Oracle ERP Support

Appendix K Benchmark Findings

City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 1

 City of Virginia Beach
Oracle ERP Support Benchmark Findings
23 September 2013

Prepared for:

GARTNER CONSULTING
Project Number: 330015256

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

2 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Table of Contents

Oracle ERP Support Benchmark Findings

 Scope and Methodology
 Executive Summary
 Detail by IT Functional Area
– Oracle e-Business Application Support
– Oracle e-Business Infrastructure and Operations Support

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 3

 Scope and Methodology
Oracle ERP Support Benchmark

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4 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Project Scope
 Benchmark Objectives
– Identification of the City’s total cost of ownership for Oracle support and maintenance
– Comparison of City’s costs to that of comparable peers
– Identification of areas for efficiency improvements where appropriate (such as through contract opportunities)
 Benchmark Scope
– Time frame for the study is 12-months, fiscal year 2013 (July 2012-June 2013)
– Includes general support effort and associated tasks including enhancement effort under 10 person days
– Excludes the implementation phase, considered to be the first install of Oracle ERP software, and any major upgrade projects
(i.e., the R12 upgrade) after the relevant go-live date

Oracle ERP Phases

Upgrade Project
Start of
Project Go-Live Date

Implementation Support Support

2007 2008 2009 2010 2011 2012 2013

The Oracle ERP Support comparisons are limited to the circled Support area in the figure above.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 5

 Project Scope

ERP Support ERP Development

 Maintenance of any duration  Brand-new applications

– Problem Support and Resolution – Initiation
– Business Support – High Level Requirements
– Corrective – Detailed Requirements
– Preventive – Design
– Adaptive – Build
– Perfective – Accept
– Implementation
 Functional enhancements
– Less than two person-weeks  Functional enhancements
– Greater than two person-weeks

Separate views for ERP Support and Applications Development

ERP Support: This includes staff involved in supporting applications that exist within the current production portfolio. This includes
bug fixes, small enhancements, conversions, code refactoring, re-platforming, language upgrades, patches, etc.
ERP Development: This includes staff involved in developing new applications, enhancing existing applications, installing new
packages and installing major functional enhancements or upgrades to existing packages.

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6 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Benchmark Methodology
Key Concepts
Adherence to “Consensus Models” “Workload” represents a provided
ensures comparability service and is balanced against cost

To compare with actual spending, an organization’s

workload is multiplied by its peers’ average unit cost.

SAMPLE
The organization’s
500 Concurrent User Count.
Peers’ average cost per
x $12,000 concurrent user.
• Based on operational expense Peers’ cost for supporting the
• Labor is not depreciated
$6,000,000 organization’s concurrent
users.
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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 7

 Benchmark Analysis Methodology
Peer Comparisons

 Independent peer groups were selected for each IT functional area based on workload and other
characteristics such as industry and geography.
 The spending and support profile of each peer group was used to simulate what the comparative
group would spend to support City of Virginia Beach's workload. A composite model representing
total IT spend in all areas included in the analysis was also created.
 Two peer groups are included in the Oracle e-Business benchmark that reflect similar Oracle e-
Business application installations in terms of named accounts, concurrent users, modules and
operating environment.
– Government peer group (Govt Peer)
– Private Sector peer group (Pvt Peer)
 The results are displayed with three peer group reference points:
– Average: representing the average for the comparative group
– 25th Pctl: representing the lowest quartile (most efficient) for the comparative group
– 75th Pctl: representing the highest quartile (least efficient) for the comparative group
 Differences in spending and other metrics derived from this analysis provide insight into
opportunities for increased cost efficiency and reduced risk.

