LOCAL GOVERNMENT ASSOCIATION (LGA)
Report of Regional Local Government Infrastructure & Application Service Provider
Submitted by ADC Results Pty Ltd 104 Frome Street Adelaide SA 5000 1 September, 2000
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TABLE OF CONTENTS
1. INTRODUCTION ....................................................................................................... 3
1.1 1.2 1.3 Background................................................................................................................................... 3 Purpose of this paper .................................................................................................................. 3 The Approach ............................................................................................................................... 4
2. SUMMARY OF FINDINGS ...................................................................................... 5
2.1 2.2 2.3 2.4 Finding “Suitable” Application Service Providers .................................................................... 5 Alternative ASP Solutions........................................................................................................... 6 Infrastructure Options.................................................................................................................. 6 Next Steps..................................................................................................................................... 8
3. APPENDIX A - Questionnaire Results ............................................................. 10 4. APPENDIX B - Application Service Providers ............................................... 14 5. APPENDIX C - Guide to Successful ASP Selection ..................................... 20 6. APPENDIX D – Networking The Nation Application..................................... 23
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1. INTRODUCTION 1.1 Background
This paper has been funded by a Local Government Research and Development Scheme grant. Receiving only minimal funding, it is designed to provide a detailed scope for a project aimed to be funded by a Networking The Nation grant. Networking the Nation is part of the Commonwealth Government’s strategy to ensure that the benefits of new and existing telecommunications facilities and services can be accessed and enjoyed by all Australians. The objective of the grant is to assist the economic and social development of regional, rural and remote Australia by funding projects which: • • enhance telecommunications infrastructure and services in regional, rural and remote areas; increase access to, and promote use of, services available through telecommunications networks in regional, rural and remote areas; or reduce disparities in access to such services and facilities between Australians in regional, rural or remote areas and those in urban areas.
•
‘Regional, rural and remote areas’ are any areas located outside the capital city of each State or Territory. It is feasible that by embracing the concept of IT outsourcing or an ASP environment Local Regional Councils in South Australia could save money whilst improving the number and value of services they can offer their communities. Understanding how to achieve this practically and maximise this position will be fundamental to true service gain in Local Government.
1.2
Purpose of this paper
This paper is aimed at complimenting a number of initiatives currently under way in Local Government in relation to improving core systems and creating a new web environment for South Australian Local Government. It is prudent to assume these will have a significant impact on the traditional levels and approach Local Government has made to communication and interaction with constituents and stakeholders. It is common amongst Local
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Councils to operate in an environment of intermittent contact with other councils, usually resulting from IT user groups, rather than relationships of close mutual cooperation on a day-to-day basis. Even with this level of interaction Councils operate independently with a history of defensiveness at Elected Member level the idea of operating in an ASP environment could seem quite revolutionary. To achieve the aims of the initiatives such projects will have a significant impact upon the need for improved Local Government IT infrastructure. In most regional areas investment on a singular basis is unsustainable and impractical. The objectives of this paper are to explore the feasibility of two key objectives; ! The joining of Regional Local Government IT infrastructure, and ! Understanding how an Application Service Provider (ASP) approach may operate in this environment.
1.3
The Approach
ADC Results approach to this project has remained simple. ! Three regional Councils fulfilling the Networking The Nation criteria were identified for detailed questioning relating to their current IT environment, core systems, infrastructure, operating performance and future projects. ! A series of vendors investigated to explore and understand the current market position in the Australian ASP market and assessed for their potential for joining Regional Local Government infrastructure. ! Industry specialists were identified in the form of The Gartner Group (recognised research experts in the global IT industry) and Summit Strategies (a recognised authority on the emerging ASP industry) for indications as to the future of the ASP industry and market trends. The results of these investigations have then been used to provide a detailed scope for a Networking The Nation application.
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2. SUMMARY OF FINDINGS
There are a number of combinations of the options available that Local Councils might consider. The most appropriate solution depends very much upon the unique position of an individual Council. Determining factors are the individual Councils community requirements, current financial position, level of technical advancement and in-house skills set. It is clear by the research outlined in Appendix B there are major benefits to be had for Councils to pursue an ASP strategy. These can be summarised as; • • • • • • • affordable method of gaining access to “Tier 1” software always available, anywhere infrastructure reliability service reliability efficient use of resource lower overall investment reduced risk
The main elements for consideration with this strategy are;
2.1
Finding “Suitable” Application Service Providers
An ASP aims to deliver and manage applications and computer services from remote data centres to multiple users via the Internet or a private network. The applications are required to be web enabled – effectively a marriage between the software and the Internet – and are managed and delivered by specialists dedicated to the delivery of that product. The minimum criteria required of an ASP can be identified as specialising in the delivery of current core application software and operating in South Australia. Several vendors operate in the UK and US, which with our research have proved to be the more mature markets, but the current operators of the calibre required within the Australian market are to be predominantly found in other States. Although the very nature of an ASP should negate this as an issue, it is preferable for the supplier to operate within the state due to support issues and the need for a genuine interest in the South Australian market. As a result of this search ADC Results has concluded the current South Australian ASP market is in its infancy due to lack of core applications providers. Given this position it dramatically reduces the options for the variety of core applications available. Even so, the apparent existence of only a small clients market providing mainly peripheral software applications may offer other opportunities. The results of the search indicated the immediate potential for
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outsourcing the back and front office solutions. The number of suppliers and the variety of applications available open opportunities for Councils to consider outsourcing CRM, HR and document imaging packages which would otherwise be beyond their budget immediately.
