C e n I T e x

A l l S t a f f F o r u m

I n f o r m a t i o n P a c k

2 0 M a y 2 0 . 3

C E N T R E F O R I T E X C E L L E N C E

M ' c h a e l V a n d e r h e i d e , C h i e f E x e c u t i v e

C l a s s i f i c a t i o n : U N C L A S S I F I E D

I. State Government directionsMinister for Technology, Gordon Rich-Phillips

2. Overview of CenlTex Strategic DirectionCenlTex Chief Executive, Michael Vanderheide

AG E " DA

3. Next steps in CenlTex evolutionCenlTex Chief Executive, Michael Vanderheide

Cenl e' CENTRE Pop " EXCELLENCE

2 . C e n ^ T e X S t r a t e g i c D i r e c t i o n

A l l S t a f f F o r u m D e c e m b e r 2 0 1 2 . . . .

W e c o n t i n u e t o d e l i v e r s e r v i c e s

V i l e c o n t i n u e t o c o n s o l i d a t e a n d t o s t a n d a r d i s e

W e c o n t i n u e t o i m p r o v e w h a t w e ' v e g o t

V i l e b e c o m e b r o k e r s d e m a n d a . o r e o a t o r s a n d . u r c h a s e r s

A n d i f i t m a k e s s e n s e , w e g e t o u t o f t h e w a y .

W e b r o a d e n o u r s e r v i c e s t o i n c l u d e c l o u d

C e n l T e

C E N T R E F o p 1 1 E X C E L L E N C E

,

,

A change in our vision=

"A connected and ICT enabled public sector"

Cenl eCENTaE ,OR it ,xCELL, NCE

O u r m i s s i o n r e c o g n i s e s t h e s h i f t f r o m b e i n g a

p r o v i d e r t o a b r o k e r . . .

O u r M i s s i o n :

" T o p r o v i d e , m a n a g e a n d b r o k e r I C T s e r v i c e s

f o r t h e p u b l i c s e c t o r t h a t b e s t e n a b l e t h e

d e l i v e r y o f r e s p o n s i v e a n d c o s t e f f e c t i v e

s e r v i c e s t o t h e p e o p l e o f V i c t o r i a . "

C e n l T e

C E N I R E F O R i t E X C E L L E N C E

CenlTex is moving from being a provider to abroker ...

Our Key Result Areas remain unchanged :

Our underpinning strategies for 2013 and beyond willsupport and reflect our mission.

^t^

Relationships

Cen TeCENTnE FOR 11 EXCELLENCE

Capabilities

Governance

W h a t w e ' r e a c h i e v i n g . . .

. P a u s e d a n d c o n s o l i d a t e d o v e r t h e p a s t 1 2 m o n t h s

. G o o d w i l l a m o n g s t m o s t o f o u r c u s t o m e r b a s e a n d w i t h i n d u s t r y

. G o o d r e l a t i o n s h i p w i t h o u r M i n i s t e r , o u r C h a i r a n d t h e C h i e f

T e c h n o l o g y A d v o c a t e

. D e e p e r u n d e r s t a n d i n g o f o u r i n f r a s t r u c t u r e

. O p e r a t i o n a l r i s k s r e c o r d e d , m o n i t o r e d a n d s t e a d i l y a d d r e s s e d

. S e v I i n c i d e n t s a r e t r e n d i n g d o w n a g a i n s t a g r o w i n g a s s e t b a s e

. W e ' r e t r a c k i n g v e r y c l o s e t o o u r b u d g e t e d e n d o f y e a r o u t c o m e

. F i r s t l e v e l r e s o l u t i o n i s c o n s i s t e n t l y a b o v e 9 0 % a g a i n s t a t a r g e t o f

7 0 %

C e n l e

C E N T R E F O R " E X C E L L E N C E

And in the world around us. ..

. Our customer base is smaller and capital available for asset refresh

is in short supply

Role of Chief Technology Advocate was established

Victorian Government ICT strategy launched in February proposed a

move away from direct ICT service delivery

We had a high level review of our costs pre-Christmas and in depth

analysis post-Christmas

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CenCE":RE FOR 11 EXCELLENCE

e

R e v i e w a p p r o a c h a n d r e c o m m e n d a t i o n

.