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8 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
Workload Profile and Peer Demographics
 Workload Profile
– City of Virginia Beach Oracle e-Business Application Suite has a total of 7,920 Named Accounts
(170 Financials and 7,750 HCM) and 341 Concurrent Users. Modules include:
• Government Financials
– General Ledger (GL), Accounts Payable (AP), Purchasing, Fixed Assets, Sub Ledger Accounting (SLA),
Payments, Alerts, Cash Management, Accounts Receivables (AR), Project Billing, Project Costing
• Human Capital Management (HCM)
– Oracle Advanced Benefits (OAB), Self Service (Manager and Employee), Payroll, Oracle Time & Labor
(OTL), iLearning (OLM), Learning Management, iRecruit, HR Intelligence

 Peer Comparison Group Profiles

– Government (Govt) Peer Group includes 8 State and Local Government Organizations with
Oracle e-Business Financials and HCM applications with a similar number of Named Accounts at
7,140 and Concurrent Users at 341
– Private (Pvt) Peer Group is a cross industry peer group that includes 8 organizations
headquartered in the US with Oracle e-Business Financials and HCM applications with a similar
number of Named Accounts 10,227 and Concurrent Users 527
• Industries represented include Manufacturing, Financial Services, Oil and Gas, Pharmaceuticals, Insurance,
Retail Trade, Advertising, Printing and Publishing

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 9

 Oracle e-Business Infrastructure Support
Workload Profile and Peer Demographics

 Workload Profile
– City of Virginia Beach infrastructure is outsourced to Oracle through Oracle On Demand hosting
agreement.
• 1 Physical Linux Server
• 4 Operating System Instances
• 2 Terabytes of Useable Storage
• Oracle Enterprise Edition DBMS Software

 Peer Comparison Group Profiles

– Government (Govt) Peer Group comparisons are based on current outsource contracts for similar
services provided by “tier 1” service providers.
– Private (Pvt) Peer Group is a cross industry peer group that includes 8 organizations
headquartered in the US with a similar number and sized Linux Server and Storage environment.

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10 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

 Executive Summary
Oracle ERP Support Benchmark

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 11

 Overview

 The overall focus of this analysis is on Oracle ERP application and infrastructure and operations support for a 12
month study timeframe representing Fiscal Year 2013.
– $2.0M of The City of Virginia Beach’s IT expenditures and 9.6 full-time equivalent staff (FTEs) are included in the consensus
models for this analysis.
– Gartner Benchmarks utilize a consensus cost model chart of accounts approach to ensure fair benchmark comparisons. As a
result, expenditures captured in the benchmark will not directly match the official IT budget.
 The City of Virginia Beach performed an upgrade of the Oracle ERP application to R12 that spanned FY2012 and
FY2013.
– The cost and associated staffing for the R12 upgrade is excluded from the analysis as the focus is on recurring Oracle ERP
application and infrastructure and operations support spending and staffing.
 Two peer groups are included for comparison purposes; a government peer group and a private sector peer
group. Both peer groups include organizations with Oracle Financials and HCM that are of a similar size and
complexity in terms of named accounts, concurrent users and modules.
– The government peer group is considered the closest comparable from a workload and complexity standpoint.
 For each peer group, three reference points are included to show the range of spending and staffing to support
similar Oracle ERP application and infrastructure environments; the peer average, 25th percentile or most efficient
performance of the peer group and the 75th percentile or least efficient performance of the peer group.
– While the 25th percentile is identified, and can be used as a stretch target at times, no organization should be driving to perform at
the top quartile for all areas as it may indicate under-investment and risk to service quality. In addition, top quartile is not indicative
of best in class.

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12 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Executive Summary
Total Spending by Functional Area

 City of Virginia Beach IT spend

for support of the Oracle
eBusiness application and
infrastructure and operations
environments is 12% lower than
what similar Government peers
would spend on average to
support the same workload, at
$2.0M versus $2.3M
respectively.
– Higher efficiency level is driven by
lower cost for application support
which offsets higher cost for
infrastructure and operations
support.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 13

 Executive Summary
Total Spending by Cost Category

 City of Virginia Beach IT spend for

Personnel is 26% below the
Government peer average.
– Lower staffing levels and lower overall
annual fully burdened cost per FTE for
application support are the key drivers.
 Software costs are 6% lower than the
Government peer average.
 Hardware costs are 17% higher than
the Government peer average.
– City of Virginia Beach’s Oracle on
Demand fees are categorized under
Hardware, but include hardware,
software, facilities and managed services
for the ERP infrastructure and operations
environment.
– For the Government peer group,
hardware also reflects outsourced
contract pricing for similar services
provided by tier 1 vendors.

