GSA supports it and market forces may soon dictate it, but so far only a few agencies have taken the plunge
By Richard W. Walker
Sandra Bates, new commissioner of the Federal Technology Service, at WillowWood, FTS' headquarters in Fairfax, Va.
Not long after Goddard Space Flight Center in Greenbelt, Md., assigned its desktop PC and network services to a private contractor, Goddard's project manager for the Outsourcing Desktop Initiative for NASA got an e-mail from a user who was boiling mad.
The ODIN vendor's on-site technicians refused to check out a computer problem, the user told Mark Silverstein. The irate user wrote: 'There are systems people two doors down the hall from me. I told them my machine is broken, but they won't come out and help me. It's a terrible, terrible thing.'
Silverstein told the user that he would first have to put in a call to the help desk. The help desk staff would then make sure a technician came and worked on it.''The user didn't understand until I explained the way it works,' Silverstein said.
The experience underscores what is widely seen as the chief obstacle on the road to desktop PC outsourcing, or seat management. The obstacle's not conceptual; it's not technological; it's not logistical. It's cultural.
In fact, it's a culture shock.
'No one likes change,' said Charles Self, deputy commissioner of the General Services Administration's Federal Technology Service and one of the progenitors of its Seat Management Program. 'It's not easy. It's easier to do business the old way.'
One of the biggest shocks is the sense of losing control over your information technology.
'No one wants to give up the desktop,' said Ira Hobbs, deputy chief information officer at the Agriculture Department. 'The desktop is the last line of defense.'
That's one reason agencies are not rushing out and embracing seat management, Hobbs said.
Added Silverstein: 'The very concept of not owning the personal computer, having it belonging to somebody other than the government, is new. Communicating to the users so they can understand the cultural change has been very difficult to do. And we continue to wrestle with that.'
Mark Hagerty, ODIN program manager at NASA, said: 'This isn't a hurdle. It's a mountain we have to climb. The most difficult thing for our customers to acclimate to and to understand is that when they get a new piece of software, that it doesn't belong to us. We're buying the services of that piece of software. Or when they get that new machine on their desk, it's not owned by the government.'
But despite the cultural obstacles, there is a growing sense in government that moving to a seat management environment is a fate few agencies will escape.
'Eventually, we'll have no choice,' Hobbs said. 'It's here. It's going to happen.'
For Christopher Wren, chief technology officer of FTS' Office of IT Integration and a senior seat management consultant, outsourcing is inevitable for one overriding reason: The federal IT work force is dwindling, and government can't compete with industry for technology staff.
'Seat management is going to happen for two simple reasons: supply and demand,' he said. 'Unless there is an increase in IT professionals that exceeds the demand, that is a major force that will drive everybody to managed service.'
So for the key champions of seat management, it's not a question of whether to outsource but how to do it most effectively. And if done effectively, the benefits can be enormous, say those who have adopted it.
'I feel like I have more control than ever before,' said Patrick Schambach, CIO of the Treasury Department's Bureau of Alcohol, Tobacco and Firearms, which was the first agency to adopt enterprisewide outsourcing when it moved 4,000 employees to seat management two years ago. 'We have much better asset management than we've ever had. And I'm freed up from being in the trenches every day.'
By buying PC services instead of PCs, agencies can focus on their core missions, Hagerty said. 'That's the cornerstone,' he said. 'We are not buying commodity items, we're not buying assets, we're not buying work years, and we're not buying work hours or people. We're buying services.'
FTS has used seat management at its WillowWood headquarters in Fairfax, Va., and commissioner Sandra Bates said it has exceeded expectations.Good marks
'Seat Management has been integral to our implementation of a new workplace concept at WillowWood,' Bates said. 'It assures that our workforce has state-of-the-art technology tools with excellent technical support, and, at the same time, it frees up our own technical staff so that they can focus attention on supporting our programs to continuously improve our business-critical applications.'
