Analysis Document

1
Analysis Document
Task 2 Current Telework Technology Costs
January 23, 2006
2
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

3
This report is the first effort to quantify the
investments federal organizations are making in
technologies that support telework

• This report provides a baseline of telework costs
  based on interviews of federal organizations and
  the current costs of the telework supporting
  technologies used by these organizations
• Subsequent reports will provide more details
  about the current telework technology, and they
  will provide recommendations and cost estimates
  for expanding the telework technology to support
  25 to 50 of the federal workforce

• This report estimates telework technology costs
  based on the current telework related
  infrastructure investments by 18 federal
  organizations interviewed for this report
• These baseline cost figures will be used to
  develop estimates of future cost investments that
  will be needed to support expanded telework
  programs across the Federal Government

4
The Baseline Cost Report provides estimates of
telework technology costs based on information
from 18 Federal organizations

• The Booz Allen team interviewed headquarters
  offices and/or components of ten cabinet-level
  departments and three bureaus
  
• Department of Agriculture (OCIO) Department
  of Interior (HQ)
  
• Department of Commerce Department of
  Justice (HQ)
  
• U.S. Patent and Trademark Office
  Department of the Treasury (OCIO)
  
• U.S. Census Bureau Internal
  Revenue Service
  
• Department of Health and Human Services (ITSC)
  Department of Transportation (OCIO)
  
• Department of Housing and Urban Development (HQ)
  Department of Veterans Affairs (HQ)
  
• Department of Education (HQ)
• The team also conducted interviews with five
  non-cabinet agencies
  
• Equal Employment Opportunity Commission (HQ)
• General Services Administration (OCIO)
• National Aeronautics and Space Administration
  (OCIO)
  
• National Science Foundation (HQ)
• Securities and Exchange Commission (HQ)

ITSC - Information Technology Service Center
5
This Baseline Cost Study found that most federal
organizations are making investments that benefit
telework, but support for telework is not the
primary objective of these investments

• None of the organizations have expanded their
  network infrastructure or Internet access in
  order to support telework
  
• Few organizations have a separate budget line
  item for telework technology
  
• Only two out of 18 organizations interviewed had
  IT investment programs in place in order to
  explicitly support telework
  
• Because of security concerns some organizations
  do not allow their teleworkers to use
  non-government equipment to process
  organizational information
• While teleworkers can take advantage of
  organization provided services like the help
  desk, teleconference services, and the enterprise
  connection to the Internet, teleworkers usually
  have to provide their own broadband or dial-up
  connections to the Internet
• Teleworkers utilize the organizations existing
  enterprise equipment and services
  
• Resources used include virtual private network
  services, applications, and terminal services
  
• Because these enterprise resources are shared
  across the entire organization, teleworkers
  typically introduce an insignificant additional
  cost burden from their use of these resources

6
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

7
How does this study define telework?

• For this study, the definition of telework is
  limited to the act of performing all or a
  portion of work functions outside of the regular
  place of business under circumstances which
  reduce or eliminate the need to commute to the
  employee's established worksite. Work outside of
  the regular place of business must occur at least
  one day per week on a recurring basis
• One or more days a week is the definition used by
  Office of Personnel Management (OPM) in their
  yearly survey of the status of telework in the
  federal government, The Status of Telework in
  the Federal Government 2005

8
Cost Study Methodology Approach Booz Allen has
organized the current Cost Study into four
distinct phases
2. Identify Data Sources Collect Data

• Identified multiple data points for each cost
  element based on data culled from interviews or
  from engineering and professional estimates of
  expenses
• Averaged data points in order to develop reliable
  per unit cost
  
• Assigned per unit cost to each element
• Developed foundational basis of estimate that
  captured project-specific drivers and assumptions

• Identified and arranged interviews with key
  executive level leadership at each organization
  (e.g., CIO, Chief Technology Officer CTO)
  
• Developed protocols for executive level
  interviews designed to provide agency-wide
  insights into current telework efforts
  
• Conducted interviews at 18 organizations,
  including several key bureaus / divisions
  
