DIR SOW NUMBER DIR-EC-PAS-0002-SOW-B FOR DATA CENTER ... · SOW B - Data Center Services Market Research dated June 28, 2017 and Stonyhurst’s original response for SOW B dated July,

DIR SOW NUMBER DIR-EC-PAS-0002-SOW-B

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STATEMENT OF WORK FOR

DATA CENTER SERVICES (DCS) MARKET RESEARCH

STONYHURST CONSULTING LLC

1. Introduction This Statement of Work (SOW) is subject to the terms of the DIR Contract No. DIR-EC-PAS-0002 for Procurement Services by and between Stonyhurst Consulting LLC (“Stonyhurst”) and Texas Department of Information Resources (“DIR”). In the event of any conflict between this SOW and the DIR Contract DIR-EC-PAS-0002, the DIR’s contract term shall control. This SOW outlines the services to be performed by Stonyhurst for DIR in providing Data Center Services (DCS) Market Research. This document also captures the current understanding of the scope of services and time estimation, describes the approach, and contains details of the activities and responsibilities for both parties in accordance with the deliverables and associated tasks mentioned in the SOW B - Data Center Services Market Research dated June 28, 2017 and Stonyhurst’s original response for SOW B dated July, 27, 2017 and Stonyhurst’s revised response dated September 15, 2017 and Stonyhurst’s revised pricing sheet for SOW B dated September 15, 2017. Detailed services which Stonyhurst shall provide under this agreement are described in the approved Stonyhurst Proposal (Attachment I).

2. Period of Performance The period of performance for this SOW is from date of award through February 2018.

3. Pricing Pricing shall be as set forth in Exhibit 1 Pricing Sheet to this SOW. The total amount of this SOW will not exceed four hundred fifty thousand dollars ($450,000.00).

4. Invoices Upon written acknowledgement of acceptance by DIR, Stonyhurst shall submit an invoice to DIR setting forth amounts due to Stonyhurst in accordance with Attachment I, Item 6. Method of Invoicing and DIR Contract Number DIR-EC-PAS-0002 requirements. The invoice shall clearly state the period of the work performed and the deliverable and reference SOW Number DIR-EC-PAS-SOW-B. Payment shall be in accordance with Appendix A of Contract Number DIR-EC-PAS-0002. No payment will be made prior to approval of any work.

5. Equipment and Workspace As necessary, DIR will provide workspace and network connectivity for a limited number of Stonyhurst staff during the onsite portions of this engagement. Stonyhurst must provide all equipment required for its staff. DIR will provide access to required documentation and


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systems information needed to complete the services.

6. Additional Services In the event that additional services are required during the term of the contract, DIR will provide written notice to Stonyhurst describing the additional services required including as applicable the purpose, scope, timeline and any other unique requirements, constraints, and assumptions for the requested service. Any additional services must be directly related to the awarded scope and intent of the SOW. If additional services are required, DIR and Stonyhurst will mutually determine a timeline for Stonyhurst to provide a work plan and pricing for the additional services. Any additional services shall be quoted at a firm fixed price inclusive of any and all additional fees or charges. A request for pricing does not constitute a notice to proceed. If DIR chooses to proceed, DIR will issue a written amendment to the contract for signature by DIR and Stonyhurst authorizing the additional services.

7. Changes to Required Services DIR and Stonyhurst will negotiate a change order process to modify or remove milestones to achieve the objectives of this SOW. All Change Orders are subject to mutual agreement and must be in writing. DIR will document any Change Order in a written instrument for signature by DIR and Stonyhurst.

8. Additional Terms and Conditions Impact Assessment Deliverable: Before commencing work on this deliverable, Stonyhurst shall request DIR approval, in writing. The request may be transmitted via email to the Contract Manager or the Designated Point of Contact, and be submitted a minimum of five (5) Business Days in advance of the desired start date. DIR will require all Stonyhurst personnel working on this project to sign a Non-Disclosure Agreement before beginning work and/or receiving any confidential materials related to this work (see Exhibit 2). Accordingly, Stonyhurst shall ensure that all staff and contractors working on this project are advised of the contents of the NDA and their responsibilities thereunder. Under no circumstances may Stonyhurst contact any third party to discuss the work under this SOW without prior written approval from DIR.

