Procuring ICT Products
from Retail Stores vs.
Transversal Contracts
Technology Advisory Services (TAS)
June 2017
• TAS is responsible for Product Certification process
• 6 certified Technology Domains:
– Personal Computing Devices
– Peripherals
– Servers & Storage
– AVCT (Audiovisual)
– Networking
– Infrastructure
• GITOC-approved specifications with input from all role players, including Departments, suppliers, >110 OEMs
– All Departments invited to participate! (e-Mail or GITOC TTT channels)
– www.sita.co.za/prodcert.htm
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Technology Certification process
Transversal Contract vs. Retail (summary)
4 * SITA Research Report - Procuring ICT Products from Retail Stores vs. Transversal Contracts
Cost factors in ICT procurement
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Pri
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• Constitution mandates cost-effectiveness, not cheapness
– Cost ≠ Price – i.e. TCO focus
• Transversal contract TCO features:
– Complete solution (e.g. pro OS, carry bag + lock)
– 3-year on-site warranty and support SLA
– Better security (encryption, no leaks during repair,
security clearance for technicians, remote wipe
option)
– Stable, manageable platform with asset tracking
and data protection options
– Pro OS options: Windows 10, Windows 7, Linux
• Home OS cannot connect to Domain (AD)
– Standard configurations with pre-built disk images
for mass roll-out
– No preloaded trialware/crapware/spyware
• Windows Pro + minimum accessories bundle = ~R3000 extra
• 3-year warranty + on-site SLA = ~R1500 extra
• Contract products have enterprise-level options: docks, biometrics, asset
tracking tools, OS downgrade rights, Linux (open source)
• Support for economic imperatives such as empowerment
• Blacklist process as recourse: only on Contract
• There are lower-price options on Contract:
– PC2, Note2 still meet enterprise requirements
• e-Waste processes supported by enterprise OEMs
• Retail stores often offer one-time specials (typically dumping older products)
• ICT products contain 100s of parts. Even if CPU, RAM and HDD are similar,
it doesn’t mean the products are the same.
• Retail systems do not comply with SITA minimum spec, cannot be certified
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Additional considerations
Note1 Note2 Note3 Note4 Note5 Retail laptop
Netbook /
Chromebook /
Thin client
laptop
Value notebook Thin and light
notebook
Midrange
business
notebook
Advanced
business
notebook
No clearly defined
user profile
Single-core, 64-
bit pref
Low-cost X64
dual-core
X64 dual-core
(Including LV &
ULV)
X64 dual-core X64 quad-core Low-cost, low-
featured, low-
quality, but cheap
Atom 1GHz 5th-gen Celeron 6th-gen Core i3 6th-gen Core i3 6th-gen Core i5 Celeron - i7
SITA-specified laptops: Comparison
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CAPABILITIES
Sweet spot
for standard
users
Price
curve
+ PRICE
Retail Enterprise
Price R380 R1330
Ink prices Black: R 145
Colour: R 170
Black: R 295
Colour: R 195
Ink yield (pages) Black: 200 Colour: 165
Black: 2200 Colour: 1400
Duty cycle per month 750 pages 15000 pages
Print speed 16 pg/min 34 pg/min
Ink cartridges 2: K + Tricolour 4: CMYK
Cost per page R1.76 R0.55
Pages per month 200 200
TCO over 3 years R 8 810 R 3 980
TCO over 5 years R 17 240 R 6 630
Printer TCO example
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Retail Enterprise
Price R380 R1330
Ink prices Black: R 145
Colour: R 170
Black: R 295
Colour: R 195
Ink yield (pages) Black: 200 Colour: 165
Black: 2200 Colour: 1400
Duty cycle per month 750 pages 15000 pages
Print speed 16 pg/min 34 pg/min
Ink cartridges 2: K + Tricolour 4: CMYK
Cost per page R1.76 R0.55
Pages per month 200 200
TCO over 3 years R 8 810 R 3 980
TCO over 5 years R 17 240 R 6 630
Retail Enterprise
Price R380 R1330
Ink prices Black: R 145
Colour: R 170
Black: R 295
Colour: R 195
Ink yield (pages) Black: 200 Colour: 165
Black: 2200 Colour: 1400
Duty cycle per month 750 pages 15000 pages
Print speed 16 pg/min 34 pg/min
Ink cartridges 2: K + Tricolour 4: CMYK
Cost per page R1.76 R0.55
Pages per month 200 200
TCO over 3 years R 8 810 R 3 980
TCO over 5 years R 17 240 R 6 630
Retail Enterprise
Price R380 R1330
Ink prices Black: R 145
Colour: R 170
Black: R 295
Colour: R 195
Ink yield (pages) Black: 200 Colour: 165
Black: 2200 Colour: 1400
Duty cycle per month 750 pages 15000 pages
Print speed 16 pg/min 34 pg/min
Ink cartridges 2: K + Tricolour 4: CMYK
Cost per page R1.76 R0.55
Pages per month 200 200
TCO over 3 years R 8 810 R 3 980
TCO over 5 years R 17 240 R 6 630
The fine print …
2.5x less!
