Department of Administrative Services

Question and Answer Log for ITE Marketplace Rate and Service Changes due to Activity-Based Costing

Effective July 1, 2008 (for FY2009)

Q1:	I have a question on the agency impact worksheet related to service ID 350 xxxx TSM Backup – variable cost. This appears to be a new service ID. Is this correct?
A1:	Service 348 TSM backup has been split into 2 services for FY09. Service 348 will continue to be the fixed cost for a server to connect to the TSM backup service. Service 350 xxxx will be billed based upon the GB of actual data stored. The 350 xxxx is a place holder until a new service number can be created. The new service number will be created before the first billing for FY09. Customers using the TSM backup service will always see charges for both services on their bill.
	Date Posted: 6/10/2008 return to top
Q2:	What is the net effect on the amount of money DAS will collect from agencies in FY09 compared to FY08 assuming activity levels are constant?
A2:	The ITE total revenues budgeted for FY08 were $33.7 million and the FY09 estimated revenue is only $30.0 million, a reduction of $3.7 million. The FY09 revenue estimate was determined by multiplying the estimated annual consumption for a service times the rate for that service. Because of the number of changes in services, metrics and rates that ITE will implement in FY09 the revenue amount noted is our best estimate at this time.
	Date Posted: 6/10/2008 return to top
Q3:	The estimate in the customer impact worksheet does not include a number of services provided by ITE, primarily mainframe printing.
A3:	Answer - Services Not Estimated: There were a number of instances where the types of changes for FY09 made it difficult to determine a financial impact with any degree of accuracy. Taking a financial conservative approach we felt that it was better not to provide a financial comparison in those instances. Answer - Print: Both the Mainframe Print services and the On Demand Print services were not part of this re-pricing project. There were a number of issues related to the various print services and we did not feel that we could work through all the re-pricing, consolidation, and billing issues in a financially timely and accurate manner. We will be working with the ITE Print area during FY09.
	Date Posted: 6/17/2008 return to top
Q4:	I was able to confirm the calculation on the agency impact worksheet provided did add up to approximately savings for our agency for 7 months. However we wanted to point out that the presentation handed out by John G had a different savings noted.
A4:	A change in methodology led to change in potential savings calculation for two services: The CIO presentation listing the top increases and decreases was prepared based upon the preliminary customer impact worksheets. The preliminary customer impact worksheets estimated differences for “consolidated” services using only the service and metric that will be in place in FY09. Using that methodology, the FY09 services of 1752 MF Usage – Online Transaction and 1753 MF Usage Data Base resulted in a large understatement of potential savings for agencies. A decision was made to change the potential savings calculation for those two services. The original methodology for these two services did not include consideration of the costs that agencies are currently paying for: 1751 (messages) and 1752 (seconds) are currently billed in FY08; however in FY09 only seconds for 1752 will be billed. 1754 (page), 1755 (event) and 1753 (seconds) are currently billed in FY08; however in FY09 only seconds for 1753 will be billed. While we were able to go back and update all of the individual customer impact worksheets, we did not go back and update the information in the presentations. The impact for the agency as a whole was to reduce the anticipated additional costs OR increase the anticipated savings for FY09, depending on what was originally communicated.
	Date Posted: 6/17/2008 return to top
Q5:	We have taken only those items you have estimated and extended them to a full year by assuming that usage in Feb and March and our estimates for Apr- June are correct. We felt this was little more accurate than simply taking a timing adjustment for 7/12 extended to a full year. We assume the magnitude of the annual change is reflected in your annual projections.
A5:	Because these are marketplace services that are subject to fluctuation, we did not annualize the amounts but used the existing consumption information (from eDAS) that had actually occurred in the first 7 months of FY08 from July through January. Individual agencies are best able to predict their future usage of marketplace services to determine if annualizing 7/12’s of the information or review actual information from February forward would be more appropriate. Estimated annual projections for consumption of service were provided by ITE managers and service providers in order to determine the FY09 rates. Depending on the particular service the estimates for FY09 were derived differently.
	Date Posted: 6/17/2008 return to top
Q6:	*So if I read this right my price for 1 [e-mail]* mail box goes from $3.80 a month to $19.73 per month.**
A6:	Yes, the cost increase you’ve identified is correct. All DAS-ITE rates, except for printing, were analyzed using Activity-Based Costing methods, and we feel this has allowed us to develop rates that are more accurate and fair. As a result of this effort some services will see a price reduction for FY09; however, the FY08 Iowa Mail rate does not cover the costs necessary to provide the service and will be increased for FY09.
	Date Posted: 6/19/2008 return to top
Q7:	Will our current rates remain in effect until new rates are determined?