2.2
Alternative ASP Solutions
The results from the questionnaires have clearly indicated that the right ASP model for one Council will not necessarily be the best choice for another (See Appendix A). The most obvious suppliers of core applications who could successfully offer and deliver Local Government solutions reliably and with the required level of support are the current core applications software vendors although the Local Councils themselves may consider themselves in a position to provide support. Based on the Councils surveyed the indications are that the current main applications providers are already considering this option. This would arguably be the most satisfactory solution and likely strategy to succeed in the short to medium term due to the lack of competition from other South Australian ASPs of the necessary calibre, the vendors existing resident skills and their ability to deliver a highly professional service. A Council will be moving into unfamiliar territory when considering the ASP option and it is recommended that all Councils carefully follow an equivalent process of decision making as outlined in Appendix C to ensure all benefits and disadvantages are carefully assessed. The major benefit available to Councils offering the service would be the opportunity to offset costs already incurred whilst investing in their infrastructure, by charging for space and additional license fees to other participating “satellite” Councils. The practicalities and impact of this option require further investigation and due consideration needs to be given to the paradox that providing ASP services is outside a Councils core business and the one of the main benefits of outsourcing enables an organisation to focus on delivering it’s core business. Further assessment is required to determine their ability to compete in this market long term.
2.3
Infrastructure Options
The idea of outsourcing government infrastructure is not new. The EDS solution in State Government is a good example of how this idea can be applied across South Australian Local Councils but requires a careful, informed and flexible approach. Ideally an ASP can now offer the customer a choice. They can offer all the infrastructure and management services and hold the licenses for the package
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or, offer management and infrastructure services and let the customer manage the licenses. This would be a perfect solution for customers who want to purchase the software themselves through a Value Added Reseller but who do not want to manage the infrastructure. Due to the relative maturity of the infrastructure outsourcing market in South Australia compared with the potential volatility of the ASP market, a standard approach to assessing infrastructure solutions will be more appropriate. This type of activity is commonplace and well tested, if not in the public sector. The opportunity to assess opportunities offered with outsourcing the responsibility for infrastructure should not be ignored. This study should be conducted at two levels; Local Area Networks The results of the questionnaires indicate the majority of difficulties experienced by Councils stem from the quality and reliability of their Local Area Networks and Windows applications. Of the three Councils, the networks were managed in-house, generally by a team of one or two staff as secondary responsibilities to their main role, which was usually more critical and demanding to the current operation. The responses to the questionnaire indicated helpdesks were operating informally, without fault logging procedures and informal priority arrangements. Those responsible for the maintenance of the operation felt both response times and down time were acceptable, although neither are measured for performance. Additionally, formal disaster recovery plans and operating procedures are not documented. All such standards are considered luxuries that would be desirable but are not critical as the IT departments are generally operating at full capacity. Reliability and the robustness of a Councils Local Area Network solution will be critical to the success of an Internet ready council providing on-line services. Without a reliable and robust LAN capable of sustaining the levels of traffic expected for on-line Council service delivery it is questionable if a Council will successfully achieve its goal. Without a true picture of performance a cost/benefit analysis of outsourcing options may be difficult to verify but not impossible to provide some clear course of actions. The exercise should aim to clarify the potential benefits of experienced, expert, dedicated and specialist staff provided by an external supplier. To assess the value of investing in such a service compared to the potential lost opportunity of remaining with the current operating environment, the following criteria need to be quantified and evaluated against current operating standards.
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! ! ! !
the potential benefits of 24/7 support identification of capacity requirements clarification of the variability of service levels the benefits of a disciplined helpdesk regime Wide Area Networks
Once again this area will require assessing in the context of a future IT strategy regarding the successful operation of on-line Council services. Opportunities available in this area revolve around links to other Council sites via an intranet, online direct banking, e-commerce opportunities and reliable links to ASPs. The questionnaires indicated the majority of the Councils issues were linked to bandwidth possibly contributing to speed and performance issues. All aspire to a dedicated ISDN facility due to the potential such a solution offers for improving performance and efficiency.
