Across the Digital Nation: An open letter to California's newest leader

Rishi Sood

Dear Gov.-Elect Arnold Schwarzenegger: Congratulations on your victory. With the California gubernatorial recall election over, the hard part of governing now begins.

With a couple of days under your belt, you already must confront a myriad of enterprise issues, budgeting complexities and operational decisions to be made.

As you work your way through your first six months, I submit three core issues for your administration:

1. Recognize the value of IT

Information technology lies at the very heart of transforming government operations. Although California has had varying degrees of success and failure with respect to technology, IT can be the prime enabler of more efficient government service delivery, lowered operational expenses and increased citizen satisfaction.

Under your leadership, you must rebuild the technology organization and reprioritize new technology initiatives to best meet operational objectives. In the end, technology will be a key factor in helping the state better predict funding shortfalls, uncover new funding streams and reduce operational waste.

2. Focus on the four new maxims.

Given the fiscal difficulties across the nation, state governors have required agency heads to focus on four maxims of government operations:

  • Cost containment: IT outsourcing and business process outsourcing can be two mechanisms to control spiraling operational expenses and have more predictable costs and defined service-level agreements.

  • Cost avoidance: Information technology solutions such as eligibility verification and fraud detection systems can help align benefits delivery and eliminate waste in the system.

  • Revenue maximization: Across the country, state and local governments are not properly compensated for federally related expenses. New technology implementation to spur Health and Human Services reimbursement is a key issue. Moreover, new solutions to maximize funds from tax dodgers and compliance from parking violators are other key areas.

  • Revenue generation: Technology also can help spur revenue, such as the development of e-government services to interested business communities, to improve areas of government compliance, such as permitting and licensing, or to facilitate economic development activities for relocating business.

To get back to higher ground, California must again examine how each agency's business operations are contributing to the goals of the new maxims. With your leadership, the state can embed these objectives into annual business planning for long-term change.

3. Reward new behaviors.

California should approach its problems, especially the huge budget shortfall, as an opportunity to expand innovation and tread new ground. In many respects, this provides opportunities to change the traditional business environment and create incentives for agencies to adopt new behaviors. Performance-based contracts may be one area in which state agencies reorient procurement processes to focus on results

These contracts allow agencies to enter innovative arrangements with vendor partners, and would enable both entities to share in the positive results from new business directions.

Similarly, state agencies that are able to improve service delivery metrics, reduce operational costs and increase customer satisfaction should be able to retain some of those savings to invest in other areas of agency transformation. In the long run, this may spur greater agency cooperation and data sharing, as well as speed the development of customer-centric solutions.

In the end, these three issues are fundamental to how California will spur short- and long-term change. All California residents would like to say "hasta la vista" to the budget shortfalls. It only sounds better coming from you.

Rishi Sood is a principal analyst with Gartner Dataquest in Mountain View, Calif. His e-mail address is

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