It may have been a first-hand lesson of the challenges inherent in organisational consolidation, but the creation and growth of Tasmanian shared-services provider Onstream has shown that shared services does not have to be as difficult as many states have made it.
Formed after the 2009 amalgamation of state water corporations Southern Water, Cradle Mountain Water and Ben Lomond Water, Onstream – officially known as the Tasmanian Water and Sewerage Corporation – faced immense political pressure and impossibly short timeframes to implement the government’s consolidation policy.
That policy had been identified as crucial because of the large geographical size and low population of many of Tasmania’s 29 local councils, which had resulted in low rates contributions and led to poor and deteriorating water infrastructure overall.
Onstream’s task was to introduce a shared-services model that would support the consolidation of the three water authorities by combining corporate IT and other services into a single location.
Adding to the challenge, the team was given just four months to design, establish and prepare its new shared-services infrastructure.
. When it was first created, Onstream had no employees. Its mission, however, would eventually involve the transfer of 720 employees from the various water authorities.
This posed very real challenges for ICT manager David Byrne, who was charged with setting up adequate IT support for those staff – but did not even have information about their names until just weeks before the 1 July 2009 deadline for policy implementation.
“We were having to set up an Active Directory structure for four corporations where you didn’t know the names of the employees,” Byrne recalls. “We’d be asking the right questions and getting no answer.”
A massive effort, however, saw the deadline achieved as Byrne’s four-member IT team worked 80 and 90-hour weeks for four months to complete the technology design and implementation, and build the team that was going to support what turned out to be 720 employees.
While it wasn’t exactly a smooth startup, the emerging shared-services organisation rapidly found its footing. “The first couple of weeks were chaos,” Byrne says. “But thanks to a huge effort on the part of the people doing the work before hand, half of people were actually productive from day 1. It was the most exhilarating challenge of my entire life.”
The shared architecture
. The shared-services environment that Byrne’s team created was built around a centralised domain into which all of Onstream’s resources were placed, and four core domains representing each of the operating entities.
This approach was chosen largely because of its flexibility: shared resources could be easily extended into two or more domains, while services offered for just one corporation would sit within its own domain. If future structural changes meant that Onstream had to bring additional organisations within its service-delivery scope, they could be added to the modular architecture.
"There has been growing momentum amongst the Tasmanian constituency around consolidation,” Byrne explains, “and the anticipated cost savings that would result in that. If the councils, for example, decided that as an exercise in shared services it would make sense for them to pool resources at one level, there’s the potential for us to be a pooled resource at another level.”
To ensure scalability and flexibility, Onstream’s architecture was built around VMware virtual servers, which allow it to rapidly commission and decommission services for its shared-services clients. Testing, development, production machines and more can be run up and down with impunity: “The sheer flexibility that VMware brings to the table in terms of being able to bring a machine up, have it do what you want it to do and kill it off, is just immense,” Byrne says.
The servers are supported with a CommVault scalable storage environment that currently offers around 18TB of capacity and manages approximately 14TB of actual data. The CommVault system provides robust backup capabilities for Onstream, which purchases the backup services on a per-terabyte licensing model in which it only pays for the capacity it uses.
“We find that license quite beneficial, and try to consume all our services in that sort of unit measure,” Byrne says. “It makes licensing and management easier, and you can track the growth of things like disk consumption a hell of a lot easier than you can track the growth of the different individual machines you’ve got.”
Because of the heavily rural nature of much of the area the water authorities cover, Onstream has built an extensive wide-area network that combines DSL, private lines, microwave, fibre and other types of services united under the Networking Tasmania joint venture between Telstra and the Tasmanian state government.
Onstream is also involved with the water authorities’ SCADA (Supervisory Control and Data Acquisition) monitoring infrastructure, which involves service delivery to some of the most far-flung corners of the Apple Isle.
“Most people tend to build water plants out of town, and the further you get from the [telecoms] exchange the poorer the comms that are available to you,” Byrne says.
Sharing for the future
. Although it was pressured at the beginning, Onstream’s shared-services platform has proved to be just the right complement to the state government’s efforts to boost operating efficiency through consolidation. Onstream started with 44 virtual machines in its environment but is now managing over 250 virtual machines for the more than 800 employees across its client organisations.
“It has been quite effective, and we’ve had standardisation across each of the corporations,” Byrne says. “The majority of apps are now shared.”
Hosted applications include standard office tools like Microsoft Exchange as well as more-esoteric systems like Microsoft Dynamics NAV, HP TRIM document management, Frontier Software’s CRIS21 payroll/HR environment, Esri ArcGIS geographical information system, Autodesk AutoCAD, and more.
In many cases, Onstream was guided by the results of a functional audit by KPMG that helped standardise the councils on a single platform for each function. “Rolling out an SOE I had full powers in that respect,” he recalls.
A nearly-completed IP telephony implementation and the move towards a virtual desktop interface (VDI) hosted-desktop model are also in the works – the latter to “claw back” some of the concessions made during the initial migration, when users would turn up with applications they wanted installed and Onstream let them be installed in the name of expedience.
“People were turning up on Day 1 and needing to do their jobs,” Byrne recalls. “There was a huge flurry of odd applications being purchased and installed, so to enable that to happen as quickly as possible, desktop administration rights were granted. But once you grant them it’s hard to get them back.”
It hasn’t been all smooth sailing, however: Byrne says the usual effort around IT-business sharing has been crucial, particularly in the beginning when IT consolidation was yet another major change in a series of massive organisational changes.
“It was quite challenging at first because there was little experience within the corporations around shared services,” he explains. “Most people know the term but I don’t think everybody understood what it would mean and how it would work. We’ve built up a lot of experience along the way, but there’s a lot of negotiation involved.”
In June 2012, Onstream received yet another challenge after the majority of Tasmanian councils voted in favour of a proposal to amalgamate the state’s three separate water authorities. This effectively makes Onstream the internal shared-services provider to a much larger organisation, which is likely to drive a significant period of organisational change.
Byrne is confident the lessons of the past few years will ease the transition. “It’s about compromise, collaboration, negotiation – and each side understanding that they’re not giving away territory,” he says.
“It’s all about the gains that shared services provide: you need to keep expressing it in terms of what is to be gained by collaborating – and not some theoretical loss by collaborating.” – David Braue