Shared Services Today: An Integrated Path to the Cloud


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State, local and federal governments need shared services such as Cloud. Cloud will enable governments to derive economies of scale, reduce redundant and obsolete solutions, and potentially roll out new services more quickly to individual clients. Unfortunately, problems will only intensify without the consideration of a solid strategy for implementing and governing shared services.

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Shared Services Today: An Integrated Path to the Cloud

  1. 1. a s t r at eg y paper fr o m Shared Services Today: An Integrated Path to the Cloud
  2. 2. The Verdict Is In: Government Cannot Afford Business as Usual Introduction public sector add increasing pressure on and program managers in their planning At least one thing is clear in today’s IT departments and make the transition and implementation activities. chaotic policy and economic climate — all the more difficult. With the right shared services founda- state, local and federal governments But now there’s help. Maturing best tion in place, government agencies could need shared services more than ever. practices have emerged to assist agen- see the ripple effects of related advantages, It’s a message IT managers are hear- cies in implementing shared services right including a clear path to private and com- ing loud and clear, which is why shared — the first time. At the top of the list is munity clouds, which build on core shared services and related private cloud the adoption of an integrated approach services components, such as resource initiatives will be high priorities over the that incorporates four critical areas: pooling and service delivery models. next 12 months. In fact, shared services • Governance How do agencies create an integrated ranked as the highest 2012 technology • Communications path to shared services and ultimately to initiative for state governments in the • Program management the cloud? Here are details about each of 2012 Midyear Market Assessment by • Technology the key components of a shared services the Center for Digital Government. City Note that while technology is important transition, with critical guidance in each and county governments were similarly to shared services, success requires gov- area. Together, these four pillars provide committed to the approach, placing ernment agencies to look beyond just the a framework for enabling organizations it third and fourth on their respective IT department to include senior executives to map their own road to shared services. to-do lists for 2012. Why the intense interest in shared services? CIOs understand that by pooling Executive Summary IT resources among many clients, they Shared services are becoming more important than ever for state, local and can derive economies of scale, reduce federal agencies. The reason: In the midst of policy and financial uncertainties, redundant and obsolete solutions, and shared services offer money-saving economies of scale and opportunities for potentially roll out new services more rolling out new services more quickly to clients. quickly to individual clients. Unfortunately, shared services don’t Unfortunately, shared services face a number of stumbling blocks that get in come with any guarantees. Stumbling the way to wider adoption rates. But maturing best practices have emerged blocks are many, ranging from under- to help agencies implement shared services right — the first time. At the top performing service-center technology of the list is the adoption of an integrated approach that incorporates four infrastructures to making program critical areas: managers become comfortable with • overnance G replacing in-house servers and appli- • Communications cations with resources managed by a • Program management third party. This helps explain why real • Technology progress has remained outside of the grasp of many jurisdictions. Without This paper provides details about each of the key components of a shared a solid strategy for implementing and services transition, with critical guidance in each area. Together, these four governing shared services, problems like pillars provide a framework for enabling organizations to map their own road these will only intensify as continued to shared services. staff losses and tight budgets in the2 Shared Services Today
  3. 3. Start on the Same Page including ”soft” costs for power and cooling with carrot and stick incentives that give When explaining shared services to or service and support personnel. shared services a chance for colleagues, agency CIOs may find Jason Albuquerque, director of infor-themselves fighting some entrenched Governance — Skip This mation technology for the town of Northideas. Many colleagues will understand Crucial Step at Your Peril Kingstown, R.I., credits high-level supporthosting services, a venerable IT option The challenge of navigating these haz- with furthering an innovative initiativewhere an organization hires a third-party ards helps explain why shared services that brought the nearby town of Exeterservice provider to manage IT resources strategies don’t always succeed. But IT into North Kingstown’s shared servicesdedicated to one particular customer. organizations can increase the odds by fold. ”I wouldn’t have been able to do thisHosting often succeeds in delivering concentrating on the four pillars of an without the support of our town managerhigh levels of performance while reduc- integrated migration plan, starting with and town council,” he says. ”Their supporting management overhead for a client’s building a formal governance framework. meant I wasn’t tied up by bureaucracyinternal staff. Effective governance often hinges on when it came time for me to go in front of However, shared services go a one key factor — having friends in high Exeter’s town council and pitch the casesignificant step further than hosting. One places. Without executive sponsorship for shared services.”example is multi-tenancy, which means — ranging from the governor’s office to a Next, CIOs must create a permanentthat instead of dedicated resources, town council or a federal cabinet secretary governance board directly