9. Point of Contact

All communications for this SOW must be directed through the following Points of Contact: Department of Information Resources (DIR) Chad Lersch, Chief Technology Office Program Subject Matter Expert (SME) Email: [email protected]


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Aiko Neill, DIR Contract Manager Email: [email protected] Meredith Noel, Project Manager Email: [email protected] Stonyhurst Consulting LLC Steve Zielenski, Delivery Partner Email: [email protected]

{remainder of page left intentionally blank}


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This SOW is executed to be effective as of the date of last signature. Stonyhurst Consulting LLC Authorized By: __/Signature on File/_____ Name: ___Jonelle St. John______________ Title: _____Managing Partner___________ Date: ____09/25/17_____________________ The State of Texas, acting by and through the Department of Information Resources Authorized By: __/Signature on File/_______ Name: ___John Hoffman________________ Title: ____Chief Technology Officer________ Date: _____09/28/17_____________________ Office of General Counsel: ___/Signature on File/__09/26/17_________

State of Texas

Department of Information Resources

Attachment B

Statement of Work for Market Research for DCS

Procurement Assistance RFO

DIR-TSO-TMP-413

Attachment B - Statement of Work for Market Research for DCS Page 1

1. Introduction The purpose of this Statement of Work (SOW) is to solicit Responses from Vendors to provide

Procurement Assistance services that will strategically and tactically assist DIR with Market research

services on behalf of the Data Center Services (DCS) re-procurement.

2. Background

2.1 Data Center Services

The DCS program currently serves forty-eight (48) customers, including both designated customers (state

agencies that are legislatively mandated to use the DCS services) and discretionary customers (state

agency and other governmental entities who have opted to use the DCS services). There are thirty (30)

designated state agencies with fully managed mainframe, server, and/or bulk print-mail services, ten (10)

agencies with email-only services, two (2) agencies with print-mail only services, and six (6)

discretionary customers receiving optional services, such as Disaster Recovery as a Service. Fully

managed services mean that DIR and its vendor partners work together to provide all the hardware,

software, tools, and staff to fully support IT infrastructure. DCS services are available for all Texas state

agencies, colleges, and universities, and with the passage of Senate Bill 866 by the 83rd Legislature, DIR

is authorized to offer data center services to local entities. These services include disaster recovery,

backup, monitoring, security, storage, production control, data center network, architecture design,

capacity management, operating system support, hardware refresh, and facilities.

DIR strives to continuously improve and evolve its service delivery to Customers through the applications

of lessons learned through actual experience, as well as to respond to the ever-changing needs of the State

of Texas and rapid technology evolution and service delivery strategies. DIR goals include increasing

service delivery quality, financial transparency and accountability, encouraging Enterprise and program

level innovation, facilitating Customer access to DIR services and promoting the Shared Service program

value.

The DCS contracts expire August 2020. These contracts include services for data center, network, server,

mainframe, and bulk print/mail.

3. Scope

DIR seeks an independent, third-party Vendor to provide Services that will strategically and tactically

assist DIR with Market research services on behalf of the DCS program.

The Successful Respondent shall advise DIR on what services DIR should anticipate procuring to

improve data center and network services, and evaluate the appropriate service delivery model for these

services not currently offered as a shared service with the MSI Framework, building upon the anticipated

digital MSI technology.

3.1 General

Throughout the services provided under this SOW, the Successful Respondent shall:

1. Develop, update, and maintain project plan and register to include documented decisions, action

items, and requirement changes, risk register and issues log.


2. Maintain and update the project register, including issues management log and risk register, with

output of integration sessions and recommend strategies to resolve issues and manage risks.

3. Provide weekly status updates and lead weekly status meetings at a minimum, unless otherwise

requested by DIR.

3.2 Market Research

DIR seeks a third-party vendor to advise DIR strategically on what services DIR should anticipate procuring

to improve data center services, and evaluate the appropriate service delivery model for these services not

currently offered as a Shared Service with the MSI Framework, building upon the anticipated digital MSI

technology.

The Successful Respondent shall, at a minimum:

1. Evaluate current DCS services against commercially available technology and recommend

technology advancements.

2. Facilitate brainstorming or Art of the Possible session with identified DIR and/or Customer staff,

to include:

a. examining options and alternatives to provide Services

b. co-creating the solution and building the areas of responsibility needed to create the solution.

3. Provide market trends and analysis to support strategy direction. May include scheduling and

meeting with third-party providers.

4. Recommend service delivery model changes that would improve customer satisfaction, lower

technology costs and increase speed of delivery.

5. Determine how to leverage the digital MSI solution to achieve the desired outcomes, as expressed

in the current MSI Request for Offer, for these identified services as they may be contemplated in

future models.

6. Develop a report recommending DCS services of the future. This support shall support DIR’s

development of a business case for these future shared services.

7. Provide overview of re-procurement options and facilitate design strategies that consider pros and

cons of multi-sourcing and lessons learned from the market. Included in this deliverable are

workshops, presentation and facilitated dialogue of multi-sourcing dynamics, and a timeline view

of the procurement phase.

4. Period of Performance

The period of performance for this service is from date of award through completion of the Market

Research services for the Data Center Services (DCS) re-procurement.

