Government Technology

North Carolina Gov. Bev Perdue Wants Privatized IT

North carolina
North Carolina Gov. Bev Perdue

December 10, 2010 By

North Carolina Gov. Bev Perdue wants a vendor to consolidate the state government’s technology services and move them into a centralized location.

Perdue’s proposal would also move the Office of Information Technology Services within a newly formed and expanded Department of Management and Administration. About 100 computer service units would be closed by moving the office into the new department, according to the governor’s office.

The proposal is one part of a larger efficiency plan Perdue revealed Thursday, Dec. 9, that includes the merger of 14 government departments into eight, a review of the state’s boards and commissions to determine their necessity, purchasing reform, and a hiring freeze. The governor’s office claims the proposal would save “tens of millions of dollars.”

“It just makes good sense,” Perdue said during a speech Thursday, Dec. 9, in Pinehurst, N.C. “When the money’s tight — and it is — you’ve got to find money from somewhere, and there are no trees growing here, and we’re not the federal government; we have a balanced budget, thank God.”

Technology isn’t the only privatized service in the proposal. A vendor would also manage procurement and save money through bulk purchasing and coordinated bids.

“I believe simply that state government needs to be more businesslike and manage for results, which saves money that then can be used for the core services that we all know we need to have, like jobs and education, and infrastructure, and health and safety,” Perdue said.

North Carolina state government spends approximately $1 billion annually on technology, according to an announcement from Perdue’s office in July. The state has a $3.7 billion budget deficit.

Last summer, Perdue ordered a third-party assessment of the state’s IT to examine “areas across all executive branch agencies where consolidation and utilization of private-sector IT services would bring more value to the citizens of North Carolina.” That assessment is under way, but the data collection isn’t finished, according to Perdue spokesperson Chris Mackey. The report is due in February 2011. Technology privatization would streamline government, improve service and save money, Mackey said.

 North Carolina also recently put out an RFP for a contractor that will manage the state’s Web portal. Half of the 50 states are outsourcing or plan to contract the design and operation of their websites.

Perdue said she will give more details on the government reorganization plan in her next budget proposal to the state General Assembly.

If North Carolina approves the outsourcing, it would join states such as Texas, Virginia and Georgia that are managing their technology with a vendor partner. Such efforts have brought mixed results. In Texas, for example, the state and IBM are trying to make the best of a struggling data center deal, while Virginia and Northrop Grumman are trying to turn around their oft-criticized agreement, which in late August was hit by a prolonged computer outage caused by a failed storage area network.

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Chad Lunders    |    Commented December 13, 2010

A lot of things look nice on paper but in practive can turn into an expensive nightmare. This would be one of those things.

John Martin    |    Commented December 13, 2010

It needs to be understood up front, that at least for several years following the execution of an outsourcing agreement, the costs will be substantially higher, and there will without a doubt be some level of service degradation.

Chris M    |    Commented December 15, 2010

Is there an example of a successful outsource model for state government?

Bob Hagan    |    Commented December 16, 2010

NYC's fraud prosecution on it's Citytime project offers a cautionary tale.

JTinTN    |    Commented December 20, 2010

Ditto to Chad's comment. Hogwash to John's. In answer to Chris, I haven't heard of a really successful outsourcing transition. You can add Tennessee's ERP system to the NO column. Parts seems to work, but the rest lacks verifiability.

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