support decision making Information Technology Page 9 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 13. Asset Management Plan – Information Technology Key objectives for 2003-2006 To ensure it delivers the above principles Information Technology’s key business objectives for the next three years (2003 to 2006) are: • Implement disaster recovery requirements. • Implement Information Technology process improvements using the ITIL best practice methodology. • Align with Council’s and Business Units’ changing strategies. • Manage Information Technology assets in line with the management principles of other Council assets • Integrate information for enterprise knowledge and decision making capability. • Continue to deliver core services to Council efficiently and effectively to agreed service levels. • Lead the programme and project management of Council wide Information Technology projects through the new Programme Management Standard. • Continue to deliver enhanced customer services through the delivery of seamless and cost effective services. • Information Technology is working with Information Management to develop an information lifecycle management position paper to describe storage issues and develop recommendations for future management and expenditure. • Information Technology will provide advice and assistance to application owners (business units) during the development of application roadmaps. 4.3 Current levels of service Service Level Agreements detail the operational service and access requirements, which must be supplied by the Information Technology business unit in order to achieve the desired outcomes and objectives of other Council business units. They also contain targets and measures that are reported on regularly. Service levels set the benchmark standard within Information Technology for the provision of services, enabling comparison with external benchmarks on an annual basis. The Information Technology business plan for 2003/04 identifies the following key performance indicators and targets: Business Unit Outcome Key Performance Indicator Target Customer service % of total customer calls that are <10% abandoned % of total customer calls that are 75% resolved at the first point of call % of total queries resolved within 90% SLA timeframes Information Technology Page 10 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 14. Asset Management Plan – Information Technology Systems management Systems’ (combination of all 99.8% systems) availability Network availability 99.8% Unplanned shutdowns 0 % of successful backups 100% Information technology undertakes regular benchmark reviews as part of its desire for continuous improvement. The following statements are derived from the Service Delivery Benchmark Report [February 2003] produced by Ernst & Young: • The Council’s system availability is 99.8%, which represents downtime of less than 1% over the past year. This is considered very low, as according to Gartner, 16% of companies surveyed have 0-1%, and 78% have 1-5% downtime. • The Council’s IT support levels are within industry benchmark standards. Fault resolution at first point of call is 76% against a benchmark of 75%, workstations supported per support person is 92 against a benchmark of 75-85 and servers supported per support person is 11 against a benchmark of 8-10. Information Technology Page 11 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 15. Asset Management Plan – Information Technology 5 Future Demand Anticipating the expected future demand on an asset is an important function of an Asset Management Plan. Once Information Technology has assessed the future load on an asset it is able to implement initiatives and programmes to ensure optimum use of the asset. Assessment and management of demand is a continuous process. Subsequent analysis of demand may reveal that current usage has altered or that resources (including physical assets) may be better used elsewhere. Demand will therefore be monitored regularly to avoid surprises and to ensure Information Technology gains optimum value from use of the resources committed to the achievement of the Council’s service goals. Demand forecasting and management will be achieved through quarterly relationship management meetings, development of operating system and application roadmaps with the business, evaluation of new technologies and through the adoption of new business initiatives. 5.1 Demand forecast Demand is affected by both internal and external influences. Internal influences tend to be business unit driven, i.e. the need for a new application driving the need for new hardware or additional performance, while external influences tend to be driven by the information technology sector, i.e. new operating system versions requiring higher minimum performance requirements. The main factors that affect the demand on Information Technology assets are: • continuation of computerisation of business unit processes and procedures • new business opportunities and initiatives • vendor certification processes, or edicts, concerning dedicated computing resources • operating system and application roadmaps • support lifecycle • new technologies • disaster recovery requirements 5.1.1 Computerisation of business processes and procedures The continued computerisation of business processes and procedures continues to fuel demand for information technology assets. Work programmes affecting information technology assets are put forward for proposal in the Annual Plan with associated expenditure being project-based. 