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Our client APA Group (APA) is Australia’s largest natural gas infrastructure business, owning and/or operating approximately $10 billion of energy infrastructure assets. APA’s pipelines span every state and territory in mainland Australia, delivering about half of the nation’s gas usage. Unique among its peers, APA has direct management and operational control over its assets and investments. APA also has ownership interests in, and operates, the Envestra and the Allgas gas distribution networks, which together have approximately 25,000 kilometres of gas mains and approximately 1.2 million gas consumer connections.

APA owns other energy infrastructure assets such as gas storage facilities and a wind farm.To support APA’s rapid business expansion, both organic and by acquisition a strategic ICT initiative was undertaken to implement a new Data Centre transformation to increase stability and reduce risk with the current in-house solution.

The Business Challenge:
APA has experienced rapid growth with increasing demands on its’ infrastructure and in particular the three Data centres which were located in 2 locations (Adelaide and Dandenong). These were considered a risk to the business as they were not fully equipped to service APA’s growth and expansion and were causing continuity issues with the current infrastructure network.

Data Centre Sourcing and Transition programme
Cost Down Revenue Up ‘CDRU’ was selected as the strategic sourcing and implementation partner to support this initiative. The CDRU people, sourcing process and network analysis tools were collectively brought together to implement a strategic sourcing process. The CDRU process known as the USP (Understanding, Solutioning, Proposing) process mapped out very clearly, and in practical steps what had to be done over an 8 month period from the initial briefing through to full change over to the new data centres.

Phase 1: The Understanding process took a forensic approach to identifying the costs and risks with the current DC set up, the costs of transition and then the future state cost and service model with the new DC’s. This included reviewing the current infrastructure and application documentation which was found to be inadequate and therefore needed to be re-written for the new future state.

Phase 2: The Solutioning process identified two main areas of focus: Transforming the current set up through strategic and tactical purchasing of hardware to build the data centre core architecture based on the design developed with the APA infrastructure team and the new supplier and the migration plan whilst tactically reusing hardware at the new centres once the data had been migrated.

Phase 3: The Proposing process, included a final ‘Best and Final Offer’ process, detailing supplier due diligence and financial business sensitivity modelling with two supplier options compared on an ‘apples-for-apples’ basis against pre-determined client evaluation criteria. CDRU then made a board level recommendation to APA Group, which was accepted.

Main Business Results Achieved by the Program:
The first step was CDRU providing a detailed ICT service cost/value baseline and mapped out high level Future Data Centre Organisational needs. This involved CDRU projecting savings based on its extensive market benchmarks. This set a very valuable strategic and tactical agenda for which areas of ICT needed both investment and also a cost focus. The strategic agenda included CDRU ‘outcome’ certainty from the outset to ensure sourcing risk was minimal, timeframes were compressed and early benefit realisation was achieved.

The benefits of our ‘USP’ sourcing process can be summarised below:

  • 24/7 infrastructure support model with significant improvement in Up Time
  •  Moved to “base cost” model for defined infrastructure work with access to specialised service at known costs
  •  Improved Quality of Service and increased capacity
  •  CDRU delivered the project on time and to the agreed budget
  •  A more stable DC network with greatly reduced risk to APA