A l l c o s t s a l l o c a t e d a c r o s s f o u r b r o a d c a t e g o r i e s o f s e r v i c e - h o s t i n g ,

s t o r a g e , n e t w o r k a n d d e s k t o p

" S h i e l d e d " a p p r o a c h t o m a r k e t f o r c o m p a r a t i v e c o s t i n g s

S i g n i f i c a n t 1 2 1 9 ^ ^ ^ s a v i n g s i d e n t i f i e d

E v i d e n c e s u p p o r t s a p p r o a c h i n g t h e m a r k e t f o r s e r v i c e s i n a l l f o u r o f

t h e s e a r e a s

.

.

.

C e n T e

C E N T R E F O R N E X C E L L E N C E

What our world looks like

Current operating model is under pressure

Increasing maturity ofmarket offering and

product portfolio

New capabilitiesaround cloud based

provision

Large fixedcomponent

to costs

Supply side forces

. .

Lowering ofbarriers to entry

and adoption

Budgetaryconstraints

Cenl e

CenlTex

. CENTQE FOR " EXCELLENCE

Fundingconstraints

limit ability tostandardise.

CurrentOperating

model

Pricing andcost

transparencyproblems

Increased demand bydepartments for modern

ICT infrastructure services

Costrecovery

Demand side forces

Emergence of utility models for theprovision of ICT infrastructure are

challenging CenlTex cost structures

Internaldemand is

flat ordecreasing

W h a t w e f o u n d d u r i n g t h e r e v i e w . . .

. L o w e r c o s t s w i t h v e n d o r s w e r e d r i v e n b y a m i x o f f a c t o r s w e c a n ' t

e a s i l y r e p l i c a t e - n e w t e c h n o l o g i e s ( c l o u d ) , l a b o u r , s e r v i c e l e v e l s a n d

s t a n d a r d i s a t i o n

. W h e r e o u r c o s t s d i f f e r e d , a p p r o x i m a t e l y I 5 % w a s d r i v e n b y s c a l e

d i f f e r e n c e s a n d t h e r e s t r e l a t e d t o t h e c o m p l e x i t y o f o u r e n v i r o n m e n t

. A b o u t 7 5 % o f o u r d e s k t o p , s t o r a g e a n d h o s t i n g e n v i r o n m e n t s a r e

l e g a c y a n d o u r c u s t o m e r s d o n ' t h a v e t h e f u n d s t o m i g r a t e

. C l o s e t o 8 0 % o f o u r e n v i r o n m e n t i s f i x e d c o s t a n d r e v e n u e s a r e

e x p e c t e d t o d r o p o r n o t g r o w f o r 3 o f t h e 4 s e r v i c e s t r e a m s

C e n I T e

C E N T R E F O R U E X C E L L E N C E

Four key options for Cen^TeX were assessed

^ , ,^,^^;I::;^;::,*, ,Do NothingDesktop services

ProcessingEnvironment

Storage

. All services remain in-

Descrip- house according to thetion current service

catalogue

Pursue incrementalsavings

Network

Desktop servi

.

Pros

. No disruption to thebusiness

, Ability to focus on otheraspects of CenlTexmanagement functionsin the short term

Processin

Cons

nV

. No benefit realised

. No ability to leveragemarket innovation

Storage

CenlTe

. The identified core services. Selectively choose. Choose selected

are all taken to the market -managed services to takeopportunities (includingGenlTex retains ingmt.to market, either one or allthose across services) tofunctionsfour to one or four vendorsreduce operational spend

and jin rove errormance

.

Desktop services

cENIRE' FOR 11 EXCELl, NC,

ork

. Minimum disruption

. Leverage some emergingopportunities

Storage

r-

All core services tothe market

. Opportunities not at scaleto have a meaningfulimpact on cost

-------

.