5.1.2 New business opportunities and initiatives New customer initiatives create demand for new and extended Information Technology services and solutions. The ability to meet these demands will require new skill sets, a more flexible support environment and access to new funding streams. Information Technology Page 12 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 16. Asset Management Plan – Information Technology Also as Wellington City Council adopts different business models for the delivery of services, e.g. trusts, shared services, etc Information Technology will be required to adapt its service delivery model to meet the changing nature of its customer base. 5.1.3 Vendor certification Application co-habitation is a term applied to how successfully applications interact with each other. It is the leading cause of the proliferation of hosting environments. Generally business units have demanded dedicated computing resources due to 1) uncertainty of dealing with the risks associated with sharing computing resources, and 2) application vendor certification processes, or edicts, requiring dedicated computing resources. 5.1.4 Operating system and application roadmaps Microsoft releases a new version of the Windows server operating system every three years and offers a minimum of five years maintenance support from the date of a product’s availability. Generally, this means Wellington City Council can expect to use the operating system for up to three years from the general product release with the fourth year being used to undertake planning and implementation associated with moving to the new version. The fifth year is a contingency year to enable implementation funding to be spread over two financial years. Application upgrades also drive demand through the requirement for higher processing requirements or changes in technical architecture. An example of this is the upgrade to PeopleSoft Financials version 8.x. This not only involved replacing the majority of the servers supporting version 7.x, but required major changes in the architecture to enable the move to Internet-based technologies and the move away from Sybase to SQL Server as the database platform. 5.1.5 Support lifecycle The use of Microsoft desktop and server products has a major impact on the asset lifecycle. For the purposes of this document it is assumed that Wellington City Council will be renewing the Microsoft Enterprise Agreement (G2003). Wellington City Council gains a number of benefits under this agreement one of which is the ability to upgrade to new releases of Microsoft products when available. However, this requires a commitment from Wellington City Council to take advantage of the latest releases and upgrade the appropriate product sets during the term of the agreement. Microsoft offers a minimum of five years maintenance support from the date of a products general availability. At the end of maintenance support customers have the option to purchase a further two years of extended support. However, the cost of extended support is likely to high and it will be more cost effective to upgrade to a supported version. 5.1.6 New technologies Gordon Moore, one of the founders of Intel, proclaimed that advances in technology would enable semiconductors to double in efficiency and complexity every two years. Generally speaking this has held true for the last 25-30 years. The net effect has been the delivery of cheaper, faster, and more capable semiconductors, especially microprocessors, to electronics equipment. While the performance increases the cost tends to remain neutral – essentially providing Wellington City Council with “more bang for the same buck”. Information Technology Page 13 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 17. Asset Management Plan – Information Technology New types of Internet-capable phones, personal digital assistants and similar devices have begun to flood into the market. Such devices have come about to fulfil the growing demand for wireless connectivity. However, for the mobile worker to realise the full potential of mobility a number of factors have to come into play. Firstly, hardware and software need to support wireless connectivity and we are seeing this now with the release of wireless connectivity integrated as standard on notebooks and with the in-built support for wireless in Windows XP. Secondly, the corporate information technology infrastructure needs to support wireless connectivity. It is likely that in the next three to four years that open source software will have dramatically increased its foothold into mainstream organisations. To date, open source has made slow progress onto public sector desktops mainly due to the fact that the majority of applications require a Windows desktop. Even if these applications are run within a thin- client environment licenses are still required and therefore cost savings are not made. Costs are actually increased due to the additional hardware requirements. 5.1.7 Disaster recovery requirements Currently Information Technology does not have disaster recovery capability that matches the needs and expectations of the business. In a disaster situation the business would require the recovery of critical systems within 3-5 working days. However, as things stand today, recovery would take around six to twelve weeks. This would have a serious impact the Council’s ability to provide essential services, and potentially suffer financial loss and reputation damage. 