‘Federal fixation’ leaves software vendors at a loss
August 16, 2017
Commentary: The founder and CEO of Everlaw encourages IT vendors not to overlook the state and local government market and offers a few tips to get started.
Amid his first tour of government service, Ed Toner is approaching the finish line on a statewide hybrid IT consolidation project he was told he would never complete.
Colin Wood is the managing editor of StateScoop. Before that, he was a staff writer for Government Technology magazine. Before that, he taught Engl...
Soon after Ed Toner was appointed as Nebraska's state chief information officer in June 2015, he began talking about his plan to anyone who would listen.
In that first week, he made it clear that he wanted to do what hundreds of other public- and private-sector CIOs around the country had done: consolidate the enterprise's scattered IT efforts. He was going to be the fresh blood the state needed to whip its archaic systems into shape.
"And I was told, 'Not in a million years. You'll never be able to pull it off,'" he says. "I was told, 'This has been tried before and failed.' I was told, 'I'll be retired before you ever have a chance to get that done.'"
The problem wasn't Toner's resume — he'd worked in the private sector at TD Ameritrade and the First Data Corporation — or the scope and size of the plan. Nebraska has a population of about 1.8 million, about the size of Houston's, and consolidating its IT systems didn't present anything uniquely challenging.
The state's track record of failed and stalled consolidation efforts, however, had jaded many of the people working in Nebraska government. Toner remembers staff who were supportive — people who wanted to see him succeed but believed he would fail.
The short story is that they were wrong. A hybrid IT consolidation was formally launched in March 2016 and Toner reports the state will "easily" complete the project by May.
Closer examination reveals not only a consolidation that is nearing successful completion, but also one that was undertaken without incident. In a December blog post, Toner adopts a near-incredulous tone. He may have believed in himself when he began, but when things went as smoothly as they did, even he began to question it.
"Honestly, I felt like a pitcher with a no-hitter in progress, and the superstitious part of me wanted to keep it going that way by mentioning it to no one," Toner wrote.
The human factor
Consolidating government data centers and the people who manage them — what Nebraska is doing — is both tricky and essential. The National Association of State Chief Information Officers lists consolidation as the No. 2 priority for CIOs in 2017. Such projects involve lots of technical assets like servers and cables and software, but that part is almost never why they fail.
Anyone can reconfigure equipment — consolidations fail for political reasons.
A consolidation that ends in failure will fizzle out like a relationship that's gone on too long. Boundaries aren't respected, there's not enough communication, people lose interest and stop answering phone calls. Governors, mayors, unions, and long-time employees can all feel threatened by change, even if the changes being proposed are ones that eliminate waste and save lots of money.
Toner succeeded by relying on his experience in the private sector, where he said he observed companies that did consolidations the right way, but also saw companies that left IT in the fragmented condition found in so many governments today.
"I did a lot of selling on the side," Toner said. "Every time I had an audience, I talked about it. I talked about it publicly. I talked about it any time I went to a meeting. Every time I had five minutes, I talked about the plan. Every time I was asked to talk to a team, I talked about, 'Wouldn't it be great if we did this?'"
Toner could call upon precedents in other states: Pennsylvania, Colorado, Utah and Michigan, as well as Washington, which has partially completed a similar consolidation. Washington CIO Michael Cockrill is impressed by what Nebraska has been able to pull off.
"It's on the order of unbelievable," Cockrill says. "Because your stature in government, how important you are, how powerful you are, is a function of how big your team is and how big your budget is. And to ask people to give that up willingly for the good of the enterprise is antithetical to human nature. It's a hard thing to do and if he really is throwing a no-hitter, the number of things that have to align for that to be the case is just statistically very significant."
Many of the details of Washington's restructuring are different from Nebraska's, but the human challenges are largely the same. Cockrill took his job in 2013 to reverse a 2011 reorganization that split the former technology office into several operational factions. Agency heads aren't interested in the good of the enterprise, Cockrill says. If the head of the health and human services department is hired to "feed babies," anything that stands between her and that directive is seen as a distraction, he says.
Toner lobbied for nine months. From the time he was hired until the day he pitched the project, he repeated over and over — sometimes to skeptical audiences — what he wanted to do. So when he formally submitted the proposal, they already knew the plan, and Toner himself had been informed by all the conversations. He knew what might trip him up if he wasn't careful.
"I stayed away from the sacred cows," Toner said. "In my presentation, I said, 'The money is in infrastructure. The efficiencies are in infrastructure. So if you have an application team that's supporting your agency-specific application, you get to keep them. I'm not going to get in your business. So I kept that sacred cow there so that if you're in roads, you run your own CAD system. I'm not going to get into your business."
"Line-of-business" applications, as some CIOs call them, stayed put. Any application functions that were used by multiple agencies, like email, were labeled enterprise applications and they were migrated to a central data center. Because each agency was running its own software, the consolidation included staff consolidation, too. He started by sending out questionnaires to all IT across the state to figure out how everyone was spending their time.
"The resistance was there. I'm not going to say we didn't have resistance," Toner said. "And in public service, I've come to find out, they'll wear multiple hats."
Consolidating staff was challenging, he said, because one state employee did not equal one network administrator or one support technician. Unlike the private sector, he said, almost everyone divided their time between different jobs, which made pulling people from one agency into a centralized office a messy job. If he pulled someone who spent 75 percent of their time on network admin because he needed that skill, he was unintentionally robbing that agency of some of their capacity for the job that person did the other 25 percent of the time.
To solve this, roles became more focused and Toner ensured he left excess capacity at each agency. The efficiency gained by centralizing IT talent left everyone with more time, overall. "Only a couple people" left the state as a result of the consolidation, but the new arrangement was a huge improvement for everyone, Toner reported.
"If you can imagine having two network people — which we did — in one agency, there was just no depth," Toner said. "If you had two people, that's all you have. Now we have 10 times that. So everything got better for them, in that you had a much larger skillset to draw on for projects. We're now seeing our projects' times are reducing. In fact, I remember our first month we had a project we had to do at corrections and they said, 'That normally takes us a couple months.' And we did it in three days because we had an entire team that could work on it."
That fast-moving group is now consolidating the state's networks into a single domain, eliminating redundant hardware. The domain consolidation piece should be completed by the end of the year, Toner said.
Building a stronger team allowed the state to end its contracts with outside engineers, too. Internal pricing for IT services were slashed. The Public Service Commission ended its external data management contract and hosted their data on Toner's servers, instead.
"We ended up saving $240,000 a year by consolidating, just for that one agency," he said.
The state patrol and state supreme court say they appreciate the cost reductions, reduction in points of failure, and "peace of mind" they gain by knowing that their assets are consolidated in a statewide disaster recovery program.
Next, the state will reorganize its IT support offices. Today, if a Department of Motor Vehicles office needs support, a technician might need to drive eight hours to get across the state and spend the night for a one hour service call. The state will establish regional service centers, so maybe technicians will only need to drive two hours instead.
Toner was further bolstered against the pushback he received by the support from Republican Gov. Pete Ricketts, himself a government newcomer, joining the state from Ameritrade where he was chief operating officer. Ricketts had gone through the same kinds of mergers and he understood the plan, Toner said.
Being careful about the political landscape was a prerequisite for success, Toner said, but ultimately it was an appeal to logic that won people over.
"Everyone is always concerned about power issues, about control," Toner said. "Do you really care what network you're riding over? Do you really care what server you're putting that application on? Or do you and the citizens of Nebraska really care that it's available all the time? And that was my business case. Do you really care about what's happening behind the scenes?"