• Consolidated and compiled notes for further
  analysis

• Defined global and project-specific drivers and
  assumptions (i.e., assumptions about the current
  telework environment at each organization)
  
• Held working sessions to determine scope and
  complexity of typical telework solutions
  
• Developed a comprehensive, standard set of cost
  elements to ensure cost estimation consistency
  
• Grouped cost elements into 3 major categories
• 1) Teleworker Home Office Costs
• 2) Services Costs
• 3) Enterprise Costs

• Documented agency specific assumptions about
  respective telework environments
  
• Produced cost profile for each organization that
  included per user total telework costs for each
  category, and overall per user costs

9
The cost estimates were designed to capture
typical telework related costs for the
teleworkers home office, services provided by
external parties, and enterprise hardware and
software

• Remote equipment
• Computers (laptop or desktop)
• Printers/copiers/facsimiles
• Firewalls/routers/hubs
• Cell phones/personal digital assistants
• Other peripherals (e.g., webcam, modem)
• Application access hardware and software
• Terminal servers
• Modems and remote access servers
• Web applications
• Security hardware and software
• Virtual private network (VPN) facilities
• Authentication devices
• Firewalls/hubs
• Collaboration and telecommunication facilities
• Collaboration software
• Broadband and dial-up facilities
• Teleconference services
• Technical support services

Computers are often a no cost item because
teleworkers are using their home computers or are
using older unused office equipment
10
Since organizations were generally unable to
identify telework-specific expenses, a cost
estimation methodology was developed

• In the interview phase, we identified the types
  of technologies that each organization was using
  in order to support telework
  
• Teleworker home office costs
• Services costs
• Enterprise costs
• Once the components were identified, we developed
  annualized costs for each item and then created a
  cost profile for each organization that reflected
  an estimated annualized cost for its overall
  telework solution
• In order to protect the confidentiality of the
  organizations, a numbering scheme is used in the
  presentation to follow
  
• Many of these costs are incremental and
  distributed across the organization
  
• Teleworkers primarily take advantage of equipment
  and services acquired for general use (e.g.,
  remote access servers), as opposed to resources
  purchased specifically for telework
• As a result, we have included only a percentage
  of their annualized costs in the organizations
  cost profiles
  
• The Telework Technology Cost Survey found that
  more than 95 percent of teleworkers work from
  home therefore the home office was used as the
  basis of cost estimates

11
A comprehensive, standard set of cost elements
for estimating the costs of current telework
costs at 18 federal organizations was developed

• In line with established cost estimation
  methodologies, the Booz Allen team made
  assumptions and estimates to compensate for
  several data limitations
• Component-level information was used for the cost
  estimates when overall organizations information
  was not available these estimates apply to the
  component organization only
• Information provided did not cover all the cost
  elements needed for analysis and the available
  information differed between organizations cost
  assumptions were made to compensate for the
  missing information
• Global and project-specific drivers and
  assumptions (i.e., assumptions about the current
  telework environment at each organization) were
  defined
• Prior year (i.e., sunk) costs are not included in
  the estimates
  
• All costs are assumed to be in FY 2005 dollars
• The cost elements were grouped into the three
  major categories teleworker home office,
  services, and enterprise costs

12
The methodology culminated in the development of
a cost profile for each organization

• Defined cost elements that fully capture expected
  expenses associated with the implementation,
  operation and maintenance of telework programs
  during the most recently completed federal fiscal
  year (FY05)
• Identified multiple data points for each cost
  element based on data obtained from interviews or
  from engineering and professional estimates of
  expenses
• Averaged data points to develop reliable per unit
  costs
  
• Assigned per unit cost to each element
• Developed a foundational basis of estimate that
  captured project-specific drivers and assumptions
  (i.e., assumptions about the current telework
  environment at each organization)
• Per user costs and an overall per user total cost
  was computed
  
• Per User Costs were grouped into telework home
  office, services, and enterprise costs
  

13
The assumptions used to make the cost estimates
were based on standard industry estimates of
costs and equipment lifecycles

