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February 20, 2018 Rated Services and Billing Structure FY 2017-2018
February 20, 2018
Rated Services and Billing
StructureFY 2017-2018
2Overview
FY 2018 Total ITS Cost Base ($943 million)
• Rated Services ($784 million) – Billed across 7 rated service categories including labor
costs, workplace services, infrastructure, networking, telecommunications, platform and
website services.
• Non-Rated Services ($81 million) – Client agencies are not billed for these costs through
the rate setting process. They include one-time project costs, costs allocated through
Statewide Cost Allocation Plan (SWCAP) and non-rated agreements.
• Non-Recoverable/Future-Rated Services ($78 million) – Client agencies are not billed for
these costs. They include technologies still under development, but not fully ready for an
agency chargeback. This also includes costs associated with excess capacity under newer
services not yet fully utilized (e.g. ECM, eFax), which are not recovered by ITS.
3Annual Change Overview
Annual “Look-Back”
• In FY 2017, the total ITS Cost base was estimated at roughly $918 million; however, actual
disbursements were roughly $935 million, a $17 million increase (1.8%) driven largely by
collective bargaining payments and related fringe benefits.
• In FY 2018, the Rate model anticipates a total of $943 million, an $8 million increase (0.9%)
from FY 2017. The increase is primarily related to Fringe Benefits.
FY 2017
Rates
FY 2017
Actuals
$
Change
%
Change
FY 2018
Rates
$
Change
%
Change
PS 295,000 301,953 6,953 2.4% 292,000 (9,953) -3.3%
NPS All Funds 453,015 460,100 7,085 1.6% 466,311 6,211 1.3%
Fringe 161,099 164,000 2,901 1.8% 174,038 10,038 6.1%
Depreciation 24,474 24,500 26 0.1% 28,185 3,685 15.0%
Capital Outlay Removed (15,669) (15,669) - 0.0% (17,402) (1,733) 11.1%
Total 917,919 934,884 16,965 1.8% 943,132 8,248 0.9%
4Annual Change Overview
Annual Increases:
• Labor Costs: Primarily higher
fringe benefit rates and a shift
from SWCAP
• Workplace Services: Shift from
infrastructure and FY 2017 under-
recovery
• Network Services: Includes
network upgrades
Annual Decreases:
• Digital Presence: Inadvertent over-
capture of website metrics in FY
2017
• Non-Rated/Non-Recoverable:
Costs shifted from SWCAP and
non-rated new services to rated
services
ITS Recovery ModelFY 2017
Rates
FY 2018
Rates
$
Change
%
Change
Labor/Application Services 332,589 $351,831 19,243 5.8%
Workplace Services 127,469 $142,326 14,857 11.7%
Infrastructure 138,191 $126,905 (11,286) -8.2%
Network Services 67,882 $77,603 9,722 14.3%
Telecom Services 43,254 $41,311 (1,942) -4.5%
Platform Services 29,820 $32,445 2,625 8.8%
Digital Presence Services 17,926 $6,940 (10,986) -61.3%
NPS Memo Pass-Through 0 $3,126 3,126 N/A
External Customers 1,761 $1,598 (164) -9.3%
Rated Service Subtotal 758,891 784,085 25,194 3.3%
Non-Rated/Non-Recoverable 175,993 159,047 (16,946) -9.6%
Combined Total 934,884 943,132 8,248 0.9%
5Rated Service Categories / Bill Types
Service Category Description
Labor/Application Services State and contractor staffing resources to manage and develop business applications.
Workplace ServicesBasic hardware, including refresh cycles, software, tools, and services, that allow employees to
perform their day-to-day job.
Infrastructure Services IT hardware, software, tools, and services that form the foundation for platforms and applications.
Network ServicesSecurely connects workstations and network devices to critical applications hosted in State data
centers.
Telecom ServicesModern VoIP technology and call center functionality that supports employees in their daily
operations.
Platform ServicesShared software services that deliver repeatable IT platforms to support agency and enterprise
applications.
Digital PresenceIT Services that support the demand for business managed channels, content and user
experience.
Non-Rated Agency
SpendingAgency-specific software that is not included in a rated service.
6Labor/Application Services
Labor/Application Services ($352 million) – State and contractor staffing resources to manage and develop business
applications. As context, ITS has a FY 2018 workforce ceiling of 3,406 FTEs and an additional 747 contract employees
supporting ITS functions. Not all of these individuals are captured as part of the Labor Services rate, a subset support other
rated services or non-billable functions. Labor services are billed on an hourly basis.
