Teri Takai, CIO of Michigan, spoke at an executive luncheon last Thursday at GTC East in Albany, describing Michigan's IT centralization and consolidation in some detail. It included a straightforward analysis of what is working as well as what went wrong and why -- something she termed her "survival guide to IT consolidation."

"Technology is not the issue here," said Takai, "what we're taking about is what's traditionally called organization. How do you change mind sets around the way people look at the way we use technology and implement technology."

Takai said the consolidation and centralization was unusual in several respects. It began under former Governor Engler, a Republican, and was then continued through a change of administration and political party to Democratic Governor Granholm.

And while Takai's department is funded by the agencies -- with no independent budget of its own -- she does have control of the money. "All IT spending comes through me. I can make the decisions. The tricky part is that you have to do that very carefully, because of who you make angry," she said, adding that the CIO must understand the budget very well to shut down a spend, or tell an agency it can't buy something.

Takai has about 1,700 state employees, runs the state's 800 critical business applications, and handles the desktops for about 55,000 state employees. "We have 19 state agencies, two of those are elected -- our Attorney General and Department of Motor Vehicles director," she explained. "I don't provide any services to our university system or the Legislature.

"From a services standpoint," said Takai, "we touch all state services -- a citizen files a tax return, pays or receives child support, wins the lottery, researches schools, applies for a driver's license or gets pulled over by a state trooper. When the trooper goes back to check the license, that goes on a system we are running. Clearly, we feel that we are at the heart of making state government happen."

What We Did
"We leveraged our technical resources," said Takai. "We have three major mainframe data centers, and we have consolidated all our telecom. All of that happened before the Department of Information Technology was formed. So people got used to the idea that they gave up their mainframes, and were no longer running their own telecom.

"We've consolidated all of our desktop resources, and server resources. We are in the process of taking out the servers, I have some 20 small data centers, scattered around the state Capital, and we're bringing those into our robust data centers. We have been able to strengthen a couple of our data centers by using Homeland Security dollars to ... protect the state's data. The rationale was that if we got the money to strengthen our data centers and strengthen our security, it would benefit all the agencies. Used [the money] for emergency generators in some of our backup sites, and also to buy security hardware and software for the network.

"The agency-specific resources, report to me, all the agency CIOs report in to the Department of Information Technology. But we made a deliberate decision to not try to co-locate them into an IT building. My feeling is that it's extremely important that those application resources reside with the agencies so they can better understand the business drivers and issues. It's a real challenge. They are still servicing that same agency, but report to us. So we had to work really hard to establish a culture and a departmental organization, but we feel very strongly that it's important that we continue to understand the business and have those strong ties.

"We renegotiated and brought together all our contracts. Our budget came down $100 million, with a 34 percent reduction in staff. I walked in the door with a 15