A Feb. 3, 2015, report by the Office of North Carolina State Auditor Beth Wood found several weaknesses in contract practices and IT procurement processes. For instance, “the State Board of Elections paid a vendor nearly $1 million to replace the State’s Campaign Finance System and received nothing in return,” the report stated. In his Feb. 4 State of the State address, Gov. Pat McCrory called for a new cabinet-level Department of Information Technology to address many of the issues highlighted in the audit.
In a wide-ranging interview, North Carolina CIO Chris Estes addressed some of the weaknesses highlighted in the auditor’s report and the governor’s address. Although Estes is not officially a cabinet member yet, he said he goes to weekly cabinet meetings, and McCrory considers him a member. Estes, who came into office with McCrory in January 2013, said several steps already have been taken to identify and correct shortcomings.
“The auditor produced a report in March 2013 that found that 74 percent of IT projects were being delivered a year late and over budget," Estes said. "So that is the root of the problem we have been trying to solve."
One first step was to create an innovation center to allow agencies to try out software before they buy it. “We were buying technology and we didn’t know if it worked before we bought it,” he said. “We created the innovation center a year and a half ago and have saved $6.8 million with this ‘try before you buy’ approach.”
He said the state also has started restructuring contracts with software vendors to consumption-based contracts so that the state only pays for what it uses.
In his State of the State speech, McCrory said his team “discovered that obvious opportunities to pool the purchasing power of several agencies are often bypassed.” Estes noted that many agencies would purchase directly from vendors, but by aggregating buying power on IT contracts, the state already has saved about $15 million.
The audit report criticized the state for not doing a better job of tracking IT project success and being unable to determine if the state achieved $1.2 billion in expected benefits. “State agencies do not follow a common standard or industry-recognized business framework to manage the state’s IT enterprise, which increases the risk of inconsistent management across the government," according to the audit report.
Estes said that making sure IT projects are completed on time and on budget is clearly the responsibility of IT professionals. But an agency deploying the technology might project that it would save $1 million over five years. “The auditor was interested in finding out who was tracking that million-dollar savings over five years after the technology is implemented. Once a project is turned on, we don’t have the authority to track benefits afterward,” he said. “We agree with the auditor that someone should be tracking that. But we’re not sure it is the IT people who should be tracking it.”
The state budget director is talking to the auditor about the role it might play in tracking business benefits after an implementation, he said, adding that the Budget Office is sponsoring an initiative called NC GEAR (Government Efficiency and Reform) that is looking at creating a results management office.
The biggest change in the works is the creation of a cabinet-level Department of Information Technology that would have authority over all IT workers, operations and governance in the state.
Although a bill has not yet been introduced in the General Assembly, Estes said there is bipartisan support and he expects the bill to pass this session. He added that the steps he's taken so far have provided value, but the new legislation is crucial to make further progress.
“For instance, currently there are about 2,400 IT employees in the state agencies and I am responsible for about 25 percent of them,” he said. “Seventy-five percent are still in cabinet agencies and I don’t have authority over those people. We want to have a single authority for IT in the state. And that is what the new department is envisioned as and what the governor is asking the general assembly to create.”
As for his most difficult task in 2015, Estes said it is making sure people understand why the state is restructuring.
"Employees can get nervous when you go through a change of this magnitude," he said. "We are committed to being open and transparent throughout this process. We have created a special website called OneIT.NC.gov, and we are posting FAQs to give them an idea of what is coming and when.”