Virginia's governor proposes sweeping IT reforms

Virginia Gov. Mark Warner plans to introduce legislation to the General Assembly next month to restructure the state's technology operations to improve efficiency and drive savings.

The measures would consolidate state IT functions within a single new agency, the Virginia Information Technologies Agency. This would eliminate three existing agencies and two government oversight boards.

The initiative, part of a broader package of reforms Warner will submit to the General Assembly, is expected to result in lower technology costs for the state, greater accountability and oversight and better opportunities for state employees.

Warner said the measures would produce immediate savings of $23 million in fiscal 2004 and substantially larger savings in future years, according to media reports.

If the reforms are implemented, Virginia would join other states such as Michigan and Pennsylvania that consolidated state IT resources several years ago, analysts said.

Under Warner's plan, all information technology assets would be transferred to the newly established agency, including all IT infrastructure and human resources.

The plan also would consolidate the independent technology divisions in 91 executive branch agencies into the new agency. The consolidation would not affect the IT assets of higher learning institutions, the legislative and judicial branches or independent state agencies.

The three state agencies that Warner proposes eliminating are the Department of Information Technology, Department of Technology Planning and the Virginia Information Providers Network Authority. Warner also proposes eliminating the Virginia Geographic Information Network board and the Virginia Information Providers Network board.

The head of the new agency would be appointed by the governor. So far, no official announcement has been made yet who will head the new agency, said Judy Napier, Virginia's assistant secretary of technology.

She expects that Warner will wait until the legislation is passed before appointing someone to the position.

A five-month study done this year by Virginia Secretary of Technology George Newstrom found that a number of the state's servers were incompatible, many state e-mail systems are incompatible, and the state lacks a comprehensive IT security plan.

The study determined that the state government, excluding colleges and universities, spends about $448 million on IT each year. When higher education is added to the calculation, annual technology spending comes to about $902 million. In addition, Virginia spends more than $192 million on 2,580 IT personnel.

The proposed consolidation of the state's IT resources may come as good news to some technology companies and bad news to others, said Tom Davies, senior vice president at the market research firm of Current Analysis Inc., Sterling, Va.

Those companies that will benefit the most from the consolidation are the ones that can help the state take out costs and consolidate operations, he said. These include professional services companies, enterprise software companies and outsourcing companies.

The ones that will benefit the least are those that can't support enterprise-wide computing models, he said.

"Once completed, [the reforms] will put the state in a much stronger position to control its IT destiny. But getting there will be a roller coaster ride like Virginia has never experienced before," Davies said.

Warner announced the measures at a Dec. 10 meeting of the Southern Technology Council in Richmond.