5.2 Demand management plan Demand management is an evolving process requiring ongoing review in order to achieve the most equitable, cost-effective, and efficient service delivery and best use and distribution of assets. Demand management strategies provide alternatives to meeting demand through creating new assets and look at ways of modifying customer demands to maximise the use of existing assets and deferring or reducing the need for new assets. The following demand management strategies are appropriate for the provision and rationalisation of information technology assets: Functional classification Consolidating services or functionality of a similar nature by using a shared server infrastructure, effectively examines how Wellington City Council can get “the most bang for the least buck”. The benefits of a shared server infrastructure are: • Reduced cost – Cost is defined here as the Total Cost of Ownership (TCO) rather than the lesser overall cost of purchasing the hardware and software. • Increased reliability – Reliability issues can involve more tradeoffs. While it is easier to maintain and administer a single server than a distributed array, if that one server goes down a greater proportion of the enterprise is affected. So extra precautions, equating to dollars spent, need to be taken to ensure the stability and reliability of the shared server infrastructure. Information Technology Page 14 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 18. Asset Management Plan – Information Technology • Reduced complexity – Consolidating the work of three or four servers onto a shared server infrastructure reduces overall complexity – there are fewer servers to monitor and therefore fewer potential points of failure. The main benefit of a shared server infrastructure is that it increases the level of utilisation of the server infrastructure by consolidating similar services or functions of multiple servers on a shared server platform. Maintenance hours are subsequently reduced as, for example, service packs are only required to be installed on the shared server infrastructure not on multiple servers. However, this option requires that the application and database components reside on separate servers to avoid any application conflicts and to ensure the impact on existing services is minimised. A dedicated server infrastructure will always be required in some instances, for example where an application vendor insists on a dedicated server infrastructure for support contract requirements, where application conflicts exist or where the application and database components are unable to reside on separate servers. In the 2003/04 Business Plan Information Technology has identified the need for the implementation of a Corporate SQL Database Server to host a number of business applications, e.g. Cemetery System, Election System. Operating system and application roadmaps Roadmaps for the major operating systems, both server and desktop, will be developed and communicated through the relationship management strategy. Ideally the roadmaps should be communicated to business units as part of the Annual Plan process. This enables business units to develop budget forecasts where capital expenditure on information technology assets is required. Information Technology will also provide advice and assistance to application owners (business units) for the development of application roadmaps. These roadmaps, in combination with the operating system roadmaps, will enable a higher degree of accuracy to be obtained in the LTFS. Implement disaster recovery A comprehensive investigation has been undertaken by Information Technology, in partnership with Resultex Limited, to confirm the business requirements, identify critical business processes and systems, investigate options for implementing full information technology disaster recovery, and provide recommendations in regard to the best and most cost effective option for disaster recovery. A phased approach has been recommended to ensure the success of such a large undertaking, as well as providing the flexibility to accommodate technology and market changes over the next three to four years. As part of the implementation of the disaster recovery solution, Information Technology will speed up the adoption of ITIL, internationally recognised best practice IT service management standards, to achieve the necessary improvements in key areas of risk management. Evaluate new technologies Information Technology has already developed hardware standards for Pocket PC devices and is in the process of evaluating Tablet PC devices. With the release of the SmartPhone and Pocket PC Phone Edition devices later this year, Information Information Technology Page 15 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 19. Asset Management Plan – Information Technology Technology should be in a position to evaluate these devices when they become available. The Information Technology 2003/04 Business Plan has identified that wireless technologies need to be investigated further. Therefore a small pilot of wireless technologies including the use of CaféNET, will be conducted to identify business benefits and risks associated with such technologies. The pilot will focus on the use of wireless technologies to provide access to Council network resources from meeting rooms and remote offices. Dependent on the outcome it is likely that some form of wireless connectivity will become available to Council employees during the 2004/05 financial year. Information Technology Page 16 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 20. Asset Management Plan – Information Technology 6 Asset Management Practices Information Technology has direct responsibility for all information technology asset acquisition, maintenance, augmentation, replacement, and disposal including planning for major capital expenditure. The majority of asset related expenditure is managed through a formal asset management process. A small percentage of asset expenditure remains ad-hoc or reactive in manner to allow Information Technology to remain responsive to demand. As part of continuous improvement efforts, Information Technology is moving to a single asset management system (asset register) and developing the appropriate recording processes to ensure the asset register is maintained and updated. There remains a disconnect over ownership and accountabilities in regard to asset lifecycle management responsibilities for information technology assets not under the direct control of Information Technology, e.g. assets related to PeopleSoft Financials, and assets under the control of City Information. To resolve this all lifecycle management responsibilities related to Information Technology assets will become the responsibility of Information Technology from 1st July 2003. 