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14 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Executive Summary
Total Spending by Sourcing Type

 City of Virginia Beach spends a

similar amount on insourced
resources compared with the
Government peer average.
 Spending on outsourcing and
contractors is lower than the
Government peer average
overall.
 Compared with the Government
peer group, City of Virginia
Beach spends less on external
resources for application support
and more for infrastructure and
operations for the Oracle
eBusiness Suite.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 15

 Executive Summary
Total FTEs by Functional Area

 City of Virginia Beach IT staffing

level for the Oracle eBusiness
application support and
infrastructure and operations is
21% lower than the Government
peer average, at 9.6 versus 12.2
FTEs respectively.
 Staffing is lower than the
Government peer average for
both application support and
infrastructure and operations
support.

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16 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Executive Summary
Total FTEs by Sourcing Type

 City of Virginia Beach IT has

more internal resources and
fewer external contractors
and consultants in
comparison with the
Government peer group.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 17

 Executive Summary
Oracle ERP Application Support FTEs by Staff Category

 Technical and Functional Oracle

ERP application support staff at
the City of Virginia Beach
perform functions that often
span multiple staff categories.
– Combined staffing for
Development, Quality Assurance &
Testing and Business Analysis &
Architecture, is in line with the
Government peer average, at 8.5
FTEs.
– City of Virginia Beach does not
have dedicated QA/Testing
resources.
 Staffing is lower than the
Government peer average for all
other functions including:
– Logical Database Analysis
– IT Process Management
– Project & Program Management
– Services Administration
– Management and Administration

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18 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Executive Summary
Oracle ERP Application Support Cost per FTE

 Total annual blended cost per FTE, including both internal staff and contractors, is 18% lower than the
Government peer average, at $97K versus $118K.
 Cost per FTE for internal staff is 9% lower than the Government peer average, at $96K versus $106K.
 Cost per FTE for contractors is significantly lower than the Government peer average, at $115K versus $175K.
 Note: peer data is not adjusted for geographic cost of living considerations, tenure and skill sets which can also
impact compensation comparisons.
Total Blended Cost per FTE Cost per FTE by Sourcing Type

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 19

 Executive Summary
Oracle ERP Application Support Service Request Efficiency
 Number of service requests (SRs)
opened for the fiscal period falls
between the average and the 25th
percentile of the Government peer
group similar to the staffing
comparisons.
– 810 service request were opened during
the year and 819 service requests were
closed indicating a significant number of
work requests were completed and that
there is not a large backlog of open SRs.
– Backlog of open SRs excludes expansion
and large project CIPs.
 Overall Service Request Efficiency
during the study year (SRs closed /
SRs opened) is 1.01% versus the
Government peer average of 0.88%.
 City of Virginia Beach has a higher
service request close rate than peers
when comparing the number of closed
requests versus those that are still
open.

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20 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Executive Summary
Oracle ERP Application Support Defects

 City of Virginia Beach reported a higher total number of defects in the production environment when compared
with the Government peer group.
 In addition, there are a higher number of the most critical and major defects which have the greatest visibility and
impact on the organization.

Total Defects Breakout of Defects by Severity

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 21

 Recommendation 1: Application Support Staffing Levels
Key Issues Actions
 City of Virginia Beach has lean staffing and low spending on  Obtain additional funding and resources to meet expected increase in
personnel costs for Oracle ERP Application production support demand for on-going support, growth and expansion.
and sustainment. – Use the results of this benchmark and business value metrics to build a
– Overall staffing is 16% lower than the Government peer average case for balancing resource needs through hiring internal staff and/or
and personnel costs are 26% lower in comparison with the contractors.
government peer group average.  Establish an approach to managing current, and planning for future,
 The City did a great job in addressing a large volume of service personnel resources.
requests and there is a smaller backlog of open service – Identify key skills, roles and positions required to support critical
requests. However, staffing is not sufficient to address initiatives, including Technical and Functional roles, Database
Administration, Quality Assurance & Testing, Business Analysis and
expansion work and will face coverage pressure due to staff
Architecture and Planning and Process Management
turnover and as the use of self-service (i.e., Open Enrollment
– Analyze and evaluate “bench strength” for those same efforts, while
and iLearning) increases.
considering needs that may be sourced by external resources.
 In addition to lean overall staffing, there is a high dependency on – Ensure that critical knowledge is documented and shared rather than
key individuals in certain areas and some significant differences siloed with specific individuals.
between the City of Virginia Beach and the peer group in terms – Take a long-term view to account for emerging roles and skills, as well
of the distribution of the FTEs across the various IT functions. as current and near-term needs.
– Staffing is similar to the peer group for direct technical and  Monitor backlog and quality levels closely to ensure that proper
functional job categories, but is lower for indirect functions such as priority is given to those efforts that are consistent with business
database administration, quality assurance and testing and objectives.
planning and process management. – Engage the business in governance and demand management to
ensure that requests are prioritized and assigned appropriately given
resource availability.

