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Best of Both Worlds

Utah's consolidation plan seeks value of centralization without sacrificing flexibility.

by / July 31, 2007

Utah's efforts to centralize technology mirror a national trend where state governments are searching for effective ways to consolidate their IT operations. Those efforts have produced everything from highly centralized IT management structures in states such as Michigan and Virginia, to loosely federated attempts in other areas.

The Utah state CIO job became a lot more consequential thanks to legislation passing all state IT authority over to the position in 2005. For years, Utah agencies controlled their own IT, essentially forcing the state CIO to sit and look pretty while they made their own hiring, firing and budget decisions over technology.

"We had somewhat of a paper tiger, and we wanted to create a true CIO position," said Utah Rep. David Clark.

Previous Utah state CIOs struggled to enact statewide consolidations because at least one agency would inevitably decline participation, hence the state created the Utah Department of Technology Services (DTS) and transformed all state IT workers into DTS employees. The governor appointed Stephen Fletcher state CIO to develop a transition process that satisfied all agencies and incorporated their input.

Fletcher now controls all state IT projects and has already cut costs. But, in a move to ensure that agency needs are met, the DTS assigned an IT director to each department. These directors act as liaisons between their agencies and the CIO, and discuss and suggest changes in resources or products that could improve operations.

Utah's approach seeks to gain the benefits of IT centralization without sacrificing the flexibility and specialized knowledge developed by agency-specific IT staff.


Giving the Tiger Teeth
The Utah Legislature passed HB 109 in April 2005, creating the DTS and setting up Fletcher to assume more power than any prior CIOs in the state's recent history.

"We had always had a CIO," Clark said, "but he did not have purse strings or hiring and firing responsibility."

In 2004, then-Utah CIO Val Oveson gave the Legislature several testimonials of his frustration over his lack of power to effect change in state IT, prompting Clark and state Sen. Beverly Evans to spend several months evaluating state agencies. They discovered that roughly 80 percent of the applications on agency computers statewide were the same.

Clark envisioned the efficiency gains that might result from centralizing maintenance of those applications under one agency. The idea was to streamline IT work for the staff, dividing the staff into groups that would each specialize in different aspects of state IT.

But he and Evans also found agencies were very nimble at developing applications for their specific needs. Those projects were best left under individual agency control, Clark said.

For example, the Utah Department of Transportation continues to create custom solutions for monitoring traffic and finding ways to more efficiently utilize agency assets.

"We don't need a 'one program fits all' for tasks like that," Clark said.

The difference is that now individual agencies must clear custom application projects with the DTS first. The individual staff members working in the specialization groups for statewide IT projects will physically remain in the agency offices that housed them before the IT authority shift.


Early Results
Fletcher consolidated statewide mainframe maintenance, and cut $2.5 million from the state's $15 million mainframe budget. He used the extra money to roll out IT security-enhancing devices for all agencies, including physical security mechanisms, firewall improvements and newer screening technologies.

He also cut travel time and frequency for remote IT repair technicians.

Many Utah agencies had several offices located throughout the state, which made centrally servicing IT impractical. They hired remote IT repair technicians who traveled to the various offices, but it was an expensive solution, Fletcher said.

"We realized that some [remote] technicians were passing other technicians in other cities on the way to service a customer," he explained. "We asked, â??Why don't you send the closest technician?'"

Those closer technicians couldn't do the repairs because they worked for different agencies.

Now that Fletcher oversees all of the state's IT activities, he sends whichever technician is closest to the office needing a repair. The drop in travel time cut remote repair technician costs by 20 percent to 30 percent, he said.

The change in authority also lets Fletcher centrally manage the state's backbone ring, which connects agencies to the state's network. He renegotiated services with the state's backbone ring vendor, increasing its capacity from 155 megabits to 1 gigabit. The network is now six and one-half times faster, according to Fletcher.

The renegotiation also added more access points to the network.    


Minimizing Culture Shock
All state IT workers in Utah technically work for the DTS, but maintain the same relationships with their prior agencies by remaining in those agencies' offices. Agencies found this approach made the transition less of a culture shock, said Gregory Gardner, deputy director of the Utah Department of Workforce Services. Some IT employees changed locations to become the DTS's upper-management team.

Gardner said he was initially skeptical of the power shift.