Still, seat management has been slow to catch on. Only a few agencies have awarded contracts in the nearly two years that the GSA and ODIN vehicles have been available. And the early adopters have been small organizations within agencies, such as GSA headquarters in Washington and FTS. Many agencies are window-shopping but not buying.
The Army's James Buckner says a good business case will convince agencies to outsource.
'I don't know what's holding people back,' Schambach said. 'I'm really surprised. When we first got into it, I guessed that agencies would soon be jumping all over it.'
Agency IT managers are circumspect. For many, there are still more questions than answers.
Take the Social Security Administration. 'One build wouldn't satisfy us,' said an IT manager at SSA, which is exploring the feasibility of outsourcing its PC operations. 'We've got too many different users doing too many different things out there. That might be one of our biggest stumbling blocks.'
What's going to sell agencies on seat management?
Federal seat management enthusiasts point to the private sector, where the outsourcing of IT, even PCs, is prevalent and becoming more so. Seat management seems to dovetail with the government's general efforts to operate more like industry.
But that may not be enough evidence for agencies. They want to be shown that it works in government'and how it works.
'To really convince everybody at the proper levels, we've got to have a good business case,' said Army Materiel Command CIO James Buckner, a proponent of seat management.
Buckner is building the case for the command based on the outsourcing results of AMC's Simulation, Training and Instrumentation Command. The Orlando, Fla., organization, which has fewer than 1,000 users, has been phasing in seat management for several years.
By June, Buckner said, all of the organization's desktop PC and network services will be outsourced.
'We're using [Stricom] as our pilot site to capture all the lessons learned, all the things that are good and bad about the process,' he said. 'We also want to get the metrics'what it cost and what were the productivity rates before and after seat management'so we can make a case with the data that this is the right thing to do across the command and possibly across the Defense Department.'
Case studies of seat management implementations are all-important to the future of outsourcing in government. Here's a look at how two agencies have fared:NASA
The Goddard Space Flight Center awarded its PC outsourcing contract in November 1998 to Intellisource Information Systems Inc. of Vienna, Va., one of seven ODIN vendors. The contract called for Intellisource to provide desktop PC and network services to about 8,000 users at NASA's Greenbelt, Md., campus and a facility at Wallops Island, Va.
'We spent a month in transition, basically implementing the business process, developing the relationship between ourselves and NASA counterparts and beginning the process of taking over management of the actual desktop assets themselves,' said Mars Mariano, Intellisource's project manager for the Goddard delivery order and a former NASA engineer.
Mariano also organized customer outreach efforts, including town hall and focus group meetings, to overcome cultural resistance to the new way of doing things.
'It's really communication that helps everybody get through those cultural issues,' Mariano said. 'It means letting everybody know what's going to happen, plus listening. We're willing to get into Socratic questioning with them.'
At NASA, where many users are technically savvy, the cultural obstacles can be challenging. One solution is to get those users directly involved.
Goddard's Silverstein calls it 'the smart buyer coordination and communications initiative.'
'It occurred to me that Goddard Space Flight Center has a lot of people with technical know-how,' he said.
'They're technical wizards; they know this stuff. I thought, why don't we take advantage of these people to make sure that the government really hasn't given full control over to the outsourcer but is watching to see what the outsourcer is doing, to make sure that we're getting those best business practices that we expected?'
Silverstein put together a team of smart buyers to do just that.
'I think it's imperative to keep some in-house expertise so that we always know what's going on,' he said.
Goddard is taking a phased-in approach to its seat management program. Currently, about 3,400 users are receiving full desktop PC and network services, with the rest receiving network services.
Silverstein expects about 1,000 engineering users to move to ODIN services this summer.
Silverstein points to Wallops Island, an 800-user facility on Virginia's remote Eastern Shore, as a shining example of outsourcing success.
'It was a good case for success because it's small scale, about a tenth the size of the Greenbelt portion of the delivery order,' he said. 'It's almost like a small village. Everybody knows each other. They go fishing together.'
When the facility came under ODIN, most of the IT support staff was retained by the vendor.