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22 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Recommendation 2: Personnel Costs
Key Issues Actions
 Personnel costs are 26% lower than the peer groups overall.  Decouple the ERP staff's salary and compensation structures
This is driven by a combination of lower staffing for application from the City’s norms, and rebase compensation in line with
production support and sustainment and lower cost per FTE. market compensation.
 Cost per FTE is lower than the peer groups for both employees  Perform periodic reviews of competitive compensation. The
and contractors. The City’s job specifications and salary goal is to be within 10 to 15 percent of market rates. Those
structure constrain the organization in terms of attracting, hiring organizations where compensation falls below 30 percent of the
and retaining skilled ERP resources. industry norm typically face higher turnover.
 The City of Virginia Beach used fewer contractors and  Compensation plans should extend beyond just monetary
consultants for routine application production support and rewards and include elements like holiday time, more flexible
sustainment work in FY13 in comparison with the Government hours, benefits and training.
peer group and the low cost per FTE for contractors reflects
strong negotiation for required skill sets.
 The concern with this environment is that organizations unable
to pay competitive salaries must consider the implications, i.e.,
an increased reliance on contractors that typically result in
higher cost and loss of business knowledge over the long-term
and potential project delays due to staff shortages.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 23

 Recommendation 3: Infrastructure and Operations Support
Key Issues Actions
 The City of Virginia Beach outsources its infrastructure support  A formal contract evaluation is recommended if renegotiations
through an Oracle Cloud Services (Oracle on Demand) hosting are an intended outcome. Service provider responsibilities, the
arrangement. software stack and environment configuration and service levels
 The annual cost for these services appears 17% higher than can have a significant impact on contract pricing.
what peers would spend to outsource an environment that is  Identify vendor versus retained responsibilities, detail on the
similar to the City of Virginia Beach’s in size and complexity, at software stack and environment configuration, and incorporate
$541K versus $464K. operational service levels into the contract that are in line with
– Note: the peer comparisons are based on current outsource business requirements.
contracts for similar services provided by “tier 1” service providers. – Standard SLAs include system availability, application uptime, and
 There is little detail in the contract on service provider resolution time for problems.
responsibilities, service levels and architecture including the  Negotiate with Oracle service levels and potential additional
software stack and the environment configuration. extended service fees for faster creation of non-production
– The environment is configured to support a peak of 900 concurrent environments for development, testing, training and
users which indicates that there may be room for growth. demonstration purposes and enhanced refreshes.
– There is built in resiliency through the outsourced arrangement and  Establish a storage management strategy that includes data
there are SLAs in the event of a disaster for recovery time of tape storage preferences, redundancy, backup, archival and
backup. retention based on a specific City storage policies.
– The City of Virginia Beach reports that storage usage has been – Prices for storage have been dropping at a rate of 30% per year.
rising which may impact contract pricing in the future. Consider renegotiating the contract at the end of its term to reflect
 City of Virginia Beach also reports that it takes 6-8 weeks to current and anticipated storage use and competitive pricing.
obtain a new test environment. A goal of using a cloud solution  Review vendor management processes and resource capacity
is to have flexibility and to provide the developers with an agile to ensure that there is sufficient oversight to manage the
environment for solution delivery. relationship with Oracle effectively.