Conclusion
• When comparing apples to apples, Contract is
cheaper and offers lower TCO.
• This is not about protecting SITA’s business - SITA
makes no money from transversal contracts.
• It’s about informing Government about “cheap”,
low-quality consumer-class devices.
• Contact us for more info:
– www.sita.co.za/prodcert.htm
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Questions?
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“In other words standards are being formulated whereby the non-standard parts, which must
conform to certain standards of non-standardisation, are also to be handled only in a
standardised non-standard way in order to standardise on the overall non-standardisation.”
— John Gordon, The Alice and Bob after-dinner speech
Thank You!
Price comparison detail
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Item Product Config
Note3 Lenovo ThinkPad
T460
14" WXGA, Core i5-
6200U, 4GB, 500GBR 14 126 N/A - R 17 699 125% R 18 561 131% N/A N/A
Note3 Lenovo ThinkPad
X260
12.5" WXGA, Core i5-
6200U, 4GB, 500GBR 12 717 R 18 179 143% N/A - R 17 945 141% N/A N/A
Note3 Lenovo ThinkPad
T460s
14" FHD, Core i5-
6200U, Upgr: 8GB,
256GB
R 17 396 R 25 565 147% R 23 899 137% R 23 292 134% N/A N/A
Note4 Lenovo ThinkPad
T560
15" FHD, Upgr: Core
i7-6200U, 8GB, 1TBR 20 413 R 22 799 112% R 21 899 107% R 23 750 116% N/A N/A
Note3 Dell Latitude
E7270
12.5" FHD, Core i5,
Ugpr: 8GB, 256GBR 23 790 R 25 935 109% N/A - R 28 619 120% N/A N/A
Note3 Dell Latitude
E7470
14" WXGA, Upgr:
Core i7, 8GB, 256GBR 27 565 R 34 009 123% N/A - R 29 062 105% N/A N/A
Note4 Dell Latitude
E5570
15.6" FHD, Core i5,
500GB, Upgr: 8GBR 21 716 N/A - R 22 699 105% N/A - N/A N/A
Note4 Dell Latitude
E5470
14" WXGA, Core i5,
4GB, 500GBR 20 111 N/A - R 17 299 86% R 18 895 94%
Consumer vs. Enterprise computers
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• Failure risk – what happens if it breaks?
– Have to take it back to store – on-site support is a huge issue
• OS considerations
– Pro OS with downgrade rights
– Domain support
– Alternative OS options: Linux
• Build quality & reliability
– Metal/carbon body and hinges, higher duty cycle, more reliable
– Often ruggedised (MIL-STD 810G), drop/dust/temperature/spill-resistant
• Security designed in (including data loss prevention)
• Long lifecycle
• Enterprise-level accessories
– Included: bag, lock, 3-year support
– Support for asset management and tracking, remote wipe
– Optional: biometrics, docks, service upgrades, etc.
Detail comparison
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Configuration Intel Core i5 CPU, 8GB RAM, 500GB HDD Identical basic system configuration – but this is not important in terms of TCO and long-term use
Storage 500GB 5400rpm HDD Old technology, low performance drive
500GB 7200rpm/SSD New technology, high speed drive
Display Low-resolution, glossy coating, medium brightness, TN Low definition, best suited to dark environments where reflections do not distract, poor
viewing angle
High-resolution, high-brightness, anti-glare, IPS High definition, good viewing quality in all environments (specifically office with bright lights),
good viewing angle
Physical size and weight Average: 2.5kg, 2.17dm3
Relatively large and heavy due to consumer design and non-optimised materials Excellent: 1.3kg, 1.16dm3
Best-in-class size and weight for enterprise: almost half the size and weight of the retail system
Mobility and battery life Mediocre Mobility is not a primary mandate – price is
Good System design and components optimised for mobility
Product focus Up-front price – short-term Sucker the buyer with a “CHEAP!” sticker
TCO – long-term Lower cost with fewer failures over long-term use
Operating system Windows 10 Home Bleeding edge consumer OS, no domain integration, enterprise features. Compatible with all
Gov systems? Not tested.
