"What underlies the current malaise of so many large

and successful organizations worldwide is that

their theory of the business no longer works."

-- Peter Drucker, 1994

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By Dennis McKenna

Publisher/Editor in Chief

Just prior to going to press with this issue of Government Technology, Indiana Governor Bayh recanted an announcement made only a few weeks earlier that his state would outsource its information technology function. Simultaneously, California Gov. Pete Wilson made news saying his administration was seriously considering privatizing certain state operations, and while he did not mention information technology it was intimated.

About the same time, a colleague forwarded me an article from the September/October 1995 issue of the Harvard Business Review entitled, "The End of Delegation? Information Technology And The CEO."

The point of the article, which includes extensive comments from the CEOs of Wal-Mart, Simon & Schuster and other corporations, is that the reality of running modern organizations requires top management to be closer -- not more distant -- to the issues of information technology.

John Rockart, director of the Center for Information Systems Research at MIT's Sloan School of Management points out in the article that "in the 1990s, information technology has become the fourth major resource available to executives to shape and operate an organization."

The other three major resources -- people, money and machines -- have been managed by senior management for years. Now, said Rockart, it is time to "see IT for what it is: a major resource that -- unlike single purpose machines such as lathes, typewriters and automobiles -- can radically affect the structure of the organization, the way it serves customers, and the way it communicates."

Not that senior management needs to become technology experts -- they have a staff for that -- but, "more important than what the CEO knows about information technology" Rockart writes "is how he and key members of the organization think about it and about their respective roles in ensuring that the organization uses it effectively."

With this article in mind, and as our columnist Larry Singer points out on page 105, it seems the problem with some of the IT privatization initiatives currently floating around state capitals is that while they may offer political mileage, they are based on a weak understanding of the strategic role information and communications technology will play in running modern organizations.

Certainly some government IT functions can be successfully outsourced and in certain cases it may be the best approach. Economic benefits from privatization, however, pale in comparison to what can happen when senior government executives take the time to combine their IT resources into a strategy of governance that addresses the deeper political, policy and administrative challenges facing the public sector today. The justice/public safety arena is a case in point, in which multiple agencies and jurisdictions struggle with procedures, systems and policies that breed ineffectualness.

The raw material of the government enterprise -- be it education, public safety or human services -- is information. Today in this rapidly developing wired world, top managers in government -- like the CEOs in leading corporations -- need to develop a stronger conceptual understanding of what role technology can play in turning their organizations around. It is from here that true breakthroughs will come.

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