Increasingly CIOs and budget directors are finding that they need to be on the same wavelength to make the case for IT investments.
Over the last several years David Behen would often brag that he had the best CIO job in the world as the IT leader of Michigan. Why? “Because I had such strong executive sponsorship: a governor who knew IT better than anybody and a budget director who understood it and had reasons to fund it,” he said. Over three and a half years, he and former budget director John Nixon communicated almost every day either in person or via email, text or phone. “That was a great relationship,” Behen added. “We got along very well from a personal standpoint. We didn’t always agree, but at the end of the day we had the same goals and vision and got a lot done.”
But nothing lasts forever. Nixon recently left the post to return to his native state to become chief business officer at the University of Utah. Behen is taking over Nixon’s spot as director of the Department of Technology, Management and Budget, and he is quickly building a relationship with the state’s new budget director, John Roberts.
In fact, Michigan’s merger of IT and budget groups into one department several years ago has made a big difference as far as communication goes, Behen said. “Creating one shared services agency really does help with everything — from having one public information officer to our legislative liaisons and their teams,” he added. “It definitely helped that we are all together and talking about the same goals.”
Roberts agrees. “Before they were combined, we saw a lot of people with good intentions but who were perhaps not as effective,” he said. “The department is much more of a driver this way. People from all sides like it, including the customer agencies.”
Increasingly CIOs and budget directors are finding that they need to be on the same wavelength to make the case for IT investments. But those relationships are often strained. Behen has heard horror stories from CIOs in other states who have to write memos to ask for meetings with their budget directors. “Or they haven’t talked to their budget director in six months,” he said.
Scott Pattison, executive director of the National Association of State Budget Officers, said some of the tension exists because there is keen awareness of major IT projects that have failed or had serious cost overruns. “Some people point to the health insurance exchange problems, but the concern has been there much longer than that,” he added. “The budget people also have been frustrated because there are dozens of agencies with requests related to IT. The budget folks don’t have the expertise to say which is most important. They need help with that prioritization.” For instance, Pattison said, for a social services solution, the person from that agency must sell a project to a legislative committee, but is there enough involvement from the CIO’s office?
After convening a group of budget directors and CIOs in Boston in 2013, Gartner analyst Jerry Mechling (who also writes for Public CIO’s sister publication, Governing) developed a white paper recommending Five Ways for Government CIOs and Budget Directors to Work Better Together. Topping that list is nurturing the budget director/CIO relationship for closer collaboration.
“Some administrations’ only charge to the CIO is, ‘Don’t let something blow up on our watch, and don’t bother us too much,’” said Mechling, a former budget director of Boston. A governor or mayor may not want to pay too much attention to technology, he explained. Technology tends to get roughly the same budget it had last year, plus or minus a few percentage points. “But there are ways for technology to be a much more powerful force,” Mechling said. “When you ask people in health or public safety about the biggest change in their work in the last 20 years, they will tell you something about computers and the way information flows. But if you keep the technology component isolated, you may miss out on big opportunities. It requires more teamwork and more strategic and creative thinking.”
Public CIO conducted in-depth interviews with some of the CIOs and budget directors who participated in Gartner’s Boston workshop about the relationship-building they have engaged in and the structural changes they’ve made to bolster the business case for IT investment.
Nebraska CIO Brenda Decker has one key advantage in her relationship with the state budget director: longevity. Gerry Oligmueller has served as state budget administrator since 1995, and Decker has been CIO since 2005.
“I think longevity is one of the things that has helped us establish a good relationship,” Decker said. “Very early on I made an effort to develop a working relationship with Gerry simply because when he was in the room discussing projects with the governor, I thought it was important that he understood the role technology could play in accomplishing that goal. He could be my voice in those meetings, because I am not going to be in every meeting.”
Once their relationship was established, Oligmueller could call her informally about state agency projects being considered. He might ask if it was something Nebraska should fund. Does the agency have the skill set to accomplish it?
Decker said that trust factor also extends to the Legislature. “Legislators are not necessarily technology people,” she said. “So they assume that the person showing up in front of them knows a lot more than they do about technology. The trick is getting them to trust that what you are telling them is really in the best interest of the state and not seen as self-serving.”
Nebraska also has made structural changes to improve the quality of government IT proposals. The Nebraska Information Technology Commission (NITC), made up of business leaders with technology backgrounds, reviews large IT project proposals and makes recommendations to the Legislature. “It adds credibility because it is not just a bunch of state insiders trying to determine the direction the state should go,” Decker said.
One of the non-voting members of the NITC is a member of the Legislature, Sen. Dan Watermeier. “He is our advocate for IT to the Legislature,” Decker said. “When I need someone to help get me in the door of certain legislators about an IT project, he is very good about doing that. I can’t even tell you how many bills in the current legislative session have something that says they have to go in front of the Office of the CIO and the NITC.”
