When Minneapolis Outsourced Its IT Department

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By Gary M. Stern

When the city of Minneapolis in December 2002 outsourced much of its IT technology and infrastructure to Unisys, it operated differently than other municipalities in its outsourcing arrangement. "We wanted to turn IT infrastructure into a utility," declares Karl Kaiser, chief information officer of Minneapolis. "You come into the office, switch on a light and don't need to own the power plant," he says. Since 60 percent of Minneapolis' IT budget was devoted to maintaining and upgrading its 4,000 desktops, the city could leverage its technology and reduce costs by outsourcing its IT infrastructure to Unisys. Unisys now owns all the equipment, and Minneapolis retained only its application support in 28 departments and new initiatives.

-->STEP #1: Bring union leadership in early.

In order to accomplish this major transformation of the city's IT infrastructure, Unisys hired 14 of Minneapolis' IT staff. Twenty-four of Unisys' staff members handle the account, 14 from the Minneapolis facilities and another 10 at Unisys' service center in nearby Eagan, assisted by network support from Blue Bell, PA and help desk support from Salt Lake City, UT. In fact, the city's IT staff has been downsized from 145 full-time staff to 81 employees.

To overcome union objections, the union was included in the original business planning of the outsourcing agreement. Moreover, the city negotiated a three-year job guarantee for the people that Unisys hired. Twenty-six union IT personnel were offered jobs by Unisys, 14 accepted, and the remaining 12 found other jobs in Minneapolis government. Unisys offered the 14 who transferred signing bonuses and improved benefits, Mr. Kaiser said.

In the seven-year agreement, Unisys maintains and supports Minneapolis' computer infrastructure including capacity management, systems software support and the help desk operation. Minneapolis saves about $2 million a year, mostly because it has reduced staff and eliminated 40 contract workers at $100 to $200 an hour, Mr. Kaiser says. Moreover, Unisys has improved IT services by offering 24x7 capabilities. "Minneapolis no longer has to worry about technology upgrades, and we now have someone to maintain service levels," he notes.

-->STEP #2: Engage the transferred IT staff through training.

The Minneapolis city staff who were hired by Unisys and new staff who specialize on the Minneapolis account are trained at Unisys University, a virtual learning center, where staff learn about Unisys' technologies and processes, reported Jim Collins, the Unisys program executive who manages the Minneapolis IT account. Since staff hired stemmed from different roles including break/fix, application support and customer liaison, each required different training. But all had to become steeped in Unisys standards and processes. Some, in fact, went through "Can Do!" training, which specializes in customer interaction. Others needed training to obtain Microsoft or Cisco certification. Further, they had to become absorbed in Unisys' culture, how it does business, and its operating principles. Many actually now work on IT projects not related to the city.

-->STEP #3: Listen to the users.

Once the staff was trained, Unisys plunged into action. "The first thing we did was put together a transition team that landed on site three days after the contract was signed," Mr. Collins says. Unisys launched a "discovery" process, asking stakeholders including department heads at police, fire and public works, what IT changes and improvements they wanted to see. Unisys staff also met with existing IT staff, technical teams and field service teams to add to their knowledge base.

-->STEP #4: Not all clients are alike. Train service provider staff on the nuances of working with them.

During the first year of the agreement, the major learning experience for Unisys employees working on Minneapolis IT was "mastering the processes and procedures of the city -- including special projects, procurement processes, and how the various departments interacted," Mr. Collins says. Since city government consists of police, fire, public works and 25 other departments, Unisys IT employees have to interact with a host of city personnel. In addition, it has to collaborate with the 80 remaining Minneapolis IT employees, who consisted of 40 "city resolvers," who maintained the city's applications for its various departments, and another 40 city employees, who specialize in telephony, internal wiring, project management and new applications.

-->STEP #5: Find what's valuable and foster and protect it.

Integrating the service delivery of these 40 city resolvers who handled the financial systems and application support systems was critical to the success of this IT partnership, Mr. Collins says. But Unisys staff had to become integrated into every facet of city government in order to make this IT partnership click. "We participate in the chief information officer's meetings, hold weekly meetings with the key management team, and have evolved into a collaborative environment where we're looking to improve processes," Mr. Collins explains.

A difference for Unisys consulting for the city of Minneapolis rather than simply another company is that major IT projects need to be authorized by a vote of the city council, rather than having a CFO, CEO or CIO OK it. For example, when Community Planning and Economic Development, which had been a separate arm of the city, was integrated into city government, the City Council had to pass an ordinance to permit it. The same applies to new IT work.

-->STEP #6: Get something done -- and keep doing it.

Unisys has been surveying a portion of Minneapolis' 5,000 city employees for feedback on how it can improve service delivery, performance and capacity. "We're always looking to deliver service quicker, faster and better," Mr. Collins suggests.

Unisys has already deployed 1,700 new desktops to city employees, which has helped standardize equipment. It will be introducing 1,600 more desktops in the next few years. Moreover, all service delivery has been centralized so that Unisys can provide one-stop help desk support. "We've brought a standardization that the city didn't have, and efficiencies that come with new software," Mr. Collins adds.

In Mr. Collins' view the key to the partnership is trust. "Unisys has been given the empowerment to make IT decisions for the city and collaborate on IT decisions that affect the business," he says.

Despite the partnership bringing efficiencies and cost reductions to Minneapolis, Mr. Kaiser still speaks carefully about what the future will bring, despite another five years left on the contract. "Unisys still needs to be proactive, pay attention to capacity management, and find ways to leverage technology. They have to take proactive steps in monitoring network applications," he suggests.

Useful Links:

Unisys
http://www.unisys.com/services/outsourcing/index.htm

The original 2002 RFP developed by the City of Minneapolis (Microsoft Word):
http://www.sourcingmag.com/docs/free/City of Minneapolis RFP.doc

Appendix 1 to the RFP (Microsoft Word):
http://www.sourcingmag.com/docs/free/City of Minneapolis RFP.Appendix 1.doc

Appendix 2 to the RFP (Microsoft Word):
http://www.sourcingmag.com/docs/free/City of Minneapolis RFP.Appendix 2.doc

A whitepaper written by CIO Karl Kaiser on the privatization of the City of Minneapolis' IT infrastructure (Adobe Acrobat):
http://www.sourcingmag.com/docs/free/City of Minneapolis.cio-whitepaper.pdf

The schedule of outsourcing-related activities:
http://www.sourcingmag.com/docs/free/City of Minneapolis Schedule of Outsourcing Activities.htm

Description of "Can Do!" Training Session Provided by Unisys to Transferred IT Staff
http://www.sourcingmag.com/docs/free/Unisys Can Do Course Description.htm

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