it portfolio plan - transpower mxc radio software upgrade lifecycle refresh of ict infrastructure in...

IP09

IT PORTFOLIO PLAN ICT Telecommunications Services – IT Shared Communications Infrastructure

1/11/2013

IP09 IT Portfolio Plan – IT Shared Communications Infrastructure

IT PORTFOLIO PLAN – ICT Telecommunications Services – IT Shared Communications Infrastructure © Transpower New Zealand Limited 2013. All rights reserved.

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Table of Contents

1 Introduction ............................................................................................ 1

1.1 Purpose...................................................................................................................... 1

1.2 Portfolio Description ................................................................................................. 1

1.3 Portfolio Plan Approach ............................................................................................ 1

2 Requirements and Strategies .................................................................. 1

2.1 Business Requirements ............................................................................................. 2

2.2 ICT Business Service Strategies ................................................................................. 2

2.3 ICT Requirements ...................................................................................................... 2

3 Portfolio Projects .................................................................................... 2

3.1 Options Analysis ........................................................................................................ 2

3.2 Project Timing ........................................................................................................... 3

3.3 Planned Projects ........................................................................................................ 3

3.4 Basis of Forecast ........................................................................................................ 5

3.5 Procurement and Delivery ........................................................................................ 5

3.6 Dependencies ............................................................................................................ 6

4 Expenditure ............................................................................................ 6

A Reference Documents ............................................................................ 7

B Capability Mapping ................................................................................. 8

C Portfolio Roadmap .................................................................................. 9


IT PORTFOLIO PLAN – ICT Telecommunications Services – IT Shared Communications Infrastructure © Transpower New Zealand Limited 2013. All rights reserved. Page 1 of 9

1 INTRODUCTION

1.1 Purpose

The purpose of this Portfolio Plan is to explain and substantiate the required capital expenditure (Capex) in the IT Shared Communications portfolio during RCP2 (2015 to 2020). It has been developed within the context established by the Information Services Strategic Plan (ISSP), Business Services Strategy (BSS) and relevant capability documentation.

1.2 Portfolio Description

The ICT Telecommunications Services - IT Shared Communications Infrastructure includes the systems required to provide the communications networks used by a range of our systems and services. This includes the TransGO network, which provides the communications that support Grid operations, critical switching and Grid protection functions.

This Portfolio plan sets out the capital projects and expenditure required to maintain and enhance the IT Shared Communications Infrastructure.

The aims and objectives of the programme of work set out in this Portfolio Plan are to:

1. deliver the infrastructure and systems required to provide telecommunications linkages between all our sites and facilities;

2. optimise the whole-of-life cost of our telecommunication assets; and

3. meet reliability and availability requirements appropriate to the very high criticality of these business functions.

1.3 Portfolio Plan Approach

Our Portfolio Plans and associated projects have been informed by our:

business capability requirements as set out in the Grid and Corporate Capability Strategy and the People Capability Strategy

ICT strategies identified in the ISSP and BSS to ensure cost-effective delivery at an appropriate level of risk

the technical requirements necessary to support the delivery of the business requirements.

A full list of documents considered in the development of this Portfolio Plan is given in Appendix A.

2 REQUIREMENTS AND STRATEGIES

Section 2 contains the business requirements, technology requirements and business service strategies that apply to the IT Shared Communications Infrastructure Portfolio.



2.1 Business Requirements

The specific business requirements applicable to the IT Shared Communications Infrastructure Portfolio in RCP2 are identified below.

Number Requirement

BR001 Maintain systems in a supportable, fit for purpose state

Table 1: Business Requirements

There are no legally enforceable duties owed by Transpower under this portfolio.

2.2 ICT Business Service Strategies

The IT Shared Communications Infrastructure Portfolio supports the business service strategies to:

upgrade and refresh Telecommunication Services Infrastructure;

enhance diversity in the TransGO network;

ensure system design emphasises the need to recover quickly, rather than focusing on availability to the detriment of being able to recover quickly; and

conform to core enterprise architecture controls and be controlled by the ICT governance process.

2.3 ICT Requirements

A set of ICT requirements has been identified to deliver the business requirements during RCP2.1 These are set out below.

Number ICT Requirement

IR001 Lifecycle Upgrade in accordance with Transpower Policy

IR016 Adequate capacity in network communications

IR031 Improve diversity and resilience of Transpower systems and networks where required to support operational requirements

Table 2: ICT Requirements

A mapping of these requirements to the relevant business requirement is set out in Appendix B.

3 PORTFOLIO PROJECTS

3.1 Options Analysis

We require a reliable telecommunications network with sufficient speed, latency and capacity to meet the needs of Grid operations and other functions that require telecommunications links.