6.1 Data and information systems Gathering comprehensive, accurate and reliable data on the asset and maintaining robust asset information systems are crucial. There must also be robust management processes for making decisions about the asset. Current information related to information technology assets is spread across a number of systems, with different types of assets being managed by different systems and even different asset managers. A list of the assets system, type of assets, and asset managers is listed below: Asset Type Asset System Asset Manager Desktop Track-It CCR Controller Application Delivery Server Asset System Team Leader, Operations Network & Communications Excel Spreadsheet Team Leader, Network & Communications Assets under the control of another Unknown Unknown business unit All capital expenditure over $2K PeopleSoft Financials Not Applicable The information currently contained in the different types of asset management systems can be summarised as follows: • lacks consistency • not all required information is being captured • multiple systems in use for different asset groups Original copies of lease documents, maintenance and support agreements are recorded and stored with Information Management. Hard copy data (specifically internal and external Information Technology Page 17 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 21. Asset Management Plan – Information Technology correspondence related to assets) is placed on individual files held by specific departmental managers. 6.2 Future information systems Information Technology must have robust management processes for making decisions concerning an asset. Effective decision making relies on the integrity of the data gathered by the Information Technology’s information systems. As part of the Annual Plan process Information Technology should review the cost of ownership of the assets on an individual basis. This will assist with any future cost/benefit analysis or feasibility study with respect to the viability of a particular asset. Information Technology is moving to a single asset management system (asset register) and developing the appropriate recording processes to ensure the asset register is maintained and updated. This will enable Information Technology to move to a decision-making framework that includes: • cost/benefit analysis of options in regard to acquisition versus augmentation • assessment of lifecycle costs • prediction of future performance of the asset • anticipation of the future needs and condition of the asset 6.3 Risk management Information Technology assets are insured to the value of approximately $2M. An excess of $10K applies as Information Technology has adopted a policy of self-insurance. Desktop and notebook computers held under the lease agreement are insured as part of the contract with IBM Finance. Information Technology also holds warranty and maintenance contracts for all major assets. 6.4 Asset management improvement The development of this plan has been based on existing levels of service and the best information and knowledge available to Information Technology. The plan is subject to ongoing monitoring, review and updating to improve its quality and the accuracy of the asset information and financial projections. The Asset Management Plan is a living document which is relevant and integral to daily asset management practice. To ensure the plan remains useful and relevant the following ongoing process of Asset Management Plan monitoring and review will be undertaken: Updating of the Asset Management Plan • The Asset Management Plan (this document) will be reviewed in its entirety each year, during the Annual Plan process. Once amendments have been made, it will be recommended to the Finance and Corporate Committee for adoption by Council. Information Technology Page 18 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 22. Asset Management Plan – Information Technology • From the 1st July 2003 all lifecycle management responsibilities related to information technology assets will become the primary responsibility of Information Technology as asset manager. The primary responsibilities of the asset owner and asset manager are described below. Some overlap does occur particularly in the area of demand forecasting, lifecycle management, and future renewal. Where this overlap occurs Information Technology will work in partnership with the asset owner. Asset owner (Business Unit) • Develop, in consultation with Information Technology, application roadmap(s) • Secure CAPEX funding for purchase of original asset Asset manager (Information Technology) • management of future need (demand forecasting), • management of future performance and condition (lifecycle management) • management of risk • cost / benefit analysis of future renewal options • performance monitoring of service levels and service costs • maintenance of the data collection and recording process • maintenance of the asset base • The asset management framework used by application delivery infrastructure assets will be extended to include network and communications infrastructure assets. Target service levels • An annual review of the target service levels will continue to ensure that Information Technology is continuing to improve its efforts to meet customer expectations. Future needs and demand levels • Procedures are required to enable future needs to be more accurately identified and managed. Similarly, a formal strategy for demand needs to be developed. This will include: • operating system and application roadmaps • centralisation of all information technology asset management processes • single repository of all information related to information technology assets • implementation of ITIL, internationally recognised best