5. Vendor Responses


DIR will select the vendor that offers the best value as determined by the information provided in the

Vendor’s response. The following information shall be provided in the Vendor’s response:

5.1. Market Research Services

1. Respondent shall describe its experience in providing Market Research services described above,

including, but not limited to, the delivery of such services in a shared services environment for

the following associated DCS services:

a. data center;

b. network;

c. server;

d. mainframe; and,

e. bulk print/mail

2. Respondent shall describe its overall experience with the following DCS services:

a. data center;

b. network;

c. server;

d. mainframe; and,

e. bulk print/mail

3. State whether any subcontractors will be utilized in the performance of the work. If so, provide

the name of each subcontractor, the experience of the subcontractor in providing the specific

market research, and a description of the specific market research services that will be provided

by each subcontractor.

4. Describe the types of reports commonly used to brief clients on work progress and ways in which

these reports have facilitated decision points necessary to advance the project associated with the

types of services described in this SOW.

5. Respondent shall provide evidence of how they have successfully conducted similar Market

research services.

6. A draft high-level project work plan addressing the tasks specified in the SOW, which shall

include:

a. A description of key activities and milestones.

b. A description of the resources necessary from DIR to support the process, including estimates

of time needed from DIR’s subject matter experts and high-level analysis of data gathering

requirements.

c. Any assumptions and dependencies of the project.

7. Discuss the Respondent’s preferred method of invoicing for each of the services as described in

Section 3.2, Market Research. At a minimum, this discussion should include: frequency and basis

of payments; how payment cost is derived; cost control; and total cost for these services.

8. Personnel:

Respondent shall identify the proposed key personnel and state the roles that they will perform.

At a minimum, key personnel shall include the Program manager, designated back-up to the

Program manager, and the people providing primary responsibility for the following services: (1)

market and financial analysis, (2) strategic planning, (3) market analysis with regard to innovative

technology advancements and relative cost, (4) needs assessment. Respondent shall relate the


qualifications and experience of each of the personnel being proposed to the specific role(s) they

are to fulfill and the services they are to provide, including demonstrated experience specific to

the proposed technologies proposed by the successful MSI Respondent. The information

provided shall be specific to the actual experience and/or qualifications of each proposed person.

The following areas shall be addressed for each proposed key person as applicable:

a. Services to be provided for market analysis and strategic planning services.

b. Related/similar projects including the function/role fulfilled.

c. The number of years of professional experience the individual has in providing the services.

d. Resume demonstrating experience and qualifications

9. Methodology:

Respondent shall describe the specific methodology to be used for each phase of the required

services identified in Section 3.1 and 3.2of this SOW. In addition to providing the specific

methodology, Respondent shall provide written responses to each of the following questions.

1. Describe the processes that would be used in conducting each of the required services

described in Section 3.2 of this SOW. Include any expected involvement of DIR staff beyond

those responsibilities enumerated in this SOW.

2. Describe Respondent’s approach for ensuring phases stay on-track and within time and

budget constraints.

3. Describe Respondent’s approach for ensuring a quality outcome.

4. Provide a draft high-level project work plan addressing the tasks for each phase specified in

the SOW, which shall include:

a. A description of key activities and milestones

b. A description of the resources necessary from DIR to support the process, including

estimates of time needed from DIR’s subject matter experts and high-level analysis of

data gathering requirements.

c. Any assumptions and dependencies of the project

[End of SOW]


Attachment I


Stonyhurst Proposal

1. Market Research Services – Our Experience

Stonyhurst Consulting was formed in 2012 as an independent Strategy, Sourcing and Results Management

firm. Since our inception we have serviced a variety of companies in both the Private and Public Sector.

Specific to the Public Sector, we have been providing market research, analysis and strategic planning

services to the State of Ohio, Department of Administrative Service, Office of Information Technology

(DAS/OIT) for the past five fiscal years. Further, prior to the founding of Stonyhurst, our consultants have

provided these services to both of Ohio DAS/OIT and the Commonwealth of Virginia since 2009 (8 years

of experience). The following major IT market analysis, business case development and strategy

development engagements demonstrate our experience and qualifications.

Ohio IT Optimization (2010-2017) - $150M+ in documented savings to the State since 2010 in data

center, hardware, storage, IT workforce, network and software cost reductions. Stonyhurst functioned

as the lead strategic advisor and change agent at the core of this nationally acclaimed initiative. Our

work included development of the initial strategic direction, extensive market research, cost and service

baselining and benchmarking of spend and savings, Enterprise-wide communications and evangelism

as well as ongoing program optimization and multi-year planning/forecasting.

