Why states should share the load of federal IT mandates

Gopal Khanna ended his five-and-a-half-year stint as Minnesota’s first CIO last month after his boss, Gov. Tim Pawlenty, decided not to seek re-election. Khanna served in the George W. Bush administration as CIO and chief financial officer of the Peace Corps and CFO of the Executive Office of the President. He is also a past president of the National Association of State CIOs. In this interview, Khanna talked about lessons he learned as a state CIO, how to lay the groundwork for IT innovation and why states should team up to tackle federal IT mandates.

GCN: Twenty-nine new governors were elected in the recent midterm elections. That means an extraordinary number of new CIOs could be appointed. How might that affect large state IT programs, especially those associated with federal mandates, such as health reform.

Khanna: It’s not particularly bad that CIOs are going to churn. The question is: Are governors going to continue to realize the relevance of technology and use it? That’s more important than whether CIOs are going to turn over. So long as the governors keep IT high on their agendas and how they are going to govern, it’s OK. They should also go out and attract professional CIOs from the private sector who would be willing to come and serve if given the tools to do the job.

What was your biggest achievement during your five years as Minnesota’s first CIO?

Coming in five-and-a-half years ago, there were several things that were of concern. One was improving the environment: There was too much duplication and redundancy, and therefore it was difficult to manage. You have so many data centers and so many operating systems — so many extra units of energy being consumed. Tied to that was the whole need for standardization. I made that as my hallmark to pursue standardization and consolidation.

I also realized we needed a governance structure that required finding alternative funding mechanisms. I knew going in that there was no way that we would have enough money in the general fund system to support systems modernization.  So we improved our portfolio management capability, and we looked at our enterprise architecture program and our cybersecurity program, which was nonexistent. We had no standardized mechanism to provide hardware and software and licenses, so we put that in place.

Nearly all states are facing drastic budget cuts. Have you been able to convince legislators that new investment in IT will save them money in the long run?

The problem we have as CIOs is that we are stuck with the burden of an old paradigm, which says: the IT budget is $100 million, can you reduce it by $10 million? Can you innovate and reduce it by 10 percent or 20 percent? As an IT executive I do that every day. I find ways to use new technology to reduce my footprint at lower cost.

But the better value proposition is how this is used to transform business. And that’s where the big savings will come from, and that’s a very difficult paradigm to explain. So the challenge is that every time I’ve been asked by the legislature, “Will this save money?”, my comeback is, “No, you’ve got to keep IT as an investment. You first tell me how much money you’re willing to invest, and I’ll show you how you can realize improvements and benefits."

IT needs to be managed like a program and as a nonpolitical effort, just like our roads and bridges are. That’s a huge paradigm shift. If they manage it like a program, they will manage it like a resource center, not as a cost center.

What technologies are vital to making this program a success?

Today, no one technology is a 100 percent solution. At one end, you’ve got the iPad and the iPhone, solutions which are in the hands of my customers, my citizens who are demanding things to be online and available 24/7.

On the other extreme, I have to have a network laid out. We need not just mainframes, we need midrange computers as well as desktop computing. They all come from different vendors. We have a variety of databases that we need. So Oracle alone is not going to cut it; Microsoft alone is not going to cut it. The silver-bullet paradigm is fundamentally flawed. Even cloud computing; it’s one of 100 things I need to deploy.

We need an assortment of solutions that need to be managed together. So the tech story is more about managing complexity; it’s about harnessing the capabilities that are available; it’s about harmonizing the solutions; it’s about integrating.

Does the budget crisis have a silver lining in that governments will be forced to become smarter about their uses of IT?

Absolutely. And I hope it does not become a wasted opportunity because the urgency to balance the budget for all the states is going to center around whether taxes need to be increased or whether we slash and cut programs. The appetite is not there on the part of the public to say, "take my services away", especially when they’re hurting.

So we have to take a look at the third rail — the operations of government — and find ways to make that more efficient and effective. The whole IT sector needs to come together to present a better solution to government and say it’s time to leverage technology for the future.

Health reform is currently looming large for states. What role will the IT community play in carrying out the new health reform mandates?

We have 30 million to 40 million new beneficiaries coming into the system. How are they going to get enrolled? How are the eligibility requirements going to be put in place? Can we create standards that are at least 80 to 90 percent uniform across all jurisdictions?

The other side of it is that current health and human service systems are aged, obsolete. They are hanging on by a thread. Thirty states are looking to modernize their Medicaid Management Information Systems, and that will cost hundreds of billions of dollars.

The question that I ask is, "Why can’t we take a multistate consortium approach?" [As president of NASCIO], I proposed we build a system that can use cloud computing and reusable code to build a basic platform.

The challenge for that is that under the current rules, [the Centers for Medicare and Medicaid Services] would rather give a 90 percent match for each state that is looking to build its own system and therefore perpetuate the building of 50 different systems, as opposed to saying. “No, we will encourage innovation, and we will build reusable code strategy, and we’ll build these multistate systems.”

I’m not saying build one system for 50 states. Take the states that are willing to work together and so they are manageable, and they’ll have more of a horizontal view. The enterprise architecture will be superior; they’ll have embedded security: they can have GIS pieces built into it; reporting built into it; and managing of data and information, which is superior to where it is today and do it much cheaper.

But that will require the federal government to change its way of funding. OMB will have to take a look at its rules and regs, and Congress will have to take a look at how it is funding these systems.

What other programs do you believe might be served best by similar multistate approaches?

Unemployment insurance. There’s no need for 50 states to have 50 different unemployment insurance programs. Four years ago, we spent $45 million to modernize our unemployment insurance program. When other states were looking to do the same, we shared our code with Iowa, and they spent $7 million to deploy their system.

Which goes to prove the point that we states have more in common than we are unique. The unique component is very small, and we sometime get too hung up on this. We need to shift our conversation from always talking about the unique piece and instead realize the power of what is standard.

What is it going to take to make it easier for states to try these nontraditional approaches to developing big program IT systems?

Innovation in government will be futile unless it is supported by incentives, rewards and mechanisms that encourage finding new solutions and give opportunity to those who are willing to take risks and support risk taking.

That’s what we have to be talking about, not the fact that it’s doable. That we know from the technology standpoint that it is very doable. We have to move from it being just a common-sense thing to saying, “We will reward this kind of behavior, and we will remove all the barriers that come in the way, and we are pursuing that route.”