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Modernizing IT Part 10 – Modernizing with a Buy or Build

Information Technology, IT Modernization, Rob Klopp, Technology

By Rob Klopp

This repost is quite long, so I will keep my opening comments short and add some new thinking in the next post. Note that I have skipped from my first cio.gov post to the last post. Of course this is intentional. I find that there is a lingering misconception around Buy vs. Build that could stand an open discussion. So here we go…

This article is reposted from CIO.gov; the original post can be found here.

In the last few posts I’ve been bragging about some successes. To close out my term I’ll try to say something more provocative and discuss how the economics of buy versus build are changing. Over the last twenty years in the commercial world, there have been very compelling reasons to buy rather than build. First, a pre-built product carries less risk of a failure in development. Note that there are lots of stories around failed implementations of commercial off-the-shelf (COTS), so this advantage can be overstated.

There is also an economic advantage as a company that has built a COTS package can leverage the software over and over again in the market and amortize the cost of R&D across many sales. In other words, it can be less expensive to buy COTS.

The downside is that a COTS product offers, by definition, a common denominator and not a purpose-built, custom application tailored to your specific business process. This downside is mitigated when your business process is more generic. We see great success in areas like accounting, finance, and human resources where companies tend to solve the business problem in similar ways. However, we see less success in building COTS for government where there is a limited number of customers and little market pressure on prices.

Finally, note that over the last twenty years, COTS has implied the installation and configuration of a shrink-wrapped product where “configuration” meant (almost) “no coding required.”

Let me describe how the playing field is changing.

Before I arrived at the agency, we performed a buy versus build analysis for a new system to build and deliver our postal notices. We evaluated the market and selected a very good commercial product and started building a prototype. In the very last step, we turned up the prototype to scale to the volumes of output required at the SSA and the product failed. It just could not scale. We executed a TechStat, ended the prototype, and parted cordially with the vendor folks. The cost of this exercise was considerable, but we did everything right. We bought rather than built and neither the vendor nor the agency could know that the product would not scale until we tried it on our workload.

That is not the important part of this story. The product we selected, like a great many COTS products today, was built upon an open sourced component freely offered by the Apache Foundation. In the course of our prototype development, my technical staff suggested that they could develop a system using the same open source component that would scale up. The cost of trying this was small and so we agreed to prove the concept. Today, we have developed a proof-of-concept and demonstrated that it will scale. This new engine, which is comprised mostly of off-the-shelf open source code, will be the basis for our next large IT Modernization effort aimed to provide a modern communications capability for the SSA.

Let me ask the reader — is our new communications capability going to be a buy or a build? Most of the capability is off-the-shelf. Note that it is not commercial off-the-shelf, it is open source. Still, did we build?

Consider the original value proposition of a “buy.” It involves less risk, but since the core of our new product is open source tried-and-true, the risk of a development failure is very small. It is less cost, but since the core is free the cost of our development effort was the same or less than the cost of trying to configure the vendor product to our specifications. Furthermore, we do not have to pay for a COTS license. Finally, we have a purpose-built custom result.

This trend, for COTS products to be built from open source components, is significant. Nearly every COTS product uses open source code and then the vendor charges the government a commercial license fee. This is not as egregious as it sounds because in a market system where there are competitive pressures, the value of free open source software will be (maybe imperfectly) passed on to the government.

There is another trend that is important. New COTS products expose their software as components just like open source. We are performing market research examining software from several firms that would want us to code our own custom result using their components to reduce the cost and technical risk of development. This is a very powerful approach, but again I would ask — does using these components represent a buy or a build?

As we plan for IT Modernization, every one of our efforts is likely to include either open source or commercial components throughout. Will these efforts be considered risky “builds” or safe “buys?” The line is just not clear anymore.

So I would suggest that every IT Modernization product must consider leveraging existing code to reduce cost and risk. When the heart of a commercial product is open source, we need to ask if the value add of the commercial wrapper is worth the cost or if we can build a bespoke product from the same components for less cost with the same or only slightly more risk. When there is no market for a commercial offering outside of a few government agencies, and therefore no pressure to reduce prices, we need to consider the ongoing costs of that near-monopolistic relationship.

