Good Governance - Effective use of IT

Written evidence submitted by Citrix (IT 46)

Background to Citrix Systems Inc

Citrix Systems, Inc. (NASDAQ:CTXS) is a leading provider of virtual computing solutions that help companies deliver IT as an on-demand service.

In the UK Citrix employs 450 people with the majority engaged in product development and engineering not just for the UK market, but globally.

More than 230,000 organizations worldwide rely on Citrix to help them build simpler and more cost-effective IT environments. Citrix partners with over 10,000 companies in more than 100 countries. Annual revenue in 2009 was $1.61 billion.

Citrix combines virtualization, networking, and cloud computing technologies into a full portfolio of products that enable virtual workstyles for users and virtual datacentres for IT.

Citrix by the numbers

• 2009 revenue: $1.61 billion

• 4,600+ employees in 35 countries

• 10,000 partners in over 100 countries

• More than 230,000 corporate customers

• 1 million servers running Citrix

• Touch 75 percent of Internet users daily

• Top 5 SaaS provide

Citrix has a significant number of UK public sector customers spanning local, central, health and education including the DWP, Transport for London, NPIA, DEFRA and numerous local authorities. Three brief examples below:

o Basildon District Council is saving £500,000 per year for the next four years in office leasing costs with extra cost savings guaranteed from the reduced utility bills by delivering a shared hosted desktop to its 1000+ employees. It has also provided flexible working and increased the lifespan of existing hardware thus freeing up IT budgets for other areas.

o Nottingham City Council has adopted Citrix XenDesktop to introduce a phased disposal of hardware and move to a more energy efficient thin client device estate. Even though in the early stages of the project, it is already delivering virtual desktops to 5000 users and has significantly reduced its desktop management costs as well as savings across date centre running and power spend.

o Hampshire County Council was able to avoid the cost of buying 8,000 PCs resulting in saving a minimum of £2 million a year in IT costs thanks to Citrix XenApp. It was also able to reduce a planned Microsoft Office upgrade that would normally take weeks to just one weekend, offer partner services, improve community services and centralise IT administration and support. The application architecture is also flexible and scaleable enough to enable the council to provide IT services to other local government organisations.

o Bracknell Forest Council has waited an extra year to replace 50 PCs thus saving £25,000 and extending the desktop refresh cycle from 3 to 5 years by using Citrix XenApp. It has also negated the need for the support team to take journeys of over 200 miles each time a visit was necessary to the Manchester office or many cumulated shorter trips within the Borough and cut application deployment times across approximately 40 sites from weeks to typically a day or even a few hours.

Executive Summary of written evidence

· The public sector will need to continue to invest in new technology to improve public services despite the era of austerity. However, austerity will encourage greater competition and create a more innovative and leaner UK technology sector

· IT is reaching its own ‘post-bureaucratic age’ and moving away from large infrastructure towards simpler systems with greater flexibility for the individual

· Virtualisation and cloud computing provide significant opportunities for the public sector to meet its current IT challenges and achieve greater localism in public service decision making and delivery. Still greater benefits could be realised if the government made use of open source software

· Tight budgetary controls over IT spend and back office functions need to continue after the era of austerity to ensure a permanent change in culture towards developing shared services

· The role of Chief Information Officer in public sector organisations needs to have greater recognition within organisations when making strategic decisions

· Procurement processes within the public sector are broadly effective. However, project over-run and cost escalations in delivery derive mostly from either the public sector over or under-specifying business needs and changing requirements during project delivery

· Government needs to better understand the resource cost of change as well as the perceived benefits when making policy decisions

· Over-specifying business needs also acts to exclude new and innovative technology solutions in favour of more familiar ones

Technology in the age of austerity and the ‘post-bureaucratic age’

The use of information technology is essential across the public sector for the efficient and cost effective delivery of public services. More than many commercial organisations, the public sector is undergoing wide ranging and extensive reforms both structurally and in what services are delivered to the public. Therefore, despite the reductions in government spending announced in the comprehensive spending review, the pace of technology procurement will not slow down greatly.

The solution to reduced spending is not be use less IT, but to challenge existing ways of procuring and to find innovative new technologies that are more cost efficient.

