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Call
to Order at
9:00 a.m. by Chairman Rick Zelznak.
Director’s Report
Exhibit 1
Approval of January-June
Minutes
Exhibit 2
Motion to approve
by Dr. Lewis; second by Dr. Blessing
Approved.
ATS Status Report
Exhibit 3
Presenters: Bob Ramming
(GITA); Jim Price (DOA)
Dr. Blessing I agree with
your proposal that we see this recapped in a PIJ because a lot has
changed, I asked a few times
for a more comprehensive overview of ATS in light of TOPAZ and other
things going on. To the
extent we can get brought up to speed and get the big picture, it would be
a big help.
Peter Woog Year to year
contracts?
Jim Price Every year there are
contracts that renew, their timelines finish.
The carrier services is, I think, three years to as many as ten
years, depending on how the state decides to take advantage of those
terms.
Peter Woog Describe the scope,
is it just the state agencies, just the campus? How about the community colleges, etc.?
Jim Price ATS is part of the
Executive Branch and has some limited scope in terms of statewide
responsibility to political subdivisions.
Operationally, ATS provides these services predominantly through
the major campus locations. We
do not go to the ASU campus to provide telecommunications.
The contracts the way they’re written can be taken advantage by
the state and its political subdivisions.
Government, municipalities, local counties, cities, etc. can take
advantage.
Peter Woog Do they?
Jim Price They do.
Dr. Lewis We do take advantage
of some when it’s cheaper than another service we can get.
Dr. Blessing This is where I
was hoping to see a 30,000’ view because there are so many pieces --
Arizona Learning Systems, for instance, trying to (inaudible) community colleges to school districts. I’m worried that we’re duplicating efforts or not
leveraging the work we’re doing in pieces.
Jim Price ATS primary
influence is within the Executive Branch.
Statewide contracts can be leveraged and they are taken advantage
of, for instance, long distance services, things of this nature where
aggregate minutes are actually combined for the state as a whole as
(inaudible) permanent use. There
are a number of things like that available.
School boards recently went out for their $100M initiative.
There are contracts out there they can leverage, the by-product
services. Our intent very
early on was to have a set of contracts you could pull off the shelf and
use, whether you were in state government or not.
Dr. Gentry I have a general
question. This is called
Arizona Telecommunication System. You
talk about a number of contracts. Do
you actually own any infrastructure that you would constitute as a system?
What is it you own and what is it you have contracts (inaudible)?
Jim Price In the handout
I give more detail, specifically by system.
We have a telephone system in Phoenix and Tucson, we have call
center systems. The state
owns (inaudible). We have a
campus backbone, again today it is based on a routed network technology.
We’re looking for converged services (inaudible) fiber.
That’s the essence of what we own on our campuses.
We do not own wide area network links, for instance, that extend to
other cities. We contract for
those. It’s not our intent
to own and manage that type of infrastructure.
There are initiatives like the shared resources, rights of way,
telephone systems that we have been pursuing as a state but not
necessarily taking advantage of. Peter
can attest; he’s been steeped in rights of way issues.
Peter Woog Can you tell us why this doesn’t work?
You’re the lead group to be doing this.
You’re doing this for the Executive Branch not for the whole
state. Why aren’t we able
to pull more agencies in, what is wrong with this picture that I don’t
understand? The more we
fragment, the more we lose our true leverage and we have many other groups
represented here in the room. What’s
wrong with the concept here?
Rick Zelznak ATS is the
service provider for Executive; however, not all Executive agencies are
(inaudible) because of that. It
goes beyond saying can we bring in ASU and the community colleges and the
county governments as well.
Laraine Rodgers I would
imagine and I will hear about this in (inaudible), I’m sure. When we talk about an enterprise architecture, we are talking
about currently what all exists and this does exist. So when you take inventory of what should be there, I think a
natural result of that will show what’s missing and it might be a
platform we can turbo charge that. I
too wonder what’s wrong with this picture?
You’re doing things right but may not be doing all the right
things.
Al Crawford About five years ago we attempted an all-encompassing statewide
Project Eagle and we couldn’t penetrate political infrastructures. They
were so smart they figured out ways to opt out – the universities,
community colleges, the Arizona Learning System – massive amount of
telecommunication needs that if you could consolidate and provide that
negotiating leverage, you could really drive a neat bargain.
