Former Michigan governor joins EDS

Electronic Data Systems Corp. has hired former Michigan Gov. John Engler as president of its state and local business, the company announced today.

Engler succeeds Anne Reed, who left EDS recently to become president of the consulting firm Acquisition Solutions Inc. of Chantilly, Va.

In addition, Engler will serve as vice president of EDS Government Solutions for North America, the company's federal unit. Engler, who served as Michigan's governor for 12 years, will report to Al Edmonds, president of EDS' Government Solutions, based in Herndon, Va.

In his new position, Engler will be able to help the company expand its primary state business in the Medicaid arena into the local governments that administer the programs, and help states look for new funding opportunities from the federal government in the form of grants and pilot programs, said John Goggin, vice president and director of government strategies for the market research firm Meta Group Inc., Stamford, Conn.

"He could use his stature to discuss cost savings by reducing fraud and retargeting the funding source to the federal government instead of state and local monies," Goggin said.

"In addition, he would try to position EDS beyond just the Medicaid business [by] convincing a state that EDS has an existing infrastructure and knowledge of the state's environment that should be used as the foundation for future transformation initiatives," he said.

John Kost, a former Michigan chief information officer under Engler, said Engler's political network will give EDS a presence in places where it may not have one. Engler's knowledge of state and local government will boost the company's credibility among its government customers. And he will be able to help the company tailor new solutions to serve market needs, said Kost, now vice president of worldwide public-sector research at the market research firm of Gartner Inc.

Despite the apparent advantages, Engler and EDS should be aware of obstacles they may encounter as they attempt to grow the company's state and local business, Kost said.

One obstacle is that not all governors are as keen to innovate as Engler was. Another is that many states still operate under archaic purchasing and human resource processes that tie the hands of elected officials who try to achieve innovation, Kost said.

While governor of Michigan, Engler created the state's Department of Information Technology. The cabinet-level office led state agencies in the development of new online government services and the state's portal.

In addition, Engler also established, through an executive order, the e-Michigan Office as the centralized agency to lead all state agencies in e-government initiatives and policy development. Engler also backed the state's data center consolidation program that affects 20 agencies and departments.

"His main accomplishment is that he demonstrated that coupling technology with aggressive leadership can get a lot done very quickly," John said.

In related news, EDS also announced that former Arkansas Medicaid Director Ray Hanley has been hired as the company's vice president for state health and human services. Hanley will report to Engler.

(Updated Jan. 21, 2003, 9:39 a.m.)