Virtualisation and the use of cloud computing technologies are able to meet the challenges faced by the public sector as it addresses the government’s drive for localism and the ‘post-bureaucratic age’, while at the same time drastically reducing costs.

The Prime Minister has used the term ‘post-bureaucratic age’ to describe the move to more localised and responsive decision-making that is nearer to the public. Similarly IT systems have historically been large, complicated and inflexible to individual needs. They also become increasingly costly to maintain or replace. Such lack of flexibility creates its own bureaucratic cost. Virtualisation allows for the centralised maintenance and development of an organisation’s IT system while giving greater flexibility and access to individual users. This is the start of the ‘post-bureaucratic age’ for technology in organisations, to use David Cameron’s words. With one centre for all data and activity, an organisation needs fewer IT staff to manage or deliver upgrades because only one place needs to be worked on. This is in contrast to having a system with data stored in multiple areas and desktop PCs, which would all need individual servicing.

The use of open source for new programmes is key to establishing ‘post bureaucratic’ technology. Many current programmes use proprietary code, often making it costly to upgrade systems and reducing competition for different suppliers to provide services in future. It is in the government’s own interests to get the best value for money and to reduce the long-term costs for IT development.

The standardising of procurement policies and the drive for economies of scale in purchasing IT is an essential part of developing effective public sector IT. Virtualisation and cloud technology now allows for such centralised activity while maintaining the flexibility for more local IT development and delivery. This ability mirrors the government’s localism agenda. In effect decision-making will happen at the most appropriate level – frameworks and procurement policies at the centre and the development of systems locally that are flexible to specific demand. The opportunity for shared services are also greatly increased by ensuring decisions are made in such ways.

It is important to note that sharing services has not been a natural tendency for public sector organisations. So the drive to localise decision-making will need to continue to be matched with budgetary pressures so that the incentives for shared services is maintained.

What is desktop Virtualisation?

Desktop virtualization technology replaces traditional, costly, time-consuming PC desktop lifecycle management with a more efficient solution to meet today’s demands for Government to meet lower costs, tighter security, and greater flexibility.

Citrix desktop virtualization enables IT to centrally store and manage one instance of an OS, applications, and user settings, then dynamically assemble them on demand to deliver a pristine, up-to-date desktop and set of applications to any device, anywhere. It could be a thin client terminal on someone’s desk, a laptop, a traditional PC or an iPad.

What are the benefits of using virtualisation?

Evidence from both private and public sector implementations of virtualisation technology indicate:

· Reduced hardware and operating costs by as much as 50% and energy costs by as much as 80%

· Reduced time taken to provision new servers by as much as 70% as you no longer need to conduct repetitive installation and configuration tasks.

· Decrease downtime and improved reliability with business continuity and built in data disaster recovery

· Deliver IT services on-demand and totally free of hardware, OS, application or infrastructure

· Effective enforcement of corporate standards in terms of anti-virus and management software in any machine connected to the network.

In turn will enable government organisations to:

· Build reliable and efficient disaster recovery plans eliminating the cost and unpredictability of traditional disaster recovery solutions by taking advantage of the inherent flexibility of a 100% virtualised datacentre.

· Ensure full data protection for your IT infrastructure and your data delivering easily recovered data within your recovery time objectives using your existing backup tools and methodologies.

· Eliminate planned and unplanned downtime with high availability for government and departmental applications with built-in service-levels that are easier and more cost effective than traditional solutions.

· Migrate virtual machines live and perform maintenance on physical servers anytime, without user or service disruption.

Desktop manageability and security - Improve manageability and security of enterprise desktops to lower cost, reduce risk, and improve flexibility of desktop infrastructure.

Virtualisation reduces the amount of hardware in the data centre as well as seamlessly operates through open interfaces and standards-based technology. When implemented correctly this can

· Manage and monitor virtual machines from a central location

· Reduce the time it takes to provision new servers by 50-70%

· Allocate shared IT resources with greater flexibility

Challenges facing government in the effective use of IT

Managing data

A rapidly growing problem for government is to accommodate the changing demands and costs of managing data from across the public sector. Power and cooling costs mean that greenhouse gas emissions from data centres are expected to overtake the airline industry in the next five to ten years and quadruple by 2020. The lack of joined strategic thinking has resulted in an often-haphazard collection of different hardware in different public sector organisations with varying degrees of operability between them. This complicated situation requires a large number of technical employees to manage existing systems. It also increases the complexity – and therefore the number of people needed – to upgrade or replace legacy systems. There is also a rapidly increasing amount of data stored in public sector data centres. This will only compound the problem of upgrading systems and to transfer data to use in new applications.