2.4
Next Steps
Clearly the combinations of solutions examined in this study offer the flexibility of a solution with the potential to contribute to all Local Councils aspirations to achieve a high standard of on-line service provision at various levels. Although the search for suitable ASPs will be challenging and require a high level of investigation by Councils it is clear that there is potential for this to be a cost effective and achievable solution. Coupled with the forecast for imminent major changes in the market to take place a cautious approach and further investigation is justified to achieve clarification and transparency of the variety and completeness of services provided performance levels and the related pricing. We would need to gain an understanding of an individual Councils financial position to assess whether renting and leasing is more expensive than buying in the long term. The main opportunity that lies with outsourcing core applications is to enable the Council immediate access to a complete, fully operational and reliable quality package currently beyond their reach due to lack of finance, current staffing levels and skills. It is recommended that the development of a thorough cost/benefit analysis methodology including both tangible and intangible elements will be essential for Councils to make a true and accurate assessment of their position and the value of benefits available to them through an ASP strategy. This should be based around the methodology outlined in Appendix C. It will provide a Blueprint framework for assessing options for core application delivery decision making, empowering Councils to make safe, well informed
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independent decisions with the confidence of having undergone a thorough and complete examination of the subject to support the decision. The results of the questionnaires indicate the majority of daily operational difficulties experienced by Councils stem from the quality and reliability of their Networks and peripheral applications. An exercise that may dramatically contribute to the reduction of disparities between Council infrastructure and will fast-track Council on-line readiness would be to perform an advanced study of both infrastructure and core application functionality. This should be undertaken on a regional basis involving all Councils willing to participate in the Networking The Nation exercise. Once undertaken the findings will be used to provide Councils with a Blueprint Council on-line enabling methodology. This would provide a complete start-tofinish project framework aimed at achieving full operational on-line service delivery at minimum cost with maximum return irrespective at what stage of progress a Council has achieved. The methodology will identify key issues and simplify the decision making process, empowering Councils to make safe, well informed independent decisions with the confidence of following a proven structured approach to achieving on-line Government service provision. The Blueprint will focus on both infrastructure and software applications whilst addressing risk analysis issues to achieve this goal.
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3. APPENDIX A - Questionnaire Results
Three regional Councils were chosen for detailed questioning. They were chosen because they fulfilled the Networking The Nation criteria as a regional Council and could potentially offer alternative views due to the variety of core applications in operation and also their geographic position.
Outline of the Councils participating in the questionnaire.
Annual Revenue $12m $8m $10m No. of employees 225 52 77 Population 14,200 7,800 8,000 Core Applications Sanderson Wacher IT Vision IT Vision
City of Port Augusta District Council of Grant Naracoorte & Lucindale
General Impressions
All three Councils are members of user groups for their current core applications packages and, therefore, have active working cooperative relationships with other Councils in their region. The Councils participating in the questionnaires were open to the suggestion that these working relationships may be expanded to operate at a closer operational level. Reservations were expressed about the quality of the decision making under such an arrangement, indicating clarity of roles and authority and responsibility are major concerns. Currently, each individual Council operates independently of the other. Such a move towards collaborative initiatives would involve a major cultural change for most Councils. It would be understandable that reactions to cooperative ventures may vary between Councils depending upon their position as service provider compared to a Council requiring the support. Responses are expected to range between fully supportive (from a position of strength) and hesitant (having had bad experiences of previous local collaborative ventures). All stated an interest in moving towards a collaborative approach at varying degrees. The introduction of a new system to Councils will require careful planning. Current experience of upgrading has been one of a long-term, painful process due to lack of resource best approached gradually. Desires were expressed for upgrading GIS packages, 17” monitors, better access to printers, extension of Council services via the Internet, web-enabling legislative packages and the provision of e-commerce facilities. Bandwidth is seen as a common restriction to operations and limited access to a wide area network posed a barrier. All councils see on-line services as the future to service delivery for Councils but recognises this will change the way they operate which will be a painful and a slow process.
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Finance & legislative packages Satisfaction Rating
Current Position
Annual maintenance Level of integration Current projects Future projects
District Council of Grant IT Vision Powermap GIS & SynergySoft & Land/property Excel spreadsheets packages Fair Average Happy with where Has potential but hasn’t been they are going tested yet Currently networking everyone so all staff can use packages (category 5). Have a strong IT Vision user group in the SE. IT team is also the Finance Manager. $15-20k IT Vision $1-2k Powermap FULL Needs to update automatically Used as trial site by IT Vision for new records system – Grant specified the business requirements. 1. Mapping available to all. 2. Payment via Internet. 3. Introduce the IT Vision correspondence module. 4. Introduce barcoding and imaging system. 5. Implement a complaints management system. Amount of time it takes to implement compared to resource available and the Council took a long time to think through the organisational needs. Council amalgamation 4 yrs previous caused a data conversion nightmare. Any future major changes will require a dedicated resource. 1. Has it been tested? 2. Can they use it? 3. Look at comparative packages/options. 4. Test integration both ways. 5. Look at cost, reputation and support. 6. $30k plus goes to full open tender with local supplier weighting. Main Office Port MacDonald Airport Sail Yards 128kb ISDN N SE Online (part Council owned) N/a Informal. Would consider co-operative venture. Prioritise 3-4 daily problems by how they effect productivity. Main complaints about application and client operating performance. Downtime is not recorded. 3 yearly plan to be reviewed Dec 2000 Download via Internet VET on weekly basis Server 1 Server 2 Client LAN = Linux Web server 95 & 98 File server @ 1yr @ 9 mnths $3k – encourage TAFE, CPA do IT seminars & CEO studies IT $60k per annum FULL
Difficulties experienced
System selection process.