State of Ohio Computer Center (2010-2014) Remediation and Private Cloud / Co-Managed Service –

$267M In 2010, the Ohio faced an extraordinary challenge: the State’s Information Technology

capability statewide was fragmented and inefficient. Among other signs of discontinuity, the State had

more than 32 data centers spread across 26 Cabinet agencies, over 9,000 physical servers, and 19

different e-mail systems. This was a byproduct of the State devoting more than 80 percent of its IT

spending to maintaining aging infrastructure, rather than investing in citizen-facing systems and

services. Stonyhurst performed extensive internal and external research and developed an industry

first strategy to refocus disjointed and poorly positioned central services to produce innovations that

would benefit citizens and businesses in Ohio. Stonyhurst practitioners developed a unique approach

to consolidating the State's infrastructure: upgrade a central data center of more than 320,000 sq/ft to

a Tier III capable computing center; implement modern virtualization, storage management, network,

and security platforms; and migrate more than 20 cabinet agencies to a State private cloud located at

the State of Ohio Computing Center (SOCC). Stonyhurst practitioners lead the strategy effort, and

highly complex sourcing of an industry-first "co-managed service" that utilizes State and contractor

talent and negotiated a highly complex design/build/run contract for Ohio under a $267M+ multi-year,

co-managed service arrangement. Ohio has moved to a high-performance cloud resulting in an almost

9 times improvement on Ohio's infrastructure dollar investment. Ohio's server, storage and network

architecture has been consolidated under a modern ITIL v3 process architecture that is supported by

leading tools and monitoring consoles that drive high levels of availability, consistency, resiliency and

computing uptime as well as provide better protection and security from cyber threats. Shortly after the

SOCC remediation effort started, the State collaborated with The Ohio State University to locate OSU’s

computing functions on the third floor of the facility which resulted in significant operating savings and

cost avoidance of more than $40M in constructing a new data center. The University of Cincinnati is

one of many Universities and Counties that are leveraging the SOCC for Disaster Recovery services.

Cuyahoga County has relocated their production environment as well as the Ohio Supreme Court, the

Auditor of State and the Ohio Legislative Information Services (LIS). Discussions are underway with

more than 60 institutions that comprise the Ohio higher education community to leverage the SOCC

for primary computing or disaster recovery purposes.


State of Ohio Enterprise Network Sourcing and Consolidation - Voice/Data/Messaging (2012) - $60M+

Stonyhurst led an effort to analyze, perform market research (via a multi-vendor RFI) and developed a

RFP and evaluation strategy for the State’s enterprise-wide network supporting voice, data and

messaging for more than 2,000 State locations, 60,000 state workers, and more than 80,000 county

and local workers. As part of this effort, Stonyhurst analyzed and researched: i)telecommunications

transport services including specifications and pricing for a specific range of voice and data services

(e.g., MPLS, SONET, DWDM, IP trunking, Outbound Voice, Toll Free Voice); ii)support services

associated with telecommunications transport and IP services delivery (e.g., superior account team

support, effective network management systems and operational support, and flexible billing and

reporting systems); iii)technical and performance assurance and full support committed service levels

through appropriate and clear Service Level Agreements (SLAs); and iv) managed router services for

the State of Ohio Enterprise and agencies. Our strategy included network hardware procurement and

maintenance as well as management of network elements as a method to explore options of acquiring

the service from the underlying transport provider, acquiring the services from another provider, or

providing the services itself. Our strategy arising from the analysis and market research resulted in: a

reduction in the total cost of ownership of its telecommunications services, of which unit price is a

significant, but not the only, component; improvements to service delivery to State of Ohio customers;

right-sizing the organization (i.e., FTEs and time spent) network support requirements; minimization of

the time to achieve the future state network (e.g., focused migration away from TDM services); leverage

of carrier networks and backbone to replace the existing SGN (State of Ohio Global Network);

establishment of standardized and flexible high-capacity access into the State of Ohio Data Center;

leverage of appropriate operational and account support, including an account team that is responsive

and provides superior support and customer service; and finally, establishment of a contract that

maintains flexibility over its life, including, but not limited to, enabling State of Ohio to access the latest

proven technologies, market rates, and service levels.

2. Experience with Similar Services to DIR DCS service

Stonyhurst, as part of our response on pages 4-5, 19-20 of our response to Exhibit B, provided significant

details as to our experiences with similar services to those required by DIR DCS.

3. Subcontractors

Stonyhurst will lead, perform and be responsible for all elements of our proposal. Stonyhurst will lead,

perform project and quality management of, and be responsible for the delivery of all expertise, deliverables,

work products or other elements as required by Texas.

4. Sample Reports

During the engagement, Stonyhurst will draft, review with State leadership, finalize and present the

following reports:

Service Quality Baseline Report – we will review Texas DIR provided materials, to the extent they exist,

and as pertinent to the current service provided by the incumbent vendor, inclusive of current state

assessment, organization of services, quality of service delivery, service utilization, agency

adoption/resistance narrative, customer satisfaction and a fit/gap analysis of the required services in the

future state. Based upon direction from DIR, we will not perform any interviews or surveys of non-

participating agencies nor seek to obtain technology roadmaps or directions associated with legacy


modernization, mainframe systems replacement, nor seek to gain their independent perspective as to

barriers to service adoption or use independent of DIR provided materials and perspectives. We will

however develop high level use/consumption models for DIR consideration pertaining to the Texas

University system (Higher-Ed) and large-scale County and Municipal Government entities that may be

candidates of interest in consuming either or both of State Data Center(s) or Public Cloud offerings via

State contract vehicles.