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24 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Recommendation 4: Infrastructure and Operations Sourcing
Key Issues Actions
 The City of Virginia Beach is considering its sourcing options for  Determine any incremental costs to obtain greater responsiveness
ERP application infrastructure and operations support, i.e., from Oracle for setting up non-production environments.
whether to continue to procure Oracle Cloud Services, host the  Weigh the total costs of the current contract plus any incremental
application with an alternate vendor or to bring the infrastructure costs with the service quality in terms of flexibility and
and operations support in-house. responsiveness and potential risks associated with a transition.
 A key benefit of retaining Oracle as the infrastructure and  Key considerations when evaluating insourcing include:
operations outsourcing partner is access to their knowledge
– What are the competitive benefits that can be achieved by
base and skills and thus increased efficiency and reduced risk in
developing the internal IT expertise necessary to support the ERP
how the application is managed and maintained. However, the infrastructure and operations environment effectively?
length of time to get changes deployed into production and to
– Does the City of Virginia Beach have the skills and bandwidth
obtain non-production environments and refreshes are clearly
needed to support the ERP operations (e.g., database administrator,
issues with the current model. system administrator, etc.)?
– Is the City of Virginia Beach willing to invest in establishing internal
resources and developing the skills to manage the ERP infrastructure
and operations?
– When comparing costs between in-house, the ERP vendor and a
third party vendor, factor in cash flows from personnel, software
infrastructure (e.g., database, middleware) licenses and
maintenance, hardware and hardware maintenance, networking
services, facilities and disaster recovery.
 When evaluating sourcing alternatives investigate critical areas,
including pricing mechanisms and demand management,
architectural specifications and limits, impact on application
software licenses, transition in and out, contract terms and
conditions, security, compliance, auditing, and risk management.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 25

 Recommendation 5: Quality
Key Issues Actions
 City of Virginia Beach reported a higher total number of defects  Focus on reducing the number of defects in the production
in the production environment when compared with the environment by improving the understanding of defect drivers
government peer group. In addition, there are a higher number and addressing root causes which in turn affords reductions in
of the most critical and major defects which have the greatest cost and improvements in productivity and satisfaction.
visibility and impact on the organization. – Review available information on accumulated defects (i.e., incident
 City of Virginia Beach has does not have dedicated Quality and event logs, metrics and reporting).
Assurance and Testing staff. Testing is performed by the – Categorize defects by module and by type (e.g. major one time
development staff. incidents, frequent incidents, events, call backs, duration of
incidents, any incidents that have automation or training
opportunities).
– Identify repetitive problems and opportunities to improve service
quality.
– Establish a set of key metrics for critical and major defects;
measure, track and improve performance over time.
 Explore the establishment of a shared Quality Assurance
Resource Center. Dedicated Quality Assurance/Testing staff
are a best practice.

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26 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Recommendation 6: Value
Key Issues Actions
 ERP is a contradiction. Organizations realize that, without a  Establish an ERP strategy that is aligned with BI, analytics and
robust ERP backbone, the organization effectively stops performance management strategies.
working. Yet, many users and business leaders wish their ERP  Evaluate business intelligence and analytic capabilities that can
would better serve the business and the users within the be leveraged as part of the ERP vendor solution or from a third-
organization party provider.
 One of the primary complaints that users have about ERP  Establish a budget and funding for investments in business
applications is that they cannot get the information they need to intelligence and analytic capabilities.
do their jobs. Many organizations believe that getting all the
data into the ERP and using standard reporting tools in the ERP
will meet the business needs. However, in order to make it
easier to get better information it is crucial to bolster business
intelligence (BI) and analytic capabilities as part of the overall
ERP strategy.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 27

