Dynamic Duo

Virginia governor and technology secretary bring private-sector savvy to government service.

by / December 20, 2002
Virginia Secretary of Technology George Newstrom says Cabinet meetings with Gov. Mark Warner are more like corporate board meetings than typical government proceedings. That should be no surprise -- both Newstrom and Warner came to public office from long and distinguished careers in the private sector.

The two share the belief that technology is no longer restricted to a handful of agencies. It is not an extravagance, nor is it a passing fascination that will fade with downturns in the economy. "Technology is in all industries," Warner said. "It is a vertical that cuts across every other issue and every component of government policy. The idea that you can segregate it off to the side ... is not the kind of thinking we are willing to bring to the table."

Warner spent 20 years as a venture capitalist, founding the Columbia Capital Corp., a technology venture capital fund, in the early 1980s. Like Warner, Newstrom brought with him strong business acumen and experience. The technology secretary came to his post fresh from China, where he served as president for Asia Pacific with EDS.

Together, they are crafting a technology strategy intended to transform the state's economy, taking it more fully into a global market. To accomplish this vision, the governor has focused his attention on the southern regions of Virginia, where traditional economies are lagging and the job market is stagnant.


Reaching Rural Virginia
Warner's IT vision is expansive, moving far beyond single applications and "quick wins." He believes that technology, learned and applied, can transform government down to its core. "How do we allow that kid in far southwest Virginia to stay in the rural community ... " Obviously, that is a huge challenge. But I am more committed than ever," Warner said. "We have got to be able to bring our knowledge-based jobs and knowledge-based economy to rural areas.

"I think we are starting from the perspective of a state that's benefited greatly from the Information Age," he continued. "I think there was a growing recognition among government and the last administration that there is tremendous potential to harness information technology, and Virginia made great strides. So there is a good foundation upon which to build. But there is a long way to go."

Virginia -- specifically northern Virginia -- is regarded as a technology leader with high-tech centers and colleges pumping out projects and skilled people. Former Gov. James Gilmore and his technology secretary, Donald Upson, aggressively recruited technology firms and left a legacy of support for e-government. The Warner administration plans to build on this platform, bringing the benefits of technology to the entire state.

"We have a highway that goes from far southwest Virginia all the way to Virginia Beach called 58," Warner said. "We are trying to create something called e58, which would be a broadband pipe that would run parallel to this rural highway that links eastern to western Virginia." Tobacco settlement funds will be used to reach these underserved regions of the commonwealth.

Warner is realistic. He doesn't picture an AOL -- the Dulles, Va.-based Internet giant -- springing up in every village. He does, however, see the potential for smaller firms employing scores of people throughout rural Virginia. He wants to go beyond telecommuting and call centers to a kind of "distributed company" that changes the economic base in parts of the state that have not entered the Information Age. The state, he said, can encourage business investments through financial incentives, a business-friendly climate and support from an already strong technology community, which includes the University of Virginia, Virginia Tech, William and Mary College and the Dulles Corridor (Virginia's "Silicon Valley" for systems integrators).

According to Warner, even these venerated institutions must step up to the challenge of the Information Age. "The university needs to become more outward focused, needs to become the economic engine that drives our region's economy, needs to be the creator of intellectual capital," he said. "One of the things we are going to have is a higher education summit where we really lay out both the incentives and the downside for those universities that don't make the transition." Warner envisions a networked approach to university education that links expertise among educational institutions.

Clearly, Warner believes broadband will be an economic lifeline for the state. "An analogy I often use is that 100 years ago it was the railroad, and if you missed the railroad, your town didn't prosper. Fifty years ago it was the interstate highway, and you can see which cities were along the interstate highway and which ones weren't," Warner said. "A town that misses both the railroad and the interstate highway doesn't have the luxury of missing broadband. Three strikes and you're out."


Politics of a Technology Economy
Some changes proposed by the Warner-Newstrom team require the backing of the Legislature. Until the most recent election cycle, many Virginia lawmakers were less than technology friendly. Champions, such as Delegate Joe May who chairs the state's Science and Technology Committee, served as advocates and educators to reluctant colleagues who preferred to talk agriculture and tobacco. "I think that technology may not win votes ... but I did very well in rural Virginia," Warner said. "The people are well ahead of their leaders. They don't expect textiles to come back. They are ready to be challenged to learn a new skill."

Warner said he believes technology will change politics. "I don't think the future is going to be so much defined by the Democrats versus the Republicans, so much as by policy-makers that kind of 'get it' ... those that understand versus those that don't," he said.

Indeed Warner, a Democrat, pledged to take a bipartisan approach to governing. He backed that promise by appointing Newstrom, a Republican, to Virginia's top technology post.

Newstrom will carry the technology message to elected officials. "I am an optimist about the new Legislature that came in," he said. "They may not know IT as well as Joe May, because Joe is in the industry, but technology permeates our day-to-day lives." Both Warner and Newstrom said they are encouraged by the technology-oriented mindset of the legislators who took office in January.

"The commonwealth has come a long way in a short period of time," Newstrom said, referring to the impact of AB 519, sponsored by Delegate Jeannemarie Devolites in early 2002. "They took all procurement authority over $1 million and gave it to the secretary of technology, who has to approve [the expenditure]. That is a huge step forward in the state of Virginia." Newstrom added that this authority encourages collaboration, joint strategic planning and the leveraging of purchasing power.

As evidence of Warner's belief that technology will drive the state's future, his first 100 days in office are replete with proposed IT policy changes and projects. Those recently launched initiatives include the development of a statewide strategic IT plan, a move toward benchmarking and accountability for all IT projects, endowing the Office of the Secretary of Technology with purchasing power, expanding local access to telecom services, and directing state agencies to expand IT training programs and educational opportunities. In September, after completing a statewide IT assessment, Newstrom released "Virginia in the Global Digital Economy: Commonwealth of Virginia State Plan for Technology." The extensive plan calls for significant enterprise-wide changes to the management of technology and online services.