• State Labor ($302 million) – The hourly State Labor rate increased to $125.18 primarily related to the increased fringe
benefits rate, collective bargaining increases and reallocation of SWCAP costs. As shown in the tables below, the State
Labor rate includes employee salaries (personal services), fringe benefits, and agency overhead and nonpersonal services.
It should be noted, in addition to direct application support, total labor costs also include time charged to training activities,
hours worked by supervisors and other indirect costs in support of agency application development and maintenance
activities.
• Contract Labor ($50 million) – Hourly rates for all contract staff increased on average by six percent from the SWCAP shift
and FY 2017 under-recovery. Contract Labor rates are based on actual contractor costs plus overhead.
State Labor Rate FY 2017 FY 2018 Change
Personal Services $65.89 $69.70 $3.81
Fringe Benefits $35.98 $41.80 $5.82
Overhead and NPS $11.95 $13.68 $1.73
Total $113.82 $125.18 $11.36
7Workplace Services
Workplace Services ($142 million): Basic hardware, including refresh cycles, software, tools,
and services, that allow employees to perform their day-to-day job.
1. End User ($118 million): Hardware and software package that supports standard
productivity software, email, web browsing, personal cloud storage, and equipment
replacement based on regular refresh cycles. Includes standard desktop, laptop, or thin
client and accessories for on-boarding new employees and asset life cycle replacements.
Also includes break/fix and device management.
2. Mobile ($14 million): Managed mobile service that includes devices, carrier plans,
provisioning, contract management, and billing.
3. Other Workplace Services ($11 million): Includes standalone Office365 licenses, excluding
the other End User services, and remote application and desktop access services.
8Workplace Services – End User
End User ($118 million): Standard desktop, laptop, or thin client and accessories for on-boarding new
employees and asset life cycle replacements. Also includes break/fix, device management, support of existing
standard software, desktop security, protection from intrusion with firewall and antivirus technologies, O365
email. Additional premium software may be purchased separately.
Primary Rates:
Significant Changes
• The Fixed User rate increase reflects a more accurate distribution of service recipients and does not
increase total cost recovery across agencies. Prior to May 2016, O365 mailboxes—the End User billing
metric—were over-provisioned to agencies. ITS worked with agencies to decommission un-utilized
licenses, thereby reducing the overall utilization year-to-year. This effort did not reduce the cost pool;
however it redistributed costs and increased the cost/device.
Service FY 2017
Rates
FY 2018
Rates
$
Change
Kiosk User (License) $83.32 $83.32 $0.00
Fixed User (License) $96.41 $103.40 $6.99
File/Object Storage (GB) $0.43 $0.37 ($0.06)
9Workplace Services – Mobile
Mobile ($14 million): Managed mobile service that includes devices, carrier plans, provisioning, contract
management, and billing services for employees who require the use of a mobile phone to perform their job
duties, as defined by their agencies. Voice and data is restricted to the United States.
Primary Rates:
Significant Changes
• Mobile rates are based on actual vendor contract rates plus additional security, accessories and other add-
ons and general overhead costs. ITS under-recovered these costs in FY 2017, resulting in FY 2018 rate
increase.
Service (Billed Per Device)FY 2017
Rates
FY 2018
Rates
$
Change
4G Device (Smartphone and Tablet) $38.58 $46.01 $7.01
Cell Phone $15.32 $22.33 $7.44
Aircard/MiFi $34.05 $42.53 $8.48
10Infrastructure Services
Infrastructure Services ($127 million): IT hardware, software, tools, and services that form
the foundation for platforms and applications.
1. Servers ($56 million): Includes the support of our managed network services, managed
platform services, managed web hosting, and hardware and software support.
2. Storage ($11 million): Provides centrally managed block storage services for data center
servers.
3. Mainframe ($51 million): A managed infrastructure for mainframe workloads; IBM Mainframe
is the standard platform. Unisys Mainframe support is included for existing customers.
4. Print ($9 million): This service provides high volume, centralized printing. Enhanced services
such as bursting and highlighting are available.
11Infrastructure Services – Servers
Servers ($56 million): Includes the support of our managed network services, managed platform services,
managed web hosting, and hardware and software support. Servers support agency applications, data, and
automation needs. Includes standard operating environment technologies of Windows, Linux, and AIX.
