Re-imagining e-Government

Improvements to the state’s accounting and procurement system, as well as its cyber-security efforts, are other areas that could benefit from consolidation. Before Khanna’s appointment, Minnesota was spending about $600 million a year on IT systems, many of which were agency specific and sometimes incompatible with each other—and which lacked a central authority to ensure integrity and security across the state’s systems. All told, there were 1,000 separately managed networks and more than 500 different Web sites.

“We found that there were hundreds of different products purchased from about eight different vendors,” Khanna says. “We went to different agencies and asked, ‘Could your people get by with using the same models of computers?’ And in most cases, they could. Before, agencies were purchasing and maintaining about 30,000 computers in total. But now, including county, city, and K-12 schools in the equation, it becomes almost 150,000. The vendors see numbers like that, and they come back with much better prices.” By standardizing IT procurement and maximizing the state’s buying power among its vendors, Khanna says that the state has already seen savings of up to 44 percent on desktop and laptop computers. He says the Drive to Excellence study that led to the formation of his department projects net savings for the state of $354 million by the time the transformation is complete.

Ideas being pursued by the Office of Enterprise Technology aren’t completely new to state employees. “We had tried a couple times to create a more centralized function for IT decision-making, but it never worked out,” observes Senator Sheila Kiscaden, a DFL member from Rochester who authored the legislation that created Khanna’s office. “We felt the restructured [Office of Enterprise Techno-logy] had the combined appeal of centralizing some functions around procurement and standards, but also letting some departments have authority to make decisions based on individual needs. We liked that it was staff driven, and focused on what rank and file could do to streamline processes.”

Getting government to adapt the kind of technological innovation embraced by business might seem simple, but the culture of the public sector is often the apple to the corporate world’s orange.

The Enterprise View

State agencies and departments are spread out in terms of function as well as geography. That makes imposing consistency and efficiency on a state government a much trickier proposition than it might be for a private business. But Khanna notes that even major companies with sprawling organizational structures have made similar transitions.

“When [former CEO] Lou Gerstner came to IBM in 1992, he was horrified that they had 128 CIOs and 155-plus data centers, and 31 networks,” Khanna observes. “Thirteen years later, they have six data centers and one network. They were able to share the service.” Minnetonka-based Cargill, Khanna says, is another company that led the way in centralizing shared functions such as human resources and accounting.

The state’s Drive to Excellence initiative is the product of five months of surveys, interviews, and brainstorming conducted by Deloitte Consulting and more than 200 employees from agencies across the state. The initiative aims to improve efficiency by building enterprise platforms in six areas: IT governance, licensing, building-code regulation, state property management, purchasing, and grant management (the pursuit, management, and distribution of the state’s annual $1.1 billion in incoming grants, such as the Minneapolis-based McKnight Foundation’s gift of $1 million to support teacher education, and $1.4 billion in outgoing grants, including $375,000 given to St. Paul’s Transoma Medical to train its employees in medical-device regulations, among other areas).

The statute that produced the Office of Enterprise Technology also gave Khanna a budget and a mandate to create an organization capable of coordinating and streamlining Minnesota’s tech infrastructure over the next five years. But instead of spending months setting up formal task forces and departmental groups, Khanna formed loosely structured “skunkworks” teams composed from 240 city, county, and state employees who were interested in helping get the process improvements and new enterprise initiatives started. This approach provided a faster, less bureaucratic way to develop new methods, and has also helped avert turf battles among the various state agencies.