The NITC website features an Enterprise Project Status Dashboard detailing the progress on major projects. The reports are not just green, yellow and red lights. There is a narrative about why something is happening. “At budget time, those reports become critical. They are part of the budget package,” Decker said. “It’s important that we track where we are with the enterprise projects and ask how to stop projects that are going off the rails and should not be completed.”
The CIO’s office and the budget director’s office collaborated to create templates that help agencies build strong business cases for IT investments. “We try to make sure we have the information we need to be able to evaluate these IT budget requests,” Decker explained. “We incorporated that format to help people build their case so when NITC begins a review, it is not just, ‘Here is a project and here is how much it is going to cost.’”
That idea of creating business case templates seems to be catching on. Kentucky requires that any IT project of $600,000 or more must use business case templates and a total-cost-of-ownership matrix.
Here is how it works: The Legislative Research Commission provides an electronic copy of all submitted IT-related projects to the Commonwealth Office of Technology (COT) for review and evaluation. COT established a cross-agency panel that reviews each submission, explained Glenn Thomas, the office’s director of IT governance, in an email interview. To augment the review, the panel holds face-to-face meetings with each agency’s representatives who give presentations with Q&A follow-up. The panel then scores each project based on the established criteria matrix of business value and project risk factors. The panel members’ scores are averaged and plotted similarly to the well-known Gartner Magic Quadrant. COT compiles a final report with its recommendations for projects to be considered for funding by the Legislature during the development of the biennial budget. Then the state CIO gives testimony to the Capital Planning Advisory Board (CPAB) based on the report. The projects recommended are typically ones in the upper right quadrant, which present the highest value with the lowest risk to the state.
(Copies of the scoring criteria and reports to the CPAB for the last two budget cycles can be found here)
“While the number of projects funded has not necessarily increased, we have seen an increase in the total dollars being committed to capital IT projects,” said Thomas. “This leads us to believe that the CPAB and Legislature feel more confident with the process for reviewing and assessing large-scale projects.”
Thomas added that COT has a very close working relationship with the Office of State Budget Director. The office’s staff members are involved in the project criteria review, have a representative on the actual scoring committee, and also sit on the CPAB, he said. Its staff are also included in the Technology Advisory Council, which is the state’s IT governance committee.
Focusing budget analysis on the full business case, not just the technology, was another recommendation in Mechling’s white paper. “A business case should justify an action based on its expected results compared with the relevant alternatives,” he wrote. “In addition to the IT itself, the actions to be analyzed should include what workers will do differently because of the technology and what leaders will do to implement new patterns of work.”
But in an interview, Mechling estimated that less than 50 percent of government IT project requests have strong business cases attached. “There are some reasons people don’t try to project measurements of improvement. If you make a productivity argument, budget folks will ask for a percentage, and if you say 5 or 10 percent, they may subtract that amount from your budget.”
When it comes to IT investment in Nevada, CIO David Gustafson and former Department of Administration Director Jeff Mohlenkamp, who resigned in March for a position in Walnut Creek, Calif., found themselves in agreement on several fronts. First, they concurred that the state had underinvested in IT for several years.
Before the recession, Nevada had been the fastest growing state in the country for many years. “During that time, our IT budget increased, but not enough to keep up with the pace of growth of the state,” Mohlenkamp said. “Then during the recession, our IT budget shrank during a time when our reliance on IT grew. Our most recent budget was the first time in seven years that we were in a position to start building back up the infrastructure. And I have told the governor that making up for lost time is going to be a six- to eight-year project.”
They also agreed that an increased focus on rebuilding IT infrastructure required a closer working relationship, including bringing the CIO’s office under the Department of Administration umbrella.
“I learned early on that the closer you get to the budget guys, the more favorable your budget ends up being,” Gustafson said. “I knew that as our technology footprint needed to grow and evolve, our greatest opportunity for success would be if we could get more time with the budget officer. When the CIO’s office moved under the Department of Administration in October 2011, that gave me a unique opportunity where I meet weekly with Jeff to talk about all the IT challenges and where we are going.”
Mohlenkamp said the state is trying to refine and improve the way that Enterprise IT Services gives input on technology projects in other state agencies. “The mechanisms we’ve had in the past to vet and evaluate IT needs at individual agencies are not adequate for the future, so we are trying to redraw that whole process.”
Like Nebraska, Nevada has established an IT advisory board consisting of private-sector executives. “That is the secret sauce of why Jeff and I are perhaps more successful than our predecessors,” Gustafson said. “I leverage the IT advisory board to validate what we are doing and to build a long-term strategy.”
Mohlenkamp said he perceives IT as critical infrastructure. “We can’t get our business done without it. IT is just like building infrastructure for a city. You have to look forward to see where the traffic flow is going to be, and what you are going to need. There is not a single business decision of substance that comes across my desk that doesn’t have an IT element. Not a single one. IT is never left off the table anymore.”