1 The complete list, including descriptions, is contained in the Business Service Strategies.



We built the TransGO network to meet the needs of the business for a reliable communications network across the country. By the start of RCP2 this will be largely complete. The investment focus will now be on upgrading and replacing components of the TransGO network to ensure that they remain reliable and supportable.

The business and ICT requirements drive the following improvements and enhancements to our Shared Communications Infrastructure systems:

predictive monitoring, management of trends and alarms in real time;

introduction and use of 100 ms, 20 ms and possibly microsecond range measurement data to support Transmission Tomorrow strategies;

support of Inter-Control Centre Communications Protocol (ICCP) connections over TransGO;

separation of critical Grid systems from Grid planning and related systems; and

expansion of TransGO into Northland and the West Coast.

Because of the business criticality of the systems associated with this portfolio, we committed, through the TransGO program, to the in-house provision of all ICT components in this portfolio. Leased circuits may be used in isolated cases. However, the majority of historical leased circuits have been retired, and leasing will not generally be considered as a sourcing option for Shared Communications Infrastructure. This has resulted in a trade-off in reduced Opex for leased circuits, against increased Capex for Transpower owned and operated circuits.

3.2 Project Timing

The one-off projects to extend the TransGO network to Northland and West Coast (to provide enhanced telecommunications route diversity in the upper South Island), and to replace sections of the fibre route between Haywards and Islington (to improve reliability and diversity) are to be carried out during the earlier years of RCP2. The rest of the Capex, targeted at updating and carrying out lifecycle refresh activity on network components and management tools, will be carried out throughout RCP2. This work is important to maintain reliability, serviceability and effectiveness of the systems.

3.3 Planned Projects

The capital projects required to deliver business and ICT requirements are set out below.

Project Description ICT Requirements Cost ($ m)

Nokia MUX Replacement Introduction

Introduction of new TransGO Nokia MUX

IR001, IR016 1.4

Nokia CNMS Upgrade Lifecycle refresh of ICT infrastructure in line with lifecycle policies

IR001, IR016 0.3

5620 SAM Service Management Device Upgrade

Lifecycle refresh of ICT infrastructure in line with lifecycle policies

IR001, IR016 0.5

7750 Service Router Introduction

Implementation of new 7750 router into the TransGo network

IR001, IR016 0.5

Replace 7710 Service Routers


IR001, IR016 8.3



Project Description ICT Requirements Cost ($ m)

1350 Optical Management System Software upgrade


IR001, IR016 1.6

1350 Optical Management System Software/Hardware upgrade


IR001, IR016 1.0

SDH Software Upgrade Lifecycle refresh of ICT infrastructure in line with lifecycle policies

IR001, IR016 0.9

9500 MXC Radio Software Upgrade


IR001, IR016 0.2

9500 MPR Radio Software Upgrade


IR001, IR016 0.1

Next Generation Support Tools


IR001, IR016 1.4

West Coast TransGO Diversity Project

Implementation of ICT infrastructure to support telecommunication diversity through the west coast of the South Island

IR001, IR016 5.2

Northland to TransGO Implementation of ICT infrastructure to support telecommunication diversity through the upper North Island

IR001, IR016 5.2

Naseby link Implementation of ICT infrastructure for telecommunications

IR001, IR016 1.0

ADSS Cable Replacement (Central Park)

Replacement of degraded fibre cable IR001, IR016 0.5

HAY-ISL Fibre Replacement Replacement of degraded fibre cable IR001, IR016 2.2

TransGO Replacement Design

Lifecycle refresh of TransGo design to support new technologies and possible topology extensions

IR001, IR016 2.1

OSS Tools Replacement Lifecycle refresh of ICT infrastructure in line with lifecycle policies

IR001, IR016 2.1

IP Network Equipment Refresh


IR001, IR016 5.6

Transport link capacity increase to STM-64


IR001, IR016 3.1

Integration lab establishment

Implementation of a single lab environment to facilitate end-to-end service testing

IR001, IR016 0.3

Refresh Integration lab Lifecycle refresh of ICT infrastructure in line with lifecycle policies

IR001, IR016 0.1

Total 43.6

Table 3: Planned Projects

For ICT projects, the dynamic nature of technology development and evolution means that it is generally not prudent to carry out detailed design and costing more than 18 months before the project starts, and therefore valid cost-benefit analysis is not possible on longer time horizons. Most of the IT Shared Communications Infrastructure programme expenditure is focused on renewing existing systems and IT infrastructure to ensure that



they are kept in support by vendors and manufacturers to avoid the higher ownership costs involved in running obsolete, out-of-support IT equipment and systems.