• Hardware technology refresh cycle is based on
  government and industry standards and varies by
  product. The article When to Upgrade by John
  Dix, Network World, November 28, 2005 and
  professional experience were used to estimate the
  life-cycle of equipment
• When applicable, an organizations telework
  participation data (based on OPMs The Status of
  Telework in the Federal Government 2005,
  December 2005) was used to estimate the number of
  teleworkers or the percentage of teleworkers in
  an organization
• Each annualized per user cost includes the
  following components, where applicable 1) the
  annualized purchase price 2) annual maintenance
  costs 3) annual lifecycle refresh costs 4)
  annual recurring fees 5) annualized one-time
  fees
• Since every organization interviewed has a
  telework program in place, these estimates are
  designed to capture the annualized costs of
  previously-made purchases
• In order to provide an annualized estimate for
  acquisition costs, the initial purchase prices
  are divided by their respective product
  lifecycles
• Calculation of Maintenance and Lifecycle Refresh
  Costs
  
• Recurring (i.e. maintenance) annual costs are
  assumed to total 15 of the acquisition cost of
  hardware and 20 of the acquisition cost of
  software
• Refresh costs are calculated by dividing the
  acquisition cost of each element by its
  respective product lifecycle

14
Appropriate methodologies have been developed in
order to estimate the per user costs for
enterprise components

• The Voice conferencing Per User estimate assumes
  that a teleworker uses an additional two hours a
  month of teleconferencing services as a result of
  their telework
• The Enterprise Connectivity Per User estimate
  assumes that each agencys Internet connection is
  a DS3, which has an annual recurring cost of
  8,650 (per GSAs Washington Interagency
  Telecommunications System pricing)
• The Server Cost Per User estimate assumes that
  one server can support 6,000 staff
  
• The Help Desk Support Per User estimate assumes
  that a teleworker is responsible for a 20
  increase per year in help desk support costs
  based on them teleworking 20 of the time
  (equivalent of 1 day per week of telework)
• The Appendix provides more details about these
  assumptions

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Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

16
Costs associated with the teleworkers home
office include equipment and software required to
perform job functions remotely

• Laptop and docking station
• Printers / Copiers / Fax Machines
• Routers / Hubs (e.g., Broadband Router)
• Web Cams
• Telecommunication devices
• Standard telephones
• Mobile telephones
• PDA messaging devices (e.g., RIM Blackberry, Palm
  Treo)
  
• Application Software
• Security devices
• Authentication devices
• Firewall

Telecommunications costs for the Home Office o
nly include the hardware. The reoccurring
telecommunications service costs for the Home
Office are in the Services section of this report.
17
The cost of equipment to support a teleworker in
the home office varies from 2,072 for a laptop
to 42 for authentication equipment
18
The data gathering for this study found varying
levels of teleworker home office support

• This study found four types of home office
  computer support of teleworkers
  
• A current or reutilized computer, and other
  appropriate hardware and software, is provided
  for the teleworker to use at the home office
  
• The teleworker is provided one set of equipment
  and software to be used in the office and for
  telework
  
• The software needed for the teleworker to perform
  some or all work assignments is provided, but the
  teleworker is responsible for providing the home
  equipment
• The teleworker provides all equipment and
  software needed to work at the home office

• Security concerns are a driver for the type of
  equipment and software that is deployed and
  mandated for the teleworker home office
  
• Union agreements sometimes influence the
  equipment and software provided to teleworkers in
  their home office
  
• The largest driver of telework costs is the
  extent to which the organization provides home
  equipment for each teleworker

19
Federal agencies widely vary in the type of items
they provide their teleworkers, but mobile
devices are the most common
Only a limited number of staff at these
organizations are provided with these components
20
Federal agencies widely vary in the type of items
they provide their teleworkers, but mobile
devices are the most common (cont.)
Only a limited number of staff at these
organizations are provided with these components
21
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

22
The cost of services includes network
connectivity and support services regularly
provided by external companies

• Internet access costs
• Enterprise
• Teleworker home
• Broadband access
• Dial-up access
• Voice conferencing services
• Long distance calling cards
• Managed VPN
• Mobile phone access
• PDA access
• Additional telephone line
• Help desk support services
• Technical training