Technology as a Tool for Government
Technology in governance also is proving its worth as a customer relationship tool in a year of budget shortfalls. When some states were struggling simply to issue tax forms, Virginia used the power of its portal to return money to residents. "I made sure we got our tax refunds out on a timely basis this year," Warner said. "This year we are actually running 400,000 tax returns ahead of last year at this same point, and the error rate is down 300 to 400 percent. The reason the error rate is down is we have moved so much to online filing." The state's 81,323 online returns were filed with an error rate of 3.3 percent, according to the Virginia Department of Taxation, which estimates paper-based filings have a 12.5 percent error rate.

New online services for residents of the commonwealth also provided early wins for the technology team. The state's portal offers live online customer service during business hours, reducing phone calls and e-mail requests for information; the Library of Virginia permits online requests for research materials and payments by credit card; and the state's online legislative tracking service now is offered free to the public. Previously the tracking service was only available to lobbyists for a fee.

Using technology, the Warner administration also intends to reach into the social fabric of the commonwealth, to citizens who depend upon public assistance. Warner said electronic systems can simplify processes that now require social services recipients to make dozens of office visits and fill out endless paperwork. And he is aware of the need to serve a growing immigrant population, many whom speak limited English.

The governor is particularly sensitive to the needs of elderly Virginians. "My mom has Alzheimer's, and trying to help my mom and dad figure out where to turn for nursing home care, to answer questions about drug interactions and the whole host of questions you have [were] things I never thought of before," Warner said. "There was no source of information, and it seemed to me we could use the power of the Internet to provide that kind of information in a user-friendly way."

The result is a collaborative program called SeniorNavigator.com -- hosted by AOL and supported by dozens of companies. The program offers a rich database for senior citizens and caretakers of the elderly. It also has trained more than 8,000 "navigators" across the state to effectively use the site and provide expertise to those who need help.

Newstrom sees more opportunities for technology in the context of overall government operations. "What we haven't addressed is the impact that technology has on the other $11 billion of [additional] government spending," he said. "If we can use technology enterprise-wide, there is a huge chance we can have a total impact out there."

For example, Newstrom estimated the commonwealth publishes approximately 5,000 forms. "About 50 percent of those are online. Of the 50 percent online, less than 5 percent are usable online. You have to print the form," he said. "I think there is a better way to do things."

Based on his private-sector experience, Warner also emphasizes the significance of research and development. "Who in the business world would suddenly dismiss half the ideas that come to them because they have R&D attached? You wouldn't make it," he said.


Big Plans, Small Budget
These are big plans in lean times, but in the first year of his term, Warner remains confident the goals will be reached. "The opportunity, the blessing ... of coming into being governor in 2002 is that financial circumstances don't allow you the luxury of inefficiency," he said. "We have cut $3.8 billion from our budget. That's more than $550 for every man, woman and child in the commonwealth." Warner said he slashed programs he liked to preserve a future that will, as far as he is concerned, be technology-driven. "Those organizations or parts of government that aren't willing to understand this new economy, they are not going to prosper, they are not going
to perform," Warner said. "I think it will force people to change -- albeit reluctantly."

Among the first steps in trimming the budget was to compile a full account of the state's IT expenditures. "We are trying to figure out where the technology is in the commonwealth," Newstrom said. "What it is, where it is and who owns it."

Newstrom looked at the details -- procurements, redundant systems, untapped capacity. "From a pure technology perspective, we are trying to figure out where we spend the money. This is rudimentary, basic IT 101," he said. "Each of the entities could be doing their own purchasing, all getting different terms and discounts. I don't see this as the low hanging fruit. I see it as fruit laying on the floor."

By September, the completed assessment showed a total IT expenditure of approximately $900 million. The study proved the governor correct in believing the state is burdened with duplicated technology and interagency silos that prevent the state from leveraging its purchasing power. But fulfilling Warner's broad vision will depend on implementing a set of specific strategies and new policies.

"My feeling is, particularly in these difficult budgetary times, there are tremendous savings in better technology, better purchasing of technology and in more standardization of technology," he said. Warner draws upon his business experience, adding that a private-sector firm could not survive in a similar environment. "It would have been one of those Dow Jones companies listed 20 years ago that would have bitten the dust by now," he said.


Keeping up with the Private Sector
Charged with carrying out the governor's ambitious agenda, Newstrom shares the viewpoint that government must alter some entrenched processes to serve the 21st century citizen. Newstrom also is concerned about the pace in which government procures technology -- a pace that doesn't keep up with rapid advancements in the marketplace. "We have to do it faster and have more flexibility and convergence. We have to have contracts and contract vehicles," he said. "I have to admit that I have a bias. A government is probably not equipped to handle the complexity and speed of change in technology any longer. Even the private sector has a hard time, including the largest players. My intent is to use the alternatives available, the best practices ... and to make Virginia a substantially better partner as a contracting entity than we have been in the past."

Warner's opportunity to reach his goals has a four-year window -- governors in Virginia are limited to one term. But at the end of his tenure in 2006, Warner wants the commonwealth of Virginia to be a model for digital opportunities that transcend location or socio-economic standing. "I want us to be known, not only as a national leader but as a world leader, in how we use technology in terms of efficiency, in terms of customer service," Warner said. "I want us to be a place that has cracked the code on bringing knowledge-based jobs to rural communities. I would like us to say that we have a truly statewide integrated technology."
Darby Patterson Editor in Chief