'So instead of having a new group come in, it was the same old friendly faces,' Silverstein said. 'They were still doing the work, except now they were doing it in a different way. That gave everybody a warm, fuzzy feeling.'
Another factor was that everybody at Goddard, from the top down, bought into ODIN. 'Management didn't get a lot of the resistance that you see in some pockets of NASA,' Silverstein said.
Silverstein said he expects most of Goddard's 8,000 seats to come under ODIN eventually.
'I doubt it will ever be all 8,000,' Silverstein said. 'There are always going to be some specialty-type machines that don't fit into the commodity model, especially in an environment like the Goddard Space Flight Center.'
Hagerty said the per-seat cost at the NASA centers for full-service desktop PCs was about $2,000 annually, less than what it would cost to do all the IT in-house.ATF
ATF adopted enterprisewide outsourcing two years ago. Now 'we have much better asset management,' CIO Patrick Schambach says.
When CIO Schambach arrived at ATF three years ago, the agency's IT infrastructure was a mess. The equipment was aging. There were multiple hardware and software platforms. The help desk was ineffective. There was no Internet access. E-mail failures abounded.
Moreover, there were only 1,500 computers for 4,000 employees at about 200 locations around the United States. 'People were sharing machines, I guess,' he said.
Schambach and his team created an IT vision for ATF. 'We pictured an IP-based WAN to 200-plus locations in the organization,' he said. 'We pictured local and remote connectivity. We pictured standardized hardware and software, enterprisewide communications and access, Internet access for every employee, and enhanced security. We envisioned world-class support that was centrally managed.'
Turning the vision into reality was another matter. The agency didn't have the funds to buy 4,000 PCs. A phased rollout of PCs over three years wasn't appealing, either.
He decided to look at seat management. In mid-1997, the GSA and ODIN contracts had not yet been awarded, and the concept was still esoteric.
'The response I got from our executives when they heard of this approach was, 'It sounds like something an airline would do'manage seats.' They wanted to know who else was doing it,' he said. 'Unfortunately, there were not a lot of models at the time.'
But Schambach convinced them it was the way to go and found the money by combining existing funds with supplemental funds from the Office of Management and Budget.
The first step was assembling a list of requirements, including new desktop and notebook PCs for 2,000 special agents, 1,000 inspectors and 2,000 support staff members at 188 locations; maintenance on those PCs; standardized software; technology upgrades every three years; enterprisewide e-mail; new LANs; enhanced security; and training for users and LAN administrators.
In October 1997, ATF awarded a seat management contract to Unisys Corp. 'We wanted Unisys to start 30 days after the award and finish within six months,' Schambach said.
Unisys outfitted the entire organization by April 1998, missing the six-month target by only two weeks, he said.
Schambach put the cost of the program at about $3,300 per seat annually, making it more expensive than directly buying the hardware, software and other equipment. But the benefits in the long run have easily outweighed the extra expense, he said.
One benefit is technology refreshment'especially important because PC technology becomes obsolete about every three years, he said.
Without seat management, 'we get through convincing OMB and Congress to give us what we need and we've got to go back up there three years later and ask for it all over again,' Schambach said.
'To me, seat management is a solution that puts it in place and you don't have to go back and ask for it again,' he said.
Schambach said he learned many lessons:
''Know your requirements. 'This a key to getting this thing started,' he said. 'If you don't know what you need, how are you ever going to know whether your providing partner is living up to the contract?'
''Establish service-level agreements. 'We thought about a lot of things, including how to get out of this deal at any time if it wasn't working for us,' Schambach said. 'But we didn't have the foresight to really get into service-level agreements. We had to build that in after the fact with Unisys.'
' Know that mutual trust is crucial. 'That's the partnership that has to happen between the agency and vendor.'
''Do a prototype installation. ATF and Unisys modified their seat management 'cookbook' three times at a pilot site before rolling it out nationwide.
''Be patient. 'This is not going to go exactly as you thought it would.'
''Actively manage the process of implementation. 'To me, this is not something we outsource and walk away from. It requires management on the government side to make sure this happens.'