Servers are delivered in standard sizes to address application workload requirements.
Primary Rates:
Significant Changes
• Server rates generally decreased as a result of realignment of server costs to the enterprise services they
support. These server costs are reflected in the appropriate rates for the services they support. This
realignment was enabled through improved metrics and reporting standards.
Service (billed per GB RAM)FY 2017
Rates
FY 2018
Rates
$
Change
P-Series LPAR $109.70 $99.79 ($9.91)
x86 Virtual $33.66 $31.81 ($1.85)
x86 Physical $72.11 $67.23 ($4.88)
12Infrastructure Services – Storage
Storage ($11 million): Provides centrally managed block storage services for data center servers, block and
virtual tape storage for the data center IBM mainframe and data archiving.
Primary Rates:
Significant Changes
• Storage rates generally decreased as a result of realignment of storage costs to the enterprise services
they support. These storage costs are reflected in the appropriate rates for the services they support. This
realignment was enabled through improved metrics and reporting standards.
Service (Billed per GB) FY 2017
Rates
FY 2018
Rates
$
Change
Block Storage $0.31 $0.23 ($0.08)
Storage-Archive $0.14 $0.10 ($0.04)
IBM Mainframe Block $1.36 $1.32 ($0.04)
IBM Mainframe Virtual Tape N/A $0.19 New
13Infrastructure Services – Mainframe
Mainframe ($51 million): A managed infrastructure for mainframe workloads; IBM Mainframe is the standard
platform. Unisys Mainframe support is continued for existing customers.
Primary Rates:
Service FY 2017
Rates
FY 2018
Rates
$
Change
IBM CPU (CPU Second) $0.0501 $0.0467 ($0.0034)
Unisys 2200 (MIPS/Month) $254.94 $245.75 ($9.19)
Significant Changes
• IBM CPU rate decrease from increased utilization against a relatively steady cost base.
• The total Unisys 2200 cost pool went down year-to-year, driving a decrease in the rate.
14Digital Presence Services
Digital Presence Services ($7 million): Support for WebNY, which offers web development
services from conception and strategy, to design and implementation for NYS government
websites. WebNY provides 24/7 monitoring and reporting, and provides site governance tools
that enables clients to monitor broken links, accessibility, and automatically perform time
consuming website maintenance tasks, while also improving website quality.
Significant Changes
• Rate decrease from increased utilization against a relatively steady cost base. Beginning in
FY 2018, all NYS websites managed by ITS will be billed for total monthly page views.
Service
(Billed Per Page Views)FY 2017
Rates
FY 2018
Rates
$
Change
WebNY $0.04 $0.03 ($0.01)
15Network Services
Network Services ($78 million): Securely connects workstations and network devices to critical applications
hosted in State data centers through Local Area and Wide Area Networks (LAN and WAN).
• LAN ($52 million): Standard offering includes office site network hardware, software, support and services
to provide a secure, monitored and managed local network for all NYS users. At the office site, this
service provides connectivity for PC and VDI workstations, video conferencing, as well as network
devices.
• WAN ($26 million): Secure voice and data connections from a NYS site to the ITS MPLS network for
connectivity to NYS data centers for applications, storage, intranet and MS Office functions. WAN
services also connect NYS sites to the internet and cloud-based applications with broadband data
circuits.
ServiceFY 2017
Rates
FY 2018
Rates
$
Change
LAN (Billed Per Device) $35.79 $39.35 $3.56
WAN (Varying metrics) Various Various N/A
Primary Rates: Significant Changes:
• LAN increase is primarily associated with
increasing personal service and related fringe
benefits, network upgrades and FY 2017
under-recovery.
16Telecom Services
Telecom Services ($41 million): Modern VoIP technology and call center functionality that supports
employees in their daily operations.
1. Voice ($38 million): Provides modern VoIP technology, including dial tone and voicemail, as a standard
offering with support for traditional lines for existing customers.
2. Call Centers ($3 million): Supported call center functionality using an on premise solution or an externally
hosted solution.
17Telecom Services – Voice
Voice ($38 million): Provides modern VoIP technology, including dial tone and voicemail, as a standard offering with support for
traditional lines for existing customers. Also provides dial tone for systems such as Faxes, Modem, Alarms, etc. Self-Service and
Online Help Guides are available for users.