 Analysis By Area

GARTNER CONSULTING

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

28 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support

GARTNER CONSULTING

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 29

 Oracle e-Business Application Support
Consensus Model

 Gartner’s consensus model for ERP

Application Support includes
spending and staffing associated with
maintenance of any duration,
problem support and resolution,
patches and minor upgrades and
functional enhancements that are
less than two person- weeks for the
following functions:
– Developers, Logical DBAs, Quality
Assurance (QA) & Testing, IT Process
Management, Business Analysis &
Architecture, Project & Program
Management and Management and
Administration.
 Licensing and maintenance fees for
ERP package software and tools, as
well as costs for facilities used by the
staff are also included in the
consensus model.
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30 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
Scope and Peer Profile
City of Virginia Beach Scope
– Oracle e-Business Application Suite 7,920 Named Accounts (170 Financials and 7,750 HCM) and 341
Concurrent Users.
– Government Financials:
• In use: General Ledger (GL), Accounts Payable (AP), Purchasing, Fixed Assets, Sub Ledger Accounting
(SLA), Payments, Alerts, Cash Management,
• Purchased but not in use: Accounts Receivables (AR), Project Billing, Project Costing
– Human Capital Management (HCM)
• In use: Advanced Benefits (OAB), Self Service (Manager and Employee), Payroll, Oracle Time & Labor
(OTL),
• Purchased but not in use: iLearning (OLM), Learning Management, iRecruit, HR Intelligence

Peer Profile
– Government (Govt) Peer Group: 8 State and Local Government Organizations with Oracle e-Business
Financials and HCM applications with a similar number of Named Accounts at 7,140 and Concurrent Users at
341
– Private (Pvt) Peer Group: 8 US organizations across the Manufacturing, Financial Services, Oil and Gas,
Pharmaceuticals, Insurance, Retail Trade and Advertising, Print and Publishing industries with Oracle e-
Business Financials and HCM applications with a similar number of Named Accounts 10,227 and Concurrent
Users 527.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 31

 Oracle e-Business Application Support
Cost Efficiency and Productivity Summary

Overall efficiency is higher (better) than the Government peer average. Cost per concurrent user is
19% lower than the government peer average, at $4,311 versus $5,354.
Productivity, in terms of concurrent users supported per FTE, is 20% higher than the Government
peer average, at 36 versus 30.

Cost per Concurrent User Concurrent Users Supported per FTE

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32 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
IT Spending by Cost Category
 City of Virginia Beach IT
spend for support of the
Oracle e-Business
application is $350K less
than what the Government
peer group would spend to
support the same workload,
at $1.5M versus $1.8M.
 Personnel is the largest cost
component. Spending is
26% or $320K lower in
comparison with the
Government peer average
for Personnel.
 Software costs, which
include the maintenance
fees for the Oracle e-
Business Suite and tools, are
6% lower than the
Government peer average.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 33

 Oracle e-Business Application Support
IT Personnel Spending by Sourcing Type

 Spending on internal
resources (insourced)
falls within a similar range
of the Government peer
average, at $872K versus
$851K.
 Compared with the
Government peer
average, City of Virginia
Beach has lower
spending on selective
outsourcing and
contractors for routine
applications support and
sustainment tasks.

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34 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
IT Personnel Spending by Staff Category

 City of Virginia Beach

has lower spending for
nearly all staff categories
including:
– Development
– Quality Assurance &
Testing
– Logical Database
Analysis
– IT Process Management
– Project & Program
Management
– Services Administration
– Management
 Lower spending levels
are a combination of
fewer staff and lower
cost per FTE.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 35

 Oracle e-Business Application Support
Total Adjusted FTEs by Sourcing Type

 City of Virginia Beach IT

staffing for support of the
Oracle e-Business
application is
approximately 2 FTEs or
16% less than what the
Government peer group
would require on average
to support the same
workload, at 9.6 versus
$11.5 FTEs.
 Use of external
contractors and
consultants is lower than
the Government peer
average.

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36 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
Total FTEs by Staff Category

 Technical and Functional Oracle

ERP application support staff at
the City of Virginia Beach
perform functions that often span
multiple staff categories.
– Combined staffing for Development,
Quality Assurance & Testing and
Business Analysis & Architecture, is
in line with the Government peer
average, at 8.5 FTEs.
– City of Virginia Beach does not have
dedicated QA/Testing resources.
 Staffing is lower than the
Government peer average for all
other functions including:
– Logical Database Analysis
– IT Process Management
– Project & Program Management
– Services Administration
– Management and Administration

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 37

 Oracle e-Business Application Support
Workflow - Support

 Workflow breakout of City of

Virginia Beach Oracle ERP
application support effort
shows similar percentages of
effort spent on Defect Repair
and Minor Enhancements in
comparison with the
Government peer group.
 Percentage of effort spent on
Business Operations
Support is lower than the
Government peer group,
 Amount of effort spent on
Technical Upgrades is higher
in comparison with the
Government peer group.