practice service management standards Condition assessments, programmed maintenance, and lifecycle management Information Technology Page 19 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 23. Asset Management Plan – Information Technology • Condition assessments will be undertaken annually. • Consistent and accurate assessment investigating and reporting will be developed. • Forward and detailed planning will be undertaken to ensure all capital expenditure, programmed maintenance and service life cycles are accurately identified, planned and accounted for. Information Technology Page 20 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 24. Asset Management Plan – Information Technology 7 Financial Summary 7.1 Funding policy Information Technology operates Capital Expenditure and Operating Expenditure projects which fund ongoing infrastructure developments: Annual Plan Project 2003/04 Budget ($) CX259 – Network and Communications 461,000 CX260 – Application Delivery 769,577 CX262 – Web Developments 125,000 C358 – Research & Development 215,174 C374 – Information Services SLA 6,318,608 C546 – PC Leasing 1,133,869 7.2 Revenue Information technology earns revenue through the provision of system hosting and support services to the City Gallery and New Zealand Symphony Orchestra: Description Annual Revenue ($) Wellington Museums Trust (City Gallery) 47,489 New Zealand Symphony Orchestra 26,307 Nui Espresso 477 Total Revenue 74,274 The 2003/04 budget identifies additional “one-off” revenue of $85K generated from the sale of decommissioned desktop computers purchased before the lease programme began. Also, the original budget does not identify additional revenue from the Museums Trust due to recharge of leasing costs associated with desktop computers. With the move to shared services and trusts, e.g. Water Integration and Wellington Zoo, additional revenue streams may become available. 7.3 Historical expenditure The following table summarises actual expenditure on an asset group basis for the following years: • 1 July 2001 to 30 June 2002 Actual • 1 July 2002 to 30 June 2003 Actual • 1 July 2003 to 30 June 2004 Budget Information Technology Page 21 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 25. Asset Management Plan – Information Technology Annual Plan Project 2001/02 Actual 2002/03 Actual 2003/04 Budget CX259 – Network and Communications 240,442 262,884 461,000 CX260 – Application Delivery 375,491 437,158 769,577 CX262 – Web Developments 146,546 214,698 125,000 C358 – Research & Development 410,147 103,738 215,174 C374 – Information Services SLA 2,647,818 5,717,405 6,318,608 C546 – PC Leasing 470,301 745,977 1,133,869 The following is an explanation regarding the above changes in budget expenditure: • CX259 - increase in 2003/04 budget for building wiring upgrade ($186K). • CX260 - transfer of 2003/04 budget ($280K) from CX245 (Service Delivery IT CAPEX). Overall impact is cost neutral to Council. • C358 - reduction in depreciation allocation for 2003/04 (450K). • C374 - increase in budget due to removal of IT recharge to business units resulting from financial process review. • C546 - budget increases in line with phased upgrade of leased PC stock. 7.4 Depreciation Depreciation is calculated in line with Wellington City Council’s existing policy for the depreciation of Information technology assets which is on a straight line basis to allocate the cost or value of the asset of its useful life. Except for desktop assets which are based on a 3 year replacement programme the estimated useful lives of Information Technology assets are 5 years. Information Technology Page 22 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 26. Asset Management Plan – Information Technology 7.5 2003/04 budget The summary 2003/04 Information Technology budget is as follows: 2003/04 Annual Plan Budget $'s TOTAL INCOME 143,360 Direct Expenses 952,626 Personnel 3,592,248 Indirect Expenses 2,091,624 Depreciation 1,120,803 Allocations 105,473 TOTAL EXPENSES 7,862,774 NET SURPLUS(DEFICIT) BEFORE ALLOCATIONS 7,719,414 Note: This excludes labour recovery charges and ORG cost allocations. 7.6 Ten year financial projections The 2003/04 Annual Plan includes the Long Term Financial Strategy for the period 2003/04 to 2012/13. This section contains the ten year financial projections for the Information Technology business unit. These forecasts include: • Operating costs. • Maintenance and depreciation charges. The ten year financial projections are based on the following assumptions: • Demand for the assets provided will continue. • Financial forecasts are based on current costs. Actual costs will change due to the Annual Plan process and this will be reflected in the annual revision of this Asset Management Plan. • There will be no significant changes in operating and maintenance charges. • Inflation has not been taken into account. • Wellington City Council will continue to use current licensing agreements for major operating system and application software for the foreseeable future. Information Technology Page 23 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 27. Asset Management Plan – Information Technology Ten year financial projections - CAPEX Network and Communications (CX259) $4,166,750 Application Delivery (CX260) $7,155,077 Web Developments (CX262) - (proposed Annual Plan project) $1,250,000 Disaster Recovery (proposed Annual Plan project) $4,795,700 $17,367,527 Ten year financial projections - OPEX Research and Development (C358) $2,162,348 Information Services SLA (C374) $64,447,346 PC Leasing (C546) $11,042,642 Disaster Recovery (additional funding required within C374) $7,536,200 $85,188,536 7.7 Summary discussion of ten year financial projections Application delivery Expenditure in regard to application delivery is assumed to be static from year to year. This project provides funding to ensure that server infrastructure is adequate to meet