Peter Woog Somehow, Al, I have the distinct feeling that if this was in your
former life and you were overseeing this whole thing, in corporate
America, you’d find ways to get the folks on the same glide path or
there would be a few less folks working at company xyz.
Al Crawford I did and had the CEO to support the leverage and support the
mandate and I went across divisions with them. We tried to go to the Governor’s Office then and the back
channel pressure prevented the Governor’s Office was saying we’ve got
to do this.
Dr. Blessing You know more about this than I do.
Isn’t there an element too though of communication and agencies
haven’t always had clear offers of here is the service and is what
you’re signing up for, so I don’t want to only blame it on the
politics. I think there is
also a problem of delivery product…
Al Crawford There was a
reputation issue, DOA was not viewed as capable of delivering reliable
service.
Tom Betlach How have the
efforts been in trying to bring on some of the other Executive Branch
agencies over the last few years. I
know DES, ADOT and others – talk about those experiences.
Jim Price That’s the last
two slides, but I’ll give an overview because they are critical.
I do recognize, Peter, you’re absolutely right.
Tom Betlach Do you know what
percentage that becomes if you took a telecommunications (inaudible)
services as a dollar amount vs. number of agencies?
Jim Price We could find that
out.
Rick Zelznak The question is,
you only get 89.8% of on-mall customers, are you counting ADOT as one and
counting the Board of Osteopathic Examiners as one?
Jim Price Yes, 49 agencies on
the mall, of those 49, that’s what the percentage is. One question was what contracts are in effect today?
Either statewide contract.
Tom Betlach Is that just on
contracts?
Jim Price Contract savings.
Laraine Rodgers In terms of
the Achievements I think to have actual high-dollar savings, I presume at
some point the budgets are physically cut v. savings. Has anyone got an assessment of the agencies that are not
part of this to say comparably what those savings could be, especially in
light of this. It was pointed
out it would be more than 4%, it will be a higher number.
Wouldn’t this be higher and proactively couldn’t you connect
and say here’s what we can do?
Jim Price Yes, and I will
touch on that in the last two pages.
Dr. Blessing Are you able to demonstrate the business case to these agencies that
your costs are lower than their current costs?
Jim Price That’s a very good
question. There is an
advantage to the state and we can show that by the state, can show our
rates are competitive with the private sector in order to receive those
services directly. Where
we’re challenged is that we’re having to compete our rates/services
that include things like overhead, administration, indirect/direct costs
with reports of costs by individual agencies that claim they can do it for
less. They are not held the
same bar that we are. It doesn’t matter that our costs are more competitive with
the private sector, we can demonstrate that time and time again.
To go to our peers and try to justify that is a very difficult
proposition.
Laraine Rodgers There’s two
ways of packaging that: top
down, you need to look statewide and the state linked everywhere else.
You’ll get a different view when you’re there.
(inaudible) agency is just perpetuating the silo approach.
You need to look at the big picture what that’s going to do and
how these are steps as you converge toward that.
Tom Betlach Let’s get
specific. Take an agency ADOT,
right? In terms of being a
customer right? And the other
two are DEQ, DHS, as well as DOA. ADOT
broadband and phone structure.
Jim Price Right.
Tom Betlach Wouldn’t the
purchase of that system come to this committee?
Jim Price It would.
Rick Zelznak It has about 2 ½
years ago a PIJ came through for a call center system and ITAC put a
condition on that they work with ATS.
Tom Betlach So we’ll review
it again prior to any award of a contract?
Rick Zelznak At this
point they worked with ATS over the last two years to come up with
something comparable and there was a significant dollar difference as of
last week -- $2M between what ADOT can do on their own and what ATS can
do.
Tom Betlach $2M on the base of
what?
Rick Zelznak I’m not
sure what the base is and that was over an extended period of time,
probably five years.
Dr. Blessing I feel like I’d be remiss if I didn’t add the quality side
of it too. A case has to be
made both for reduced cost as well as quality service.
Jim Price There are four
basic criteria we tried to direct our services toward: cost competitive; service quality, not only in terms of
availability to systems but the responsiveness of the organization;
security. You’re right,
that’s the value proposition, just not cost alone.
