Contents | July 2006 | Volume 1, Issue 4
“It Happened to Me”—Conversations with Transitioned Employees
The May issue of the Data Center Download featured an article on data center consolidation in other states. This article, based on interviews with transitioned employees, continues the theme of learning from the experiences of others. DIR interviewed several employees. All of the employees interviewed work in information technology (IT), transitioned through an outsourcing contract, and currently work for one of the service providers bidding on the Texas Data Center Services Request for Offer (RFO). Their years of service ranged from two to twenty-three at the time of their job offer and most worked in the public sector before transitioning. While each of their personal experiences and circumstances is unique, their stories share some common themes.
In the Beginning
For most of the employees interviewed, the potential for outsourcing was not welcome news. They mentioned feelings like “fear,” “betrayal,” and “denial” as their first reactions to learning their employers might transfer their function to a technology service provider. Some employees helped to document workflows and service levels and, thus, felt somewhat involved in the process. Others learned about the pending deal through informal channels and rumors, which only increased anxiety and concern. They didn’t know what to expect and wondered what would happen to their careers. They reported frustration with the lack of communication and many wished for more information from their employers so they didn’t have to rely on speculation.
All of the employees interviewed considered their options carefully when they received their job offer. Some had opportunities to stay with their employer while others did not, but all wanted to continue to work and grow their IT skills. As one employee commented, “I had a decision to make; there were opportunities for me to stay, but I decided that the best career path for me was to go with a company that valued the technical expertise of the jobs we were doing.”
After distributing the job offers, each of the service providers held information sessions and provided human resources contacts for questions so the prospective employees could find out about health care and other benefits. The employees also met individually with managers to discuss their skills, learn more about the technical organization, and begin the career planning process. Even with all of this information, one employee waited until the last possible day to decide what to do.
Interestingly, this same employee turned down an opportunity to return to his former employer and elected to stay with the service provider when the contract ended.
Transition
After living with rumors and changes for so long, the employees were relieved when they finally began their new jobs. Functionally, most continued to do the same work on day one of the contract. But, things were different. Their former colleagues became their customers. It was, as one employee said, “a paradigm shift.”
After settling in to the new organization, the employees began to notice opportunities. While most were initially concerned that they would only work on the same projects or be laid off as soon as the contract allowed, this did not materialize. As one employee noted, “There is plenty of opportunity. Taking advantage of it depends on where you want to go.” All employees interviewed spoke highly of working for a technology company, where their skills are the core business rather than a cost center. They appreciated access to resources, like subject matter experts and researchers, to help with challenging technical issues. They found extensive opportunities for paid training and certification. One said, “they are helping me improve my marketability, even though it doesn’t directly relate to my current role.”
Navigating a new job and facing unexpected change are always a challenge, but the employees DIR spoke with found plenty of support working for a service provider. They meet every six months with their managers to review the training, new roles, and mentoring planned for their career development. They make the most of company resources, understand the value of their technical experience, and seek opportunities to build their skills. Overall, they have been in their new careers an average of eight years. The transition was, in the words of one employee, “not the end, but the beginning.”
Sourcing Management 101
When the new Data Center Services (DCS) contract commences March 31, 2007, Texas will begin a significant shift in the way state technology infrastructure services are delivered. All 27 agencies in the DCS contract will pay for services consumed, rather than assets and resources. To effectively manage this contract and ensure the services and service levels are delivered as committed, the state will use a variety of processes, collectively called sourcing management, to oversee the contract and manage the relationship with the service provider.
Sourcing management is an umbrella term for the functions and business processes required to manage a sourcing relationship. It encompasses several well known disciplines: performance management, governance, relationship management, financial management, contract management, and supplier management.
Effective sourcing management starts with the contract. The Texas contract will include the Master Services Agreement (MSA); Statements of Work (describing the technical requirements); service levels (describing performance and uptime standards); prices and fees; and the rights, obligations, and liabilities of both parties. The contract establishes the “ground rules” for all parties; it is supported by the Policies and Procedures Manual (PPM) which provides the “playbook.” The PPM will guide day-to-day operations, describe general and agency specific processes, and explain roles and responsibilities in detail.
Agencies will be involved in DCS sourcing management in several ways. Agencies will provide content for the PPM, including specific agency policies and requirements, and use the PPM to guide interactions with the service provider and DIR. Agency staff will also be highly integrated into the governance process and, together with DIR, ensure services and contract value are delivered.
August Data Gathering
In December 2005, agencies began to report on in-scope assets and resources for the data center services project. With the RFO released, responses received, and the evaluation well underway, it is time for review and refinement of this data. Two verification activities will occur in parallel starting in August to ensure the final contract is based on the most accurate data possible.
The FTE audit will focus on determining the total number of affected employees at each agency. A contractor will review data gathered and conduct surveys and interviews to determine the number (but not the names) of employees who perform the in-scope and retained functions. Because each agency has a different organizational structure and different job titles, the number of surveys and interviews may vary across agencies. The goal of the FTE audit is to provide both agencies and the data center with the right number of employees with the necessary skills and experience to successfully manage the required functions. The results of the FTE audit will be provided to the bidding service providers and reflected in the amended Interagency Contracts.
Due diligence is a two-part data validation process. The state will perform due diligence on the service providers and the service providers will perform due diligence on the state. The state’s due diligence activities will include reference checks and other activities designed to verify statements made in the proposals. The service providers’ due diligence may include deeper reviews of asset data and contract terms, interviews with key agency staff, and visits to agency sites. The service providers were required to include a due diligence plan in their proposal. The evaluation team reviewed the proposed plans to verify that they accomplish data gathering goals with minimal impact to agency operations. The final due diligence plan and schedule will be validated by DIR. The due diligence process is designed to remove assumptions so the service providers can produce their Best and Final Offer (BAFO) and the state can fully validate the proposed capabilities of the service providers’ organizations.
Schedule Update
The timeline has changed. Here are the new dates for the Data Center Services project.
Due Diligence – August 14–September 29, 2006
FTE Audit – August 14–September 15, 2006 (estimate)
Best and Final Offers (BAFO) – October 5, 2006
Contract Signed – November/December 2006
Employee Offers – December 2006
Transition – December 2006–March 2007
Contract Commencement – March 31, 2007
Definitions
This article continues the Data CenterDownload’s review of important terms from the Data Center Services project.
Transition Plan. The transition plan includes all of the activities and timing required to enable the selected service provider to “stand in our shoes” (27 participating agencies) on the commencement date. The transition will begin after the contract is signed. Transition typically includes activities such as issuing employee offer letters, meetings and benefits discussions with employees, planning meetings with agencies, development of the Policies and Procedures Manual, and legal tasks required to assume leases and third-party contracts. Each service provider submitted a transition plan with their response. The evaluation team reviews and assesses these plans.
Transformation Plan. The transformation plan includes the strategy and timing for the consolidation from thirty-one to two or more data centers. Transformation typically includes the order of agency consolidations; upgrades to existing hardware, software, and facilities; and risk mitigation plans. Each service provider is required to provide a transformation plan with their response. The evaluation team reviews and assess these plans.
Training Announcement
All IT staff involved in the Data Center Services project are invited to attend DCS Change Management Training II. This half-day training program in September will help employees and supervisors with changes associated with the DCS project. It will answer:
- What’s the status of the DCS project and what does the project mean for me?
- How do I manage DCS-related changes in my career?
- How do I talk with my coworkers about the project?
Interested? See the DIR Website for additional information and registration procedures.