The buy versus build equation is much more complicated now. We need to rethink. Old school shrink wrapped vendors will push us to always “buy.” New age vendors will offer components and ask us to build a little. We cannot knee-jerk to a “buy” and we must allow this sort of “build” to happen. Once we agree that these builds are OK, we need to consider builds that use open source instead of commercial components. We need to be sure that we are not paying commercial fees for free open source code. Finally, we need to be sure that when we buy, we buy products that compete in a market. If we enter into near monopolistic COTS relationships, we will surely pay the price.

About the Author: Rob Klopp is a CIO with a deep technical background. As the CIO at the Social Security Administration, Rob started and led an IT modernization program that influenced the entire Federal IT space. Before moving East, Rob held technical leadership positions at SAP, EMC, and Teradata; he consulted to several technology companies along the way. Currently, Rob is consulting to the State of California and is again helping to start initiatives to modernize legacy IT systems.

Modernizing Federal IT Part 1 – Catching Up and Jumping Ahead

Information Technology, IT Modernization, Rob Klopp, Technology

By Rob Klopp

This series on IT Modernization was written during my time as CIO at the Social Security Administration. This first post outlines an argument for why modernization is not just a nice-to-have, but is an imperative. Further, I argue that technology is advancing and now is the time to start.

Today, I would add to the argument that the gap between your legacy systems and modern systems is too large to overcome incrementally. Technology is advancing away from your legacy faster than you could ever catch up in conservative increments. Sooner or later you will need to take a bold stance and jump onto modern technologies.

I hope these posts help you to argue for a bold move. If you are on the business side, I hope you can argue against conservative technologists who argue for the status quo. If you are an IT professional, I hope that this series helps you to convince your leadership that the jump is inevitable, that it is not going to get easier, and that the advantages of modernization support the bold move.

This article is reposted from CIO.gov; the original post can be found here.

To start, let us consider the modernization problem from a high level. Figure 1 is designed to outline the problem. The blue curve represents the ability of a hypothetical Federal agency to adopt technology. The green curve represents the ability of a hypothetical Fortune 500 firm to adopt technology. The technology gap between these curves represent the problem confronting a Federal CIO; we believe that we must catch up to the Fortune 500.

Note on the curves that in the late 1970’s and early 1980’s, the Federal space, and especially the SSA, was on a par or even a little ahead of the Fortune 500. In that timeframe, the SSA was aggressive in developing systems and databases to store information. These systems pushed the state of the art. They represented Big Data in the 1980’s.

Unfortunately, the systems of the 1980’s, once developed and stable, became stagnant. Today they represent a significant technical debt. SSA’s core systems are today run on 60 million lines of COBOL and on another 1 million lines of Assembler language. Much of this code was developed long ago, before programmers carefully structured code to reduce the cost of maintenance. The mainframe languages, development, and operating environment are no longer widely taught in our university systems. The Federal staff who developed and maintained these systems are retiring. As a result, the interest payments on this 30-year-old technical debt are compounding and in the next five years we could face a crisis keeping the systems that execute the SSA mission running.

Closing the gap between Government IT and Commercial IT is critically important. However, closing that gap could be the wrong target.

Consider the orange curve… representing not technology adoption curve but technology advancement. You can see there the gap that haunts the CIOs of the Fortune 500. Technology is advancing faster than even the Fortune 500 can adopt it. It is this gap that start-up companies exploit to put the Fortune 500 out of business by jumping straight onto the technology curve.

Start-ups can make this jump because they are not encumbered by technical debt or by a requirement to sustain an existing customer base. They do not attempt to catch-up… they jump. If their jump succeeds, they make companies on an incremental growth path completely irrelevant.

Now consider the red dashed curve. This depicts the ambition of most Federal CIOs: matching the IT prowess of the Fortune 500. Consider the steepness of this dashed line. It is truly ambitious. But if a most-amazing Federal CIO managed to bridge this gap she-or-he would find that their agency has actually lost ground to technology.

