Technology Management Changes Save Indiana Millions

Indiana technology management changes include consolidating servers, networks, e-mail systems to reduce state budget deficit.

by / November 30, 2008

Photo: Indiana CIO Gerry Weaver


A quip that rings true is that IT management should be more of a dictatorship than a democracy. Indiana Gov. Mitch Daniels' 2005 executive order creating a state CIO position and the Indiana Office of Technology (IOT) embodied that philosophy. The office overhauled the state's technology landscape, consolidating IT infrastructure -- such as the network, e-mail, payroll and help desk -- across 70 agencies. That enabled the IOT to consolidate purchasing for those functions and reorganize hardware. As a result, the state saves more than $14 million annually, said Indiana CIO Gerry Weaver.

"When the governor started this, he gave us the authority -- you might say dictatorial powers -- to drive cost savings and improve performance," Weaver said.

Before the consolidation, agencies ran their own IT, leading to costly, disparate systems.

"Nobody wants to centralize, so you get a lot of resistance," Weaver said.

The IOT took over IT infrastructure functions, like human resources, payroll, e-mail and data center maintenance. Some agency IT employees became IOT employees and started performing infrastructure functions statewide. Agency CIOs stayed in their agencies with smaller teams refocused on agency-specific application development. The consolidation cut roughly 150 agency-IT jobs and many of those employees were retrained for other agency jobs requiring an IT background; others left state government. The IOT recruited around 30 private-sector executives. Approximately 230 IOT workers now manage IT for 28,000 end-users, Weaver said.

Weaver had a long career at outsourcing provider EDS, which he used as a model for Indiana.

The consolidation was part of Daniels' strategy to put the state's deficit-plagued budget in the black. The state had been borrowing money from education bonds and using other temporary fixes. Two years after Daniels' budget initiative, Indiana paid back those education bonds and reports a balanced budget.

"We'd be glad to share anything with any states that are approaching this regarding the templates we used, the processes we used and the way we set up the billing mechanisms," Weaver said.


Forming the A-Team

Weaver found a mess when he became Indiana's CIO. A section of the Indiana Department of Administration (IDOA) was charged with approving technology purchases, but lacked standards. That section also managed IT for 900 of the 28,000 PCs statewide. Allowing the IDOA to manage IT was optional for agencies, so most preferred to keep it in-house.

Weaver searched for the state's best agency IT staff to use as a foundation for the statewide model. He chose the Indiana Family and Social Services Administration (FSSA). It had the biggest IT department in state government and had consistent management processes, unlike most agencies, Weaver said.

"[The FSSA] had some metrics. There were no metrics in the IDOA. The FSSA really monitored what was going on from a customer satisfaction standpoint," Weaver said. "We expanded all that and created a series of metrics that we measure every day, every month, every week. Then we started the consolidation."

Weaver transplanted several FSSA staff members to the IOT. Those employees then recommended IT staffers they knew in other agencies who would be a good fit for the IOT. Weaver cherry picked those employees and also recruited from the private sector.


Operation E-Mail

The state maintained several e-mail systems in 2005, making interagency communication cumbersome. If an employee wanted to e-mail someone working in another agency, he or she usually had to search that agency's Web site for the e-mail address. Sometimes employees simply cracked open phonebooks.

The IOT standardized agencies on Microsoft Outlook and put all 28,000 users on a single network.

"That was challenging because four or five larger agencies had different e-mail systems, and when you get used to one thing, it's not

easy to change," Weaver said. "We did this carefully because we knew if we had one failure, people would want to back off. We never did have a failure."

The IOT accomplished the e-mail consolidation by establishing thorough agreements with individual agencies about their specific support needs.

"For example, the Bureau of Motor Vehicles is up on Saturdays," Weaver said. "They're not open on Mondays. State Police has a different requirement than everybody else. The Department of Workforce Development does a lot of their work on Sunday evening. In each of those cases, we had specific business agreements we defined, and then we measured against those business agreements," he said.


Data Center Central

Agencies managing their own IT led to many underused servers and the unnecessary maintenance cost. The IOT consolidated the state's five data centers into one.

Weaver's staff reorganized servers and deployed more efficient storage technology. Before the consolidation, some data centers doubled as storage facilities, housing stacks of cardboard boxes containing government property.

"There were about 3,000 servers around the state, and now we're less than 2,000. By consolidating on one e-mail system, we can eliminate a bunch of servers," Weaver said. "We also use VMware to have virtual servers wherever we can."


Budget Magic

Assessing its vendor contracts made Indiana realize it had a vastly better bargaining chip than executives realized. Some vendors had several different contracts with the state, all at different prices for the same product.

The IOT inserted itself in the technology purchasing approval process conducted by the IDOA. That agency no longer approves technology purchases without the IOT's agreement. The IOT established standards for statewide bulk purchasing, eliminated purchases from some vendors and renegotiated contracts with others.

"I can't even tell you the number of cell phone plans we had," said Adam Horst, deputy director of the Indiana State Budget Agency. "Everybody was on a different plan. No volume, no sharing of minutes across users, just people accumulating huge overages."

The IOT negotiated a cell phone "family plan" for the state, saving $1 million.

Unified standards, bulk purchase quantities and better negotiating at the IOT led to more beneficial contracts. That interested local governments, especially school districts.

Horst said the IDOA previously offered bulk-purchasing contracts to local governments, which rightly avoided them.

"They weren't good deals, and they weren't well publicized," he said. "The locals and schools were saying, 'Why would I ever buy off that?' They might do their own regional consortium and buy together locally or through some other entity."

Pleasing the public schools and other local government entities paid off for the IOT. Roughly two-thirds of purchasing through the agency's $31 million PC deal with Dell comes from local governments.

The state now replaces all state workers' PCs every four years and pays for the new equipment from the consolidation savings. The savings that funds the PC refresh is in addition to the $14 million in annual savings the IOT claims as a result of the consolidation.

The IOT also deployed Intel's vPro motherboard technology that automatically shuts down PCs at night. It saves Indiana $400,000 annually in electricity bills.


Equal Classes

Indiana's pre-IOT technology landscape created disparity among state agencies. Federally funded agencies, such as the FSSA, could afford to update their technology regularly. But agencies without federal funds, like the Indiana Department of Correction (DOC), could not, said Jake Moelk, CIO of the Indiana State Department of Health.

"A lot of times with DOC, they'd wait until the FSSA got rid of something, and then they'd glom on to that stuff because it was a lot better than what they had before, even though it was

four or five years old," Moelk said. "All of the DOC's funding had to come from the state coffers, and the state budget wouldn't support a three-year refresh program."

Weaver's team guarantees all agencies the same hardware and support services.


Farewell to the Grind

Moelk managed his agency's desktops, servers, network and help desk before the consolidation. He used to survey end-users every 30 to 60 days to measure help desk service satisfaction. The transition to a centralized, statewide help desk was difficult for the first few months, resulting in lower survey grades than normal. However, the situation changed after a few more months.

"At the end of the first year, the survey results were better than the survey results when we had our own resources," Moelk said.

Now that Moelk doesn't deal with the daily grind of network maintenance, he devotes more time developing agency-specific software projects.

"I can spend a lot more of my time strategically with customers talking about next year's grant. How are we going to attack this or where are we going to spend new money if we get it?" Moelk said. "Personally I find it a lot more up my alley because that's part of the value a CIO should bring to an organization -- talking about the future."

Andy Opsahl

Andy Opsahl is a former writer and features editor for Government Technology magazine.

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