Case study of CITY OF SUNNYVALE, CALIFORNIA

The City of Sunnyvale, California, in the heart of Silicon Valley, is rated as one of the best-run cities in the United States. Its performance based budgeting system, which has been honed over the past 25 years, has fostered citywide fiscal soundness and day-to-day accountability by city administrators. This budgeting process, along with the city’s 20-year planning horizon, is aiding the IT department in creating and  financing the city’s information infrastructure.

Sunnyvale’s director of information technologies was hired to move the city into the future. He thus concentrated on building the city’s information infrastructure as its foundation for the future. Says the director, “if the city  of Sunnyvale is to succeed in leveraging technological resources to deal with increasing customer demands, as well as improve efficiency and customer service, the IT department must first take responsibility for capturing accurate information and delivering that information in a timely manner.”

This statement is the driving force behind the city’s IT department. The driver for investing in infrastructure is quality of service to  customers. To provide high-quality service to customers, the infrastructure user (city  departments) must have timely and accurate information to do their jobs. For this to happen, the IT department must have the right pieces of information at the right place at the right time. The IT director believes the city needs to develop an expandable  infrastructure to leverage  technology and capitalize on opportunities.

The infrastructure provides connectivity between the city’s traditional mainframes with attached terminals/PCs, numerous stand-alone LANs, and the outside world. It is based on a fiber-optic backbone, Internet-based computing technology. A three-level distributed architecture is used, with enterprise servers, and desktop clients. The architecture encompasses more than traditional computing equipment, throughout the city will someday be replaced by laser printers so that employees can send a request for 50 copies of a report from their desktop rather than ask a secretary or clerk to make the copies.

The information infrastructure is like the foundation for a home, says the director. It needs to withstand all the weight, all the noise, and all the things  you want to plug into it.  Because IT is changing so rapidly, the city must think long-term about its infrastructure to ensure that it can be easily expanded and upgraded. Unfortunately, traditional fiber optic vendors have not been able to support upgradability. As a result, the city laid a new type of fiber optic conduit. From the end, it looks like a honeycomb with 19 cells, only 2 of which were used initially. New fiber bundles can easily be blown through the spare cells in the future using a special gas, thus making  it easy to upgrade the fiber backbone to accommodate new services such as video teleconferencing or combined voice and data transmission.

Infrastructure investments are paid through charge-back. When the IT department places equipment on someone’s desk, installs a software package on a computer, or hooks up a PC to a LAN, that equipment, software, or communication link immediately begins generating its own replacement funds. Sunnyvale charges back everything on rental rates, because it knows everything will eventually need to be replaced.

“Super” rules guide technology investments. One such rule is that the city will standardize on products to make effective use of resources. Another unwritten super rule is that a person using a computer at, say, the senior center will have the same access and response time as someone working next to the mainframe. Another IT super rule is that all projects are subject to review buy an executive body that represents all city departments. Thus continuous buy-in, support, and fine-tuning of demands forms an improvement cycle. An outcome of this super rule is a more participative executive body–one that understands departmental priority and guides the city’s IT goals as a high-performance team. A joint environment is established  for a consistent framework form which all departments can benefit.

Required:

a) Discuss the main reasons why firms invest in IT infrastructure.

b) Discuss the approach of City of Sunnyvale’s  IT director to ‘move the city into the future’ and how ‘Super’ rules guided IT infrastructure investments.