Federal agencies are unlikely to go out of business. But the technology gaps represented here could make Federal agencies irrelevant. The most amazing applications today… pick your favorite: Uber or Siri or Facebook… will be outdated in five years. What will the public think of Federal agencies that are still rolling out web services with electronic forms in 2020? Not much, I suspect.

This is the topic I’ll consider in the blog posts to follow… how might the Federal government catch up in IT. I’ll discuss in detail how the SSA is addressing the problem. I’ll also be discussing buy versus build options, techniques to modernize old code, initiatives to develop a modern infrastructure, and jumping onto the technology curve.

I hope you enjoy the series and look forward to your comments.

About the Author: Rob Klopp is a CIO with a deep technical background. As the CIO at the Social Security Administration, Rob started and led an IT modernization program that influenced the entire Federal IT space. Before moving East, Rob held technical leadership positions at SAP, EMC, and Teradata; he consulted to several technology companies along the way. Currently, Rob is consulting to the State of California and is again helping to start initiatives to modernize legacy IT systems.

KAI Partners Staff Profile: The Enterprise Architect

Agile, Certified ScrumMaster (CSM), Enterprise Architecture, Government, KAI Partners, KAI Partners Staff Profile, Sacramento, Scrum, Technology

There are many paths to success and while not everyone takes the same path, we often manage to arrive at the same destination. In our KAI Partners Staff Profile series, we share interviews and insight from some of our own employees here at KAI Partners. Our staff brings a diversity in education, professional, and life experience, all of which demonstrate that the traditional route is not necessarily the one that must be traveled in order to achieve success.

Today, we bring you the journey of one of our Consultants, Steven Duart. Steven works with one of KAI Partners’ public sector clients as an Integration Enterprise Architect. He helps implement the structure, guardrails, and guidelines for the future product development teams to modernize a large-scale statewide information system.

KAI Partners, Inc.: How did you get into Enterprise Architecture consulting work?

Steven Duart: I was recently told that I have a thought process of an Architect. Reflecting on that comment, I believe that mindset was developed through both education and experiences. I went with a traditional education route and received a Bachelor’s degree in computer science, a second Bachelor’s degree in technical studies, and a Master’s in computer information systems. The experiences of having to design a technical architecture for client that did not understand their business and working for a State agency that did not know what their true mandate is have matured my mindset which is naturally analytical and good at synthesis, abstraction, visualization, imagination, and practicality. I believe that I have always been an architect, but the realization did not happen until I was surrounded by like-minded individuals in the work I currently do.

KAIP: Are there any certifications or trainings you’ve gone through that have helped in your career?

SD: It was not until around the past five years that I started to obtain certifications. In the past two years I have received two certifications, Certified ScrumMaster® (CSM) and TOGAF® 9 Certification (The Open Group Architecture Framework). I believe those two certifications have helped me establish myself at and allowed me to take on additional roles. The TOGAF® 9 Certification has given me the knowledge of their framework and how to tailor their framework to develop an architecture for clients.  It has been a benefit for State clients because the TOGAF® 9 Certification is internationally recognized. In addition to my CSM and TOGAF, I also hold a certification in Functional Programming Principles in Scala and am a Certified Paralegal.

Here are a few certifications I am evaluating to help me provide better service to clients:

  • AWS Solution Architect
  • Certified Business Architect
  • Certified Product Owner

KAIP: What is your favorite part about your line of work and why?

SD: My favorite part of Enterprise Architecture is that it is a unique line of work which juggles past, present, and future. We must focus on the future, while living in the now and being completely aware of the past. This drives my thinking, impact, and presence. It allows for me to put the customer at the center of an approach (i.e., Agile) and design technology around the customer’s unique needs. This enables innovation of a product service experience through iterative, incremental activations which delivers continuous enterprise transformation at speed and scale.

KAIP: What is one of the most common question you receive from clients and what counsel or advice do you give them?

SD: The most common question I get is, “Why do I need a ‘Framework’ for IT Architecture?” The advice I give is that using an architectural framework will speed up and simplify the architecture development. This will ensure more complete coverage of the designed solution and make certain that the architecture selected allows for future scalability in response to the needs of the business.

