Centralizing State IT Functions Gains Momentum

In his 2019 state of the state address, Connecticut Gov. Ned Lamont painted a vision in which the state’s IT functions would be centralized, and citizens of the state “will be online, not in line.” He was realistic, at the time acknowledging that “It won’t be done overnight.”

After making steady progress for a couple of years, the governor announced on March 17 that his administration “has launched a year-long process of building a new information technology organization within state government,” as reported in  a gubernatorial office press release. 

According to the state’s CIO Mark Raymond there were a few major reasons for this massive effort. With the growing pace of technology, centralization will allow the state to keep up with advances in a way that individual agencies cannot. What’s more, it’s increasingly vital to be as efficient as possible in fending off cyber villains.

“Our adversaries have become more sophisticated and interested in the things we’re doing,” he says. 

Yet another impetus for the change is specific to Connecticut. According to a report done for the state by Boston Consulting Group, as a result of a change in the state’s pension plans, more than 8,000 state employees, or 27% of the total workforce, are eligible for retirement in 2022, 72% of whom are seriously considering retirement.

As a result, explains Raymond, “If we left the structure the way it has been, we’d have to hire a bunch of new people to support the agencies’ individual legacy systems.” A centralized approach, on the other hand, will allow the state to efficiently hire a cadre of specialized IT experts who can work across all its agencies. 

Connecticut isn’t re-inventing a cyber wheel here. Almost exactly 20 years ago, we published a book about information technology in states and cities titled “Powering Up.” It included a chapter titled Lurching Toward the Center, in which we wrote, “The problems with inadequate central control are easy to uncover and just begin with a patchwork approach to IT.” 

Just a few years after that book came out, Connecticut made an effort to centralize, under then CIO Rock Regan, who is now managing director of public sector for Precisely, a data-integrity software firm. The hope was to eliminate positions that were redundant within the agencies and bring the necessary jobs into a central IT department. But he recalls, “the agencies all wanted to retain their own sandboxes.” Then Gov. Jodi Rell didn’t want to use political capital to push for the centralization, and it failed ignominiously.

Objections from agencies that want independence in most IT matters continues to be the major stumbling block on the way to centralized IT. Mississippi, for example, is largely decentralized when it comes to technology. 

“We have lots of boards and commissions here, and they have their own staffs and their own budgets,” says James Barber, executive director of Mississippi’s Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER). “The culture here is that everybody gets to do their own thing. And that stifles efficiency.”

One way in which Mississippi, and other states, can suffer from lack of IT centralization is in project management. While a central IT office can easily maintain a team of trained project managers, it’s costly and difficult for individual agencies to do so. The downside of this was seen in 2018 when a contract for a special education data management system in Mississippi was terminated, costing the state nearly $1 million. 

The original contract made it clear that the state’s Department of Education, not the centralized Department of Information Technology Services, was to be involved in the day-to-day implementation of the contract. But it failed to do so successfully. In a memo to a legislator from PEER, it was noted that the executed contract lacked a set of deliverables and contract oversight by the Department of Education appeared to have been lacking.

Says Doug Robinson, executive director of the National Association of State CIOs (NASCIO): “A lot of this is about power and politics. Agencies say, ‘we have a business, and we know it best.’ Centralization is such a four-letter word with many agencies that many CIO’s use euphemisms. They talk about ‘IT optimization’ instead.”

Steady Trend Toward IT Centralization 
Despite this, according to Robinson, there’s been a steady trend toward centralized IT structures, and the consolidated hardware and software that generally accompanies them. He explains that all the states fit someplace on a spectrum that includes centralization, a federated approach, sometimes called a hybrid, and fundamentally decentralized. 

New York, Utah and Oklahoma are among the most centralized. Texas and Florida are among the most decentralized. Many of the remainder fall someplace in between.

In Oklahoma, the drive toward centralization and consolidation was originally motivated by a quest for cost savings. But, beyond the identifiable savings the state gained, it also put itself on a path toward heightened security against cyberattacks.

According to the state’s chief information security officer Matt Singleton, Oklahoma has a central point where the state can monitor for the kinds of anomalies – through all its agencies – that can lead to a successful cyberattack.

“In the state of Oklahoma alone we see about 61 million attempted attacks in a day,” says Singleton. “The majority, though, are white noise. In the two months of 2021 of the 61 million a day, we had 263 that required human interaction.” With a centralized approach the state has the capacity to filter out the truly dangerous potential infiltrators and address them quickly and directly. 

Another benefit of centralization is the ability to create better business analytics. Utah, one of the first states to centralize its IT functions, is a leader in this front. The state has just two data centers, one of which is a backup and is moving much of its information to the cloud.

The easy data sharing this permits has multiple benefits. For example, Utah is helping to make smooth transitions for people leaving prisons. “Data across agencies lets you know that people with certain characteristics, who are in the correctional system, can benefit from a variety of services offered by other agencies,” says Dave Fletcher, the state’s chief technology officer. 

Louisiana’s centralized IT system has provided the kind of efficiencies that have helped it move its technology into the 21^st century. As of 2017, the state had an estimated $959 million backlog for modernizing the most at-risk applications with an estimated $79 million backlog for infrastructure modernization, reported the Office of Technology Services in Louisiana. Today, according to Dickie Howze, Louisiana’s chief information officer, thanks to the ability of the state’s 800 centralized IT workers, “We’ll soon have that down to $285 million. That’s a monumental accomplishment.”