Colorado Looks to IT Vendors To Help Transform Government

By William Welsh, Staff WriterWhen Paul Quade took over in September 1999 as the temporary chief information officer for Colorado, Gov. Bill Owens (R) charged him with laying the foundation for a coordinated statewide approach to electronic government.Since taking office, Owens had pledged to bring Colorado state government into the digital age. To prepare the way for this transformation, Owens created a new cabinet-level Office of Innovation and Technology and arranged for Quade, then with Galileo International Inc. of Rosemont, Ill., to serve an 18-month tour as the state's CIO. At the time, Quade was director of technology and planning at Galileo's global data center in Denver and was serving as the chair of Colo-rado's Information Management Consortium, a business and government group that assists state IT officials. Two-thirds of the way through his assignment, Quade is well on the way to fulfilling the governor's charge. By mid September, the state will have chosen a vendor to implement an electronic procurement solution, and is on the verge of issuing a request for proposals for a vendor to build its state government portal. For both projects, Colorado is asking for vendors to provide a self-funded model, especially for the portal, Quade said.The construction of a service-oriented portal is expected to save the state between $5.5 million and $10 million, while the implementation of electronic procurement is expected to save between $3 million to $7 million, according to a report on the transformation process Quade and his colleagues released this summer.The report, "New Century Colorado Final Report: Transforming State Government," recommends that the state pursue a coordinated statewide approach to online renewals and registration for professional licenses, and that it consider providing additional applications such as driver's license renewal and motor vehicle registrations. On the surface, this entrance into e-government is not much different from many other states. But scratch deeper, and Colorado's approach can be seen as a fundamentally different tack. "It has been a unique approach, because a lot of other [state] governments have gone right to looking at what they should do on the Internet," said Gary Miglicco, managing director for state and local government, KPMG Consulting LLP. "No one started like Colorado by finding out how to restructure technology capability to deliver Internet services."KPMG Consulting of McLean, Va., won a $2.1 million contract in October 1999 to help Colorado with the transformation known as the New Century Colorado initiative. KPMG has done similar projects in Louisiana, North Carolina, Oklahoma and Pennsylvania, according to Miglicco. Four months into the project, Cisco Systems Inc. of San Jose, Calif., invested $1 billion in newly incorporated KPMG Consulting, giving it a 19.9 percent share in the company. Although Cisco didn't have a specific role in the project, its advice was sought on the initiative through KPMG, Quade said.The purpose of the initiative was to review the business processes of the state government, and then develop a strategic vision that would provide it with e-commerce capability, Miglicco said. The initiative tackled five strategic areas: electronic government framework, enterprise infrastructure, centralized knowledge management, statewide capital asset management and re-engineering studies.Regarding enterprise infrastructure, the state also is preparing contracts to purchase standardized desktop computers and to build a multiuse network for use by all state agencies. The desktop reconfiguration is estimated to result in $1.2 million of savings annually, and the network is expected to save $7 million, according to the report. The implementation of statewide IT standards will increase buying power, make it easier for agencies to communicate with each other, and improve technical support ? a major accomplishment for the state, Quade said.Quade believes the reason New Century Colorado has been successful is that it had widespread political support and was based on sound policy."One of the most important components you need is support at all levels, from the governor on down," Quade said. "The other component is good policy. You need policies in place that identify your limits, and provide the authority to execute those policies. So we looked at the states that have the best of those qualifications."Among the states that have top-level support and strong IT policies that inspired Colorado are Pennsylvania, Texas and Virginia, Quade said.In studying these states, Quade and his colleagues in the state government working on the initiative found that the states that had the most success deploying the technology used outside vendors. "We found that the states that used outside integrators had the best approach and the most success in deploying the technology as opposed to those that tried to develop the technology in-house."The state must take one important factor into account when outsourcing projects, though. Only new projects can be outsourced, because there is a Colorado law that prohibits outsourcing if it displaces state employees. But for the e-government aspects of the initiative, which are all new projects, this has not been an obstacle, Quade said. Relying on vendors makes good business sense for two reasons, Quade said. First, the self-funded models that the state is requesting for electronic procurement and the portal lessen the risk to the state. "When you put it out for RFP, you don't take possession of the product unless the vendor or integrator proves it works," he said. Second, the vendors provide critical technical support at a time when there is an acute shortage of high-tech workers. "As we expand, I don't believe we can keep up with recruitment and retention of high-quality people," Quade said.As Quade's short term draws to a close, the state is looking for a new CIO. The state may announce a successor as early as October, said Quade. Until then, Quade will monitor the implementation of key projects coming out of the initiative. But when he leaves, the transformation will not be complete."It is hard to say how effective [Quade] has been until all is said and done," said Mark Boyer, Cisco's director of public-sector Internet business solutions. "Of course, full implementation of the recommendations is the true test."Owens made a wise decision by hiring a temporary CIO from the private sector to orchestrate the transformation to e-government in Colorado, Boyer said. A former CIO of Alaska, Boyer said it's hard to see how someone inside the state government could have succeeded in bringing about the major changes that Quade has made. After seeing what Quade achieved in Colorado, Boyer said that now when a governor asks his advice on how to transform state government operations and implement e-government, he points to Colorado's experiment with a temporary CIO. "It may not work for everybody," Boyer said, "But it may help accelerate success for a [state] that is late to the game."