Quick Q&A with Steven:

Daily, must-visit website:

Preferred genre of music or podcast to listen to:

  • Music
  • Hawaiian R&B
  • Reggae
  • Rap
  • Indie
  • Podcast
  • Security Now
  • tv
  • Hollywood Babble On (This is a fun podcast, but may not be for everyone)

Best professional advice received:

  • The best career advice I received was to be persistent and resilient and to not let detours or failures derail my career. Successful men and women frequently have failures and detours in their careers, but do not let those bumps dissuade them. In fact, for successful people, failures are a part of success and detours are seen as opportunities to push your career further ahead.

Book you can read over and over again:

  • Beyond the Band of Brothers
  • The Biggest Brother

Most-recent binge-watched show:

  • Silicon Valley
  • Big Bang Theory
  • Archer

About Steven: Steven Duart is an Enterprise Architect who works with one of KAI Partners’ public-sector clients. Steven has recently partnered with KAI Partners to launch an Enterprise Architecture practice to deliver business driven experiences at the intersection of strategy, design, behaviors, and products.   Steven is a certified in TOGAF and has a Master’s degree in computer information systems from St. Edwards University in Austin, Texas. Steven is a die hard Notre Dame football fan, he enjoys playing recreational sports, and could go to the movies daily.

How we Can Promote Workforce Development in the Sacramento Region

Co-working, Corporate Training, Event Recap, Internet of Things, KAIP Academy, Learning, Professional Development, Sacramento, Technology, The WorkShop, Training, Workforce Development

By Terry Daffin

I recently had the opportunity to attend the Golden Sierra Workforce Tech Forum: Occupations & Skills in an Automated World, hosted by Valley Vision and Golden Sierra Workforce Board.

Valley Vision “…inspires leaders to think big and collaborate on bold, long-term solutions that improve people’s lives and Golden Sierra’s Workforce Board, “…is an industry-led board of directors who identify and solve problems within key economic sectors in the tri-county region (Placer, El Dorado and Alpine).”

As the Project Manager for KAI Partners’ KAIP Academy and the Community Manager for co-working and incubation space The WorkShop – Sacramento, I was especially interested in hearing firsthand what employers are looking for in terms of workforce development for their organization.

There were many great panelists at the forum, including Sean Moss, Senior Estimator and Project Manager for McGuire and Hester; Gordon Rogers, Project Principal of the Owen Group; Annette Smith-Dohring, Workforce Development Manager for Sutter Health; Bernadette Williams, CMI Operations Manager at VSP; and Joseph Taylor, Assistant Professor at CSU Sacramento.

Each panelist was asked to describe what they believe the biggest educational need is for graduating students entering the workforce. Here’s a sampling of what they said:

  • Gap in technical skilled labor—employees are either highly skilled/specialized or they have little technical skills
  • Up-skilling; providing skills training on the Internet of Things and Artificial Intelligence to an existing workforce
  • Critical thinking skills; under-preparedness upon graduation

I left the forum with the question, “What can we do to close these gaps?” As a training provider, it’s clear we need to help industry and education align their efforts so that the workforce can stay updated on new methods, software/programming languages, and other emerging skills.

Here are a few ways to stay on top of digitalization and close the skills gap:

  1. Industry and education leaders should seek out training programs that will prepare students for critical thinking, data and business analytics, problem solving, and soft skills necessary to enter the workforce and immediately become productive.
  2. Students should be encouraged to seek out internships in work-based learning opportunities (especially those that provide educational units for their participation).
  3. Employees should be encouraged to widen their professional development by taking certification courses (especially those that provide professional development units).

There is a lot we can do to close the skills gap and promote workforce development in our region. KAIP Academy is excited to offer training courses and programs for building up a more highly skilled Sacramento.

