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DTGOV – A Case Study

Background

 

DTGOV is a public company that was created in the early 1980’s by the Ministry of Social Security. The decentralization of the Ministry’s IT operations to a public company under company law gave DTGOV an autonomous management structure with significant flexibility to govern and evolve its IT operations and structure.

At the time of its creation, DTGOV had approximately 1,000 employees, operational branches in 60 different localities nationwide, and operated two mainframe-based data centers. Over time, DTGOV has expanded to more than 3,000 employees with branch offices in 300 different localities. DTGOV now has three data centers running both mainframe and Intel x86 platform environments. Its main services are related to processing social security benefits across the nation.

DTGOV has enlarged its Government customer portfolio in the last two decades. It now serves other public sector organizations and provides basic IT infrastructure and services, such as server hosting and server co-location. Some of its customers have now outsourced the operation, maintenance and development of applications to DTGOV.

DTGOV has sizable customer contracts that encompass various IT resources and services. However, these contracts, services and the associated service levels are not standardised – negotiated service provisioning contracts are typically modified for each customer individually. DTGOV’s operations are becoming increasingly complex and difficult to manage, which has led to inefficiencies and inflated costs.

The DTGOV Board of Management realised, some time ago, that the overall company structure could be improved by standardising its services portfolio. This standardisation implies the redesign and re-engineering of both IT Operational and Management models. This process has started with the standardisation of the DTGOV hardware platform through the creation of a clearly defined technological lifecycle, a consolidated procurement policy and the establishment of new acquisition practice.

 

Technical Infrastructure and Environment

DTGOV operates three data centers:

  • One is dedicated solely to Intel x86 platform servers. These servers use Windows Server 2012 R2 (approximately 70%) and Red Hat Enterprise 5 (approximately 30%);
  • The remaining two have both Mainframe and Intel x86 platforms. The Mainframe platforms are used exclusively for the Ministry of Social Security and are therefore not available for outsourcing. The Intel x86 platform servers in these data centers have the same mix as that of the first data centre.

The data centre infrastructure occupies approximately 1,860 square meters (20,000 square feet) of computer room space and hosts approximately 100,000 servers with different hardware types and configurations. The total storage capacity of DTGOV’s data centers is 10,000 Terabytes (10 Petabytes). DTGOV’s network has redundant high speed data links (minimum speed of 100 Mbit/sec) connecting the data centers in a full mesh topology. Their Internet connection is considered to be provider-independent as their network connects to all major national telecom carriers.

A server consolidation and virtualisation project has been in place for five years, and has had some success in considerably decreased the diversity and number of hardware platforms. As a result, systematic tracking of the investments and operational costs related to the hardware platform has revealed significant improvement. However, there is still considerable diversity in the DTGOV software platforms and configurations due to the many different customer service level agreements and service customisations.

Business Goals and Strategy

 

A chief strategic objective of the standardisation of DTGOV’s service portfolio is to achieve increased levels of cost-effectiveness and operational optimisation. An internal executive level working party was established to define the directions, goals and strategic roadmap for this initiative. The working party has identified cloud computing as a guidance option which offers an opportunity for further diversification, improvement of customer services and customer portfolios.

The roadmap addresses the following key points:

  • Business Benefits – Concrete business benefits associated with the standardisation of service portfolios under the umbrella of cloud computing delivery models need to be defined. For example, how can the optimisation of IT infrastructure and operational models result in direct and measurable cost reductions?
  • Service Portfolio – Which services should become cloud based, and which customers should they be extended to?
  • Technical Challenges – The limitations of the current technology infrastructure in relation to the runtime processing requirements of cloud computing models must be understood and documented. Existing infrastructure must be leveraged to the greatest extent possible in order to minimise up-front costs assumed by the development of the cloud based service offerings.
  • Pricing and SLAs – An appropriate contract, pricing and service level strategy has to be defined. Suitable pricing and SLAs must be developed to support the initiative.

 

One outstanding concern relates to changes to the current format of contracts and how they may impact business. Many customers may not want to – or may not be prepared to – adopt cloud contracting and services delivery models. This becomes even more critical when considering the fact that 90% of DTGOV’s current customer portfolio consists of public organisations, such as Government Departments, Government Agencies and Community-based organisations and agencies, that typically do not have the autonomy or the agility to switch operating methods and models on short notice. Therefore, the migration process is expected to be long term. This may add to DTGOV’s risk if the roadmap is not clearly defined. A further outstanding issue relates to IT contract regulations in the Public Sector – existing regulations may become irrelevant or unclear when applied to cloud technologies.

 Roadmap and Implementation Strategy

 

Several assessment activities were initiated to address the aforementioned issues. The first was a survey of existing customers to probe their level of understanding, on-going initiatives and plans regarding cloud computing. Most of the respondents were aware of and knowledgeable about cloud computing trends, which was considered a positive finding.

With these findings, the working party decided to:

  1. Choose IaaS as the target delivery platform to start the cloud computing provisioning initiative;
  2. Hire a consulting firm with sufficient cloud provider expertise and experience to correctly identify and rectify any business and technical issues that may afflict the initiative;
  3. Deploy new hardware resources with a uniform platform into two different data centres, aiming to establish a new, reliable environment to use for the provisioning of initial IaaShosted services;
  4. Identify three customers that plan to acquire cloud-based services in order to establish pilot projects and define contractual conditions, pricing and service-level policies and models;
  5. Evaluate service provisioning of the three chosen customers for the initial period of six months before publically offering the service to other customers.

As the pilot project proceeds, a new Web-based management environment is released to allow for the self-provisioning of virtual servers, as well as SLA and financial tracking functionality in real-time. The pilot projects are considered highly successful, leading to the next step of opening the cloudbased services to other customers.

 

 

 

Task


Answer each of the questions below:

  1. Describe the difference between a locally hosted service (ie. in an enterprise data centre) and a service provided using an SaaS provider. What are the critical points, other than cost, that an enterprise would need to consider in choosing to migrate from a locally hosted service to an SaaS service. Your description should take no more than two to 3 pages.
  2. Describe the difference between locally hosted infrastructure (ie. in an enterprise data centre) and infrastructure provided using an IaaS provider. What are the critical points, other than cost, that an enterprise would need to consider in choosing to migrate from local hosted infrastructure to an IaaS service provider. Your description should take no more than two to 3 pages.
  3. DTGOV, the department in our case study, wants to investigate moving to a service based model where many of its services would be supplied to its clients as a service, in addition to its plans to move to an IaaS model (See the DTGOV Roadmap and Implementation Strategy (Erl, Mahmood, & Puttini, 2013, p. 19)). There are a number of infrastructure models that could possibly be used to achieve this. Some of these models are:
    1. Local hosted infrastructure and applications;
    2. Local hosted infrastructure with some SaaS applications;
    3. Hybrid infrastructure (some locally hosted infrastructure with some IaaS) and applications;
    4. Hybrid infrastructure and applications with some SaaS applications;
    5. Full IaaS model with some with SaaS apps;
    6. Full SaaS model.

You are required to choose an infrastructure model that you think will achieve the DTGOV Roadmap;

Describe the benefits and drawbacks, excluding costs, of your chosen infrastructure model. Your description should take no more than two to 3 pages.