Primary Rates:
Significant Changes
• The VoIP rate increase is primarily driven by realignment of costs previously recovered through other services (e.g. servers,
storage and non-recoverable WAN) to VoIP, enabled through improved reporting metrics. Corresponding rate decreases
have been realized in storage and server rates.
• Rate increases for other voice services driven by disproportional utilization decreases relative to total costs as customers
migrate onto VoIP and off of legacy voice platforms. Updated utilization metrics identified FY 2017 under-reporting for vendor
lines, driving a decrease in the FY 2018 rate.
Service (Billed Per Line)FY 2017
Rates
FY 2018
Rates
$
Change
VoIP $14.15 $16.57 $2.42
PBX at State Office Buildings $46.04 $71.24 $25.20
Centrex (Verizon) $26.96 $68.72 $41.76
CAPNET $62.84 $131.75 $68.91
Vendor Lines $65.92 $32.24 ($33.68)
18Platform Services
Platform Services ($32 million): Shared software services that deliver repeatable IT platforms
to support agency and enterprise applications.
1. Database Servers ($28 million): Managed relational database services using Oracle, IBM
DB2 and Microsoft SQL server technologies to establish a highly scalable, simplified delivery
and consumption model intended to reduce costs, improve service levels and enhance
information access, security, and rationalization.
2. Application Services ($4 million): Includes SOA Akana and two new services for FY 2018 –
Enterprise Content Management and eFax services.
19Platform Services – Database Servers
Database Servers ($28 million): Managed relational database services using Oracle, IBM DB2 and Microsoft SQL server
technologies to establish a highly scalable, simplified delivery and consumption model intended to reduce costs, improve service
levels and enhance information access, security, and rationalization. This service includes the physical database design in
addition to the infrastructure support.
Primary Rates:
Service (billed per DB instance)FY 2017
Rates
FY 2018
Rates
$
Change
Oracle $822.96 $980.13 $157.17
SQL $507.84 $489.23 ($18.61)
DB2 $617.99 $811.60 $193.61
Significant Changes:
• Oracle and DB2 database rate increases driven by more accurate alignment of utilization and costs:
o Oracle -- re-packaging of an Oracle-specific contract to the Oracle cost pool.
o DB2 -- improved data metrics, which appropriately re-packaged DB2 server costs to the DB2 cost pool. This
realignment does not impact utilization. In FY 2017, these costs were captured in the server cost pool.
20Platform Services – Application Services
SOA Akana ($3 million): Enterprise-class platform for designing, implementing, securing, managing,
monitoring, and publishing Application Programming Interfaces (APIs). The platform automates access and
control of the connections and traffic between the APIs exposed on your network and the applications that use
them. API Management securely delivers APIs across multiple channels (i.e. mobile, cloud, on premise, and
the Internet of Things), enabling data sharing, connecting and integrating applications.
Service FY 2017
Rates
FY 2018
Rates
$
Change
SOA Akana $1.32 $1.08 ($0.24)
Enterprise Content Mgmt N/A Tiered New
eFax N/A $0.08 New
Primary Rates
Enterprise Content Management ($1 million) – New Service: Provides the ability to store and retrieve
documents using APIs. This offering will enable a business unit to use their existing capture solution to
convert paper files into electronic format, store the electronic documents into a secure enterprise content
repository, and retrieve the documents efficiently and immediately for viewing.
eFax ($200K) – New Service: Enterprise eFax
Services uses the new RightFax Fax Over IP
environment including, new FAX numbers,
troubleshooting, quick start guides.
21Non-Rated and Non-Recoverable Services
Non-Rated/Non-Recoverable ($159 million): Includes development costs of future services,
migration costs of old technologies and other costs not eligible for reimbursement.
1. Recovered – Other Means ($81 million): Includes SWCAP, Project Costs, Project
Engineering Services, and other ITS costs recovered outside of the rate model.
2. Future Services ($52 million): Includes Managed File Transfer, JBOSS, eDiscovery, and
Data Reporting and Analytics.
3. Other ($26 million): Includes excess capacity of current services and non-billed staff costs.
22Sample Agency Billing Summary
23Sample Agency Bill
24
Additional Questions? Contact ITS Finance at:
Director of Rate Setting
Joe Schultz – [email protected]
ITS Billing Team – [email protected]
Contact Information and Rate Card
Rate Card:
The FY 2018 rate card will be available at the following link prior to bill
release: https://its.ny.gov/service-rates
