Cloud Computing: A Problem Shared

1. Cloud Computing: A Problem Shared • Municipal Association of Victoria • Metro Forum • August 2013

2. KPMG and MAV – Cloud Review • KPMG was engaged by MAV in May this year • Review the use of Cloud technologies across the Victorian Local Government sector • Consider broader trends in the industry • Assess Whole of Victorian Government activity • What impacts could these technologies have across the Sector? • KPMG’s review encompassed extensive data gathering • Interviews and Site Visits with 7 Councils… • Attendance at multiple MAV meetings • Case study reviews… • Interviews with exemplar representatives from the UK, Qld, etc • Access to KPMG’s own data stores • This presentation represents the primary deliverable from that assignment • Supporting material also developed, will be available from MAV

3. Introduction • What is Cloud computing? • “Cloud computing” is a term which is used loosely to indicate by the use by one party of the computing facilities of another party or parties. • Essentially, this is a form of outsourcing • There have been some classic examples of this sort of activity – email, DropBox, etc • Offerings are rapidly becoming more sophisticated – Oracle Cloud, Amazon Cloud, etc • Increasingly the IT market is dominated by ‘Cloud’ offerings • As offerings mature speed to deployment is increasing markedly • How does Cloud work? By sharing the facilities of other organisations • Infrastructure… • Storage… • Disaster Recovery… • Systems… • Processes … • Data… • Who uses Cloud? • At last count, pretty much everybody!

4. Cloud Offerings - a Broad Spectrum

5. Why is Cloud Important? Sharing IT resources can deliver many forms of benefit • Convenience • Lower cost of IT • Less need for specialist resources • Ability to deliver better quality and previously unavailable services …but sharing IT resources is generally only the first step • Sharing processes can bring significantly greater benefit • The Cloud model is a collaboration model • Option to deliver significantly greater increments in service capability without going though the process of developing internal skills • Option to support processes across organisations by sharing resources across common processes • “In federal government alone we spend $80 billion a year on IT… we cannot continue on that path in this tough fiscal environment. • That is why we, as part of this administration, instituted a ‘Cloud first’ policy” • - Vivek Kundra, CIO, US Federal Government 2010 • “The speed, flexibility and economies of scale offered by cloud computing are prompting organisations to rethink what needs to be delivered in-house. • It is financially responsible for the Victorian Government to consider these alternative delivery models. ” • - Victorian Government ICT Strategy, 2013

6. Levels of Cloud Adoption KPMG has identified multiple phases of Cloud adoption across organisations KPMG has observed all phases of Cloud adoption across the group of Councils we engaged with during this assignment

7. Cloud SWOT • STRENGTHS • Offers deployment of new processes with minimal requirement for up-front cash flow • Transfer risks associated with technical delivery to the outsource provider • Offers speedy deployment and can be scaled very quickly • No need for such a multi-skilled IT capability • WEAKNESSES • Highly tailored cloud may be more expensive than in-house IT costs • Reduced customisation of processes • Inadequate planning can limit benefits • OPPORTUNITIES • Deployment of mobility tools and/or bring your own device (BYOD) options will be easier through a Cloud provider • A shift away from delivery of IT allows organisations to focus on provision of services to customers • May provide options for new service delivery • Shared processes allows for shared resources across Council groups • THREATS • Cloud deployment may lead to “client captivity” • At present Cloud-to-Cloud interoperability is limited. • Data ownership and success rights tend to be open in Cloud arrangements, with the vendor generally being advantaged. KPMG observation – Cloud issues can seem technical but this SWOT is strategic

8. Local Government and Cloud

9. Why is Cloud Important for Local Government? Because Local Government lacks funding • Cloud offerings can decrease direct IT costs in a range of areas • Cloud offerings can deliver core services to your organisation at much lower cost • Because your customers are expecting more and more • Speed to market of new Cloud offerings tends to be significantly greater • Platforms for deployment of new information services or content can be deployed. literally in minutes Because the Cloud model can fundamentally re-orient your approach • The principle of “sharing” finds itself pertinent across more than just IT • The Cloud model is a collaboration model • Ability to develop deeper capabilities by sharing them across multiple councils • Common processes will support easier data sharing, common reporting, etc • Our review has shown that many Councils have already embraced this approach

10. MAV’sCloud Resource Kit • Resources to help understand Cloud and its strategic opportunities for your Council • Cloud Computing Maturity Model • Considers the levels of Cloud adoption discussed earlier • Shows the sorts of thinking, issues and opportunities available at each stage of development • Links to case studies • Presents multiple dimensions of the issue – privacy, governance, architecture, etc • Local Government Cloud Case Studies • Various case studies from across Victoria • Interstate and International examples • Examples showing Cloud use across several levels of Cloud sophistication

11. Cloud Computing Our challenge for Councils - Is there a way you can SHARE your problem?