Site overview Network Access ISP Help Desk
IT Strategic Plan Virus Protection
Annual Training $ Systems budget
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Finance & legislative, land & property packages Satisfaction Rating Web enabling Current Position
City of Post Augusta Sanderson Wacher GIS Authority
MapInfo
Annual maintenance Level of integration Current projects Future projects Difficulties experienced System selection process. Site Overview Network Access ISP Help Desk
Fantastic Terrific for price On working group Spent 3-4 yrs implementing a network throughout 9 sites. Chairman of the Sanderson Wacher user group IT team 1 qualified & 1 trainee $24k Authority license + $6k support COMPLETE POS type equipment (barcoded) souvenirs 1. Purchase of Document Imaging package Very easy. Upgrades available for all Authority users over the Internet. All run on same version. N/a 9 sites including nursing homes, child care centres, special needs and depots. Permanent 128kb ISDN link between sites. Fibre optic cable from exchange to offices. Central Online N/a Informal. Prioritise daily problems by mission criticalness. Main complaints about application and client operating performance. Downtime is not recorded. IT strategic plan used but not revised Download via Internet VET on daily basis Server 1 Server 2 Server NT NT AIX 4 (IBM) File server @ 2yrs @ 3 yrs @ 1 yr $10k – Microsoft Certified Engineers Course $130k per annum
IT Strategic Plan Virus Protection Client 98 & 2000 Annual Training $ Systems budget
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Finance & legislative packages Satisfaction Rating Current Position
Annual maintenance Level of integration Current projects Future projects
District Council of Naracoorte & Lucindale IT Vision None GIS & Land/property packages Complete Technical infrastructure support provided by Green Triangle Electronics Member of strong IT Vision user group in the SE. IT manager also the Finance Manager. 25 user license FULL Information not available Information not available Indicated interest in working with other Councils regarding outsourcing and pooling of resources in all areas. N/a N/a 3 sites on network Not conclusive N/a No formal help desk. Prioritise unknown number by how they effect productivity and legislative requirements. Main complaints about network performance as well as application and client operating performance. Downtime is not recorded although not considered a concern. None Inconclusive which package but is operated Server 1 Server 2 Client NT Unix upgraded Windows 98 @ 1yr @ 1998 Unknown Not available per annum
Difficulties experienced System selection process. Site overview Network Access ISP Help Desk
IT Strategic Plan Virus Protection
Annual Training $ Systems budget
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4. APPENDIX B - Application Service Providers
What applications can be delivered by an ASP Just about any kind of application can be delivered via an ASP. Web applications are simply standard applications that run on a browser. With rarely anything to install, they run from servers and software which can reside anywhere on the Net. Enabling technology from companies such as Citrix, GraphOn and SCO allow current applications to take precedence in an ASP environment. The only difference in the application (unless it was re-written for the web) is that it is running on a central server managed by the ASP as opposed to on the end-users desktop or the company's server. The application would look the same unless the application was specifically rewritten for the hosted environment. If it wasn't re-written, the application will look and function exactly the same.
Customisation issues This is possible when Internet Service Vendors (ISVs) modify applications to be hosted over the Web or for a specific organisation. Depending on the application and the organisation, this may or may not be sufficiently individualised to meet the needs of the customer. Applications requiring a high degree of customisation may not lend themselves as well to a leasing arrangement.
The benefits of an ASP environment
(Main source: Gartner Group)
The primary opportunity identified by The Gartner Group for ASP suppliers is to be the solution to the problems associated with working with ERP software companies. The primary dissatisfaction though is not with ERP software companies themselves. It is with the consulting, systems integration, outsourcing and professional services suppliers that were involved in these ERP projects. The emergence of ASP marks a new value proposition in the IT industry. ASPs should deliver competitive parity at vastly reduced cost freeing up capital to be invested in areas where return on investment is a more realisable objective. The majority of top tier solutions suppliers now have some type of offering that aims to exploit the ASP wave. The Gartner Group predict that "Custom ASPs" will soon emerge in the next crucial 36 months. Integration has not been an inhibitor in the past but will not be
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in the future. As individuals conduct more and more transactions over such networks the simplistic and naive fears in relation to network intrusion and the handling of mission critical applications over networks will wither away. Gartners are making bold statements such as 2001 being the year of net-native ASP solutions. ASPs provide a stepping stone from an ERP world to an Internet world. They predict that net native applications will out-perform Citrixised ERP applications in the future. Gartners suggest the ASP model generates traction when it is about new things done in a new way. The new thing is an application-neutral business service which generates revenue through transaction fees. Everything else in the ASP space in the last three years has been about an old thing (ERP software) being delivered in a new way (via a management company). An ASP arrangement aims to save time and money by simplifying ongoing system reliability and support. Obtaining such applications from an outside supplier can be a cost-effective alternative to the demands of systems ownership such as; ! ! ! ! ! ! ! capital expenditure implementation resource allocation training ongoing maintenance costs upgrades customisation
Commercial ASPs offer both leasing and rental arrangements and in some countries non-profit or government organisations provide these services free. ASPs offer small to mid-sized organisations the opportunity to benefit from the efficiencies of integrated, enterprise applications that were previously beyond their budget for software and personnel skills and resources. It can be seen as a viable alternative to procuring, implementing and maintaining complex systems, providing customers with a comprehensive alternative to building and managing complex internal IT centres which detract from the main focus of a business. With the data processing activity being performed off-site by a third party, organisations can focus on their areas of core expertise. ASP customers also are able to control more precisely the total cost of technology ownership through scheduled payment schemes. Always available, anywhere. With virtual private networks (VPNs) and other web-based tools an organisation can provide global access and broaden availability to
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business applications and data. ASPs state their reputation on availability delivered through the provision of built in redundancy, power grids and communication links. An ASP already has the equipment, applications and expertise ready to provide access to a fully operational application. Infrastructure Reliability The ASP makes available a state-of-the-art application hosting facility via a web browser. They have the capacity to handle growing bandwidth needs as well as traffic spikes, with experienced network specialists monitoring traffic and performance, ensuring corrective action is taken when needed to maintain service levels. They are flexible, scalable and secure, minimising risk. Service Reliability The purpose of the ASP industry is to make the management of information technology transparent and simplistic. An ASP aims to offer superior application reliability and availability than experienced from an organisations internal IT department. The primary business of an ASP is to run information systems for other entities and therefore has the staff, expertise and state-of-the-art equipment to maintain and sustain a reliable and up-to-date service. Efficient use of resource By outsourcing application management, the organisation can focus its energy and critical resources on improving their performance relating to core business functions and achieving the organisations strategic goals. Affordability The right choice of ASP will facilitate the implementation of best IT practices for superior levels of availability, security, backup, disaster recovery, CRM and financial flexibility otherwise outside of an organisations budget or technical capability. Potentially great savings can be achieved by economies of scale in the long run.