. Choose best of breedprices for services

. Potentially keep servicesthat are closer to scale orhave specific requirementsin-house

^^^^^

. Requires uplift in currentcapabilities

. Needs both good vendormanagement and goodoperations capabilities

. Faster transfer of issues to athird party

. Ability to lock in stepchanges in unit prices

. Large scale change in runeconomics

Maximum complexity toimplementation requires wellthought through large scale,rogramPotentially increased risk

^^^

3 . N e x t s t e p s i n C e n ^ T e X e v o l u t i o n

P r o g r a m E V O L V E

C e n l e

C E N T R E F O R " E X C E L L E N C E

Recommended that 3 streams would be needed=

Objective

Capability uplift

KeyActivities

Strengthen organisationalcapability to meet commercialand operational businessoutcomes using targetoperating model

. Build procurement and vendormanagement capabilities

. Strengthen strategy andarchitectureIncrease service managementoverlay on service delivery

Market engagement

Cenl e. CENTRE FOR in EXCELLENCE

. Solidifying benefits andtransition costs for thebusiness case through fullmarket engagement

Transition Pro ram Managemen

Changemanagement

. Define initial requirements andseek expressions of interest

. Detail scope and issue RFP

. Review submissions to informbusiness case

. Prepare the organisa 10n oadopt the new operatingmodel while loweringoperational risk

. Drive communication plan toeffectiveIy manage allstakeholders

. Plan and execute migration tothe target operating modelmeeting current labour policies

.R e v i e w p r o p o s e d c o n t r a c t s i n p l a c e i n J u l y 2 0 . 4

w i t h i m p l e m e n t a t i o n o v e r t h e f o l l o w i n g 2 y e a r s .

,

H i g h l e v e l t i m e l i n e

M a y ' I 3

E O l s c o p e d a n d

d e t a i l e d

C h a n g e m a n a g e m e n t

C a p a b i l i t y u p l i f t

< . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

J u l

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; J u l y ' 7 4

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R F P p r o c e s s e x e c u t e d

B u s i n e s s c a s e i m p a c t c o m p l e t e d

C e n l e

C E N T R E F O R I T E X C E L L E N C E

N o v D e c

J u l y ' I 5

M a r

I m p l e m e n t a t i o n

C h a n g e m a n a g e m e n t

J u l ' 7 4

C a p a b i l i t y u p l i f t

=

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T r a n s i t i o n

p l a n n i n g

a n d

e x e c u t i o n

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J u l ' I 6

What does it mean for what we do today?

. Key considerations for the next I2 months:Invest in essential capability

Ensure continued service quality and address immediate risks likely to manifestwithin I8 months

Evaluate customer funded projects with them to determine delivery method andfor consistency with future operating model

Look to opportunities that support staff involvement in the changes ahead

. Asset Refresh will continue

. Key internal projects will continue in business improvement andservice development

. Customer funded projects will continue.

Cenl e' CENTRE FOR I, ExCEUENCE

W h a t n e x t . . . .

. E n g a g e w i t h C h i e f T e c h n o l o g y A d v o c a t e a r o u n d s h a p e o f t h e

p r o g r a m

. B r i e f C L G s o t h a t t h e y c a n h e l p y o u u n d e r s t a n d w h a t i s h a p p e n i n g

. E s t a b l i s h p r o j e c t t e a m s t o s u p p o r t t h e p r o g r a m a n d f i n a l i s e i n i t i a l

p l a n s

. E n a c t g o v e r n a n c e a r o u n d t h e M a r k e t E n g a g e m e n t s t r e a m ( D S D B l ,

C e n l T e x & D T F )

. E s t a b l i s h a c u s t o m e r r e f e r e n c e g r o u p

. C o m m e n c e a c o m m u n i c a t i o n p r o g r a m t o k e e p s t a f f a n d c u s t o m e r s

i n f o r m e d o f p r o g r e s s

. K e e p d o i n g t h e i m p o r t a n t w o r k w e a r e d o i n g .

C e n l T e

C E N T R E F O R i n E X C E L L E N C E

Staff support and further information

. Speak to your senior manager with any concerns or questions

Email questions confidentially to the Evolve mailbox which can befound on the Or an is ational chan e page on the Intranet.

Check the org change page which will be regularly updated includingQ&As - Bulletins will let you know when things are added.

Participate in the Chief Executive Live Chats

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Cen TeCENTRE FOR 11 EXCELLENCE

Remember - we don't know all the detail yet

and it's going to take time.