About the Author: Terry Daffin is an Executive Consultant within KAI Partners. He has worked in the IT industry for more than 30 years and has over 25 years of project management experience. As a public sector consultant in the health care industry, Mr. Daffin assisted in the development and implementation of Project Management Offices that include project management, service management, lean agile and traditional product development lifecycles, and governance processes. He has been an innovation advocate and evangelist for 15 years and has implemented innovative processes for projects that he has been engaged on since 2001. Mr. Daffin currently works as the Project Manager of the KAIP Academy, KAI Partners’ training division and is the Community Manager at KAI Partners’ new co-working space, The WorkShop – Sacramento, focused on connecting innovative start-ups and the public sector.

Get Ready for the Internet of Things

Information Technology, Internet of Things, Technology

By Jason Hardi

Now more than ever, there is a buzz surrounding the “Internet of Things.” What is the “Internet of Things”? It’s a fast-evolving planetary infrastructure upgrade that is capturing and analyzing more data than ever.

More specifically, the Internet of Things, or “IoT,” involves an infrastructure move towards increasing machine-to-machine communication (called M2M) built on cloud computing, IPv6, 5G networks, and billions of mobile, virtual, and instantaneous connections to computer “smart devices.”

Just how many devices can IPv6 handle? According to Wikipedia: The length of an IPv6 address is 128bits, compared with 32 bits in IPv4. Therefore, the address space has 2128 or approximately 3.4×1038 addresses. Doing the math, this translates to 340,282,366,920,938,463,463,374,607,431,768,211,456 potential devices, each with a unique IP address. Read aloud this number:

340 undecillion, 282 decillion, 366 nonillion, 920 octillion, 938 septillion, 463 sextillion, 463 quintillion, 374 quadrillion, 607 trillion, 431 billion, 768 million, 211 thousand and 456

We live in a word where “smart devices” are everywhere, and with the IoT, smart devices will become ever-present: Always there, always on, and always exchanging data 24/7/365.

While the foundation of the IoT focuses around “smart devices,” in reality, these are nothing more than sensors and reporting devices that report data to the cloud, which supports “Big Data” algorithms and research.

Cloud-based applications leverage the data and enable real-time meta-data analysis on everything from tracking where you are, your purchases, airplane data, and more—all of which comes from sensors enabled by the push to build the next generation 5G network. The cloud enables the sensors to capture data anytime, anywhere.

Real-time examples of how this emerging technology can save lives include adding “smart sensors” to bridges to measure real-time stress, weather-related issues such as ice, cracks, and movements that can predict failure. Such information has the tremendous real-time advantage of saving lives before failure ensues.

The IoT has allowed real-time software updates of the next generation of electric cars: The Telsa. Now, instead of taking your car in for service, it is automatically updated at night when you sleep—always evolving and always updating.

According to Fool.com, major corporations have been investing in IoT for years. Monsanto and other agriculture companies use IoT to make planting and harvesting food easier, faster, and more efficient by utilizing data from sensors on farm equipment and plants, satellite images, and weather tracking in order to increase food production.

General Electric (GE) is using IoT to help liquefied natural gas (LNG) plants decrease their downtime by pinpointing potential problem areas before they become major issues—a savings of up to $150 million a year, according to MIT Sloan Management Review (Sloan Review, Big Idea: Competing With Data & Analytics Research Highlight October 21, 2016).

With the IoT comes ubiquitous real-time monitoring that can improve our lives and help make the world a safer place. While the possibilities are endless, they do involve a degree of discernment over just how much monitoring should be allowed when looking at practical considerations involving privacy of our lives and the ethics related to big data tracking.

At KAI Partners, we specialized in these highly complex integrated projects, where cross-functional technologies provide leading solutions in the cloud, complex network architectures, and highly evolved leading edge architectures.

About the Author: Jason Hardi has been in the Information Technology field for over 25 years. Prior to that, he started his working life as a Marine Biologist. As a Marine Biologist, he saw the need to develop an early advanced statistical analysis program for biologists. The application, formerly called “Hyper Stats,” was subsequently marketed and sold at colleges across the country. Following this, Mr. Hardi entered the Information Technology field as a System Operator working in mainframe shops and has enjoyed advancing from entry-level positions up to Project Director and Advisor.

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