Windows 7 Pro Mature, Dept-approved and domain-integrated, enterprise OS. Tested compatible with Gov
systems
Security No specific provision No built-in security capabilities
TPM, AD login, Encryption, Fingerprint, K-Lock Secure storage of crypto keys, Departmental login, support for encryption, physical cable lock
Data security in case of failure
Data is at the mercy of retail store No guarantee of breach or data loss
Data does not leave office Cannot be lost or compromised
SSA guidelines for data security in case of failure
No provision for data security Hard disk with data has to be returned to OEM
Keep your HDD programme OEM allows hard drive to remain at client, in line with SSA guidelines
Installed software No control – OEM marketing Several types of scareware, trialware and ransomware – even spyware
Full control – Gov software image Built by Department, loaded @ factory
Additional features None Backlit keyboard, Fingerprint reader, Dual pointing device, Docking station support, 3G support
Certified build quality & reliability
None Built from cheapest, low-end parts
MIL-STD 810G Tested for ruggedness for day-to-day use
On-site delivery and installation
User responsibility Carry in to store with 6-week turnaround
Included in price
Support and warranty 1-year carry-in User responsibility, turn-around time unknown
3-year on-site Guaranteed 8x5, 8-hour repair SLA
Standard accessories Charger Other accessories are extra
Charger, Carry bag, K-lock No other accessories needed
System management None Cannot be remotely managed
Intel vPro or equivalent Fully manageable by Dept ICT staff
Anti-theft No provision No support for third-party anti-theft/tracking tools
Anti-theft support built in Full support in BIOS for tools like CompuTrace
Hardware design Retail, low duty cycle Lower-quality components and accessories built to sit on a desk at home for 80% of the time
Enterprise, high duty cycle System and accessories designed and built to withstand 3 or more years of daily travel
Product life cycle 3-month cycle High churn rate of components, including motherboard. No possibility of standardisation
12-month+ cycle Stable components selected for long life cycle. Standardisation is easy and manageable
SITA-certified No Retail products do not meet Gov specifications
Yes Meets all Government requirements
PPPFA support None BEE according to NT Full support for empowerment
TCO factors
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Category Expense Definition How to Calculate
Hardware &
software Direct
Includes initial hardware and software purchases or
lease costs, along with software licensing,
subscriptions, maintenance contracts, extended
warranties, set-up fees, supplies, materials and spare
parts.
Pull invoices, purchase orders and records related to hardware and
software expenses over a three year period. Divide total costs by
three to get an accurate annual TCO picture. Depreciation costs
should also be included.
Operations Direct
Includes all labor costs for IT operations, such as tech
support, database administration, website, helpdesk,
etc. Includes staff salaries (wages and benefits), as
well as any outside service providers. Also includes
facilities costs used by IT staff (office space, furniture,
utilities), along with network costs and internet
connectivity.
Many small organizations do not have dedicated IT staff. In that case,
responsibilities typically fall to the office manager or person who knows
the most about computers. Estimate the # of hours that person (s)
spends directly managing IT and multiply by their hourly wages. If you
work with an IT service provider, add up all those payments, including
hourly fees. If you are locked into a monthly retainer or long-term IT
service contract, make sure you factor in those fees as well.
Administration Direct Includes finance, HR, administration and procurement
costs spent managing internal IT staff or outsourced
providers. Also includes training for staff members.
Whether you have an internal IT staff or work with outside service
providers, someone still spends time hiring, procuring and managing
those relationships. Estimate the # of hours spent on IT oversight and
multiply by the appropriate hourly wage. Any employee training
expenses should also be calculated.
End-user
operations Indirect
Includes productivity lost to end-user frustration,
troubleshooting, “futzing” and providing informal IT
assistance to co-workers.
This category is the most difficult to measure, yet represents the
highest percentage of TCO. Many employees try to fix problems
themselves, rather than pay expensive hourly rates for outside service
providers. Estimate the # of hours employees lose dealing with
computer issues, along with the # of hours they spend self-training or
helping others, and multiply by the average hourly wage.
Downtime Indirect Productivity and revenue lost to inoperable or
inaccessible computers, servers, software, internet
connectivity, etc.
Estimate the # of hours computers are down due to viruses, hardware
failure and planned maintenance and multiply by the average hourly
wage.
www.networkalliance.com/your-advantage/understanding-technology-costs
SITA SCM: Why use transversals?
• “Computers acquired from contract come with an on-site
three year warranty which includes maintenance, while
product acquired from retail comes with a one year
warranty which requires the customer to carry the
equipment in for any repair.”
• “All the IT equipment acquired from contract are quality
checked by SITA LAB and OEMs have signed an
agreement with SITA to ensure that they supply the
equipment according to government standards.”
• Well-informed, objective advice from SITA Lab, tested,
vetted and benchmarked
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Discussion
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• Cost ≠ Price: Constitution Article 217 requires cost-effective procurement.
• “The same” ≠ “The same” – retail systems differ fundamentally i.t.o.
design, quality, components, manageability, reliability, longevity, etc.
– In a true apples-to-apples comparison retail systems are usually
significantly more expensive.
– OEMs estimate ~R6000 value-adds for enterprise-class systems.
• Time and Material repairs are costly, ineffective, time-consuming and
difficult to manage. Bundled on-site SLA is hassle-free.
• Research Report available with all the details.
• SITA specifications are drafted with input from Government.
– Collaborative effort, “open-source” methodology.
– Please participate via e-mail or monthly GITOC TTT forum.
e-Government House of Value
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