California sets new management course

State unlikely to <@SM>resurrect discredited IT department

Clark Kelso, new chief information officer of California, is also a professor at McGeorge School of Law in Sacramento.

Mark Morris

Been there, done that.

California most likely will not re-establish a statewide technology office this year after the old one was shut down in 2002 for malfeasance.

"What we are looking at now is fundamentally different," said Clark Kelso, California's chief information officer. "I don't believe there is much interest in resurrecting a model that didn't work well for us."

Analysts and industry officials are split over how this decision will affect the state's ability to effectively manage and coordinate the $2 billion that California agencies spend annually on IT hardware, software and services.

On one side, analysts are saying that the absence of a strong technology office -- one that can act as an independent broker among state agencies -- will make it difficult, if not impossible, to establish compatible systems capable of sharing data.

On the other side, state lawmakers and industry are saying that a state CIO alone, if given ample authority to enforce common architecture and standards on agencies, may be sufficient to establish and implement a statewide IT strategy.

Both Gov. Gray Davis and the state legislature are awaiting the findings of a study on IT governance by the California State Auditor that will be completed in February. For now, the state is proceeding with a federated model, in which agencies are responsible for monitoring their own investments and have an equal say in IT strategy and policy matters, Kelso said.

The auditor's report will allow lawmakers to decide whether an empowered CIO will be sufficient to instill best practices, or whether the state may want to take another stab at a technology department, said Debra Bowen (D), chairwoman of the California Senate Committee on Energy, Utilities and Communications and the Senate subcommittee on new technologies.

The legislature's closing of the Department of Information Technology wasn't intended as a dismissal of IT governance but was an indictment of the way the department was structured, Bowen said. She and other legislators believe the state needs some type of a mechanism to oversee IT spending by the agencies.

"This is more about leadership than anything else," she said.

The California Department of Information Technology closed last year as a result of a scandal that erupted when lawmakers learned that California CIO Elias Cortez and other officials approved a $95 million enterprise licensing agreement to Oracle Corp. of Redwood Shores, Calif., without conducting a competition.

The department's charter was up for renewal in June, and the legislature chose not to renew it as a result of the Oracle contract. The state also canceled the contract.

Following Cortez's suspension, Kelso began serving as acting director of the Department of Information Technology on May 16 and was appointed special adviser on information technology and state CIO Sept. 20.

In his position, Kelso provides leadership on IT policy and makes recommendations to Davis for the oversight, procurement, management and operations of the state's IT systems. While Cortez oversaw a department of about 80 employees, Kelso has virtually no staff support or authority over agencies.

"I would say he has had no diminution of authority relative to that model, and in some ways he has more authority," said Kevin Terpstra, Kelso's spokesman, referring to the now-defunct department.

Kelso leads 15 different IT working groups that include stakeholders throughout the state government, Terpstra said. The agencies provide staff support for those working groups.

Davis drafted an executive order July 1, 2002, instructing state agencies and departments to assume full responsibility for oversight of ongoing IT projects and procurements within each agency's jurisdiction. As part of the order, agencies also were required to develop ethical guidelines and study their own oversight processes, Bowen said.

At the same time, the state legislature asked the state auditor to study how California buys and manages IT. The auditor is supposed to review and evaluate the laws, rules and regulations relating to IT as well as obtain an understanding of the state's IT infrastructure.

The auditor also will review IT strategies used by other state and local governments, the private sector and academia and review IT management and oversight under previous California administrations.

In his capacity as special adviser on IT, Kelso will play a key role in shaping California's governance model after the state auditor's report is completed. For now, he is in a tough spot, lawmakers and industry officials said.

"You've got Kelso caught in this middle ground between the old and the new way," said Steve Kolodney, vice president with the public-sector group of American Management Systems Inc., Fairfax, Va. "The current approach doesn't suggest that this is the way it's going to turn out."

John Goggin, director of e-government services for the research firm Meta Group Inc., Stamford, Conn., said the state is risking a lot by improvising its IT strategy as it goes along.

"Until they come up with a true governance [model], with the people who know the business and know what they are doing, they are not going to succeed," he said.

John Kost, vice president of global public-sector research at the market research firm of Gartner Inc., Stamford, Conn., said the collaboration among agencies in a state as large as California is not going to happen on its own. A technology office led by an empowered CIO, who has an enterprise view and the authority to enforce collaboration and integration across the agencies, is essential to successful IT governance, he said.

"Agencies will continue to do perhaps good projects and perhaps bad projects, but they will be all their projects, as opposed to projects that are in the overall interest of the state and able to defy organizational boundaries," Kost said.

Kolodney said that while strong IT governance doesn't necessarily require a technology office independent from agencies, it requires at the very minimum a strong CIO who can serve as an adviser to the political process, implement enterprise architecture and oversee IT governance.

Indeed, the establishment of a more permanent governance model later this year would go a long way toward improving the business atmosphere, Kolodney said.

"[The state] needs to settle on a strategy and structure for managing IT. In the absence of certainty, none of the important work gets done," he said.

Whatever approach lawmakers recommend, it will require Davis' support to succeed, lawmakers and industry officials said.

"It doesn't matter if it is a department or a cabinet position or Bill Gates himself, if the administration doesn't make good IT practices and purchasing a priority, and follow the procedures and policies adapted, it won't matter," Bowen said. *

Staff Writer William Welsh can be reached at

About the Author

William Welsh is a freelance writer covering IT and defense technology.

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