current demand and to ensure that the infrastructure can provide added value services or meet future business demand. It also ensures that Wellington City Council operates a supported information technology environment that meets best practice and industry standards. Network and communications Expenditure in regard to network and communications is assumed to be static from year to year. However, a technology “refresh” is assumed every five years to ensure that the network and communications infrastructure are adequate to meet current demand and to ensure that the infrastructure can provide added value services or meet future business demand, e.g. mobile and wireless technologies, updated security infrastructure. Information Technology is completing the planned technology refresh this financial year. Therefore a technology refresh has been forecasted for the 2007/08 and 2012/13 financial year. Web Developments Information Technology has identified $100K in the 2003/04 Business Plan for the implementation of a Corporate SQL Database Server to host a number of business applications. E.g. Cemetery System, Election System. Research and Development Information technology is a continually changing area. Research and development is required to ensure that next year’s Annual Plan projects are planned with prudent prior research. Wellington City council needs to commission specialists to provide research and development services where it does not have in-house expertise. This includes areas such as evaluating and piloting new technologies, benchmarking services, developing strategies and commissioning reviews in high impact areas. Expenditure in regard to research and development is assumed to be static from year to year. Information Technology Page 24 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 28. Asset Management Plan – Information Technology Information Services SLA Information Technology is the in-house information technology service provider for Wellington City Council. Information technology supplies proactive and reactive technology support services through Service Level Agreements. PC Leasing Wellington City Council replaces desktop computers every three years to ensure that technology supports productivity and to maximise its investment in information technology. This is a three year replacement leasing programme. Leasing costs are assumed to remain static from year to year unless there are changes in staffing or business demand. While the performance of desktop computers increases the cost tends to remain neutral – giving Wellington City Council “more bang for the same buck”. Disaster recovery A number of IT Disaster Recovery options were considered ranging between: • Setting up and managing in-house a backup computer centre at the old Tawa Service Centre. • Totally outsourcing IT Infrastructure and Operations, including full IT DR capability. Tawa was identified as the best option based on the following: • Being the lowest cost. • Allowing an incremental approach and thereby providing a greater chance of success. • Allowing the required discipline changes and prerequisite work to be phased in at the same time. • Accommodates market or technology changes. This solution assumes some geographical risk for an earthquake scenario although it is assumed that only one of the computer rooms, Civic Centre or Tawa would be rendered unusable in large earthquake. An incremental approach to implementing a disaster recovery capability is recommended as this is the most cost effective method. By using the old Tawa Service Centre, the Council can achieve a large initial improvement at not too great an investment. A phased approach allows the Council to incrementally improve Information Technology’s disaster recovery capability over several years while also providing the following benefits: • It allows Information Technology to implement the process improvements and necessary prerequisites while simultaneously improving the disaster recovery capability. • Operational changes are more sustainable. • It accommodates technology changes and/or market maturity without losing any of the initial investment. • It is more likely to succeed than using a “big bang” approach. Information Technology Page 25 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 29. Asset Management Plan – Information Technology The project activities in the first year, 2003/04, will setup the base infrastructure. Other work that will also be undertaken in the first year of the project includes: • Initiating the implementation of ITIL. • Focusing on the improvement to specific process areas. • Implementing the required prerequisite work. Year one recovery time of the key business systems will be reduced from the current 6-12 weeks to 3-6+ weeks. The activities in subsequent years will then build on this base infrastructure by: • Refining the disaster recovery capability processes. • Completing the procurement of the disaster recovery backup computers. • Recovery of the key business systems will be reduced to 3-5 days in 06/07. By Year 3(2005/06 financial year) infrastructure related to disaster recovery, based on current demand, will be in place with replacement under life cycle management scheduled to begin 2006/07. The CAPEX expenditure requirement will be funded as a separate Annual Plan project with the OPEX expenditure requirement funded through the Information Services SLA (C374) Annual Plan project. OPEX expenditure requirements will increase to take on the responsibility for the day-to-day operations and management of the disaster recovery environment. Information Technology Page 26 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 30. Asset Management Plan – Information Technology 7.8 Detailed ten year financial projections Network and Communications (CX259) Capital Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Expenditure 386,000 386,000 386,000 386,000 