Our systems have been rock solid for 12 years, very reliable.
It is a class 5 CO grade switch.
It is based on circuit switch technology, not packet switch
technology. Those of you who
have voice-over IP aware, that could be a concern; however, the system
can’t evolve to voice-over IP. We
are supporting some of our remote customers with voice-over data,
voice-over IP services, the by-pass is being taken advantage of.
Those things can and do happen.
We do have numbers, we do have cast projections, and we have
analysis pending. The
contract for this particular engagement was completed about one month ago
and there are a number of things that have to be evaluated including what
is being proposed and the logistics on the campus and how these things
will be implemented. We can
certainly provide you that information.
Tom Betlach What’s the
timeline?
Jim Price I think ADOT
feels they have all they need, it’s up to us to make sure we get
analysis done, down tight so you have quantifiable information you can
(inaudible).
Rick Zelznak There are
some significant institutional barriers out there, making it difficult for
ATS to compete and we’ve got to acknowledge that.
The finance area of DOA that prices some of these services has
certain rules to follow which preclude some volume discounting, making it
difficult to do that pricing in anticipation of additional services coming
online. So you know you got
DEQ, AHCCCS and ADOT coming on these systems, you’ve got to price your
service today to meet your cost today.
Any business will take a loss of fund.
When you open a gas station, you don’t charge $8 for that first
gallon of gas, you price it competitively.
Those are some of the institutional barriers I think Jim and ATS
are facing to bring more of these players to the table and Executive
agencies to the table.
Peter Woog Why are we
here? We’re here as the
ITAC board to give counsel to your organization and you in turn to these.
We sit around here with very smart people, wringing our hands,
saying we don’t know how to fix this so we’ll let them wage war with
one another, at the end of the day we throw out lots of money.
If we don’t have the right technology here, than fix Jim, and if
we don’t have the right people, get the right people.
Just to think we’re doing our job here and to march on and have
all the little fighting with each other, it’s truly nuts.
I wouldn’t put up with it in my business and as long as we sit on
this board, this is my business. Al
is a smart guy, has been fighting this for five years, hasn’t made any
forward progress, so I should just sit here and give up.
Maybe we should pick up our marbles and go home, probably not the
right answer, so what are we going to do about this?
We will sit here and they will spend bucks on ADOT’s new toy,
they have consultants helping and they love this little food fight.
This is what perpetuates building all these independent systems,
this is what perpetuates spending all the money and then we sit here
wringing our hands and say we have a budget deficit and I don’t have a
clue how we’re going to do it.
Danny Murphy Does GITA
have legislative authority to require agencies to do one or the other?
Laraine Rodgers How can
we get you legislative authority, what do we have to do, draft
legislation? We’re capable.
Jim Price We have been
successful in the past. Call
Centers would not have happened had Government Information Technology
Agency not been there to press the issue.
Justification was made and the system for development, so it can
happen. There have been successes, numerous successes for the contracts
that everyone in state government enjoys, including ADOT being able to go
out and compete for telephone system.
These are tools available, so I don’t want to lose sight of that. Your tools are as important as people skills and we have that
going for us. We can provide
numbers.
Peter Woog But your own chart you’re showing to us says lost economies
of scales, perhaps hundreds of millions of dollars.
Jim Price Yes
Rick Zelznak Government
Information Technology Agency has pressed issues in the past but when it
comes down to the final decision and the cost benefit is not there, I
can’t with good conscience tell an agency to spend 50-100 percent more
for ATS.
Laraine Rodgers What you
can do is when you look at enterprise architecture, if everybody is
singing from the same tune who supports you, and I commend you for what
you did going forward from our June Planning meeting, people start to
think that way. I can’t
fault the project manager, director, whatever for saying this is my role;
this is what we have to do. We
should be able to help you and it can happen better top down so they can
get the support.
Rick Zelznak Government
Information Technology Agency has to work within the bounds we’ve got to
live with specified by law. The
approaches we’ve taken are precisely that.
If we want to get consistency, we address that with our policies
and standards, we look at the technology side.
The frustration is here on our side as well.