Cost Model Baseline – inclusive of DIR provided State internal, external operating and investment costs,

partitioned by service area, service provider as well as a future cost outlook, to the extent they are made

available to us by DIR for both agency customers, and pro-forma estimates of potential non-agency, Higher

Ed and Local/Muni customer consumption estimates for future adoption and volume / cost synergy

consideration.

Review / Assess Future State Consumption Model – which builds upon the aforementioned Cost Model

Baseline and establishes a pro-forma view of the future consumption of DCS services over the anticipated

time horizon of the DCS contract inclusive of potential reduction in consumption or retirement of legacy

services (e.g., mainframe services consolidation or replacement), migration of non-critical/non-prod

environments to public cloud options, usage of (as examples) “rack as a service”, “infrastructure as a

service” or private/public cloud options and hybrids. As part of the analysis we will work with DIR to identify

strategic Higher-Ed and Large Muni/Local customer groups that may be interested in consuming DCS

services in the future to provide the State as comprehensive a view of a possible future state of DCS

services.

Review / Assess Incumbent DCS Vendor Dependencies/Impacts – an analysis of the current MSI/DCS

provider dependency set from a process, tools and data perspective as required to transition the current

DCS service set to a potential new provider of these services. This analysis will help ensure overall service

continuity as it relates to “transition out/disentanglement” from the current DCS provider and “transition

in/to” a potential new DCS provider. Additionally, this analysis will consider (at a high level) the operating

process set between the State’s MSI (which is changing as a result of a current solicitation) and the

dependencies on operating processes, tools and technical data (e.g., I/P/C ticket streams, knowledge

bases, CMDB, asset databases, Service Ordering and Management and the like) and the DCS provider to

help ensure that the relative dependencies between the MSI and DCS are understood, that processes,

tools and state technical data impacted as a result of potential change to the DCS provider are identified

and that the relative capabilities and expectations of the State (via the MSI) are included in the design

requirements of the next-generation DCS provider and included in the development of any RFO for DCS

services.

Comparative Options Analysis – a comparison of current state services, capabilities and costs to future

state models including evolutions to the current model, introduction of hybrid public cloud elements to the

DIR DCS model as well as future (end-state) public cloud computing models from a variety of market

leaders in that space.

Go-to-Market Analysis – an assessment of providers of status-quo type services, hybrid/transitional

services and end-state public cloud options as well as suggested engagement models (prior to solicitation

development) on engaging this marketplace to build mutual understanding of Texas needs and direction in

advance of any procurement activity.

Service Segmentation and Packaging – based upon the service strategy agreed with State leadership,

segmentation of DCS services based on the most appropriate method (e.g., “fully integrated model”,

“segmented model by service delivery area (server, mainframe etc)”, “hybrid models” and the like). We will


compare and contrast service efficiencies through tight integration (e.g., fewer providers) or loose

integration (many specialist providers) from a service, quality, synergy and cost of ownership perspective.

Service Quality and Outcome Measures – that include outcome based metrics for time, quality, cost,

efficiency gains, productivity gains, outcomes and other factors that must be demonstrated to stakeholders

and customers of DCS services and will result in Service Level Agreements, Service Level Objectives and

KPIs in any solicitation of DCS services.

Outline of Solicitation Documents – leading into a solicitation phase, we will structure all of the above

elements into the basis (outline) of solicitation documents that will serve as the foundation for embellishment

(i.e., detailed requirements and statement(s) of work) in a solicitation development effort to obtain the

agreed upon DCS services for DIR.

5. Project Workplan

We have developed our project workplan as to align with the timing parameters provided by DIR in Exhibit

D – Pricing Sheet for the RFO. This Statement of Work directly aligns with our methodology and our

experiences in performing similar work for other States. During the first week of the project, we will review

this workplan with State leadership in light of the then prevailing factors and preferences and adjust as per

the direction of the State. Thereafter we will baseline this plan and use it to report to the State: status,

progress, risks and issues that arise in the course of performing the work.