Typically formal business analysis (including cost-benefits analysis) and final signoff activity will not occur until between 6 and 18 months before the project starts. However, the proposed IT Shared Communications Infrastructure programme has been reviewed and agreed by the relevant business owners and General Managers.

All proposed projects in this portfolio comply with the policies, standards and good practice recommendations contained in the reference documents listed in Appendix A.

3.4 Basis of Forecast

The majority of our ICT assets have a depreciation life of less than five years, reflecting the rapid rate of innovation and change in the technology industry. The implication of this is that we cannot know with certainty what technologies we will be looking to commission in 3-5 years, or the exact techniques that we will use to deliver them into the business.

For The TransGO network, the refresh cycle for different components ranges between 5 years and 20 years. Components with 5 to 7-year lifecycles will require refreshing in RCP2 to keep the TransGO network maintainable and reliable.

The forecast costs have been developed by considering historical costs for previous ICT platform investments, historic TransGO costs, and current market pricing for hardware, software and design services.

Scoping workshops and industry analysis have also been used to further refine cost estimates. These activities involved internal subject matter experts, relevant consultants, industry analysts and peers.

The cost of a number of the high-value projects in this portfolio were forecast based on historic costs of the original installation, including:

replacing the Alcatel 7710 Service Routers ($8.3 m);

refreshing the IP Network equipment ($5.6 m);

replacing the Operational Systems and Support (OSS) Service Management tools ($2.1 m); and

upgrading link capacities to STM-64 ($3.1 m).

The cost of extending the use of TransGO on the West Coast of the South Island ($5.2 m) and from Auckland to Marsden Point ($5.2 m) were based on historic costs of implementing TransGO in other areas of the country. The cost of replacing and enhancing HAY to ISL Fibre on the existing network from Oteranga Bay to Islington to address reliability and diversity issues ($2.2 m) was based on historic costs of fibre installation and replacement2.

3.5 Procurement and Delivery

We are confident in the deliverability of this programme, as there are no expected issues with resource availability or with the ability of key vendors to provide the necessary level of support for the programme.

2 Refer to the BC1 document prepared for this project for further details (refer Appendix A).



3.6 Dependencies

Timing of the Substation Automation projects in the Northland and West Coast areas will be dependent on completion of the Northland to TransGO and West Coast to TransGO projects in this portfolio.

4 EXPENDITURE

The following table and chart show historical and forecast Capex for the IT Shared Communications Infrastructure portfolio.

Table 4: Expenditure forecast

Figure 1: Capex for IT Shared Communications Infrastructure

For RCP1, the average annual Capex for the portfolio is $12.3 m. This decreases to an average of $8.7 m for RCP2. This reflects that RCP1 included large projects to complete the initial TransGO rollout whereas RCP2 expenditure is focussed more on maintaining and upgrading the TransGO network.

The base expenditure throughout RCP2 is driven by the refresh of equipment with a 5–7 year lifecycle, at similar levels of expenditure to the original investments in the equipment in the pre-RCP1 and RCP1 periods. These projects include replacing the Alcatel 7710 Service Routers and OSS Service Management tools, refreshing the IP Network equipment, and upgrading link capacities to STM-64.

There are also three one-off or long lifecycle projects to expand and enhance the TransGO network that are being undertaken during RCP2. These are the TransGO to Northland, West Coast TransGO and Haywards to Islington Fibre Replacement projects.

Real 2012/13 NZ$ (m) 12.3 18.4 3.8 6.0 3.1 43.6

Expenditure Forecast 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 Total

0

$5M

$10M

$15M

$20M

$25M

$30M

09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20

ICT Capex - Telecommunications Services - IT Shared Comms Infrastructure

All figures are real 2012/13

RCP1 RCP2



A REFERENCE DOCUMENTS

Document Date

IS01 Grid and Corporate Capability Strategy October 2012

BR01 People Capability Strategy October 2013

IS02 Information Services Strategic Plan 2013–2020 September 2013

IS03 ICT Business Service Strategies 2015/16-2019/20 Overview October 2013

Transpower Enterprise Architecture Principles August 2010

Transpower Technology Refresh Policy 2010 February 2010

BC1 Business Case for HAY-ISL Fibre Replacement Project 11 October 2013



B CAPABILITY MAPPING

Business Requirement ICT Requirement(s)

BR001 Maintain systems in a supportable, fit for purpose state

IR001 Lifecycle Upgrade in line with Transpower Policy

IR016 Adequate capacity in network communications



C PORTFOLIO ROADMAP

This chart shows the planned timing of the projects in the IT Shared Communications portfolio

during RCP2.