Public Switched Telephone Network
23
Services include the cost of enterprise
connectivity and support services such as help
desk and training
24
Most organizations interviewed are not paying for
teleworker access to the Internet from the home,
but are providing other services that benefit
telework

• One organization is in the process of
  establishing a direct relationship with broadband
  providers, so that teleworkers will be provided
  premium service and so the organization can be
  directly billed for the telecommunications
  services
• A few organizations are supplying a second
  telephone line, so the teleworker can use the
  telephone while being connected to the enterprise
  network over dial-up on the other telephone line
• Most teleworkers must provide their own Internet
  connections to enable access to their
  organizations
  
• Most organizations help desks are available to
  the teleworker and are becoming increasingly
  educated about supporting teleworkers
  
• Teleconferencing services are provided by all
  organizations
  
• Most organizations are providing mobile
  communications services (e.g., cell phones, PDAs)
  to some of their staff to facilitate
  communications regardless of their staffs
  location

25
GSA Telework Centers provide a well-equipped
remote work environment as an option for telework
and other remote work needs

• Although Telework Centers are currently used by
  relatively few teleworkers, they provide a viable
  option for some individuals whose home offices
  are not adequate for telework
• Inadequate space to support an environment
  conducive for effective work
  
• Inadequate security in the home
• Disruptive presence of other individuals in the
  home
  
• Lack of facilities at the teleworkers home such
  as broadband or a second telephone line
  
• Several federal organizations also use the GSA
  Telework Centers for continuity of operations
  (e.g., during inclement weather or other
  emergencies that cause commuting difficulties)

• The costs for the GSA Telework Centers in the
  Washington DC Metropolitan area depend on usage
  and facilities required for the teleworker
  
• How many days a week the teleworker expects to
  use the center (see table at right)
  
• What facilities are needed beyond standard
  desktop such as COOP support, administrative
  services, static IP addresses, or additional
  conference rooms

26
The GSA Telework Centers provide services similar
to what would be provided to the teleworker in
the office

• Standard Desk and Computer
• IBM Compatible PC
• High speed Internet
• Microsoft Office Suite
• PC Anywhere
• Corel Perfect Office
• Lotus 1-2-3
• Internet Explore/Netscape
• Antivirus Software
• Modem
• Data Backup Facilities
• Office Support Facilities
• Copier/Facsimile/Printer
• Shredder
• Conference Room
• Kitchen
• UPS/Generator

The specific services offered by the Telework
Centers vary, but they can usually accommodate
specific needs of the teleworker
27
All organizations provided their teleworkers
voice teleconferencing and help desk services
Only a limited number of staff at these
organizations are provided with these components
28
All organizations provided their teleworkers
voice teleconferencing and help desk services
(cont.)
Only a limited number of staff at these
organizations are provided with these components
29
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

30
The enterprise costs include the equipment and
software located at the organizations
headquarters or field offices that support
teleworkers

• Remote access servers/modem bank
• VPN system
• Terminal emulation system
• Enterprise Systems (email, web applications,
  security, and other enterprise applications)

Public Switched Telephone Network
31
The enterprise resources that most directly
support the teleworker are access and security
facilities, such as terminal/access servers and
virtual private network systems
Negligible additional cost due to telework
because the enterprise systems are already in
place to support each organization's existing
operations
32
Teleworkers use existing enterprise facilities
without significantly impacting the
organizations enterprise resources

• Only one organization stated that they needed to
  make modifications to the enterprise
  infrastructure to support telework
  
• Teleworkers are able to use existing security and
  remote access facilities to access applications
  at the enterprise
  
• Teleworker traffic does not appear to have a
  noticeable impact on the enterprises
  telecommunications infrastructure
  
• Teleworkers may increase the concurrent user
  license fees for VPN services or other
  facilities however, staff interviewed for the
  study did not notice a significant impact on
  license fees due to telework