The Gartner Group (World leader in business technology research) report that some studies have indicated that by leasing an application from an ASP, customers can save between 33% and 53% over purchasing and managing the hardware and software for the application themselves.
Of course, costs and service levels vary widely according to the types of applications and services provided. Pricing is one of the most confusing issues in the ASP market and some may bury hidden costs within their
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pricing models. Network connections or implementation costs may be extra. Bringing the solution in-house later may also have an additional cost. Lower overall investment Facilitates the reduction of fixed costs and lowers overall expenditures for hardware, applications and management. Reduced risk Without capital expenditure on software, hardware, and IT personnel, organisations can "test" a new technology with minimal impact to their existing environment and bottom line. They eliminate the need to struggle with hardware and software implementations, connectivity issues, security and upgrades. The key to success will lay with the quality of homework an organisation has made in their ASP selection process and the service-level agreements promising specific levels of reliability, availability, scalability and response times to support incidents.
A Changing Global Market Environment. The Gartner Group predict that the emergence of ASPs may threaten a major computing revolution which will effectively redraw the current IT global market based on the delivery of application services over a network. It has been suggested there is potential for massive growth with the emergence of new web based software that exists purely on the Internet enabling the delivery of business services and accelerating the adoption of new applications and technologies around the world. Ben Pring of The Gartner Group predict "Software licensing models, application and networking architectures, and vendor strategies will all be impacted greatly." There are several factors involved in the emergence of this industry. The popularity of enterprise information portals has helped prove that business intelligence can be effectively and securely developed through a browser. This development offers organisations of all sizes the opportunity to access “best of breed” application functionality without significant infrastructure, software and personnel investment. Additionally, the challenge to provide better service delivery, at a lower cost, with a more distributed and mobile workforce are fundamentally met by the ASP model.
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Although the ASP market is strongest in North America The Gartner Group are predicting that the market will become much more global in the next few years. 1999 2004
Europe Asia/Pacific North America
(Source data Gartner’s Dataquest forecast research)
Both the European and Asia/Pacific markets tended to trail behind the United States when adopting new technologies and applications however, by 2004, these markets are expected to mature. The impact of change is destined to effect software licensing, application functionality, network architectures and vendor strategies.
The Gartner Group predict 60% of of current ASPs will fail by the end of next year and that the postcollapse landscape will look nothing like the ASP marketplace today.
A service provider focussing upon business services is expected to become king. Developments over the next 12 months should indicate the outlook for the future ASP model.
Which ASPs will survive Gartner have developed a six layer business model for ASPs of the future. The survivors will offer a combination of the following; ! ! ! ! ! ! neutral applications scalable platforms operational sound data centres heavy-duty networks legacy integration services customer relationship management
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Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
It is recognised as a common mistake to try to do everything, including owning the data centre which is not a sustainable strategy in most cases. The successful ASPs will focus on no more than two layers of our model. These ASPs are expected to transform into Business Service Providers offering sober-minded business propositions. Business services wrapped around application functionality are the most useful to customers, and software licensing models, application and networking architectures, and vendor strategies will mature also. Telecom firms poised at the fringe of the ASP market are perfectly positioned to win in the evolving BSP market. British Telecom has already made a move in Europe.
The Asia/Pacific Market Indicators Gartner suggest there is an opportunity for the European and Asian markets to lean toward 'mobile' ASP applications due to the current make-up of the market place. Both Europe and Asia have a greater penetration of mobile/cellular users than the US which could produce a fertile worldwide marketplace to exploit. The wireless computing sector is becoming a high growth broad-based market and IBM is actively manoeuvring to become a major player within this market by implementing a pervasive computing strategy of “partnership” with current leaders in the mobile and cellular market. Mobile telecom operators have the opportunity to develop more sophisticated, business-user-focused applications, which can be delivered via an ASP market.
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5. APPENDIX C - Guide to Successful ASP Selection
(Source: Summit Strategies)
The following nine point guide provided by Summit Strategies are the recommended considerations when assessing the applicability of an ASP strategy for the future. By using this checklist the ASP selection process can be streamlined to create a shortlist more quickly.