Month 1 Month 2 Month 3 Month 4 Month 5

week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Work Area

Assemble & Assess Current DCS State Models

Current State Assessment: Use, Adoption, Service Coverage/Quality and Baseline Cost Model

Review/Assess Service Quality Elements (by provider of service)

Review/Assess Availability, Performance, Utilization, Security and Agility Factors

Assemble and Review Agency Adoption / Resistance Models

Review/Assess Service Cost and Satisfaction from DIR Perspective

REPORT: SERVICE QUALITY BASELINE

Develop High-Level DCS Cost Model Foundation

Data Center

Network

Server / Storage

Mainframe / Storage

Bulk Print/Mail

Labor Cost (State and Vendor)

Licensing, Maintenance and Repair Costs

External Vendor Costs

Future Investment Plans (all above elements)

REPORT: COST MODEL BASELINE

Review/Assess Future State Consumption Model (Services, Revenues and Costs)

Model Potential Future Customer Services Consumption by Service Tower

Evaluate Agency Migration from Private to Public Cloud Options over Future DCS Contract Duration

Assess future Customer Potential - Existing Customers, HigherEd/Muni (Services, revenues & costs)

+ Conduct Dependency Analysis for Current DCS Vendor (Process/Tools/Data)

+ Assess above dependencies w/r/t New MSI Contractor Offerings (Gap Analysis)

+ Perform High Level Gap Analysis to identify elements of Services impacted in potential RFO

PRO-FORMA MULTI YEAR CUSTOMER/SERVICE/REVENUE/COST MODEL

INCUMBENT DCS VENDOR PROCESS, TOOL, DATA IMPACT ASSESSMENT

Develop Market Engagement Model


On-Premise Service Tower Providers

On-Premise Integrated Service Providers

Hybrid (on/off) Premise Service Providers

Public Cloud Providers

Business model development (status quo vs. integrated service vs. hybrid service vs. public cloud)

REPORT: COMPARATIVE OPTIONS ANALYSIS

REPORT: GO-TO-MARKET PLAN

Develop Services Segmentation and Packaging Model

Data Center

Network

Server / Storage

Mainframe / Storage

Bulk Print/Mail

Delivery Services (ITIL/ITSM Service Desk, Incident/Problem/Change)

Roles & Responsibilities (State and Service Provider(s))

Service Governance Model

Outlines of Solicitation Document(s) based on Segmentation/Packaging Model

REPORT: SERVICE SEGMENTATION AND PACKAGING

REPORT: SERVICE QUALITY AND OUTCOME MEASURES (KPI/SLA)

REPORT: OUTLINE OF SOLICITATION COMPONENTS (ALIGN W/TEXAS CONTRACT STDS)


6. Use of State Resources and Dependencies

Stonyhurst will require the involvement of State service owners/experts by service area (e.g., data center,

network, servers, mainframe and bulk print/mail) during the engagement to participate in brainstorming

sessions, review of market research elements (scope, functions and cost) establishment of service

preferences and customer facing tools and processes. As work items are created and developed in final

form and as required to support the overall strategy of the DCS services, this involvement must include

DCS leadership and current agency customer consumption and usage patterns to help build a common

understanding and buy-in to this strategy. At the direction of DCS, Stonyhurst will not seek to interview,

survey or obtain infrastructure-related cost information from non-Customer agencies as part of the work.

Stonyhurst will schedule these sessions and review meetings in advance of need, and will endeavor to

work around schedules as to not impact the work effort or timing.

7. Method of Invoicing

Stonyhurst will perform the work on a deliverables based engagement with monthly invoicing as evidenced

by an authorized client signature on any deliverables approved by the State in writing during a monthly

project period. We have included in this Statement of Work a project plan that identifies key elements

required for the project, Stonyhurst (named resources) and State participants (by function, e.g., IT expertise,

other stakeholders etc) to the extent we anticipate their involvement and an budget not to exceed for each

deliverable that comprise the work as it is currently understood. We will review progress weekly with

program leadership and seek agreement should any course corrections be required.

Our public-sector clients generally subscribe to industry leading research firms that produce advisories and

research documents tailored to IT industry trends and common technology interests. As contained in our

research methodology and overview in response to the RFO, Stonyhurst utilizes these client subscriptions

in addition to our extensive research capability and proprietary tools and rate databases.

8. Project Team Personnel

Stonyhurst has staffed this project with team members that are highly skilled in market research, cost

analysis and modelling, Data Center services option modelling and State IT cost baselining assessments.

Individual practitioner resumes of our team follows the response to the RFO Exhibit B. Experience levels

of our firm and our practitioners in this area are identified in Exhibit B, Page 17.


Name Role

Data Center Managed Services / Outsourced Sourcing Research

Services Experience (Years)

Data

Cen

ter

Ente

rprise T

ele

com

/

Netw

ork

ing

Mark

et and F

ina

ncia

l

Analy

sis

Ente

rprise S

trate

gic

Pla

nnin

g

Innovative T

ech

nolo

gy

Mark

et R

esearc

h / C

osts

Agen

cy N

eeds

Assessm

ents

Custo

mer

Inte

rfa

ces a

nd

Inte

raction M

od

els

Clo

ud a

nd “

as a

Serv

ice”

Models

Team Members

Steve Zielenski Texas DIR Program

Manager 15 11 25 25 20 8 10 8

Greg Campbell Texas DIR Program

Manager - Backup 7 9 15 15 15 8 10 8

Michael Titmus

Market Analysis /

Enterprise Architecture &

Services Sourcing Expert

20 - 25 20 20 20 20 10

9. Approach, Methodology and Reports

We have assembled the activities to be performed into six distinct work areas, each with several

deliverables and work products that are essential to the overall success of inevitably identifying a long-term

and sustainable business model for Data Center Services (DCS) that are as follows:

1. Allows Texas Agencies, local/municipalities and other interested participants (e.g., other

governmental and Higher-Ed.) to obtain high-performance, secure, highly available and cost-

effective computing infrastructure solutions on which to build, operate and maintain their

applications.

