South Rising

Like private industry, states must adapt to the fast-moving Internet economy or pay a steep price for lagging behind, said Valicenti, who spent 21 years with Amoco Chemical Co. before becoming Kentuckys first cabinet-level chief information officer in 1997.

"Were not going to go out of business, but there are only so many ways of generating revenue," she said. "Either you become a very attractive state to do business in or you raise taxes -- and you know thats not going to happen."

Therefore, Kentucky finds itself among a handful of southern states that are aggressively courting New Economy companies and investors through technology-oriented economic programs and broad initiatives to Web-enable state government services and transactions.

Valicenti spearheads a comprehensive effort to restructure the way Kentucky government uses and manages information technology. And the commonwealth also took the unusual step last year of creating a commissioner of the New Economy position. The post was filled in December by Gov. Paul Pattons appointment of William Brundage, who will direct initiatives to lure high-tech industry to the state.

Like the CIO, Brundage views advanced IT capabilities as key to Kentuckys future prosperity.

"I feel that any state or region that does not build the infrastructure for this information-based economy is not going to have much of an economy within 10 years," said Brundage, a veteran of economic development programs in Florida and Kansas.

Building a Foundation

Kentucky recently passed the halfway point in a massive IT transition effort intended to pull the operation of essential functions such as network services, Internet access, e-mail and desktop PC support under the umbrella of Valicentis organization, the Governors Office for Technology (GOT).

The transition officially began in 1998, but its seeds were planted several years earlier with the release of Pattons Empower Kentucky initiative, which proposed upgrading the technology used by state agencies and moving a range of services and information to the Internet. So far, the project has resulted in fairer tax collections; simplified permitting for Kentucky businesses; Internet connections in every public library; and online access to thousands of health, employment and assistance services, according to a progress report released last year. It has also triggered fundamental IT management changes that continue to ripple through the state.

"In order to support this redesigned state government, we needed to approach information technology in a different way," Valicenti said. "We are trying to take a look at how to do things on a statewide basis."

That approach manifests itself in a new breed of shared services hosted by GOT, including telecommunications, wide area network connectivity and e-mail. In all, the commonwealth has identified 15 IT functions -- including mainframe computing, desktop PC support and virtual private network services -- that benefit from central operation.

Much like an application service provider, the technology office runs the services and delivers them to agencies throughout the state. Those agencies pay a fee to GOT based on how much they use the applications.

Valicenti said the centralized approach yields savings through economies of scale and by eliminating duplicate IT systems operated by individual agencies. It also takes mundane IT support issues off the plates of agency managers.

"You cant really focus on higher-level issues of how IT can support the business [of your organization] if you dont get away from the traditional questions