"We had a really close relationship between IT and our business users - we had built some great applications - so we were concerned that a huge, monolithic organization would be built and we would lose those on-the-ground relationships," Gardner recalled. "But when Steve [Fletcher] came on and handled the transition process by visiting all of the agencies, understanding the needs of the executive directors, keeping the IT employees located within the agencies and having a very incremental way to make changes, it proved that the fears were unfounded."

Gardner said he supported the power shift after Fletcher demonstrated his commitment to substantively including agency input in the decision-making process.

"One thing Steve did before he formed the new department, he conducted an extensive process with the executive directors, laying out all of their initial business requirements or business needs for the new department. He actually produced a report and used that as guidance to move forward."

Fletcher produced the state's first set of written, formalized service-level metrics, which gave it a standard to measure itself against, Gardner said. "We did day-one service-level agreements, which were really a reflection of the existing service-level agreements, but they had never been written down. They were unstated."

Fletcher said this approach helped sharpen the DTS's vision. "We are able to focus on the results the agencies want us to achieve, and it gives us a great scorecard," he said. "It gives us our objectives, helps us eliminate anecdotal information and have better conversations with our agencies."  

Gardner said the DTS can't completely standardize the state's desktop management process because several agencies use custom applications. The DTS will form a specialization team to manage a large portion of desktop maintenance throughout the state, but the IT workers residing in individual agencies will continue maintaining custom applications, he said.

Since the DTS controls all state IT employees, individual agencies can reach outside IT workers in addition to those already located in their offices to help develop new custom applications. The agency negotiates a billing rate with the DTS to pay for the extra help.

"We've made a commitment not to disrupt services," Gardner said. "If there is a change, it's going to improve services, and it's going to be more cost-effective. Steve has been careful to make change incrementally. We're all fully apprised of the change. We have the opportunity to comment on it and shape it."

Fletcher recruited Gardner to help with the transition. 

"I was in kind of a unique situation," Gardner recalled. "I worked half of the time for our department, and the other half for Steve on the transition team. I helped Steve visit agencies and write up the findings. We got to help define the management structure. I was in charge of the organizational work group that helped define his organization structure for day one. He was really inclusive."


Forfeiting the Safety Net
Legislators sought to make Fletcher's staff adjustment more flexible by eliminating the bureaucratic hurdles to firing employees.

"If someone was hired 25 years ago," Clark said, "that may not be the best person to be doing up-to-date technology today."

But merit status made unfit employees difficult to fire. If an employee had merit status, he or she could appeal a disciplinary action on five different levels before the state enacted it.

But many think merit status is outdated, said Charles Woods, a managing director with SMART Business Advisory and Consulting, adding that it appeared in government roughly 70 years ago to produce stable government employment. Before that, each time a new governor took office, he or she typically brought his or her own army of employees. Many would lose their jobs with gubernatorial changes.

"The merit system came about for people who weren't involved in elections, who were competent, who wanted to be professional employees with state government when the administration changed," Woods said. "That was the sole purpose of civil protection, decades ago."

Woods said that culture no longer existed for most state jobs. "There's kind of a generational push to say, â??We really don't need civil service.' It's like unions. A lot of people feel, in the case of IT, it hinders recruitment, which is highly competitive."

Woods added that removing merit status also lets states hire people more quickly.

Fletcher and the Legislature developed a strategy to remove that merit status without mass hostility from agencies.

"We did not require everyone to forgo their merit status," Clark said. "But we did offer incentives to those willing to do so. We wanted a carrot approach."

Each employee who gave up his or her merit status received a three-step pay increase. Gardner said it amounted to roughly 8 percent.

"It hasn't been used in a negative way," Gardner said. "If there is someone needing new skills, Steve is committed to offering training resources to get the job done - not just throwing somebody out."

Fletcher said he needed IT technicians who were familiar with new programming languages, like Java or .NET. Many current Utah programmers use COBOL, which the state is eliminating.

Fletcher said he preferred to train those COBOL programmers as Java or .NET programmers, rather than laying them off and hiring new people. He said training people new to working in government was more expensive than retraining seasoned employees because they already understand government culture.

More than 90 percent of the employees chose to forfeit their merit status.

"It has been a healthy thing because you're more motivated to do a good job," Gardner said. "You're motivated to keep your skills current. Plus you get paid more, so it has been a win-win." 

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Andy Opsahl

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

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