States benefit from one-for-all approach

'The cost of operation was too expensive, and there is a great deal of exposure to risk when everyone does their own thing.'

'Virginia CIO Lem Stewart

When Virginia Gov. Mark Warner took over in 2002, he asked George Newstrom, then the state's CIO, how much the state spent on IT. Like many other CIOs, Newstrom had trouble answering the question.

So Newstrom inventoried hardware, software, telecommunications and related contracts to figure it out. What he found was a need to improve the efficiency and effectiveness of state agencies by combining systems and managing them better.

Virginia is not alone with this problem. As state and local governments implemented technology in recent years, many did it in a decentralized way, letting agencies purchase the technology they needed without considering other parts of the government.

'We are trying to define how we do the business of state government,' said Lem Stewart, who was recently named Virginia's CIO. 'We want to bring innovative technology solutions, leverage our size, and create greater accountability and oversight for IT projects.'

Virginia is among a number of states working to improve its IT management by combining systems and other assets. Michigan started merging telecommunications contracts in 1994, and over the past year embarked on centralizing all IT operations under its IT Department, said Teri Takai, the state CIO and director of the department.

Missouri and Kentucky also are unifying their IT structures to improve management and cut costs.

'States are heading toward a statewide environment and common platform where they can make good IT investments to support the state agencies,' said Thom Rubel, vice president for government strategies for consulting firm Meta Group of Stamford, Conn.

'When you look across the state, there are a lot of functions and business processes that are common and are taking place at different levels,' Rubel said. These inefficiencies are driving states to figure out how to buy IT more efficiently and effectively, he said.

Stewart said the goal for Virginia is to operate not as 91 separate agency-centric components, but as one organization.

'We are standardizing across security, integrating people, assuming control and management of IT assets and procurement reform,' he said. 'The cost of operation was too expensive, and there is a great deal of exposure to risk when everyone does their own thing.'

Virginia is six months into an 18-month plan, Stewart said, and already has saved $12 million to $15 million.

Michigan's Takai said her state's goal is to centralize IT purchasing, strategy and policy making under the IT Department's umbrella. She also moved 1,700 IT employees from 19 agencies into the department.

Leap forward

Takai said, 'We have made significant progress' in getting the department up and running so that it can supply desktop PC services and leverage resources. 'We also have renegotiated many of the IT contracts to get consistent pricing and volume discounts.'

Michigan officials set up committees to make these changes go more smoothly. Takai said the deputy director from each agency sits on the committees that help make statewide technology decisions.

Takai said these efforts have saved the state more than $58 million over the past year.

Rubel said this trend is a part of the natural evolution of IT, but it requires leadership from the governor and the CIO.

'The governance structure needs to be in place where all the stakeholders are well represented,' Rubel said. 'If you can't live up to the changes, it may set you back years and get higher levels of management involved, which then could protract the process.'

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