Talking IT consolidation these days is preaching to the choir. Once-unwilling state bureaucracies see the wisdom of merging IT operations. Now they are steering toward enterprise consolidation and beginning to reap the rewards.
Yet one area ripe for consolidation seems to have escaped notice -- government and education. Given the whopping percentage of a typical state's budget earmarked for education, why wouldn't consolidating state government and education IT get more attention?
The potential savings should be enough to make such consolidation attractive to many states, especially since cutting costs and driving efficiency in government is the mantra coming from state capitols over the past several years.
Government/education IT consolidation is the exception to the rule -- only a handful of state and local governments can boast of IT mergers of this sort. Among states, North Dakota embarked on a government/education consolidation plan in 2002, while at the local government level, Sarasota County, Fla., took the unusual step of designating one CIO to oversee IT operations for both the county government and the Sarasota County School District.
Three years ago, North Dakota officially unveiled ConnectND, an ambitious plan to integrate the state's universities and government agencies into one administrative software platform enabling front-line staff to use common financial, and human- and student-resource management applications.
On Jan. 1, 2005, the final four North Dakota University System (NDUS) campuses went live with financial and human-resource software, said North Dakota CIO Curtis Wolfe, completing the 11 campus rollout.
The groundwork for ConnectND began in the late 1990s, when the NDUS sought funding approval from the Legislature and the governor to replace an archaic set of applications and technologies.
"Higher ed felt that, to remain competitive against other university systems outside the state, it was important for them to get more modern in their technology and create more services available on the Web," Wolfe recalled. "They were really strongly promoting this and had done so previously, but never got the right funding to actually move forward."
The state also had its share of problems with legacy systems, Wolfe said.
"We didn't have a human resources management system [HRMS], we just had a payroll system," he explained. "On the financial side, we had a 25-year-old system that had been modified extensively and was becoming more costly to continue to support. There was a need in state government, it's just that we weren't promoting it as aggressively as higher ed was."
The NDUS originally tried to secure $21 million for a PeopleSoft ERP implementation, but couldn't convince the Legislature or executive branch to approve the request.
Wolfe said his department and NDUS representatives hit on the idea of pursuing a consolidation project as a way to convince the Legislature to approve funding. Both branches clearly needed a new platform to run their operations, he said, so why not consolidate?
"If you look at what we paid PeopleSoft and Maximus, as our implementation partner, we were able to get all state government and all of higher ed done for approximately what the bid was for higher ed in the late '90s, just on a stand-alone basis," Wolfe said. "Certainly the state benefited from a joint initiative, and that's how we sold it to the Legislature."
On the Same Page?
Since then, the state and the NDUS have built on the initial joint procurement and installation of common back-office applications to expand into other areas of consolidation.
"We host the financial and human-resource systems for higher ed and state government here at the state's data center," Wolfe said. "They host the student administration system so we don't even have replicated databases and separate hardware configurations. We've operationally merged to where we're jointly processing information for both branches of government here in Bismarck."
Wolfe's counterpart on the higher education side is Grant Crawford, CIO of the NDUS, who said ConnectND's relatively smooth maturation is built on the two branches of government's experience in consolidating various IT functions.
"We had a lot of practice in getting to where we are because of the state network," Crawford said, explaining that a smaller network run by higher education evolved into the North Dakota state network, which was then run jointly by higher education and state government until 1999, when legislation was passed turning over primary responsibility to state government.
"We were OK with that because we really have to get a lot of people together in this state to get much buying power, because there's not a lot of people here," Crawford said. "The bigger aggregation we can come up with, the better it is for all of us. State government has been very good about working with us in the networking area to ensure our needs are met."
Despite that history, ConnectND still presents some troublesome areas for the two branches of government, Wolfe and Crawford acknowledged.
One such area is upgrading software modules, Wolfe said, noting that the state wants to upgrade its PeopleSoft HRMS from version 8.4 to version 8.9 before this year is over.
"Higher ed, I think, is going to struggle making a decision to join us in that same time frame," Wolfe continued. "From a governance perspective, we'll see how well this works out. We would hope we can get on the same page here and agree to do these upgrades. We have to do them together since we just have one version of the software.
"That will be the first test to see if governance really works here, and whether the centralization of processing is, in fact, going to be successful," he said. "If we get to where we can't agree to things like that, it's going to drive us to separate the databases out and have separate systems. None of us wants to do that because the cost will increase significantly."
The upgrade decision will test the governance apparatus the state and the NDUS have put together, he said, because the state needs to move fast on the upgrade, while the NDUS prefers a more deliberative decision-making process, which could drop anchor on the state's progress.
The looming problem is support -- it ends in late October for the 8.4 version of the HRMS module, Wolfe noted, and the state likes certain components of the 8.9 version. In addition, the NDUS is on version 8.0 for student administration and the upgrade for 8.9 of student administration could be released in the same time frame.
