In 2004, Michigan set the standard among states for using technology to serve citizens and improve government operations, according to the Center for Digital Government's 2004 Digital States Survey. The annual survey rates state governments on electronic service delivery, IT architecture and infrastructure, collaboration and technology leadership.

Michigan's IT success starts at the top. Gov. Jennifer Granholm and CIO Teresa Takai spearhead an aggressive statewide effort to boost the use of technology -- and use it more effectively.

Granholm, who faced a staggering $3 billion budget deficit when she took office in 2002, views technology as key to cutting the cost of running government. She also made technology a cornerstone of her strategy to revitalize Michigan's rust-belt economy, which lost more than 170,000 manufacturing jobs since 2000.

One of Granholm's first steps was hiring Takai, a former technology executive at EDS and Ford Motor Co., to lead Michigan's IT operations. Takai worked quickly to implement a corporate IT model, completing a massive centralization initiative and closely tying technology spending to the administration's policy goals.

Ultimately IT operations from 19 executive branch agencies were transferred to Takai's Department of Information Technology, a move that has saved Michigan $97 million so far, Takai said.

The state also has tried to make itself a better business partner. For instance, Michigan re-engineered its permitting process, drastically reducing the amount of time companies wait for necessary approvals. Granholm used her 2005 State of the State address to back a $2 billion bond proposal for promoting alternative energy and biotechnology industries in Michigan.

In a recent interview with Government Technology, Granholm and Takai talked about their use of technology to optimize state government and stimulate economic growth.

Q: From your perspective, what are the keys to using technology successfully in state government?

Granholm: When I got here, I knew I wanted a CIO from the private sector who could infuse state government with an enterprise view and look under every rock to find out how state government can be more effective. Teri has been critical in our strategic planning, which infuses technology in it as well. So those two roles are pivotal for our state's success in the use of technology.

In every aspect of citizen contact with state government, we want our state to be leveraging technology. When I asked Teri to take this position, I said, "We want to have a role inside of government, but also outside, because there's a policy aspect to this too." We want to bridge the digital divide and make sure Michigan leverages its ability to get broadband access. We have a goal of connecting every corner of the state by 2007.

So we are very focused on internal and external leveraging of technology as an economic driver, and also to make state services more accessible and rapid, and better for citizens.

Q: Work that builds the foundation for IT success -- setting standards, creating architectures, strengthening infrastructure, etc. -- often flies under the radar for citizens and even lawmakers. How do you make that important?

Granholm: Our state is going through a budget crisis -- like many states have been -- and most lawmakers don't come from a technology perspective. Many don't come from the private sector. So there is an education process. The first place they go for budget cutting is IT.

We think results are the best form of defense for that. One example is our new permitting process, where we have a one-stop shop online now -- one door, one portal for all of our permitting.

We did this whole value stream mapping with the private sector to make our permitting process more rapid and streamlined. We are proclaiming ourselves fastest in the nation as a result of