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City of Toronto Agencies
Global Toronto and CreateTO
The client is two City of Toronto agencies, Create TO and Toronto Global. The agencies are funded jointly by 7 different governmental organizations, the province of Ontario, and numerous municipalities: the City of Toronto, Vaughn, Richmond Hill, Markham, King, Newmarket, Aurora, Whitchurch-Stouffville, East Gwillimbury, Georgina, Mississauga, Brampton, Caledon, Pickering, Ajax, Whitby, Oshawa, Clarington, Uxbridge, Skugog, Brock, Oakville, Burlington, Milton, and Halton Hills. The agencies themselves are both at arm’s length from the City of Toronto. While they’re largely a creature of the municipalities, they are autonomous and therefore they have the freedom to get things done in a timely fashion. Toronto Global was responsible for putting together the bid for the second Amazon headquarters in which Toronto was the runner up. Create TO manages holdings like Green P parking, Toronto Transit Commission (TTC), and Toronto Zoo.
These organizations are charged with the responsibility of letting the world know that Toronto is open for business. They act as a public interface between business and the city. Each of these organizations is responsible for servicing its own clientele.
Create TO and Toronto Global were using a very small scale IT provider—a lone wolf as they’re called in the IT industry. As both organizations grew, they started to need more support and they didn’t have the budget to insource IT. CITI represented the next logical step in terms of IT services and coverage capacity. Rather than go to City of Toronto for outsourced IT support, they went to CITI because they were aware of the difference between the City of Toronto IT support and the IT support provided by CITI.
Insourcing Versus Outsourcing
The fully loaded cost of insourcing IT is 30% to 50% higher once you factor in the indirect costs, such as management costs and employee benefits. When the costs are added up it can easily cost 50% more. If you also need to hire a junior, it could be up to 75% more expensive than outsourcing. The average cost of group benefits per employee is roughly 30% of base salary. For example, a $60,000 per annum salary with benefits actually costs the employer $80,000. That’s why organizations outsource.
Organizations also outsource because IT requires a broader range of technical skills. It’s not good enough to know how to help users with day-to-day office problems. If you only hire a junior at $40,000 per annum, they won’t have all the technical knowledge required and they don’t have the experience to cover any eventuality. You would also need an IT manager who is employed by the company to handle deeper technical issues. You can’t get an IT manager for less than $100,000 per annum. Many organizations that are paying $100,000 per annum for outsourced IT think that they can save money by hiring someone at $70,000 or $60,000 per annum. However, that rarely works out because good IT support requires a broad range of technical skills. Every organization needs:
- A network engineer
- A support person
- A consultant
Even if you hire a unicorn who has all the above skills, you run the risk of hiring someone who twiddles their thumbs or leaves your organization on a few weeks notice.
Outsourcing to CITI
CITI specializes in providing managed services. We take care of all of your IT management. The first step we took for Create TO and Toronto Global was providing a rich communication and liaison role with their senior management.
A clear benefit of working with CITI is that there are so many IT services that you don’t need to worry about or do. Here are some of the tasks that we cover:
- We help with your annual IT budget and tell you what products you need and what support contracts you need to buy.
- We establish standards. Standardization raises the level of security in your office.
- We communicate with you routinely about any aspect of your IT that can adversely affect operations.
We’re not saying that a staff member wouldn’t do that, but you’d also need to hire an IT manager and someone needs to manage the IT manager. Create TO and Toronto Global simply told CITI what their objectives were and we made it happen. Our clients like working with us because we know what we need to do. By contrast, senior managers don’t actually know what their IT manager should do or how to instruct them. Even with the most competent insourced IT staff, objectives get bottlenecked because managers don’t fully understand the IT domain.
Using Zero-based Budgeting Best Practices
CITI is an IT resource that comes with both communication skills and business acumen. We practice zero-based budgeting. The zero-based budgeting method ensures that all expenses are justified and approved for each period. Once you establish an IT budget, you can’t just find more money elsewhere in your organization if you go over budget. If you need a new server, we outline that process along with what are your operating budgets should look like. It’s not that your IT manager won’t do that but they may not understand zero-based budgeting.
In addition, there may be a number of senior managers dealing with in-house IT. This may result in problems with morale because the budget is too static, instructions can conflict, or the insourced IT employee is bored to tears.
The Need We Addressed for Create TO and Toronto Global
Each of these municipal agencies intended to restructure and their IT resources were inadequate. CITI delivered a bespoke suite of services targeted to the precise needs of Toronto Global and Create TO. One of the common drawbacks among outsourced managed services is the adoption of the tenet “one size fits all.” However, at CITI we believe that every client is unique and has different needs and priorities. An analogy is that we all wear shirts and pants but we all need different sizes, and different styles and colours work better depending on the person. At CITI, we believe that we’re more the same than different, but that we identify through our differences.
