Newly elected Utah Governor, Jon Huntsman announced sweeping changes to Utah State government yesterday including a plan to consolidate all 1000 IT workers in the state into a single department. (see stories in the Deseret News and the Salt Lake Tribune). I've heard rumblings of this for the past few weeks and there are more than a few nervous people in the State IT ranks.

Huntsman also plans to shake up the information technology operations in state government that are now strewn across all programs and agencies without a centralized line of control. The state's chief information officer, for example, only technically has two employees, while the state employs about 1,000 information technology workers.

From Salt Lake Tribune - Utah
Referenced Fri Jan 14 2005 09:17:03 GMT-0700

While I think there's some merit to reorganizing State IT functions, there is much that could go wrong here. There are a 1000 ways to do this wrong and only a few that will ultimately work. There are plenty of smart people advising the Governor on this--I'll offer a few suggestions in public:

Don't Overcentralize

State agencies can't be left without an IT function. In an era where IT is at the core of almost every business function, State agencies need IT advice and leadership that is steeped in domain knowledge. As I argued in my whitepaper on modular IT organizations, there are three primary functions that IT organizations perform: service provisioning (making the infrastructure work), solutions delivery (developing or buying IT solutions to business problems) and value innovation (figuring out how to derive business value from IT and meet business needs).

Of the three, service provisioning is easily consolidated and there are big benefits to doing so. The State's done that already with its network. The next logical place to do this is with desktop computers. Other possibilities include servers and data centers.

Value innovation has to remain in the agency. They're the only ones with enough domain knowledge to do it. This means that each agency ought to have a CIO and an IT staff sized according to the size of the agency's IT needs that is responsible for the agencies IT decisions and works closely with the business to drive innovation.

Solutions delivery is already largely done somewhere other than the agencies since almost all solutions delivery is already outsourced. Solutions delivery must remain under the control of the agencies. Agency IT staff should act as the "customer," who is determining what they need and, most importantly, controlling the money. This is one of the primary responsibility of the IT personnel who remain in the agency. There will always be some development in any IT organization and these people probably ought to be part of the central IT shop and hired as "consultants" as needed by the agency IT staff.

Give the CIO Authority

This plan will be a huge blow-up if the CIO doesn't have the right authorities. The primary goal of those authorizations will be to ensure the CIO can create policies that result in interoperability. Regardless of any other consolidation, agencies will always be in the business of buying and putting IT in place. Restrictions that disallow agency involvement in IT will prove to be too inflexible. To make this infrastructure interoperable, the CIO must be able to create and enforce policies that affect those decisions.

An important part of this is to ensure that the CIO doesn't actually run the IT Services. There should be a separate director of ITS. Its fine to have that person report to the CIO, but the CIO's role is about more than just running the centralized IT shop. As mentioned in the last paragraph, the CIO should also be creating policy. There's no point creating policy if its not enforced and you can't effectively enforce policy and provide service from the same organization. The CIO needs a separate organization (not large) that writes and enforces policy. Utah could probably do this with 2-3 people. One of the biggest problems with ITS in past years has been that too many people in that organization see themselves in the role of policeman rather than service provider. That mindset has to be shelved or this plan will never work. Ensuring that the function is organizationally separate is one way to do that.

Change the Merit System for IT Workers

This plan will be nothing more than a reshuffling of bodies if there isn't some room to make sweeping changes in the make-up and nature of State IT workers. The State will end up with too many of some types and too few of others. The inflexibility of the State Merit System is out of touch with today's fast-paced world of IT. As CIO, I'd rather have 700 well-paid IT workers than 1000 underpaid workers. At the very least, the bill doing the reorganization ought to put a moratorium on merit system-induced employment requirements and restrictions for two years in the new agency while it gets everything worked out.

The most important thing is to give the new organization enough flexibility to succeed. Don't tie its hands with lots of restrictions and then wonder why it failed. I think its important for Huntsman to do this early in his administration. There are the obvious political benefits, but I also think its important that all the kinks get worked out well ahead of any change in the administration. Otherwise the gripes and complaints (and there will be plenty) get turned into political footballs and the next administration feels compelled to undo the changes when it comes in. This has happened in several other States.

Conclusion

Interestingly, if you'd have asked me when I was CIO if I though this was necessary, I would have given an unqualified "yes," but two years of introspection have convinced me that you can achieve most of what needs to be done without this kind of massive shake-up. You have to do consolidation to get savings, but there are less risky ways of getting the savings than by doing a massive shake-up. Remember, scavengers get fatter then predators in public service. The scavenger strategy here would be to just mandate desktop consolidation and give the CIO clear policy making authority. Then leave everything else alone and see what falls out. I suspect that strategy would yield 90% of the benefits with almost none of the attendant risk of the more predatory full-scale restructuring.