500,000 200,000 200,000 200,000 200,000 500,000 Indirect labour 75,000 78,250 78,250 78,250 100,000 78,250 78,250 78,250 78,250 100,000 CAPEX Total 461,000 464,250 464,250 464,250 600,000 278,250 278,250 278,250 278,250 600,000 Application Delivery (CX260) Capital Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Expenditure 580,000 580,000 580,000 580,000 580,000 580,000 580,000 580,000 580,000 580,000 Indirect labour 189,577 129,500 129,500 129,500 129,500 129,500 129,500 129,500 129,500 129,500 CAPEX Total 769,577 709,500 709,500 709,500 709,500 709,500 709,500 709,500 709,500 709,500 Web Developments (CX262) - (proposed Annual Plan project) Capital Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Expenditure 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Indirect labour 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 CAPEX Total 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 Information Technology Page 27 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 31. Asset Management Plan – Information Technology Disaster Recovery (proposed Annual Plan project) Capital Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Expenditure 533,300 428,900 303,000 350,000 350,000 350,000 350,000 350,000 350,000 Direct/Indirect labour 225,500 175,500 75,500 75,500 75,500 75,500 75,500 75,500 75,500 75,500 CAPEX Total 758,800 604,400 378,500 75,500 425,500 425,500 425,500 425,500 425,500 425,500 TOTAL CAPEX 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 CAPEX Total 2,114,377 1,903,150 1,677,250 1,374,250 1,860,000 1,538,250 1,538,250 1,538,250 1,538,250 1,860,000 Information Technology Page 28 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 32. Asset Management Plan – Information Technology Research and Development (C358) Operating Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Expenditure 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 Indirect labour 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 Other 30,174 29,951 30,385 31,484 30,089 31,398 30,480 32,635 32,600 33,152 OPEX Total 215,174 214,951 215,385 216,484 215,089 216,398 215,480 217,635 217,600 218,152 Information Services SLA (C374) Operating Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Income (74,274) (74,274) (74,274) (74,274) (74,274) (74,274) (74,274) (74,274) (74,274) (74,274) Expenditure 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 1,844,250 Indirect labour 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 2,502,566 Other (includes Depn) 2,030,152 2,208,140 2,183,605 2,119,241 2,092,525 2,147,552 2,152,308 2,242,637 2,273,247 2,272,492 OPEX Total 6,302,694 6,480,709 6,456,147 6,391,783 6,365,067 6,420,094 6,424,850 6,515,179 6,545,789 6,545,034 Information Technology Page 29 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 33. Asset Management Plan – Information Technology PC Leasing (C546) Operating Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Income (85,000) Expenditure 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 1,100,000 Indirect labour 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 Other 28,869 31,712 32,173 33,336 31,859 33,245 32,272 34,555 34,518 35,103 OPEX Total 1,133,869 1,221,712 1,222,173 1,223,336 1,221,859 1,223,245 1,222,272 1,224,555 1,224,518 1,225,103 Disaster Recovery (additional funding required within C374) Operating Expenditure 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 Maintenance 16,400 82,500 123,200 123,200 123,000 123,000 123,000 123,000 123,000 123,000 Premises 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 Depreciation 151,800 272,600 348,300 363,400 363,400 363,400 363,400 363,400 363,400 Network 39,600 39,600 39,600 209,600 209,600 209,600 209,600 209,600 209,600 209,600 Direct/Indirect Labour 111,3000 100,000 Other 36,500 36,500 36,500 36,500 36,500 36,500 36,500 36,500 36,500 36,500 OPEX Total 258,800 365,400 526,900 872,600 787,500 787,500 787,500 787,500 787,500 787,500 Information Technology Page 30 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 34. Asset Management Plan – Information Technology TOTAL OPEX 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/2012 2012/13 OPEX Total 7,809,237 8,282,772 8,420,605 8,704,203 8,589,515 8,738,237 8,650,102 8,744,869 8,775,407 8,775,789 Information Technology Page 31 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 35. Asset Management Plan – Information Technology 8 Lifecycle Management Plan When considering the lifecycle of an information technology asset, there are a number of elements which must be considered over the lifetime of an asset. These elements allow Information Technology to accurately plan the future of the asset. Total Cost of Ownership (TCO) For any asset, TCO measures the total cost of purchasing, operating and maintaining the asset over its lifetime. TCO is directly linked to the lifecycle of the asset in that TCO can predict the asset lifecycle accurately by indicating when maintaining or upgrading the asset is no longer viable or cost effective. Support The asset must be a supported product in order to ensure that the cost of maintenance is not prohibitive. Extended warranty should be purchased for all hardware. If the vendor will not support the hardware, it must be decommissioned. Upgrade Path The asset must have a designated upgrade path over its lifetime if it is to be scalable and useful for the whole of its lifespan. When assessing an asset, if there is no clear upgrade path, the asset may be marked for decommissioning and/or replacement depending on its stage within the lifecycle. Business Principles Information Technology assets are depreciated over a five year “write-down” period. At the end of this period the asset retains no commercial value which correlates with the asset lifetime period. Project Initiatives Project initiatives will influence asset lifecycle. The Windows 2000 Migration Project saw the replacement and rationalisation of many older