We provide the precise amount of IT required by our clients—from a thimble’s worth to a dump truck’s worth. As Global Toronto and Create TO’s partner, CITI went from being an outsourced contractor to the equivalent of their insourced personnel. Their previous team simply didn’t have the breadth of technical skills nor the decades of IT experience that CITI could bring to the table.
Global Toronto and Create TO needed autonomy because those organizations were in P3 mode—public-private partnership. They had timely deliverables and couldn’t allow a cumbersome bureaucracy to slow them down. This included their IT capacity. CITI was able to craft bespoke IT service solutions that took into consideration their need to retain new staff. We amalgamated third party vendor relationships and allowed them to consistently hit their targets.
The Solution We Provided to Create TO and Toronto Global
- End user support, helpdesk support, and deskside support.
- Network administration and support—including implementing activities to keep their systems running.
- Disaster recovery planning and maintenance.
- IT security reviews.
- Hardening their IT infrastructure. Hardening means reducing the potential attack surface and bricking up (all the metaphorical doors and windows) of an organization so that cybercriminals don’t have so much as a crack through which they can execute a cybersecurity attack.
- IT management including product sourcing, RFP (request for proposal), RFQ (request for quotation) development.
- IT budgeting.
- Overseeing all third party technology vendor relationships.
Our solution was agile and related directly to Global Toronto and Create TO’s rapidly changing needs. Due to the merging of their operations, we needed to review and rationalize current infrastructures and then determine how to integrate their systems. Both agencies had existing IT infrastructures that were forged by their previous IT contractors. We had two different organizations that were coming together and needed one IT platform to operate effectively and efficiently. We needed to integrate the two entities in order to rationalize the network to determine what should be kept and what should be disposed of. We determined that they could cut their number of servers in half and rebuild the network. That’s what led to enormous savings. Previous to working with CITI, the managed services plan that they were on was based on the number of assets under their management. They were motivated to pay CITI to rebuild everything, because they were paying approximately $18,000 in monthly fees before the network had been rationalized and downsized. We were able to get those payments down to $13,000 per month which represents a cost savings of nearly 27%. The problem involved planning new infrastructures and rationalizing existing infrastructures. We achieved all of that while reducing operating costs and support costs.
Total Cost of Ownership
All computers, like any asset, have a total cost of ownership (TCO). Not all short-term cost savings result in long-term cost savings, so we recommend that our customers always buy the best tools that they can afford. Cheaper computers often end up costing our clients more in the long run. We drilled down into the actual costs and presented Global Toronto and Create TO with data on the total cost of ownership on various options.
Any asset involves an initial capital outlay. On top of that there are maintenance costs. With a computer, you also have the cost of the software that has to be loaded onto it. If Adobe Illustrator doesn’t work on your computer, then there’s also the cost of getting your IT services firm to set up new software. If there’s a new version of MacOS, you will have to train yourself on it. Reduced efficiency is a cost that also gets attributed to TCO. Study after study demonstrates that the initial capital cost of a computer represents only 20% of the total cost of ownership. The TCO of a $900 computer can easily be higher than $3,000 so cheap computers can actually turn out to be very costly computers.
We train our customers on analytical techniques like total cost of ownership. It’s the total hard dollar savings associated with doing things in a best practice way. If you buy a less expensive computer, it will take you more time to get your work done, while a more expensive computer can result in a 75% improvement in efficiency.
reduced per user cost
increase in their overall organizational efficiency
The organizations grew massively and they brought on new people and added to their team. Despite their exponential increase in size, CITI ensured that the net costs for Create TO and Global Toronto’s IT services remained low. Although the new agencies increased in size by 80%, CITI ensured that their IT operating costs only increased by a modest 15%.
- We were able to reduce per user cost by 25%
- We were able to reduce the footprint of their infrastructure by 50%
- We were able to reduce Internet connectivity and data communication costs by 30%
All of these cost reductions occurred while supporting a staff that doubled in size.
Not only were substantial cost savings introduced, but also thanks to the software and systems that CITI introduced, Global Toronto and Create TO saw a 20% increase in their overall organizational efficiency. By adjusting specifications on individual computers, we were able to adjust work productivity by 400%.
CITI is a reseller for the best computer companies in the world. We always try to help our customers establish standards for the computers they buy and that’s what we did for Global Toronto and Create TO. We know exactly what kind of computers our customers need, which is why they can confidently purchase their computers through us.
In the span of 3 years, our recommendations resulted in a total cost savings of $140,000 for Create TO and Global Toronto.
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Moving to the Cloud
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