We can strategize until our faces are blue, but moving the state
forward requires that operational side to be able to do the things we
strategize.
Laraine Rodgers Does policy
have to change, can we help with that?
Rick Zelznak I think
important policy with the law, a number of things to change.
Laraine Rodgers So those are
in the minutes – Action items to follow up on, so it needs to be
assigned and we’ll help.
Dr. Blessing I would like to add a couple other action items.
This is a changed world and I’m less worried about criticizing
what went wrong in the past and starting fresh, don’t want to pick up
our marbles and go home. We
do need to see a new PIJ for the project; there is a lot of money at stake
here. I would like that
30,000’ view that shows all the other components that ought to be
factored in when you prepare that PIJ.
Included in it I think needs to be the business case both in terms
of cost effectiveness and quality of service.
Jim Price We concur.
Bob was talking about revamping that PIJ.
It was everything from soup to nuts and it was anticipation of
projects that were proposed that never did.
You look at this $84M thing and it isn’t like that at all.
I do have specific numbers with respect to Call Centers.
We have a utility; a utility is not a bundle of services that we
can sell to Holsum Bakery or Arizona Center.
It is only state government entities that we can legally deliver
and sell services to, a closed environment.
The question then becomes what value?
If I only have 12 people in my organization, it may not make sense
for me to own my own system, but if I’m dealing with 15-20,000 people in
a common area, then there are economies to gain and we do have those
benefits available today. Where
the rub comes – agencies are funded individually by the state or federal
funds. You’re going to cost
me $200,000 more than I say I can provide it for.
Look at the figures and they may be right; however, if you look at
the broad-base customers and the savings that can be introduced as a
result of everyone now enjoying the lower rates, the savings outweigh the
differential in cost. That’s
the cost benefit analysis we’re going through to justify the services
that are delivered.
Karl Heckart What agencies do the cost against you, do they actually factor
in all the people working on it, a pro rated percentage of the management
structure that exists in the organization, the desks, building costs, all
those things in your overhead costs?
Jim Price Absolutely not.
It’s apples to oranges thing.
I look at a capital expense, here’s what it costs me, ATS I
can’t believe you cost so much. That’s exactly where the discrepancy comes, that’s where
the battle lines get drawn and they are unnecessary.
Karl Heckart This whole project comes down to a political problem.
There has to be some political will and some political stability.
I’ve been working around this project with Jim for a decade and
we’ve had bright moments where we’ve had political alignment.
They twinkle and go away very quickly.
When it goes down you can’t expect Jim to deliver in that
environment because the support for him, that constant change of
direction, enforced magnet sell off magnet.
Dancing to a never ending tune and unfortunately without some rock
solid legislation, that’s going to be reality because there is election
cycle here and there’s social issues that come up and it’s possibly
driving people crazy. If clear indication is no political will when an
agency in spite of the fact there is pretty strong authority in DOA’s
camp right now to do voice communication for the state is allowed to run
an RFP for a new switch. What
does that say? It says to
every agency you know if you play the cards right, you can sneak around
this thing.
Rick Zelznak The legislation
is truly there, anything below legislation in terms of policy though, I
think we need to (inaudible) because ATS is through legislation central
(inaudible) telecommunications. What
does that mean? It’s not
truly defined in the level below that; may be something too we can address
in a PIJ to define policies, what are the rules that everybody should live
under.
Jim Price I don’t
think there are any rules with respect to ATS legislation or even
Government Information Technology Agency legislation with respect to this
topic.
Jim Wang Is the value
proposition not committed by agency?
I think there is a lot of incentive if infrastructure cost can be
reduced, I think the agency will be on board.
I don’t know if that has been well documented or communicated.
Jim Price We have over
the past several months struggled with a technique to demonstrate that.
We think we’ve got a (inaudible) now that illustrates that –
(inaudible) capital costs, operating costs, project activities, time
lines, quantity, etc. There
are so many services we showed earlier. Telephony is one of the issues we’re concerned about.
We have telephone system investment that can evolve, can migrate to
the next generation utility. Our concern is that if we let these projects go, we’re
going to be in the same situation we were when everyone bought their own
local area networks, different brand, different technology requirement,
different training issues, different support staff requirements that wind
up adding cost that don’t get seen until 10 years from now the
Legislature says stop, start over, consolidate, do what you were told to
do in statute. We do have an opportunity and these problems are not
insurmountable.
