"Georgia's technology investments have not resulted in a reliable, recoverable and secure system that ensures data is protected and needs are being met." -- Gov. Sonny Perdue, November 2008.

In announcing that the state had signed contracts with IBM and AT and T to outsource much of its IT infrastructure, Georgia Gov. Sonny Perdue called the bold step necessary because he could no longer assure Georgians about the security of their data.

"Imagine a CEO saying that to his customers," said Patrick Moore, CIO of Georgia. "A governor shouldn't have to say that to his citizens."

As executive director of the Georgia Technology Authority (GTA), Moore saw himself as someone leading an agency that was failing its constituencies in many ways. Shortcomings he identified included unnecessary duplication of efforts, inefficient allocation of resources, and an inability to promote and adopt best practices.

After several years of studying the issue, in 2008 Georgia decided to become the second state to outsource most of its IT infrastructure. (In 2005 Virginia entered into a 10-year, $2 billion partnership with Northrop Grumman for the provision of most of its IT infrastructure services. Texas has outsourced its data center provisioning.)

"Many states are reaching the same conclusion to consolidate infrastructure," Moore explained in a recent interview with Public CIO. "Then the question becomes: Do you outsource or insource those services?" That's up to each state to decide, he said. Texas and Virginia have been pioneers in outsourcing, and Michigan has been for insourcing. "We looked at all their experiences in our decision calculus."

The infrastructure services deal with IBM, which took effect April 1, is valued at $873 million over eight years with two, one-year options to renew. It includes mainframes, servers, printers, service desk, end-user computing and disaster recovery. Dell and Xerox are subcontractors. The telecommunications pact with AT and T starts May 1, 2009, and includes wide-area network, local-area network and voice services. It's valued at $346 million over five years with two, one-year options to renew. The state said it expects to save an estimated $180 million compared to existing IT spending across the 12 agencies affected by the change.

The Bigger Picture

Georgia's decision to outsource IT infrastructure is part of a larger effort by the Perdue administration to focus on bringing private-sector practices to state government services. Describing himself as the "CEO of the ninth largest, third fastest-growing state," Perdue, the state's first Republican governor since the 1870s, has stressed the principles of efficiency, transparency, accountability and customer service.

Among his first steps after becoming governor in 2003 was the establishment of the Commission for a New Georgia (CNG), a group of business executives that creates task forces to examine state practices and makes efficiency recommendations. The state is carrying through many of the commission's streamlining recommendations on procurement and management of real-estate assets. Early in its deliberations, the CNG identified the GTA as an outsourcing target.

Perdue also created a state chief operating officer position and named Jim Lientz, a former Bank of America executive, to the post in 2003.

Lientz said he has spent the past six years applying business principles to state government activities. "When we came in, the state didn't know what real estate and leases it had or how many vehicles it owned," he said. "These are things that are basic for the private sector."

Photo: Georgia COO Jim Lientz

A 2008 CNG report noted that today, detailed records on