1. Assess current and future business needs
! ! ! ! ! ! ! ! ! Assess reasons for considering hosted solutions Weigh potential trade-offs between in-house and hosted deployments How willing are they to sacrifice some customisation. What applications make most sense to host. Assess whether they should offloading existing in-house solutions or deploy new ones through the ASP model. Assess existing internal IT competencies. Agree what type of work the IT people will do in the future. Assess whether the solution is critical to the business. Identify whether the desired solution involves highly confidential information.
2. Map the ASP to the business needs
! Identify credible and viable ASPs which are compatible with the Councils needs. ! Identify ASPs size and reputation, market and solution experience, and existing customer base (preferably an ASP operating in the Public sector). ! An ASPs key partners and investors may include firms already involved in the public sector, where the ASP may be better equipped to complement and integrate with existing IT infrastructure and strategy.
3. Assess the architecture
! Preferably the ASP would have an open, flexible and scalable back-end architecture, to allow for rapid, tight integration with new solutions. This will negate the need to hire a systems integrator to make the hosted applications work together. ! Investigate how the ASP intends to use enabling technologies such as eXtensible Markup Language (XML), Java and Lightweight Directory Access Protocol (LDAP) to create plug-and-play applications, components and services.
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! On the front end, weigh trade-offs between a pure HTML desktop (requiring nothing more than a standard browser) and one that requires a desktop component, such as a Citrix client. Fewer and smaller desktop components reduce administration hassles, but client-side controls can provide functionality that are required. ! An ASP that offers simple, self-service client interfaces that require little or no training will be essential if the Council intends to extend hosted solutions to both internal and external constituents.
4. The data centre
! Some ASPs have their own data centres, while others contract with third-party capacity service providers for infrastructure services. ! Study the infrastructure on which the solution is to run. Map the types of hardware, operating systems and networking products used; the number of skilled people on hand; whether the applications will run on dedicated or shared servers; and whether both Internet and private leased lines will be provided. ! If the ASP contracts with a capacity provider for data-centre services, the quality of the two parties relationship will be important if a problem arises.
5. Documentation
! This includes backups, standard procedures and disaster recovery plans. ! These should include details about: software, alternate power and disaster recovery systems for end-to-end solution availability; backup frequency and possible off-site storage of backup media; and the method for archiving and retrieving data.
6. Security
! Check the ASP deploys tools and procedures to seek out both "real-world" security problems (such as employees with malicious intent) and virtual holes. ! Some ASPs prevent and remove them. Investigate their virtual private network, firewall, and encryption capabilities, and whether the solutions they host can block virus infections.
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7. Sales, service and support
! ASPs should provide dedicated account management, 24x7 help desks and adequate geographic coverage. ! They also should provide intuitive, interactive online training, and document procedures to log, track, report and close support incidents.
8. Pricing
! Pricing is one of the most confusing issues in the ASP market. ! Some ASPs may bury hidden costs within their pricing models. ! Check out how comprehensive the subscription fee is, and whether network connections or implementation costs are extra. ! Check how much bringing the solution back in-house will cost later and how it will work.
9. Read the fine print.
! Service-level agreements (SLAs) should promise specific levels of reliability, availability, scalability and response times to support incidents. Though most ASPs offer some type of SLA, it is often poorly documented and can be difficult to interpret. ASPs should answer these questions: ! What level(s) of continuous application availability will the ASP provide? ! What components of the total solution are covered? ! What types of response times will the ASP guarantee? ! What kinds of penalties apply if the ASP fails to live up to its SLA?
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6. APPENDIX D – Networking The Nation Application
Project Title: Application Service Provider model for Council services Coverage: South Australia Contact Officer: John Mundy Alternate Contact Officer: Chris Russell Director, Policy & Public Affairs Local Government Association of SA Mob: 0417 830 105 Fax: 08 8232 6336 E-mail: chris.russell@lga.sa.gov.au Short Description of the Project: (limit of 250 characters) This project will determine the feasibility of building an Application Service Provider (ASP) environment through Councils or the private sector via cooperative infrastructure and resource sharing arrangements for the provision of online services. The project aims to build a complete infrastructure and ASP decision methodology to apply when determining a future IT strategy and expedite online service delivery. A scaleable and flexible tool aiming to reduce disparities via cooperative infrastructure and resource sharing initiatives. Project Summary The project aims to build toward an environment of shared applications and/or infrastructure assisting the removal of disparities between Councils due to location, budget restrictions and essential skills in an appropriate, co-ordinated and sustainable fashion. It addresses the potential of delivering Council services online in a sustainable manner through a combination of outsourced and cooperative infrastructure arrangements, resource sharing initiatives and ASP arrangements, these being provided either by local government acting as ASP or private sector. The project seeks to provide the most cost/benefit effective solution determined through a decision tree methodology to Regional Council service delivery with the potential to reduce disparities of access for some Councils to web enabled core applications and infrastructure currently beyond their budget and skill base. Ultimately enabling the delivery of online Council services, by reducing the ongoing investment required to maintain such a solution by independent Councils and ensuring the technology required can be delivered via a scaleable solution for all budgets.