machines with lower specifications. When considering project initiatives, it is important to consider a definitive set of measurements that can define if an asset meets the criteria for the project. Information Technology Strategy The IT strategy should be an important influence in assessing the lifecycle of a particular asset. If the asset is not aligned with the goals of the IT strategy then its future can be easily decided. Technology Trends This section is objective and can contain information regarding any current or future technologies that may influence direction. Technology trends should be closely aligned to IT strategy. This plan details the life cycle management plan for Information Technology assets designed to deliver agreed levels of service and meet demand forecasts (identified in Sections 4 & 5 respectively) while optimising lifecycle costs. Asset management lifecycle plans include the following components: Information Technology Page 32 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 36. Asset Management Plan – Information Technology • acquisition and replacement • maintenance • augmentation • disposal 8.1 Acquisition and replacement Information Technology currently has preferred supplier agreements in place for all of the assets groups identified. Except for the desktop asset group, these agreements have not been reviewed via a formal Request for Proposal (RFP) process since there inception over three years ago. Information Technology is committed to achieving “best value” for Wellington City Council and will be undertaking a review against the market in the 2003/04 financial year for the remaining asset groups. This review will also include investigation of other financial arrangements including capital purchase, lease agreements, and service provision (or capacity on demand). An IT Desktop Equipment and Support standard has been developed and approved and is available as a download from the Intranet. This standard outlines the support provided by Information Technology for desktop equipment, explains how to obtain desktop hardware, software, telephony, and peripheral devices such as printers, and explains how to deal with equipment that is no longer required. A standard for the purchasing of all information technology assets is also in place, with a central purchasing service being provided by Information Technology. The “IT Inventory Management Operational Procedures and User Guide” (ITAM) details operational procedures for the specification, purchase, installation, transfer, repair, replace, upgrade, or decommissioning / disposal of an information technology asset. 8.2 Maintenance Information Technology purchases extended warranty for all major information technology assets. Warranty extension provides value-added services that extend, uplift, or upgrade the standard manufacturers' warranties to ensure ongoing performance, minimise risk and reduce downtime. Warranty extensions provide a number of valuable benefits over the standard manufacturers' warranties including: • committed response times, such as two hours, four hours or next business day • priority response on the replacement of specified parts • single point of contact when hardware composed of multiple components fails • lower total cost of ownership Warranty extensions are purchased with the asset and are serialised over three years. At the end of three years, the asset is either disposed of, or if the asset is to be replaced during Year-4 or Year-5 a decision can be made whether to purchase additional maintenance. Information Technology Page 33 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 37. Asset Management Plan – Information Technology 8.3 Augmentation Augmentation, the adding of additional components to an existing asset, should be avoided at all cost where possible when associated with an information technology asset. Generally speaking it is more cost effective to replace the asset rather than add additional components during the asset lifecycle. The one area that augmentation should be considered for is the area of storage, or adding disk drives to an existing storage array. 8.4 Disposal In line with the Council’s financial principles, assets that are declared surplus to strategic or operational requirements are disposed of. Disposal includes any of the activities associated with the disposal of a decommissioned asset. Disposal strategies will be determined via two channels: • Research which identifies any assets that are surplus to requirements. This may be, for example, because of: • obsolescence, inappropriate design or architecture • provision not meeting required level of service • service provision by other means (e.g. external provision) • Condition monitoring and associated financial projects will indicate when an asset becomes uneconomical to maintain and requires replacement. Generally, by the end of the asset lifecycle the asset is of little value and what value it does have is related to its “scrap value” or “spare parts value”. Information Technology already has processes for the disposal of such assets. Information Technology assets are disposed of through: • New Age Materials Limited • Computer Enhancements Limited The disposal of information technology assets is cost neutral, with the “auction house” responsible for the collection, transportation, and disposal of the asset. Information Technology Page 34 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final
  • 38. Asset Management Plan – Information Technology Appendix A Contributors Name Title David McLachlan Manager, Information Technology Peter Borich Manager, Customer Services Rob Stevens Manager, Programme Management Jos van Herk Manager, Production Services Tamsin Evans Executive Office, Corporate Services Information Technology Page 35 Author: Stephanie Mardell Date: July 2003 Version: 1.0 Status: Final

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