With far less funding available, the cost of maintaining existing inefficient systems can act as a drain on dedicating resource to upgrading or replacing legacy systems to better meet changing demand. Continuing to maintain such systems also make it harder for IT to keep up with the decentralising agenda of the government.

Data security

Public sector organisations have suffered a number of security issues with confidential data being lost primarily because storage devices (such as CDs, memory on laptop computers, memory sticks) are so easily lost or stolen. By having a single datacentre information never leaves the central location. When a terminal is switched off or disconnected from the datacentre no information is left behind on the terminal.

Virtualisation therefore can make a significant contribution to preventing loss of confidential data within the public sector.

The role of the CIO in the public sector

Though 55 per cent of the U.K.'s productivity comes from technology-intensive sectors (according to the Office of National Statistics) there is scant recognition of the post of CIOs both in the public and private sectors.

But the job is incredibly complex, with CIOs involved in issues that span cost management, workforce, environmental concerns, corporate responsibility and ethics, business processes, strategy, innovation, competitive advantage, outsourcing and offshoring, IT governance and legal compliance.

Analyst Clive Longbottom, the service director at Quocirca, said the CIO's lack of recognition is a problem peculiar to the U.K., and one that has a wider impact on the economy as a whole. "In Britain, the CIO is a CIO in name only. He [or she] is likely to report to the CFO and won't have the recognition at board level of other C-level executives. The department is seen as a cost centre and inflexible. A CIO in the U.K. is likely to be perceived as separate from the business," said Longbottom. "If the perception changes, they might be of more strategic use."

We would argue that this needs to be addressed also in the public sector.

But many CIOs are too tied up in conflict lower down the hierarchy to advise on strategy, according to a new report by Butler Group. The firm's group infrastructure expert Roy Illsley has warned that Britain's CIOs don't even have control of the data centre yet, let alone influence on the wider economy.

Only about 30 per cent of the CIOs in the U.K., for example, are held to account for the electricity bill according to some reports (Butler Group). And yet this is now one of the most expensive and politically charged variables in any public sector organisations’ itinerary, especially with the rise of the Carbon Reduction Commitment.

Government procurement and past IT programme failures

The procurement process within the public sector is broadly effective. A classic point made is that it takes considerably longer to go through the competitive tender and procurement process than in the private sector. However, this can be mostly put down to the increased accountability measures that need to be in place to justify any spending of public money; and to demonstrate fair and open decision making.

The ‘competitive conversation’ process used by central government has proven to be an extremely effective way of negotiating the best use of technology at the best price with the most appropriate supplier.

More often than not project over-run and cost escalations occur because of two reasons: Either over or under-specifying business needs; and the client changing demands once project delivery has begun. Many parliamentarians place blame on technology companies miss-selling products and confusing those making procurement decisions. Rarely is this the case.

Government also needs to better understand the costs of change. Too often thought is only given to the benefits of change but not to the costs (financial and human) of making those changes. Commercial organisations are acutely aware of the costs to change when making decisions and change their strategies far less regularly than government or the public sector.

Taking Advantage of new and emerging technologies

While it is important to learn the lessons from the past (and the public sector does this to varying degrees of efficiency), it must not be forgotten that technology is a rapidly developing sector. This means that lessons learnt may not be relevant after a short period of time. It is just as important that the public sector does not ‘fight the last war’ and has a clear sight of new and future technologies. As well as increasing the risk of over-running and expensive IT programmes, over-specifying the business requirements can also shut out technology solutions that are new or particularly innovative. It is often the case that business requirements will be drafted with a solution in mind. Suppliers of new solutions may therefore not tender for contracts because their product goes beyond the specification that is outlined – despite being significantly more efficient and cost effective than proposals using older and less efficient technology.

January 2011