Forming a Technology Consortium

Mar 20, 2017 | ARTICLE

In 2012, a group of 13 Chicago-area villages engaged a management adviser to evaluate their IT services and to determine how they might achieve better service efficiencies.

Five of those Illinois villages—Buffalo Grove, Glenview, Lincolnshire, Kenilworth, and Lake Bluff—eventually moved forward with a shared IT services model called the Government Information Technology Consortium (GovITC). Today, its formal, legally binding program gives the communities more robust, cost-effective IT service and lets them plan for and schedule future expenditures efficiently.

Although I was not a participant at the beginning of this journey, I was deeply involved in bringing GovITC to fruition, and I have since become its president. I hope that by sharing our story, we can help other local governments explore the value they might gain from such a model.

A Solution Emerges

With a mutual recognition of the importance of technology—and the logic of outsourcing it—the group undertook an analysis of each village's current environments and benchmarked costs and services against industry standards.

The management adviser recommended the group standardize and adopt the same solutions and systems and have them managed by a single IT services provider. With such an approach, the group could leverage economies of scale and collective bargaining power to achieve greater purchase efficiency and pricing for the IT services, hardware, software licenses, and other technology components they were currently purchasing individually. When possible, the group could also share systems—e-mail, network, and backup servers, for example—and potentially even personnel.

After the consultants made their recommendation, all members of the original group decided independently whether they wanted to move forward with a potential consortium. Five communities—the current members of the consortium—said yes. With no binding requirement for participation at this point, the five members formed a working group to gather information and evaluate if the idea would work for them.

In late 2013, after further working group consideration, the five villages moved forward to initiate the process of forming GovITC. The group engaged collectively in a formal request for quotation and then request for proposal process modeled after those that the individual communities had used in the past.

After receiving all bids, the group selected a managed services provider (MSP) based upon two core criteria—competitive pricing and experience working with other governments. The group had all agreed that it was vital to GovITC's success for MSP to understand the unique challenges and technology needs of non-stop public safety operations.

Fast-Tracking IT Savings

Although forming GovITC was important for long-term governance, the members understood that hammering out the details would be time-consuming, and they collectively agreed not to forego potential savings they could achieve in the interim. To foster this goal, each village terminated its existing IT contracts or staff and signed individual agreements with the chosen MSP, InterDev.

During the first six months of 2016, the group began meeting to work out the nuts and bolts of GovITC's legal and financial structure, including its governance and bylaws. Concurrently, MSP took over each locality's IT services and made individual recommendations for bringing current systems up to industry standards.

Until GovITC structure was completed and approved by all boards, MSP would maintain each village's systems individually, and no joint purchasing would occur.

Formalizing the Effort

With all villages enjoying the benefits of IT savings and expert technology assistance, our group focused on developing its formal structure. This was probably the biggest and most important component of our effort.

We weren't simply working collectively to replace individual silos of materials, systems, or even providers. Technology touches every aspect of our operations, so we had to ensure all bases were covered equitably and completely.

For 18 months, we worked through bylaws, membership agreements, and an intergovernmental agreement that would allow GovITC to function as its own entity under Illinois state law. Key activities included:

  •  Addressing how members exited the consortium or new members entered it.
  • Setting minimum standards for existing members and consortium membership.
  • Developing a framework on voting procedures for such items as approving consortium purchases or changing MSPs.

In late 2015, the formal membership agreement, the bylaws, and the intergovernmental agreement (IGA) were finalized. Village boards signed off on the IGA and membership agreement, and consortium members approved the bylaws.

A Long-Term View

Today, each member of the group is still operating under an individual contract, negotiated with collective savings, and we are working to complete our master agreement. We have put several systems in place and are working on more.

We meet monthly to discuss proposals and monitor progress towards our goals. Since inception, we have achieved or agreed to several near-term and long-term goals:

  • Have an approved list of service agreements with our MSP that allows GovITC to track performance.
  • Maintain an approved list of computer types and require all members to purchase from that list in order to standardize hardware.
  • Implement a shared network monitoring program hosted on a consortium-owned server in 2017.
  • Initiate a three-year strategic plan for future joint technology purchases and upgrades in 2017. Joint purchases and upgrades are prioritized in these three ways:

Easy Wins: Such projects as e-mail archiving that can save each village money and are easy to implement.

Security Enhancements: Such technology enhancements as intrusion testing that foster stronger security and are needed by all members of the group.

Common Goal Achievement: Technology replacements that are either needed by a majority of the members or tied to software contracts and license renewals due at similar times, which increases the efficiency of communal platform and system migration.

  • Fully deploy a shared data center taking advantage of server virtualization within 10 years. Virtualization is the process of carving multiple, discrete servers out of a single physical server. It increases efficiency and reduces cost while maintaining privacy and security through access control and policy and permission setting.

The diversity in our village populations means we will never be able to share some systems, like our enterprise resource planning (ERP) software solutions. Our goal is to achieve as much unification as possible.

Benefits of Buying Power

Beyond the efficiencies we have garnered, our buying power also gives us access to specialists that none of us could have afforded individually. For the network-monitoring project, for example, our MSP brought in certified, on-staff security experts to evaluate our needs and help make more effective recommendations.

We are also saving hard dollars rather than simply leveling out expenditures. By eliminating its in-house IT staff, Buffalo Grove saved nearly $240,000 yearly on staffing.

As a group, we are saving too. Two small examples among many are intrusion testing (two times a year) and application monitoring, where we collectively are saving, on average, 47 percent by purchasing licensing as a consortium rather than as individual communities.

GovITC approved two additional members in February: the village of Oswego, Illinois, and the United City of Yorkville, Illinois. Plus other municipalities have expressed an interest in joining in the future. The new challenge for the consortium, therefore, is properly managing growth, which is a great challenge to have!

Forming an IT Consortium: Key Takeaways

1. Joining an IT consortium, or any shared arrangement that has broad operational impact, requires a leap of faith. In exchange for more effective solutions at a better price, each member must be willing to give up some autonomy and control.

2. Differences in perspective can derail the project if not addressed. Our example was support ticket resolution and server downtime, where we worked to agree on a common set of metrics that ultimately became the consortium’s service level agreements with a managed services provider.

3. When communities differ in size and IT sophistication, the plan must be both fair and all encompassing.

4. Trust is critical. Make sure that the participants in the room trust each other and are able to have open and honest dialogue. It's the only way to find the best solution.

5. Evaluate providers not only on their overall proficiency but also on their experience with communal IT models.

 

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