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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This will involve consulting each Regional Council to assess their level of Internet readiness for on-line core application software, standard of infrastructure, level of IT skills and staff resource. As a result a decision tree style Blueprint methodology will be developed for both infrastructure and ASP strategic planning purposes. This will provide Councils with a combination of options enabling them to decipher which is the most appropriate and cost effective solution, individually mapped to the needs, capabilities and priorities of each Council. The focus of the Council ASP study will be to assess the appropriateness of capitalising on technologically advanced Council positions to act as ASPs for other Councils and provide methods of implementing an Internet ready infrastructure of a standard required to operate online Council services. Estimated Cost of the Project: $ 55,000 Estimated Funding sought from Networking the Nation: $40,000 Proposed Start Date: 1/1/2001 Proposed Finish Date 30/6/2001 Goal: (limit of 250 characters) The project is part of an incremental approach to providing Council services online. It will build towards an informed and coordinated environment of local government or private sector ASPs and co-operative infrastructure and resource sharing strategies, fast tracking Internet readiness. Objectives: (limit of 1000 characters) The project seeks to provide options for the most cost/benefit effective solution for Councils to deliver on-line services via access to web enabled core applications and infrastructure currently beyond their budget and skill base with the following objectives: - Follow recommendations of the Research Report (attached) - Investigate the Internet readiness of Regional Councils for service delivery, core application software, infrastructure, level of IT skills and staff resource - Identify Councils willing and potentially capable of providing ASP and infrastructure services to other Councils. Investigate investment required - Produce a Blueprint Methodology for ASP selection identifying practicalities and benefits of various options and impacts - Produce a Blueprint Methodology for infrastructure aiming to contribute to achieving an on-line strategic plan stating the combination of options open to each individual Council
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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- Identify appropriate training requirements and savings Activities: (limit of 2000 characters) The project will apply the recommendations of the research report (attached) and investigate and conclude any outstanding issues, including: - Investigating issues around licensing of local government ASPs, provision of redundant capacity, disaster recovery planning, maintenance and support for local government ASPs, reliability and documentation of procedures supporting a local government ASP operation. - Establishing guidelines and essential requirements for service level agreements, council to council and between councils and private sector asps - Investigate issues surrounding web enabling of core applications - Identify training requirements - Identify bandwidth and connection issues, providing clear guidelines for reliability in relation to budgetary constraints - Consult regional and rural councils about their current standard of infrastructure, core applications, technical capabilities and Internet readiness. - Assess current level of IT skills and resources available for on line service capability. - Establish method of assessing cost/benefit scenarios for ASP services - Produce Blueprint Methodology of ASP assessment of available web enabled core applications and outsourcing arrangements for infrastructure and its potential impact upon current operations and council on-line service delivery. - Assess individual councils potential for acting as ASP to satellite councils and document requirements to achieve this. - Produce Blueprint Methodology of infrastructure options for the cost/benefit rationalisation to contribute to an IT strategy document to achieve online service delivery for each council consulted and a statement of further investigations required to draw final conclusions. - Prioritise any additional research requirements to provide the tools to achieve a coordinated, sustainable and scaleable regional ASP and infrastructure plan for potential NTN application
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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Milestones: (Limit of 2000 Characters) The project will have the following core milestones: - Resolve outstanding issues raised by the research report (attached) - Consult regional and rural councils - Deliver Blueprint infrastructure Methodology - Deliver Blueprint ASP Selection Methodology - Identify and investigate issues surrounding potential council ASPs - Prioritise additional requirements to achieve regional plan Performance Indicators: (Limit of 2000 Characters) The project will have the following discrete performance indicators: - Number of Councils involved in ASP and infrastructure review - Completion of and application of, ASP selection blueprint methodology clarifying online strategy implementation - Completion of and application of, infrastructure blueprint methodology clarifying online strategy delivery - Identification of issues and benefits of potential Local Government ASPs Meeting Needs: Moving Local Government online services to an Application Service Provider (ASP) model is part of the LGA Regional Local Government IT strategy. It has been widely identified by The Gartner Group that ASPs can deliver competitive parity at vastly reduced cost freeing up capital to be invested in areas where return on investment is a more realisable objective. The Gartner Group predict that "Custom ASPs" will soon emerge in the next crucial 36 months. Integration has not been an inhibitor in the past but will not be in the future. As individuals conduct more and more transactions over the Internet the simplistic and naive fears in relation to network intrusion and the handling of mission critical applications over networks will wither away. An ASP arrangement aims to save time and money by simplifying ongoing system reliability and support. Obtaining such applications from an outside supplier can be a cost-effective alternative to the demands of systems ownership such as;
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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- capital expenditure - implementation - resource allocation - training - ongoing maintenance costs - upgrades - customisation This project will seek to fast track the development of regional council infrastructure through an environment of local government and private sector ASPs via co operative infrastructure and resource sharing arrangements to support the provision of on line Council service delivery. The development of an ASP selection methodology and infrastructure blueprint will provide Councils with a clear project strategy to achieve Internet readiness at an achievable and necessary pace. This task will be difficult to achieve on an individual basis by regional councils at a reasonable cost. Some Regional Councils in South Australia are not in a financial position or have the resources to develop their own infrastructure and support web enabled core applications to provide on line services. Without this project the result would be the intermittent development of regional council web sites of varying degrees of interactivity and perceived responsiveness due to the councils inability to manage a two way communication link. The major benefit available to Councils offering greater online services to its community through an ASP model would be the opportunity to offset costs already incurred whilst investing in their infrastructure, by charging for space and additional license fees to other participating “satellite” Councils. The practicalities and impact of this option require further investigation and due consideration needs to be given to the paradox that providing ASP services is outside a Councils core business and the one of the main benefits of outsourcing enables an organisation to focus on delivering it’s core business. Further assessment is required, through this project, to determine their ability to compete in this market long term. Support: The LGA is committed to the Australian Local Government Association's 'Nationalising e-momentum' project and attends its meetings on a regular basis in order to facilitate projects of national significance as they arise. The LGA believes this project is in line with the objectives of the ALGA to both move forward with practical projects putting local government services online and providing a co-ordinated mechanism for doing so. The results of this project will be made available to each State through the ALGA forum.
