To save on IT outsourcing, Minneapolis takes over help desk

Realizing that IT outsourcing firms make their highest profit margins on technical support, Minneapolis plans to save millions of dollars by bringing those jobs back to the city.

That is one component of a plan to sever ties with the city's current provider, Unisys, ending a 12-year relationship ultimately worth $147 million to the Pennsylvania-based company — the city's largest contract. The council gave initial approval Wednesday to switch some other services to OneNeck IT Solutions.

Changing contractors and bringing the help desk and desktop support in-house will save the city about $3 million a year. It currently pays about $13 million a year to Unisys for technical and desktop support, in addition to data storage, security and networking.

The change involves hiring 33 employees, most of whom will staff a round-the-clock support center or install hardware and software.

The city's IT chief, Otto Doll, said city officials were surprised by the cost savings of bringing those services back to the city. They learned that the service desk and desktop services are "the most lucrative part of the outsourcer's set of activities," Doll said.

The transition itself will cost about $10 million, since the city has to hire new employees and purchase equipment owned by Unisys. But that cost will be covered by past charges to city departments that have accrued in an account now worth $45.8 million.

The new five-year contract with OneNeck is worth $22 million and includes data storage and network services. While headquartered in Arizona, OneNeck has a Twin Cities division that was previously known as Visi Inc.

Doll said bringing back the help-desk jobs would let the city evolve. The annual cost of that change will be just over $3 million, one chunk of the annual $10.5 million in expected future IT costs.

Outsourcing companies are focused on making the most money they can from the processes they create, Doll said. He said the city really wants to "own that client relationship and have that ability to evolve how we deal with employees and with the departments overall."

The city has had challenges hiring IT employees in the past because the jobs required a lot of expertise, Doll said. The new arrangement will make it easier to find people who can then climb a career ladder in the IT department. "There are just literally more people out there with these types of skills," Doll said.

He said the city is working with Minneapolis Community and Technical College, Genesys Works and other groups to find more people of color to work in the city's IT department.

"People of color are going into that field far more than whites across not only the United States, but the world," Doll said.

Council Member Andrew Johnson, who has helped steer the change in the past year, said the new contract is clearly better for the city. "It's not every day you have an opportunity to save taxpayers money, improve internal services and in-source jobs," Johnson said.

The Unisys contract officially expires in December.

Eric Roper • 612-673-1732