Pyrrhic victory

A massive restructuring of Virginia's technology offices slated to take effect next month could prove a mixed blessing for both Gov. Mark Warner and for information technology companies doing business with the state.The Democratic governor last month signed legislation consolidating the state's IT authority into a single department, the Virginia Information Technologies Agency. But instead of giving control of the new agency to the state's secretary of technology, as Warner originally requested, the reform package created a new oversight body, the Virginia Information Technology Investment Board. The legislation also created a chief information officer to lead the state's new IT agency.Consequently, the new board and CIO --not the governor's technology secretary -- will oversee the more than $1 billion the state spends annually on IT.The consolidation will enable the state to better coordinate how agencies buy and use technology resources, said industry officials, who expect to see an increase in statewide IT projects. While this is good news to contractors, the creation of a board and a state CIO outside the governor's control could lead to conflict and confusion with the state's IT policy. Moreover, the secretary of technology, a cabinet-level official who previously functioned as the state's de facto CIO, has been left with limited and uncertain powers. Don Upson, a partner with the consulting firm of ICG Government, Reston, Va., who served as the state's first secretary of technology under former Gov. Jim Gilmore, said the secretary of technology position "got sliced and diced, and now it's not there anymore."The person directing the new IT department, Upson said, should be Secretary of Technology George Newstrom, who devised the consolidation plan and has more than 30 years of experience in the technology sector."[He's] the guy you want running the job, not the one you want to run out of the job," Upson said. COMPROMISE PLANThe architect behind the independent board and state CIO is Virginia Senate Majority Leader Walter Stosch, a Republican from the state's 12th district. Stosch backed Warner's plan to consolidate IT resources in the Virginia Information Technologies Agency, but, citing the state's mixed record of success with large technology projects, placed a CIO in charge of the new agency's day-to-day operations. The CIO will serve under a five-year contract, which will provide continuity beyond the four-year gubernatorial term, state officials and lawmakers said. The Information Technology Investment Board will oversee the CIO and IT agency. "There was great angst when the notion of a separate board and a separate CIO was first mentioned," said Newstrom, who was slated for the CIO's role under Warner's plan. Newstrom said he has little control over how agencies purchase and use technology. At best, the state secretary of technology is only a policy adviser to the governor and executive-branch agencies on technology matters, he said.The Warner administration's unease is shared by industry, which also preferred a state CIO reporting directly to the governor, said Josh Levi, vice president of policy for the Northern Virginia Technology Council."The glaring concern we had was that the CIO function was being removed from the secretary of technology," he said. "We wondered whether that was effective and pragmatic."Stosch defended his changes by citing studies by the state's Joint Legislative Audit and Review Commission showing Virginia needed to view its technology investment on a long-term basis rather than a short-term one."We felt strongly that the CIO should report to the board and be shielded from the turnover of administrations that takes place every four years," he said.Ultimately, Warner accepted Stosch's revisions and signed the legislation to achieve the IT consolidation and other reforms he wanted for the state.The governor will pick four of the 10 members of the board, and the General Assembly also will choose four. The secretary of technology and state auditor of public records also will be members of the board. The auditor, however, will not be a voting member. The board will meet quarterly to determine project priorities and establish long-term IT strategy. Del. Jeannemarie Devolites, R-35th District, sees problems with both the board and the new state CIO. Because the board is only scheduled to meet quarterly, it is likely to experience substantial backlogs and, therefore, may be unable to make decisions in a timely manner, she said. The Virginia CIO won't be directly accountable to leaders in the state government, namely, the governor and secretary of technology, she said."I think this is unfortunate. The way it turned out in the end, I don't think we've done right by either the citizens or the technology sector," she said.Upson agreed. "It doesn't matter how good a person is in the CIO position if he or she can't reach the governor," he said.[IMGCAP(2)]BUSINESS BOONNewstrom is taking a more conciliatory approach toward the board and CIO. "While it may sound a little more cumbersome, I believe in a government setting, unlike a private-sector setting, it provides for greater checks and balances," he said. The purpose of the arrangement is to give both the governor and the legislature a hand in shaping the state's long-term IT strategy, he said. As a result of the consolidation, technology companies are more likely to see the need for solutions and approaches that solve the problems across agencies, rather than piecemeal solutions for each department, said John Kost, managing vice president of worldwide public-sector research at the market research firm of Gartner Inc., Stamford, Conn.Technology companies that want to win new business in the state should take steps to demonstrate enterprise successes from other jurisdictions that can be quickly brought to bear in Virginia, he said.The technology industry is hopeful that the consolidation will improve the state's buying power, allow it to leverage its resources through contract consolidation and enable agencies to share core resources, Levi said. The IT consolidation should make the state a better business partner and should also produce better business opportunities in the long run, he said. "We would rather have a smaller chance of getting a quality contract than have a better chance of getting a less predictable, lower quality contract," Levi said.Staff Writer William Welsh can be reached at wwelsh@postnewsweektech.com.