responsible forcustomers take what they need from — an IT evangelist has only a slim chance creating the long-term shared servicespools of resources that provide server of gaining the necessary buy-in of program roadmap; monitoring the progress ofprocessing power or case management managers and front-line staff to adopt the current activities; addressing problems;capabilities. With the right technologies new service delivery model. Reticence runs and presenting proposals to governors,and policies in place, service providers can the gamut from fears about inadequate mayors and other top executives.partition these mutual resources securely performance that will make it impossible Along with executive participation,and provide necessary performance levels. to execute core missions to uneasiness the board should include IT managers Chargebacks are another key about cutting the direct connections to an and stakeholders from each departmentcomponent of shared services. Service internal IT department. using a shared service. For states, thiscenters deliver resources using a These are valid questions that IT means agency heads or their desig-pay-as-you go model, similar to how managers will be able to answer with nees; for local municipalities, membersutility companies charge customers. well-documented presentations and work- include liaisons appointed by the fireWith electricity as well as IT shared flow charts that illustrate the technical chief, police chief, department headsservices, customers pay for what they underpinnings that will maintain and often or maybe even members of a regionaluse, unlike in traditional IT architectures improve the support department heads planning council. For example, the townwhere organizations may incur excessive need. Executive evangelists add weight of North Kingstown is exploring ways tocapital and operational expenses from to these presentations and can step in offer shared services to area cities andredundant or underutilized equipment. to break up roadblocks created by less towns and is discussing county-wide What’s not to like with shared services? rational fears, such as that shared services technology projects with the Washing-Sticker shock is one factor — not because is just a technology-for-technology’s-sake ton County Regional Planning Council.shared services are necessarily more plan or that forfeiting internal IT services Once appointed, the governance boardexpensive, but because customers may not is a first step toward a larger downsizing should meet no less than monthly tohave a clear idea of traditional IT spending, strategy. Senior executives can step in keep the project moving forward and to 3
  4. 4. tackle concerns before they grow large services requires well-honed change • IT staffs at individual departments enough to threaten the entire effort. management skills to cultivate accep- and agencies — doing more with A consistent governance process and tance. Even more significantly, shared increasingly smaller budgets will likely executive support are required to ensure services providers must have a technol- be a fact of business life for years projects move forward for the good of the ogy infrastructure in place that delivers to come. Finding solutions within enterprise. Smaller working groups that expected performance and security levels these constraints will keep them meet more frequently are also valuable — skeptics will see any shortfalls in viable within their organizations. ”It’s for targeting specific initiatives. service quality as justifications for return- important for IT that they know that For example, in the state of Ohio the ing to traditional and costly IT models. shared services is bigger than all of us governance authority consists of the individually,” Davis says. ”If we don’t Office of Budget and Management and Keep Communications do this together, the likelihood that Department of Administrative Services. Lines Open senior executives will find somebody The state CIO also receives advisory sup- Open and regular communications are else to do it is pretty high.” port from two smaller bodies, the Multi- essential to getting department heads, No matter which group is the targeted Agency CIO Advisory Council (MAC) and program managers, rank-and-file staff audience, helping them understand the the Leadership Management Committee and IT personnel to buy into the shared full implications of shared services is key. (LMC), staffed by eight department CIOs services philosophy. But the communica- One of the biggest hurdles is explaining and the CTO of the Board of Regents. The tions strategy must be flexible enough the difference between traditional hosting LMC looks out for grassroots initiatives. to resonate with individual audience services and the shared model. Resolv- ”This is how we incubate new ideas segments and provide a two-way flow of ing misunderstandings upfront will avoid and make proposals to the MAC,” explains information. Also important: The gover- concerns later on about the performance, Stu Davis, Ohio’s CIO and assistant director nance board and service implementers security and reliability of multi-tenancy of the Ohio Department of Administrative must customize messages for each of services later on. Services. This bottom-up process recently these stakeholder groups: Effective communications requires led the MAC to consider a plan for state- • Senior executives — focus on enter- shared services administrators to be well wide mobile device management services. prise-wide cost savings opportunities, versed in the needs of individual agen- The governance board and subgroups management efficiencies, and the cies, not only for current operations but also provide a reality check to assure new potential to improve or expand over time as mission goals evolve. Done initiatives won’t be redundant with exist- mission activities within current right, gathering this information can be ing or planned shared services. The board budget restrictions. an education process for both service will also be essential for tackling a fun- • Program managers — explain how providers and recipients. For example, a damental decision — whether to make IT resources will perform at levels program manager may unnecessarily shared services voluntary or