Nancy Robertson still recalls the panic she felt when her name appeared on a furlough list five years ago. A single parent with 15 years of state employment under her belt, Robertsons position as a mainframe computer operator was being eliminated as part of an ambitious plan to outsource Pennsylvanias data center operations.
"It hit me really hard," she said. "The old adage that when you have a state job, youre guaranteed work forever -- all of a sudden that was gone."
Pennsylvanias outsourcing plan offers an extreme example of the upheaval facing public agencies as they struggle to streamline operations and position themselves to do business electronically. Completed earlier this year, the project replaced 17 state-run data centers with a single facility managed by a consortium of 10 private companies.
State officials now estimate the move will save more than $110 million over five years and deliver more reliable technology services throughout the state. But when the massive consolidation was first announced, nearly 200 IT workers faced the prospect of seeing their current positions disappear.
What happened next, however, transformed adversity into opportunity. Robertson and others in danger of losing their jobs at Pennsylvanias Commonwealth Technology Center (CTC) were offered state-sponsored retraining. Courses could be completed during work hours, and the agencys director vowed to find positions for anyone who took advantage of them.
Robertson dove into a series of online classes and landed a new job as a distributed systems specialist. Now she installs personal computers, loads software and tends to the computer network in the state Department of Finance building. Along the way, she also became an enthusiastic supporter of Pennsylvanias outsourcing project.
"The best thing that ever happened to me was outsourcing the data center. I had to get the lead out and choose another career path," Robertson said. "As a computer operator, I was dead-ended. Between the training and my new job, the things I have learned are astronomical."
Comments like Robertsons are the hallmark of successful change management programs, which are designed to foster understanding and acceptance of new ways of doing business within organizations.
"For people at all levels, change is a threatening event. Change management is about reducing the amount of that threat," said Ron Salluzzo, senior vice president in charge of KPMG Consultings state and local government practice. "You need to get people committed to thinking their lives are going to somehow be better, their jobs are going to be more rewarding and theyre going to be contributing more to the organization."
Issues addressed by change management may be closer to psychology than technology, but theyre critical to the success of major IT projects -- particularly as public agencies retool to meet the demands of electronic government. In fact, the people issues addressed by change management may pose a larger concern for project managers than computer hardware and software.
"Whats happened in the last five or six years is that the technology has gotten so good and so advanced that its generally not the issue," Salluzzo said. "The success of a project is directly related to your ability to do change management well."
Failure to address these issues can slow IT projects to a crawl as employees resist new processes or dont understand them. And the result can be disastrous.
"Anytime you slow something down, it costs money -- thats obvious," he said. "Less obvious is that the longer a project takes, the less likely it will get finished. This is particularly important in the government setting where you have a certain amount of turnover based on the political process. If you lose your sponsor, that will often stop a project entirely."
Pennsylvanias CTC took important steps toward avoiding those problems by clearly informing staff of pending changes and offering workers viable retraining options, according to industry experts.
Robertson agreed with that assessment. In particular, she praised the impact of initial meetings held by then-CTC director Charles Gerhards.
"He had individual meetings with all three shifts to explain how this came to be, and he assured us that if we all applied ourselves, he would see to it that we were retrained," she said. "That meeting he had with all of us was one of the best things that could have happened."
Gerhards, now director of the Pennsylvania Office for Information Technology, held weekly meetings throughout the 18 months it took to put the outsourcing plan in place. He said he attempted to take an open, balanced approach to communicating with the employees.
"Your message cant be extreme in either direction. You cant say, Dont worry; nothings going to happen, when theres a possibility that something will happen," Gerhards said. "On the other hand, you shouldnt say the sky is going to fall when that isnt the case either."
He took a similar tack with union officials. "Even before we talked with the staff, we had very high-level contact with the union to explain what we were doing, why we were doing it, and we committed to them that we were going to do everything within reason to try and mitigate a negative impact on employees."
Ultimately, the state made good on its promise. Of 180 employees displaced by the outsourcing plan, all but one were retrained and placed in new positions at the commonwealth, Gerhards said. The single staff member who is no longer in state service opted out of retraining.
"The union now points to this as the [standard] for labor/management relations when it comes to this type of situation," Gerhards said. "When you have the union saying this really worked well, to me thats the benchmark that it was done appropriately."
The experience left Gerhards a firm believer in the importance of change management. He intends to employ similar techniques as Pennsylvania completes a statewide installation of ERP software.
The $40 million project will deploy an enterprise software package from SAP to handle accounting, budgeting, personnel, payroll and purchasing at state agencies under the governors supervision. State officials say it may be the most comprehensive ERP project attempted by a large state, and they are determined to build acceptance for the plan among Pennsylvanias workforce.
Currently, teams of workers are meeting with KPMG, the systems integrator for the project, to hammer out new business processes that will be used with the software. Gerhards said involving employees in the design process pays off when the system is up and running. "When they go back into the workplace, they become advocates," he said. "They say, We helped make this decision."
Pennsylvania also has kicked off an aggressive communications plan that includes a project Web site www.imaginepa.state.pa.us
, newsletters and even mass voice-mail messages from the secretary of administration.
"Good communication with employees is very important with all of these projects," Gerhards said. "They may not like what theyre hearing, but theyd rather hear something than nothing. When they hear nothing, they assume the worst."
Although its too early to gauge exactly how the project will impact workers, said Gerhards, a newsletter distributed this summer told employees that many of them will see major job changes and promised to provide appropriate training. Furthermore, the newsletter acknowledged that the ERP installation could make some current positions unnecessary. The state is committed to placing those employees into other state government jobs, the newsletter said.
State personnel and purchasing offices could see some of the most significant changes, as the state implements the ERP packages self-service employee benefits and electronic purchasing features. By giving employees greater purchasing power and the ability to choose and modify their own benefits options the state expects to eliminate a huge amount of paper shuffling.
"Whenever you have this kind of total decentralization, youre going to change the procurement and personnel organizations because they will no longer do the routine things," Gerhards said. "They no longer will be paper processors. Theyre going to be arbitrators and problem-solvers, where the job isnt very straightforward."
Regardless of how the project ultimately impacts the state workforce, Gerhards intends to help the staff make a smooth transition.
"Its all part of change management. Were communicating with them and trying to explain what these changes are and how they could be affected," he said. "We dont know how this is going to shake out yet. Our commitment to our employees is do our best for those who will have changing responsibilities."