Cost of ownership study makes a believer of Air Force IT manager

Cost of ownership study makes a believer of Air Force IT manager

In outsourcing circles, there's a mantra for seat management neophytes: You need to understand the assets you have in place and all the costs'hard and soft'related to those assets. In other words, what's your total cost of ownership?

For Lt. Col. Alvin Lee a TCO study of the Air Force's Air Education and Training Command's PC hardware, software, networks and other computing assets'which serve 60,000 users at 13 U.S. bases'was an eye-opener.

In fact, the TCO study turned Lee, chief of the command's Technology Branch, into a self-described seat management zealot.

'I am pretty fired up about seat management,' he told feds who attended a seat management seminar last month in Washington.

About two years ago Lee's superiors directed him to come up with a strategy for fixing the command's persistent information technology problems, including network downtime.

'The bottom line was we didn't have a staff that was educated, skilled and trained well enough to operate and maintain our networks,' he said. 'So I started doing some research and heard about this concept called seat management.'

Lee began looking into the idea. He talked to Teresa Weipert, vice president and general manager of global network services for Unisys Corp.'s federal group. She cautioned him that if he wanted to do it right, the first thing he needed to do was a TCO study. 'I was smart enough to realize at that time that I wasn't smart enough to do that on my own,' Lee said.

After releasing a statement of work for a TCO study of PC operations at a representative sampling of four command bases, he received about a dozen bids ranging from $167,000 to $500,000. He selected Harris Technical Service Corp. of Alexandria, Va., which bid $250,000. Harris finished the TCO study last June.

The study found that the four bases' hard costs, encompassing specific products and services, totaled $37 million annually.

Harris also estimated that if the command were to outsource those assets under a seat management program, the costs would be $63.1 million annually.

The additional $26.1 million in hard costs largely reflected the state of the command's IT infrastructure.

'For the past decade we haven't invested any money in our infrastructure,' Lee said. 'We've fallen so far behind that it's going to take a quantum-leap cash outlay to catch up.'

Harris also looked at the soft costs, which reflect the hidden expenditures of IT management and don't appear on balance sheets. Soft costs include things such as decreased productivity because of network downtime and help desk problems.

Soft money

Harris found that soft costs at the four bases amounted to $110.6 million a year. But under seat management, Harris estimated, the command would be able to reduce soft costs to $59.3 million a year.

So the $26.1 million increase in hard costs would be more than offset by the $51.3 million reduction in soft costs'a theoretical net gain of $25.2 million.

Despite the projected increase in hard costs, Lee was able to use the TCO study to build a business case for a seat management strategy. And, he convinced the command's senior leaders that seat management might be the answer to improving the organization's IT.

Although Lee didn't get the go-ahead for commandwide implementation, he did get permission to do a seat management prototype at Tyndall Air Force Base, Fla.

Lee is seeking funding for the prototype. 'We're going through the Air Force budget process,' he said. 'I should know in May whether we get the money.'

'Richard W. Walker

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