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38 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
Service Requests

 810 service request were

opened during the year and 819
service requests (SRs) were
closed indicating a significant
number of work requests were
completed and that there is not
a large backlog of open SRs.
 Overall Service Request
Efficiency during the study year
(SRs closed / SRs opened) is
1.01% versus the Government
peer average of 0.88%.
 City of Virginia Beach has a
higher service request close rate
than peers when comparing the
number of closed requests
versus those that are still open.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 39

 Oracle e-Business Application Support
Defects

 City of Virginia Beach

reports a higher total
number of defects in
the production
environment when
compared with the
Government peer
group.

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40 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Application Support
Defect Severity

 City of Virginia Beach also

reports a higher number of
critical and major defects
which have the greatest
visibility and impact on the
organization.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 41

 Oracle e-Business Application Support
Cost Per FTE
 Total annual blended cost per FTE, including both internal staff and contractors, is 18% lower than the
Government peer average, at $97K versus $118K.
 Cost per FTE for internal staff is 9% lower than the Government peer average, at $96K versus $106K.
 Cost per FTE for contractors is significantly lower than the Government peer average, at $115K versus
$175K.

Total Blended Cost per FTE Cost per FTE – Insourced versus Contractor

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42 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Infrastructure and Operations Support

GARTNER CONSULTING

This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for
the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain
information that is confidential, proprietary or otherwise legally protected, and it may not be further copied,
distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 43

 Oracle e-Business Infrastructure and Operations Support
Midrange Server Consensus Model

 Gartner’s consensus model for ERP

Infrastructure and Operations Support
includes spending and staffing associated
with the provisioning of the full life cycle
management of processing/hosting services
on midrange platforms including acquisition,
deployment, maintenance, change
management and disposal.

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44 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Infrastructure and Operations Support
Storage Consensus Models

 Gartner’s consensus model for ERP

Infrastructure and Operations Support
includes spending and staffing associated
with the provisioning of the full life cycle
management of storage services utilizing
on-line, near-line and offline technologies
including acquisition, deployment,
maintenance, change management and
disposal.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 45

 Oracle e-Business Infrastructure and Operations Support
Scope and Peer Profile

City of Virginia Beach Scope

– Oracle e-Business Application Suite is hosted by Oracle through an Oracle Cloud Services (Oracle on Demand)
hosting agreement at Oracle’s data center(s).
• 1 Physical Linux x86 Server
• 4 Operating System Instances
• 3 Database Instances
• 2 Terabytes of Useable Storage
• 24.6 Terabytes of Tape Stored Offsite
• Oracle Enterprise Edition DBMS Software
• Oracle Fusion Middleware
• Virtualization Software

Peer Profile
– Government (Govt) Peer Group: Reflects comparisons with rates for current outsource contracts for similar
services provided by “tier 1” service providers.
– Private (Pvt) Peer Group: Cross industry peer group that includes 8 US organizations with a similar number and
sized Linux Server and Storage environment.

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46 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Infrastructure and Operations Support
Efficiency Cost per Operating System Instance

 Overall cost per

Operating System
Instance falls at the high
end of the range for the
Government peer group.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 47

 Oracle e-Business Infrastructure and Operations Support
Total Spending by Cost Category

 City of Virginia Beach IT

spend for support of the
Oracle e-Business
infrastructure and
operations is $77K
more than the market
price for similar services
provided by “tier 1”
service providers, at
$541K versus $464K.

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48 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach

Oracle e-Business Infrastructure and Operations Support
Total Adjusted FTEs by Sourcing Type

 Outsourced
equivalent staffing to
provision a similar
environment is 0.8
FTEs.

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City of Virginia Beach | ComIT Master Technology Plan (Appendix K) 49

 Contacts

Gartner Contact
Lisa Warden
Associate Director
Gartner Consulting
Telephone: +1 303-733-4321
lisa.warden@gartner.com

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50 ComIT Master Technology Plan (Appendix K) | City of Virginia Beach