"We're running on the same database in HRMS and the same database in finance, so whatever one of us does affects the other one," Crawford said. "We really are in this together, and we're in it together like that by choice.
"The state has been live for longer than we have in the HRMS environment. They want to upgrade it, and there's some functionality in there that they really want," he continued. "Well, we don't care as much about that functionality."
Because the final rollout of the HRMS happened only in January, the NDUS is still trying to iron out the kinks, Crawford said.
"The state is in a position where it feels it needs to do an upgrade, and we're not ready to do it yet," he said. "That's one facet of the difficulty that it [this type of partnership] can cause. At least we appreciate the common need to do the upgrade. We understand that they want it and why they feel they need it."
One CIO Will Do
At the local government level, Sarasota County, Fla., saw an opportunity to consolidate government and education IT operations in an entirely new way. County Administrator Jim Ley and Sarasota County Public Schools Superintendent Dr. Gary Norris realized that working together could help both branches of government.
The school district and county government discussed creating several partnerships to save taxpayer money while making both operations more efficient. The first joint effort is sharing IT functions, capabilities and executive management.
As a result of this IT partnership, Ley said, Bob Hanson, CIO of Sarasota County, is also the CIO of the school district, and the two government branches split Hanson's salary and compensation package 50/50. Hanson already spent two months earlier this year working with school board staff to perform a comprehensive analysis of the district's IT infrastructure and assets, and developing an IT strategy for the district.
The primary benefit of one person leading the two IT shops is that person's ability to spot potential cost savings.
"When we look at opportunities across organizations, having one person at the helm of both existing IT groups helps those opportunities surface," Hanson said. "I know what exists here. I know what exists there, and I can bring it together."
As a result, eliminating redundant functions frees up money to spend on new applications for schools and government agencies. Combining two organizations that operated with barely enough resources to get by allows both of them to knock items off their expanding to-do lists.
"It's been a very easy relationship," Ley said. "Both of our boards have been very supportive."
The historical barrier to this level of IT consolidation is that managers have been trained to think within their silos, Ley said, crediting the county's Board of Commissioners with giving him the flexibility to explore new relationships with other governments in the county. It's helped the county forge a cohesive plan for responding to growth management issues, economic development and other challenges.
Leaders realized the community's success in economic development or building a sense of place through growth management is intrinsically tied to the school board's success, Ley said.
"Five, six or seven years ago, the [school board] would have been viewed in a maybe more traditional sense as a competing political and operational organization looking for the same assets -- property taxes or what have you -- that we were," he recalled. "In most communities, that's the environment that exists primarily because they're all hung up on their operations. They're not focused on what they are both trying to achieve for the community and where those overlap, and I think that's a traditional flaw of large organizations and communities."
Ley said he and Norris took the plan of a CIO with dual responsibilities to various community leaders at the end of 2004, and they wholeheartedly endorsed the idea.
One Shop Fits All
The county and the school district haven't yet created the umbrella organization to consolidate their IT shops, said Hanson, though a draft of the future organization's structure and operational reach is completed and going through an approval process.
The first order of business was integrating the school's network into the communitywide network already in place, Hanson said, especially because the school district was relying on expensive leased lines.
"It seems so silly for us to do things redundantly when our only reason is, 'This is us, and that's them,'" he said. "One of the constraints the school board suffers from right now is that by virtue of their leased-line network, they've had to place a couple hundred servers distributed across schools. That's a less-than-ideal infrastructure from a number of perspectives."
The school board has been very supportive, he said, and once they saw the clear cost benefits of jumping on the communitywide network, members realized staying on their leased-line network was foolhardy.
"When you've got a fiber backbone capable of carrying several hundred times the capacity of the leased-line networks, and you're experiencing constraints from the low-line capacities, I think it opens people's minds to the possibilities."
That network integration is already happening, Hanson continued, and once complete, will allow the two branches of government to take the next step, which is integrating government and education data centers. Besides the obvious savings in physical costs associated with maintaining and running a data center, Hanson also expects staffing benefits.
"That will enable us to share staff in many ways, and we're already sharing staff on the fiber network side," he said. "Our guys have developed that expertise, and we'll transition some of that expertise to some of their guys. We'll optimize -- where we've both run lean before, we'll have the right amount of people, perhaps in some areas, or we'll have the ability to move some people into new functions as we bring our organizations together."
Perhaps the most important ingredient in this consolidation effort is the changing relationship between government branches.
The school board itself and its IT staff express optimism about the consolidation, Hanson said. Because the consolidation makes sense and capitalizes on many opportunities, people recognize it's being done for the right motives.
"We're starting to trust each other more too in the public sector," Hanson said. "That's important. We've finally realized that we're not competitors."