2. Establish a cost and service foundation on existing services (i.e., data center, network, server,

mainframe and bulk print/mail) based on DIR provided (to the extent they exist and are made

available to us) either within DIR or the incumbent service vendor) status-quo “full cost”

considerations and estimates inclusive of: hardware and software cost; storage and backup cost;

network, firewall and load balancing costs; operating system and virtual machine management costs;

hardware, software, storage repairs and maintenance costs (for both the distributed computing and

mainframe environments); investment direction and plans (e.g., technology refresh); and state

workforce costs inclusive of state, contractor, staff augmentation and contracted data center services

costs. This cost estimate foundation will be utilized throughout all market research, planning and

solicitation development phases as the foundation of truth.

3. Develop a stakeholder engagement model to ensure that State Agencies and other potential

customers of the State data center and related services are aligned with two fundamental goals: 1)

solicit customers active participation in the design of the Data Center and related Support services

that can meet their near and longer-term needs; and 2) to help ensure that once the Data Center and

related Support services are delivered that customers of these services, are willing to pay a


contemporary market rate for these services. In addition, on an ongoing basis ensure that agency

customers are active participants in the ongoing governance and management of the center as well

as being strong advocates for continued adoption to future agency/customers.

4. Develop a market engagement model designed to help the State in better understanding the state

of the art, and state of the industry with respect to: 1) pure managed services model utilizing State

computing locations and assets; 2) a shared services model utilizing State computing locations, but

with shared assets and a hybrid of state/contracted workers; 3) a hybrid model that utilizes State

computing locations and assets, as well as Public Cloud offerings for non-sensitive computing

requirements (e.g., systems development, testing, non-sensitive data stores etc); 4) a fully

outsourced Public Cloud computing model that, over time, divests the State from infrastructure and

asset based computing in lieu of a future “computerless” state which would allow Texas to leapfrog

the rest of the public sector. Stonyhurst will design and execute with the States involvement a

“competitive dialogue” with leading industry vendors to explore the “what ifs”, “how” and “when” of

such a strategy.

5. Develop a services segmentation and packaging model in advance of any solicitation

development project that allows Texas to: package work areas (e.g., server management, storage

management, outsourced mainframe on demand) that comprise the full spectrum of DCS services;

identify roles, responsibilities, dependencies and hand-off/demarcation points between the State and

Vendors – and in a multi-sourced model – between vendors such that the State does not get in the

middle of vendor disputes and “finger-pointing” nor is forced to perform “service integrator” roles

between vendors that are falling short of their obligations to one another, and by extension the State.

6. Develop a final recommendation package as to the: overall design of the service, likely costs and

cost savings, migration models and plans, high level engagement and sponsorship models within

and across the State and between the State and DCS vendor(s); service segmentation and sourcing

approach/strategy inclusive of a table-of-contents level outline of the solicitation documents; sourcing

timeline and detailed project plan; vendor engagement and communications plan for sourcing

activities; and internal to the State executive and IT leadership presentations based on all work efforts

performed during the engagement.

Activities and Report Deliverables

Activities and report deliverables for this Statement of Work are:

Internal (State) and External Customer identification;

Assembly of a program “kickoff” briefing and the process by which to collect technical and functional

requirements for the Data Center Services;

Create and manage (for the duration of the engagement) an ongoing set of communications materials

to apprise DIR identified stakeholders as to the progress made, and anticipated value derived through

the delivery of Data Center Services. This element is one of the keys to active expectation management

and working to ensure that Agency Customers of Data Center Services are ready to consume these

services once they are commercially available, but also to help drive requirements over the life of any

contract arising with a DCS vendor as a result of a solicitation with these Customers via effective vendor

management and service evolution over the contracted term;

Assembly of Functional and Technical requirements for the initial set of customers, but also extending

them to help ensure that they are commercially durable, relevant and priced in line with 3rd party

offerings of similar scope and caliber;


Establishing final “pricing” or “rate” plans to ensure that fair value is collected from customers as well

as to help ensure that the services are offered in a profitable manner;

Establishing a transition framework of services designed to assist Agencies and customers with the

transition from their current support model to an evolved shared service with “evergreen” considerations

that factor continued evolution in the data center services marketplace and advancements in state

agency requirements as a result;

Creation of Center/Service communications materials to assist DIR in capturing new customers from

Agencies and outside interested parties; and

Ongoing support of the State’s CIO (and designees) in the “marketing and selling” of Data Center

Services as required.

