FCR(98-99)56

For discussion
on 18 December 1998

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Architectural Services Department
New Subhead "Office Automation for Architectural Services Department"

Members are invited to approve a new commitment of $19,429,000 for providing office automation facilities to the Architectural Services Department.

PROBLEM

The absence of an Office Automation (OA) network system in the Architectural Services Department (Arch SD) inhibits effective and efficient communication both within the Department as well as with policy bureaux and other departments.

PROPOSAL

2. The Director of Architectural Services (D Arch S), with the support of the Secretary for Works and on the advice of the Director of Information Technology Services, proposes to install an OA system in the Department with a commitment of $19,429,000.

JUSTIFICATION

3. It is Government's policy to take full advantage of information technology to improve the efficiency, quality of service and cost-effectiveness of policy bureaux and departments. While Arch SD has been using computer systems in technical and property management applications, the existing mode of communication within the Department mainly limits to paper correspondence and direct person-to-person contacts. The benefits of one-to-many and interactive mode of communication under an OA system are not available.

4. To bring the communication mode up to the modern standard, D Arch S proposes to implement an OA system in Arch SD, comprising -

1. a local area network (LAN) with 224 workstations and software for electronic mail communication, meeting scheduling, graphics presentation, word processing, spreadsheet and database management;

2. access to the Government Communication Network (GCN) through the LAN for electronic mail communication and information exchange/sharing with policy bureaux and other departments; and

3. access to the Government Common Application System (GCAS) for sharing of data management and retrieval of commonly used information and documents.

The main users of the OA system include all senior professional and equivalent officers, personal secretaries and heads of functional units such as the General Registry, the Personnel Registry, the Accounts Section and the Supplies Section.

Benefits of the proposed OA system

5. The proposed system will bring about the following benefits -

1. facilitate management and the decision-making process by turning data into useful information for analysis and reporting purposes through standard software packages and by sharing and exchanging such information efficiently among offices of Arch SD at different locations (including the Headquarters at the Queensway Government Offices and the Property Services Branch at the APB Centre in To Kwa Wan);

2. improve communication between Arch SD and policy bureaux and other departments through connection to GCN;

3. enhance data management and retrieval of commonly used information and documents, such as Government Circulars and Regulations, and Government Telephone Directory through GCAS;

4. increase the operational efficiency of Arch SD by eliminating duplicating efforts in updating data by individual users, reducing paper consumption and improving the turn-around time in document production and delivery; and

5. enable speedy transmission of documents electronically thereby minimising efforts in delivering paper documents and facilitating collaborative working on common subject matters.

Cost and benefit analysis

6. Electronic data transfer has become the present-day mode of office communication. While it has generally been accepted that an OA system will improve office efficiency and productivity, it is often not possible to quantify precisely the productivity gain or savings arising directly from such a system. The normal cost and benefit analysis with an estimated pay-back period is therefore not entirely applicable in this case. However, this proposal to equip Arch SD with the necessary OA facilities will enable its staff to communicate more efficiently among themselves and with other policy bureaux and departments and result in benefits to the Department's operations. A notional 1% saving in staff costs arising from improved efficiency and productivity gain would amount to about $3.1 million a year. In addition, there will be annual savings of about $33,000 in the consumption of paper in the Department. Greater use of information technology will also help the Department to attain productivity targets under the Enhanced Productivity Programme despite increases in workload arising from projects in the building programme.

FINANCIAL IMPLICATIONS

Non-recurrent cost

7. The estimated non-recurrent cost of the OA system is $19,429,000, broken down as follows -

	1999-2000 $'000	2000-2001 $'000	Total $'000
(a) Computer hardware, software, data communication equipment and cabling	7,500	2,500	10,000
(b) Implementation services/contract staff	2,024	3,334	5,358
(c) Site preparation	2,213	0	2,213
(d) Consumables	357	0	357
(e) Training	384	192	576
(f) Contingency (5% of items (a) to (e) above)	624	301	925
Sub-total	13,102	6,327	19,429
Other non-recurrent costs
(g) Arch SD staff costs (including on-costs)	641	107	748
(h) Information Technology Services Department (ITSD) staff costs (including on-costs)	1,734	289	2,023
Sub-total	2,375	396	2,771
	______	_____	______
Total	15,477	6,723	22,200
	______	_____	______

8. As regards paragraph 7(a), the cost of $10,000,000 is for the acquisition of computer hardware (including workstations and peripherals), software, data communication equipment and cabling work.

9. As regards paragraph 7(b), the cost of $5,358,000 is for the hire of services for system development, customisation of the common applications, implementation of the electronic mail solution, detailed network design, integration of the OA system with the existing operational systems of the Department, installation of equipment and software, and comprehensive testing activities.

10. As regards paragraph 7(c), the cost of $2,213,000 is for site preparation works required for setting up the network.

11. As regards paragraph 7(d), the cost of $357,000 is for acquisition of miscellaneous items including start-up consumables like tape cartridges.

12. As regards paragraph 7(e), the cost of $576,000 is for training staff of Arch SD in using the facilities and in administering the network on a day-to-day basis.

13. As regards paragraph 7(g), the cost of $748,000 represents the staff cost for four man-months of Senior Executive Officer and 6.5 man-months of Executive Officer I (EOI) for providing executive support during the implementation of the OA system. We shall absorb the staffing requirements by internal redeployment.

14. As regards paragraph 7(h), the cost of $2,023,000 represents the staff cost for four man-months of Senior Systems Manager, eight man-months of Systems Manager (SM) and 12 man-months of Analyst/programmer I (API) required by ITSD for providing technical support in project development and management, and overseeing the implementation of the OA system.

Annually recurrent cost

15. The estimated annually recurrent cost of the proposal is $3,107,000 for 2000-2001 and $3,477,000 (full-year) for 2001-2002 and beyond. The breakdown is as follows -

16. As regards paragraph 15(a), the cost of $1,424,000 is for hardware and software maintenance, employment of contract staff and/or engagement of support services in providing on-going system maintenance and operation support.

17. As regards paragraph 15(b), the cost of $101,000 is for the payment of rental charges for data communication lines.

18. As regards paragraph 15(c), the cost of $401,000 is for the acquisition of consumables such as tape cartridges for system backup.

19. As regards paragraph 15(d)(i), the annual staff cost of $705,000 is for one EOI post to perform on-going system administration tasks and operational activities. We shall absorb the staffing requirement by internal redeployment.

20. As regards paragraph 15(d)(ii), the annual staff cost of $846,000 is to cater for four man-months of SM and eight man-months of API effort for providing on-going maintenance support and technical services.

Implementation Plan

21. The proposed implementation timetable is as follows -

Activity	Target completion date
Detailed system design and procurement	June 1999
Site preparation and cabling	August 1999
Installation and testing of OA network	January 2000
Installation and testing of GCAS	May 2000
System operation	June 2000

BACKGROUND INFORMATION

22. Since late 1993, the Government has started implementing OA network systems on a project-by-project basis to improve the productivity of government offices and the efficiency of communication among policy bureaux and departments. These office networks are linked to the GCN enabling them to exchange information electronically with one another. To date, all policy bureaux and many departments have been connected. As these systems have proved helpful in improving efficiency, they are being extended to other departments.

Works Bureau
December 1998