A7:	ITE marketplace rate changes will begin with the ITE marketplace services provided in July 2008. All ITE marketplace rates for FY09 have been identified and are posted on the DAS website in the memo previously received.
	Date Posted: 6/27/2008 return to top
Q8:	I was provided a Customer Impact Sheet where some costs were shown as unavailable. Does this mean that rates are unavailable and if so, when will we be advised of the new rates?
A8:	All ITE marketplace rates for FY09 have been identified and posted to the DAS website. The information listed as unavailable can not be reasonably estimated due to the FY09 changes related to that service such as: Multiple services were consolidated and consumption is currently captured using different metrics. Change was made to how the consumption will be captured in FY09. For example, various storage rates are being consolidated into service 198 and the metric will be GB of data stored. Because the existing storage services being consolidated into 198 were captured and billed using various metrics there was not enough information to provide a financial comparison. All of these changes were explained in a memo distributed to DAS-ITE marketplace customers (directors, CFO’s, and CIO’s) in early June.
	Date Posted: 6/27/2008 return to top
Q9:	In looking at the new rate sheet for FY09, the Enterprise LAN Support (Service 768) is being eliminated. Is it fair to say that this cost will be “rolled into” the new line item called Desktop Support cost?
A9:	The short answer is no, the LAN support was not rolled into managed desktop. Rather those services, such as file and print, are now categorized and priced separately. The Managed Desktop rate includes not only your desktop-related incident reports but other direct support (questions, software installations, hardware moves/adds/changes etc.) for users as well as time staff spend on research, software testing, developing packages for roll-out, and similar things that are of a more global nature and serve all desktop customers.
	Date Posted: 6/27/2008 return to top
Q10:	Do you know if there is an increase/decrease in costs for the “old” desktop services you mentioned?
A10:	Customers who originally purchased Enterprise LAN Support (Service 768) from ITE received a bundle of services that will be disaggregated and billed separately in FY09. Depending on the quantities and types of service used, the customer impact will vary. For example, a customer that purchased 10 units of Enterprise LAN support in FY08 would pay $32.51 per unit/month for those services. In FY09, the same customer would receive monthly charges for some or all the following billable items: Antivirus Services (Service 4241) SMS Services (Service 4242) Exchange Mailbox (Service 763) SPAM Filtering (Service 4240) File Services (Service 4243) Print Services (Service 4238) Please visit the DAS website which contains a link to additional information regarding FY09 ITE marketplace changes, rates and supporting services.
	Date Posted: 6/27/2008 return to top
Q11:	Are file restores or device renames included in any of the new rates?
A11:	These items are all available on a time and materials basis.
	Date Posted: 6/27/2008 return to top
Q12:	I currently have Service Level Agreements (SLA’s) for some of the service I currently receive from DAS/ITE. What is the impact of the new rates/services on existing SLA’s? If the services defined on the SLA’s are different than the current/new service offerings, will those SLA services be continued at the SLA rates or are SLA’s now null and void?
A12:	The most common language on rates embedded in our Service Level Agreement addendums is as follows. To the best of our knowledge all of the agreements in the last couple of years have this language, but agreements earlier than 2005 may not. “Current DAS-ITE published rates (https://edas.iowa.gov/intake/Process.do) in effect at the time of SLA signature apply. It is the goal of DAS-ITE to provide notice to its customers before rate changes. “ SLA’s currently in force will remain in force until their expiration date but new rates are effective July 1, 2008. DAS-ITE understands the desire for guaranteed rates by customers but does not currently offer term agreements with fixed prices. DAS-ITE’s rates are influenced by many factors many of which are beyond its direct control. As a result DAS-ITE will be adjusting its rates more frequently in the future to accommodate operating in a dynamic economic environment.
	Date Posted: 7/9/2008 return to top
Q13:	The service code for Microfiche: 0730 was not included in your lists. Has it been consolidated or eliminated? What will the charge be if kept?
A13:	DAS - ITE Print services were not included in the ITE re-pricing and will be going through a rate review during FY09. At this time, Microfiche rates have not changed. Agencies have been told that Printing is looking at alternative offerings for Microfiche so we can phase out this service that is not widely used and which we are unable to recover our costs of providing the service.
	Date Posted: 7/10/2008 return to top
Q14:	Several of the old tape services were consolidated into service 198 Tape Storage Rollup. The old metric charge was ‘per unit’, ‘per hour’, and ‘per tape’, how are you converting that usage to ‘GB/day?
A14:	There is no conversion from the old tape charges to the new “per GB/day” rate. We will no longer charge for mounts, occupancy, or tapes. The charge will be computed based on the size and the number of whole days the dataset is stored on tape during each billing cycle (month). There is a minimum charge of 1 cent per dataset per month.
	Date Posted: 7/10/2008 return to top

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