Tom Betlach You have a
lot of data on the services you provide, what else is out there that
you’re not providing services, the ADOT telephone switch or DES
telecommunications?
Jim Price I can give
that information in our fairly extensive matrix that shows by service
category which agencies are actually serviced by ATS.
Tom Betlach Do you know which
agencies?
Jim Price For telephony, ADOT
is not; DES and ADOT in wide area network is not; DEQ coming on the mall
is serviced on our wide area network but we do not provide the dial tone.
1200 customers coming to the mall.
Jim Price We are not here to
take over agency operations. When
you add 5-6000 customers, you need to leverage the resources, not get rid
of those resources and agencies. John
McDowell taught me a federated model years ago.
It works! We have one
of our most challenging agencies in terms of application sophistication in
DES and DOR. They have a
support staff, they do work with us, their systems do run and they work. The relationships work, take a lot of effort.
My troops have worked with these agencies sometimes daily to bridge
gaps. If this program
didn’t make sense, I wouldn’t be here.
I’m a taxpayer like you guys and that’s an opportunity we have
to see as a group.
Tom Betlach In terms of
adding all of this new capacity with the (inaudible) buildings and if you
add on ADOT, how much would your rates go down?
What are the potential savings for existing customers and how big
is your existing (inaudible) in
terms of customer dollar amount?
Jim Price Telephone rate cost
savings 5,000 x 20, 6,000 x 20, 5,000 x 31 is basic monthly recurring
revenue stream for those systems. That
$31 and $20 would be reduced by the percentages they have indicated.
With ADOT it is significant; without ADOT we’re saving but we
guestimated $45,000 a year savings. We’re
into the millions with ADOT.
Tom Betlach I need to get
those numbers from you.
Dr. Gentry It seems like
we’re all saying there is huge economy of scale benefits by using ATS.
I’m not sure we need legislative or policy changes.
The core issue is getting fair comparison, apples to apples.
Your service vs. 101 do it yourself.
If we can force real apples to apples comparison one on one project
by project, get in front of ITAC with quality of service very important
and held equal, then it seems like the common user solution which is ATS,
will be more economical from everything else that may be considered.
Case by case you just knock it down.
Tom Betlach We didn’t pass
legislation to (inaudible) site
consolidation.
Rick Zelznak Is it
ITAC’s role to look or do that cost benefit analysis or is it
(inaudible) something other than the agency, it is a question for…
Karl Heckart I don’t
think you suboptimize this benefit analysis.
The court is trying to do enterprise automation across local,
county and state which has a whole level of complexity to it.
When you look at one court, can it operate more effectively than
the cost at the state level – maybe?
When I leverage that, the benefits of bringing Tempe and their
functionality into the system across all the courts in the state, there
are dramatic savings and benefits for all the courts in the state.
You can’t do this agency by agency; you’ve got to do it at the
enterprise level.
Rick Zelznak No question
we’re suboptimizing now (inaudible).
There are institutional barriers we have to knock down to make the
cost competitive.
Laraine Rodgers I
understand you need it agency by agency but you invert that and when
you’re looking at enterprise architecture, there will be certain
categories. Let the names of
one of the components within the categories drive it and use it as the
(inaudible). You can look at
different ways but when you talk about voice data, etc., you see the
agencies going across, so you see it both ways – the vertical way, the
silo way and the big picture. That
should be in sync with what you’re doing with enterprise architecture,
whomever is working on that. That’s
something Government Information Technology Agency can and should drive.
Peter Woog There are two
gatekeepers here, clearly Government Information Technology Agency with
their role to the intellectual overview of the project and I think you,
Tom, need to step up, at the end of the day you control the bucks. If we’re serious about this, you two guys have to figure
out how we’re going to do this. Will
it make you popular with your peers?
I doubt it. This is a
fairly unanimous message here; we’re dead serious.
Rick Zelznak Government
Information Technology Agency’s bailiwick is technology.
His is the funding side of looking at cost benefit.
I think that’s appropriate having it split that way.
Peter Woog So what
happens next? Are we going to
go then come back to this group with a plan?