mandatory at least as good — or even better — reign in his or her aspirations for the for individual departments. Full participa- than what their departments future — not for a lack of imagination but tion maximizes the collective power of currently experience. because of an incomplete understanding the services model — spreading the costs • End users — help them understand of how available technologies can create among a large group of customers that moving from a familiar in-house higher levels of service for constituents. reduces the individual burden for all and email platform or ERP application, Discussions at the early stage of a eliminates the redundant expenses that for example, could mean new new shared services engagement may saddle many states and municipalities resources for helping them do their be more successful if they’re limited to today. But a forced march to shared jobs more efficiently. department heads and program staff,4 Shared Services Today
  5. 5. without the input at least initially of the resources, negotiate and formalize a section addresses specific needs of thedepartment’s IT organization. Ohio’s shared services contract, and regularly customer, including contingency plansOffice of Information Technology is report on performance levels once negotiated by the two parties. The serviceseeing advantages in this approach in the customer migrates to the shared provider may guarantee that a disruptiontalks around a new initiative for improving services implementation. in a non-vital resource will be correcteddata sharing for the Health and Human CIOs can create the necessary within 24 to 48 hours, while a mission-Services organization. ”We don’t want to customer baselines with on-site visits critical service will be repaired within fourdefine what the technical solution is until to the client’s data center to assess the hours, with regular updates in between.we know what the mission requirements current IT operations. Focus on server Collaboration may produce an evenare,” Davis says. and storage resources and the network- more detailed response where an agency Finally, shared services veterans warn ing infrastructure, including the wide says it can’t live without a particular enter-that steady communications aren’t impor- area network and switches that will act prise service for specific times of the year.tant only at the beginning of projects; as the main components for delivering In some cases this may result in additionalongoing interactions are also necessary to services. North Kingstownkeep efforts on track. Face-to-face meet- takes assessments aings are the main vehicle, but online tools step further. ”We ask the Shared Services Modelcan also help keep parties connected. One town managers where With shared services, a number of agencies and departmentsoption is formal or informal surveys that they see inefficiencies and tap into common resources owned and managed by a hostseek feedback from users about service where they want to be in agency using a computing model known as multi-tenancy.performance. Consider semi-annual or five years,” Albuquerque This differs from traditional hosting services, where an agencyannual in-depth information gathering — explains. That feedback purchases its own IT resources and hires an outside serviceusing online tools like FluidSurveys, provides a clear ”before” provider to manage them.SurveyMonkey or Zoomerang — to and ”after” picture of ITuncover both successes and areas where expectations, he adds. Enteringservices fall short. Regular, informal Next, the two parties Public Works Dept. Town of SpringFieldemails throughout the year augment need to formalize their rela-formal surveys with a question or two tionship. Service providersthat solicit end-user comments and favor standardized servicesperhaps uncover emerging problems. to avoid custom tailoring Claims Processing Processing Power Storage Application for each individual clientFormalize Program that increases costs for ITManagement investments, management Successful program management and upgrades. But thatfaces some additional challenges. doesn’t mean customersService providers need to work closely have to accept one-size-with clients to formalize service levels, fits-all agreements. Forso customers receive the resources they example, one section ofneed for their missions and so providers the contract can reflect thecan provision their IT infrastructures at necessary standardizationreliable levels. This requires a three-step by defining the service and HHS Dept.process: profile a new client’s existing its per-unit costs. A second 5
  6. 6. costs for a higher service level to keep storm so additional IT staff are aware and virtualization platforms can provide the uptime at the highest rates during those can be deployed in anticipation of any needed statistics and charge-back tools times. In others the service level objectives service problems. to create these reports. These documents can be modified to provide the requested Once the SLA is completed and will quantify the effectiveness of the technical support and coverage. For services are being delivered, providers relationship for both parties and allow example, Ohio’s DOT relies on email services should continuously gather data about them to resolve problems, whether in during the winter months to coordinate performance levels and summarize service shortfalls by providers or exces- storm responses. So in addition to work- the information into reports deliv- sive demand from clients. ing with the IT office to set higher service ered monthly or quarterly. Log reports, The reports can also be a starting point standards, DOT sends weather updates to network management tools, enterprise for renewed negotiations between provid- the shared service provider before a coming monitoring applications and some server ers and customers. If one department A Shared Services Checklist Governance ✓✓ Cultivate senior-level sponsorship ✓✓ Create a governance board with multi-departmental representation ✓✓ Establish a monthly meeting schedule for the board ✓✓ Encourage the formation of small working groups to evaluate new ideas ✓✓ Decide whether to make shared services mandatory or voluntary Communications ✓✓ Tailor individual messages to explain