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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As detailed in the attached Financial Statement, the following inkind contributions will be made to the project: - 2,000 - 2,000 - 1,000 - 5,000 Project Oversight & Coordination with LGA IT Strategy Council consultation via Intranet and LGA Circulars Telecommunications from LGA to Councils LGA funded Report of Regional LG Infrastructure & ASP's
The LGA funded the attached "Report of Regional Local Government Infrastructure & Application Service Providers" project that sought to: - clarify that it is feasible that by embracing the concept of IT outsourcing or an ASP environment Local Regional Councils in South Australia could save money whilst improving the number and value of services they can offer their communities. - understanding how to achieve this practically and maximise the opportunities for true service gain in Local Government. The project will compliment a number of initiatives currently under way in Local Government in relation to improving core systems and creating a new web environment for South Australian Local Government. It is prudent to assume these will have a significant impact on the traditional levels and approach Local Government has made to communication and interaction with constituents and stakeholders. It is common amongst Local Councils to operate in an environment of intermittent contact with other councils, usually resulting from IT user groups, rather than relationships of close mutual cooperation on a day-to-day basis. Even with this level of interaction Councils operate independently with a history of defensiveness at Elected Member level the idea of operating in an ASP environment could seem quite revolutionary. Implementation of an ASP approach to core Local Government systems and services to the community online will have a significant impact upon the need for improved Local Government IT infrastructure. In most regional areas investment on a singular basis is unsustainable and impractical. Value For Money: The project will deliver affordable alternatives for on-line service delivery for both applications and infrastructure for all Councils involved that would otherwise have to be achieved on an individual Council basis or be unachievable due to budget and resource restrictions.
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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The focus is upon capitalising on the advanced state of existing applications and knowledge base already existing in technologically advanced Councils, by sharing a best practice methodology for infrastructure strategies, addressing the potential for Councils acting as ASPs for disadvantaged Councils and stating guidelines for a cost/benefit rationale with decision making. This is an opportunity to take advantage of existing infrastructure and resources and use them to their full capacity rather than recreating the wheel for Local Council. With a comparatively minimal investment it will provide a method of implementing a coordinated Internet ready infrastructure of a standard required to operate online Council services throughout South Australia. The LGA intends to conduct an Expression of Interest for developing the Application Service Provider model for Council services. Since the cost for developing the model will be contested on a competitive basis the LGA will be seeking a value for money option and thus will then draw down on the funds allocated by Networking the Nation as required. Management Skills: The LGA is currently managing the following five Networking The Nation projects and as such has clearly demonstrated its ability to undertake project management inline with NTN expectations. Networking the nation projects: - (SA1998/29) Regional Internet Services - (SA1998/42) Regional Internet Access Project - (SA1998/52) Regional Videoconferencing Facilities Project - SA - (SA1998/62) Regional Internet Access Project - Ethernet Extension - (SA2000/156) South Australian Regional Community Information System In the case of this project, the LGA will seek a degree of external assistance for the detailed project management of the initiative to ensure comprehensive implementation of the large number of NTN projects it currently is responsible for. Sustainability: This is a discrete project that will develop a significant bid for Networking the Nation funds for implementation whereupon the issue of sustainability will be addressed.
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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It is understood there is a commitment from Councils to provide on-line Council services, allocation of human resources for maintenance of infrastructure, support services and on-going training. The overall project goal is to enable online Council Services. This will be achieved ultimately by a sustainable solution, reducing disparities of access, by building an environment of Local Government or private sector ASPs and cooperative infrastructure and resource sharing arrangements. Competition: This project will determine the feasibility of building an Application Service Provider (ASP) environment through Councils or the private sector via cooperative infrastructure and resource sharing arrangements for the provision of online services. As a result a clear and transparent blueprint methodology, using the decision tree approach, will be provided for councils to use and allow them to fast track the strategic decision making process for infrastructure and co-operative resource sharing arrangements for the provision of online services. A key component will be an assessment of the major issues surrounding key decision factors and the associated risks. The LGA intends to conduct an Expression of Interest for developing the Application Service Provider model for Council services. Since the cost for developing the model will be contested on a competitive basis the LGA will be seeking a value for money option and thus will then draw down on the funds allocated by Networking the Nation as required.
Local Government Association (LGA) Report of Regional Infrastructure & Application Service Providers
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