Tom Betlach My intention
is to get some of the numbers for rate reductions are just on the ADOT
system and start our analysis there and working with enterprise wide
savings are and getting with ADOT staff as well.
Rick Zelznak We need some type
of a standardized comparison model so whenever we look at the cost,
we’re including the same thing (inaudible), and we don’t have that
right now. That’s a task
for OSPB.
Dr. Blessing You seem to agree, I saw you nodding about the old PIJ problem.
When can we realistically expect that to come back?
Jim Price We tried to
put an update together on the monster PIJ and it didn’t make sense, so
we started going project by project like anybody else would with respect
to our operation. If there is
something larger than that, I think the observation is right, (inaudible)
architectural time and make sure you’re in sync with that. A recreation
of an (inaudible) PIJ would
be our best interest at this time. The
PIJ as originally drafted talked about future projects and lots of money.
If an agency has a project and has funding for it and it is found
that ATS is the more cost competitive or best solution, then those monies
would be channeled to (inaudible).
Dr. Blessing Maybe it’s not a PIJ, maybe it is some other plan that
captures the big picture.
Jim Price We can
certainly work on that. It’s
time to resurrect a business plan I started some months ago.
Dr. Blessing Time frame?
Jim Price Draft next session
or one after.
Rick Zelznak
Then your operation will get development, say let’s close out
this PIJ now, make a motion to
(inaudible), got to be some time line, say 60 days.
Can I entertain a motion on something to that effect?
Dr. Blessing I hope it would
include that business case. I
realize it will be subject to modification but we need a fresh starting
point. The 1999 PIJ is
probably worthless today.
Jim Price In principle it’s
ok but when you get into details.
Laraine Rodgers I don’t know
if a point of this motion should be separate but I would like reassurance
it is going to be done in alignment with (inaudible), not separate.
Continuously.
Karl Heckart One of problems
is we’re looking at a PIJ which is designed for a project and asking for
a business model. We don’t
really need a PIJ. A PIJ is
the wrong instrument which is why I think you got in trouble the first
time out; it’s designed for project base, so then you went back to very
tactical project approach; now we can see the big picture where it’s at,
how is the enterprise leveraging coming in.
Laraine Rodgers Then you
should have that conversion plan – here’s where we’re going, where
are we today, what do you need from an architectural standpoint, where are
you today and how do you migrate the (inaudible).
Peter Woog PIJ format
doesn’t lend itself to that kind of treatment.
Dr. Blessing I make a motion
for PIJ comprehensive plan come back to ITAC in 60 days.
Peter Woog Does that also
include working with GITA and the finance group on coming
up with common valuation metric so we get the apples and apples?
Dr. Blessing I
hope it would include that business case.
I realize it will be subject to modification but we need a fresh
starting point. The 1999 PIJ is probably worthless today.
Jim Price In principle it’s
ok, but when you get in to details.
Laraine Rodgers I don’t know
if part of this motion or separate, but I would like reassurance it’s
going to be done in a line of enterprise architecture, not separate cost
– continuously.
Karl Heckart We’re looking
at a PIJ that is designed for a project and what we’re asking for really
is a business model.
Motion by Dr. Linda Blessing:
ATS will provide within 60 days a business plan which addresses the
tie-in to a statewide enterprise architecture, cost benefit analysis and
documentation of the value proposition of providing services through ATS.
Second by Peter Woog
Approved.
TOPAZ
Status Report
Exhibit 4
Presenter: Brad Tritle (GITA)
Question and answer discussion followed.
Web Portal Status Report
Exhibit 5
Presenter: Gene Martel (GITA)
Question and answer discussion followed.
Microsoft Contract Status Report
Exhibit 6
Presenter: Lisa Meyerson
(GITA)
Question and answer discussion followed.
Statewide Architecture
Exhibit 7
Presenter: Rupert Loza.
(GITA)
Question and answer discussion followed.
Executive Session Guidelines
Exhibit 8
Presenter: Rick Zelznak
Question and answer discussion followed.
Monthly Project Monitoring Report
Exhibit 10
No discussion
Other Business
No discussion
Motion by Al Crawford to adjourn; second by Peter Woog.
Meeting adjourned at noon.
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