shared services to core stakeholder groups ✓✓ Schedule regular meetings among stakeholders in new projects ✓✓ Use emails, surveys and other tools to solicit feedback from clients ✓✓ Determine the unique needs of individual clients ✓✓ Target program managers rather than IT officials during initial project planning stages ✓✓ Make sure regular communications continue even after clients adopt new services Program Management ✓✓ Work with clients to formalize service levels ✓✓ Profile a new client’s “as-is” operations ✓✓ Negotiate service level agreements ✓✓ Continuously monitor post-implementation service delivery and demand Remote Access and VPN ✓✓ Determine what services are appropriate for sharing ✓✓ Target solutions that support multi-tenancy and scalability ✓✓ Avoid custom, one-off solutions ✓✓ Find ways to keep internal technology costs low ✓✓ Identify investments required to upgrade the shared service center’s IT infrastructure ✓✓ Train IT staff in new skills ✓✓ Cultivate a culture of shared services6 Shared Services Today
  7. 7. regularly draws higher service levels than entire departments or agencies sign on.what’s been established in the SLA, the Similarly, custom applications designed toprovider may either ask to rewrite the meet one organization’s exclusive needs,contract or find an alternative adjustment without an opportunity for multi-tenancy— for example, running some projects are more appropriate for in-house orduring off-peak hours. hosted services. IT managers also must work to keepCreate a Solid internal technology costs low to makeTechnology Foundation chargeback services a viable alterna- Shared services aren’t an IT-only tive to internal data centers. Serverinitiative. Senior executives, program virtualization, which can reduce capitalmanagers and agency staff at all levels investments and resource managementmust be part of the governance, design overhead, is one answer. This option alsoand management processes. Neverthe- serves scalability requirements becauseless, technology is the foundation for the IT managers can provision new virtualservices being delivered and the ability services within a day or so to meet ato create the right infrastructure is an demand spike, versus the weeks typically and that technical resources are on handimportant part of a successful foundation. required to purchase, receive, implement to quickly restore services. First, service providers must deter- and test a physical server. In addition to more extensive training,mine what services are right for sharing The challenge is balancing cost the new after-hours reps had to learn aand which ones don’t easily fit the model. containment with quality of service call center mindset, and this illustratesGood candidates include general busi- requirements. In many cases the latter another fundamental change in the sharedness systems that multiple departments goal requires new spending to upgrade services model. The service center’suse, including word processing and the supporting IT infrastructure. Two key IT department needs to evolve fromspreadsheet programs, email applica- performance areas that directly impact traditional ways of thinking to what sometions and core services like voice-over-IP performance are networking systems, to veterans call a culture of shared services,phone systems. But shared services don’t optimize the flow of data and services to which is characterized by the ability tohave to be limited to general purpose clients, and networked storage systems, maintain multi-tenancy systems, deliverresources. A variety of departments may to make data and virtual machines avail- services to a large and varied customertake advantage of more specialized solu- able with the least amount of latency. base and adhere to the service-qualitytions, such as the multi-tenancy building The IT department in charge of a agreements of multiple clients. The transi-and permitting system used by North shared service center will likely require tion might be rocky at first, but there’s aKingstown that is being evaluated for use additional training to master new skills. payoff for IT organizations — it movesby Exeter — a move that could provide For example, when Ohio’s computing them a step further into the future.additional capabilities without the expen- center consolidated six call centers down ”Shared services develops the mental-sive new capital investments. to two, it required some of its mainframe ity of cloud computing — our centralized Poor options for shared services are staff to field after-hours service calls. data center is a private government cloud,resources that can’t be expanded or con- This assures that shared services clients for all intents and purposes,” Albuquer-tracted to meet predictable demand levels will speak with a representative even if an que explains. ”Our staff needs to embraceof existing users or grow exponentially as outage occurs in the middle of the night that and become comfortable with it.”  7
  8. 8. Cisco is the worldwide leader in networking that transforms how people connect, communicate, and collaborate.Learn more at more information about Cisco Services for Governments, please visit: Center for Digital Government, a division of e.Republic, is a national research and advisory institute on information technology policies andbest practices in state and local government. Through its diverse and dynamic programs and services, the Center provides public and privatesector leaders with decision support, knowledge and opportunities to help them effectively incorporate new technologies in the 21st century.www.centerdigitalgov.comAcknowledgements: Alan Joch specializes in technology best practices for the public sector, education, and industry. Areas of expertise include cloud computing, mobile applications, server and desktop virtualization, and enterprise storage. His feature articles appear in The New York Times, Federal Computer Week, Engineering Inc., and other industry publications. Previously, Alan spent seven years as a senior editor at Byte Magazine, where he alternately ran the product testing lab and the features department. He also is author of the book ”How to Find Money Online: An Internet-Based Capital Guide for Entrepreneurs.” © 2012 e.Republic. All rights reserved.