We will perform an objective analysis as to the viability of the DIR Data Center Services offering from a

technical, commercial and practical perspective. To that end, a three-pronged approach is proposed to:

Determine the long-term disposition of the Data Center Services and short-term measures to provide

DCS based services that are compelling and commercially viable to all Agency customers while helping

position the State for the inevitable migration to public cloud-based services sometime in the next 5 to

10 years;

Establish a workable redesign to the Data Center Services that is both cost effective and aligned with

future customer needs; and

Develop a financial “viability” model that considers contemporary service offerings and potential market

rates while factoring the not inconsiderable expenses of continuing with the existing business model,

moving to a multi-vendor model based on service towers or similar logical groupings or beginning to

exiting to a more cost effective model that leverages public cloud elements within the State’s computing

architecture.

To perform this analysis, Stonyhurst will work with the State to create a high-level top down financial model

that describes an optimal design of DCS services, assesses potential revenues but factors costs (to the

extent such costs exists and are made available to Stonyhurst) of ongoing investments, operations

consolidation and capacity increases. Should the current composition of DCS be determined as viable in

consideration of all costs, a detailed assessment and plan will be established to: 1) reconfigure the services,

augment the services with more cost effective alternatives, identify within the underlying cost models

potential services to eliminate duplicative or obsolete spending; reconfigure the design of the services to

better align with the consumption patterns and demand requirements of current and future customer needs

and establish a cost aligned operating model for DCS that is financially viable for both the State and

customers alike.

Service Design Considerations

During the assessment (internal to the State as compared to what is available in the marketplace), we will

work in concert with DIR data center stakeholders to determine and develop required Scope of Services,

Statements of Work and Service Levels to meet the needs of the DIR Data Center Services user community.

This will include both those responsible for the data center today from an operations perspective, as well

as those who use the services of the data center from a business perspective – with the goal to ensure that

any solicitation contains a clear understanding of current, proposed and future customers as to the services

offerings, their operational parameters and expected service levels of the next DCS vendor.

Our activities will be as follows:


Provide a template of data center-specific scope of services, statement of work and service level

objectives that are contemporary and viable from a cost, market and delivery perspective;

Share better practices in creating and designing data center-specific service level agreements that are

aligned with the expectations of customers;

Collect any existing service or operating level agreements or key performance indicators that are

currently in use within DIR between the data center and the business and modify/augment them to be

aligned with current and future customer expectations and market offerings;

Interview and work with DIR experts and service owners to determine any additional service levels to

capture or create (beyond those collected from existing materials);

Assemble a modular scope of services document do aid the State in soliciting customers for the service

and a related (and more detailed) Statement of work for each service that describes Data Center

Service capabilities, features and functions that can be used to construct an agreement between DIR

and its customers in a defined set of services, corresponding service levels and appropriate prices for

these services;

Following the scope/statement of services a draft agreement document will be created to aid the State

in formalizing services, roles/responsibilities and pricing agreements by and between DIR and the DCS

vendor;

A high level final solution architecture will be created to anchor the services in credibility. This document

will highlight facility, capabilities, services and delivery functions of the center and can be used as a

tool for the State to gain new customers and customer mind share in a credible and fact-based manner.

10. Statement of Work Pricing

Our pricing for this Statement of Work (Attachment B – SOW for DCS Market Research) is contained in our

response to the RFO, as part of Exhibit D Services Pricing.

DIR-EC-PAS-0002-SOW-B

Exhibit 1 - Pricing Sheet

Data Center Services Market Research Duration Price Per Deliverable

Deliverables (Weeks) (Inclusive of Travel)

Service Quality Baseline Report 4.00 92,418$

Cost Model Baseline 3.75 83,502$

Pro-Forma Multi-Year

Customer/Service/Revenue/Cost Model 1.50 30,990$

Icumbent DCS Vendor Process, Tool, Data Impact

Assessment* 2.00 45,856$

Comparitive Options Analysis 3.00 69,750$

Go-To-Market Analysis 1.20 23,903$

Service Segmentation and Packaging 1.00 19,500$

Service Quality and Outcome Measures 2.00 42,085$

Outline of Solicitation Documents 1.50 37,000$ 20.0 $ 445,004

Pricing Assumptions:

Project work effort is overlapping, weeks are approximates - 20 total work weeks

Authorization:

*Impact Assessment Deliverable: Before commencing work on this deliverable, Stonyhurst shall

request DIR approval, in writing. The request may be transmitted via email to the Contract Manager

or the Designated Point of Contact, and be submitted a minimum of five (5) Business Days in advance

of the desired start date.