33
Almost all federal organizations have resources
in place that allow teleworkers to securely
access enterprise applications
34
Almost all federal organizations have resources
in place that allow teleworkers to securely
access enterprise applications (cont.)
35
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

36
The total telework cost per user varies from 310
to 5,420 across the 18 organizations interviewed
37
Most organizations are not making
telework-focused investments in infrastructure,
so teleworkers typically are leveraging existing
facilities to work successfully from home

• Telework is being enabled across government as
  agencies modernize their enterprise IT
  infrastructures with technologies that are
  favorable to telework
• Technologies such as web-based applications,
  blackberry devices, laptops, and remote email
  access, allow for increased telework without
  additional costs
• Most resources and therefore costs are shared
  across the organization by mobile workers, office
  workers, and teleworkers
  
• Telework is typically funded at the office (not
  the departmental) level
  
• Telework spending is incidental rather than
  strategic, therefore, costs are incremental and
  tend to be off the radar of agency budgets
  
• For example, only two of eighteen organizations
  interviewed were able to identify costs specific
  to teleworking
  
• The purchase of new laptops for teleworkers is
  the primary cost driver to agencies due to
  expenses associated with the initial acquisition,
  annual maintenance, and refresh cycle
• Home office purchases, particularly laptops, are
  by far the greatest telework costs for agencies
  
• However, most agencies do not currently purchase
  laptops for teleworkers in large quantities, so
  the overall telework costs are still a minimal
  portion of overall agency budgets
• Other equipment and services used to support
  telework tend to be existing agency resources,
  and result in only incremental costs to the
  agencies

38
Table Of Contents

• Introduction
• Methodology
• Telework Architecture Components / Costs
• Teleworker Home Office
• Services
• Enterprise
• Findings Conclusions
• Appendix

39
Appendix - Per User Cost Build-Up Methodology
Enterprise Connectivity

• It is estimated that, during traffic peaks, 20
  of the user base is actively using the enterprise
  Internet access connection
  
• The peak traffic is then multiplied by 20, based
  on the assumption that staff telework one day a
  week
  
• See sample calculation below this calculation
  resulted in a per person cost of approximately 1
  for each organization

1 day per week of Telework 20
40
Appendix - Per User Cost Build-Up Methodology
Voice Conferencing

• Regardless of the number of teleworkers, this Per
  User Cost remains the same across each
  organization, illustrated by the following
  calculations which include dramatically different
  numbers of teleworkers

Source The Office of Personnel Managements
(OPM) OPMs 2005 Report The Status of Telework
in the Federal Government
41
Appendix - Per User Cost Build-Up Methodology
Help Desk Support

• The 100 per user help desk support cost is based
  on the average annual per user cost of a
  contractor-operated help desk that supports
  15,000 staff at a large cabinet-level department

42
Appendix - Per User Cost Build-Up Methodology
Server Costs

• Server vendor estimates were used to determine
  the maximum number of users a server could
  support
  
• The maximum number of concurrent users that one
  server can support is 250
  
• The total user base that one server can support
  is 6,250
  
• Therefore, 1,000 to 6,000 staff requires one
  server 6,000 to 12,000 staff requires two
  servers, etc.
  
• Annualized cost of server of 1,295 4,533 /
  3.5 yrs (server lifecycle)
  
• Per user cost of .21 1,295 / 6,250 users

43
Appendix Acronym List

• CIO Chief Information Officer
• COOP Continuing Operations
• CTO Chief Technology Officer
• DSL Digital Subscriber Line
• FTS Federal Telecommunications System
• FW Firewall
• GSA U.S. General Services Administration
• HD Help Desk
• HQ Headquarters
• IRS Internal Revenue Service
• ITSC Information Technology Service Center
  (Health and Human Services)
  
• KBPS Kilobits per second
• OCIO Office of the Chief Information Officer
• OPM Office of Personnel Management
• PC Personal Computer
• PDA Personal Digital Assistant
• PSTN Public Switched Telephone Network (also know
  as plain old telephone service)
  
• PTO Patent and Trademark Office
• TW Teleworker