October 2002

Table of Contents

Cal-Tax Home

Email Editor

Guest Commentary 

Joe Rodota is CEO of Forward Observer, Inc., which analyzes state and local government markets for technology and services. He wrote “Sacramento After Oracle: Don’t Lynch Technology. Embrace It” in the May 2002 Cal-Tax Digest.

Damage control usually gets much less attention than the original mayhem, which is unfortunate considering the smart moves taken this summer by Oracle Corporation and the Davis Administration.

Credit goes to Oracle for abandoning its scorched-earth tactics and unraveling its software contract with the state. And credit goes to Governor Davis for tapping a smart, seasoned individual to help clean up after the contract debacle.

For the second time in as many years, J. Clark Kelso, a professor at McGeorge Law School, entered a state government building without protective clothing.

Two years ago, he mopped up after former Insurance Commissioner Chuck Quackenbush. And this summer he accepted the delicate job of disinfecting the state’s technology procurement system.

Kelso has issued his preliminary findings, and like every bag filled by the government, it’s mixed.

Kelso deserves credit for being modest. He said that he doesn’t have all the answers, and is not ready to propose legislation. Given the circumstances, he might have been forgiven had he claimed turf, pointed fingers and knocked heads. But thankfully, Prof. Kelso’s style is, well, professorial.

Nonetheless, the Kelso plan, and a parallel set of recommendations provided by a Cabinet-level task force, will do much to shore up weaknesses in the state’s technology procurement system.

First, accountability will be established at the department level. The same appointee responsible for the administration of a state program will also be responsible for choosing and deploying appropriate technology.

Second, the Finance Department will be given sole responsibility to validate the business case for state technology investments. A decade ago, the department had similar authority and nonetheless failed to prevent the loss of millions of dollars in the Department of Motor Vehicles technology foul-up. But as the Oracle contract gathered momentum in the Davis Administration last year, only Department of Finance analysts consistently urged caution.

And third, more information about procurement opportunities and decisions will be available to the public. It should be easier for department plans and needs to be known by the vendor community as well as the general public. As became clear in the hearings on the Oracle contract, too many important tech purchasing decisions are being made without full and open competition.

Now for the bad news. Kelso recommended that the state take in-house responsibility for managing its online portal, and cutting online customer assistance.

Is this a leading indicator of a new, negative attitude toward outsourcing? If so, California will be zigging while the rest of the nation zags. (Florida, for example, just announced a seven-year contract to save $173 million by outsourcing benefits and payroll administration and other services for 189,000 state government employees.)  And by cutting the availability of online customer support, California may simply end up steering more citizens to the phones or to lines in government offices – at higher cost to the taxpayer. The administration should clarify its plans.

In his proposed 2003-04 budget, which will be presented to the Legislature next January, Governor Davis or Governor Simon should articulate a vision for using technology to improve government services and reduce costs.

The open questions include:

1. How will government-wide priorities be set if key technology decisions are decentralized?

2. With the state budget likely to be tight for many years to come, how will significant technology investments be funded?

3. How can the state upgrade the quality of its IT workforce, taking advantage of the technology industry slowdown and the hiring opportunities this presents?

4. And how will the state measure and report a return on investment?

In an April 9 survey by the National Association of State Chief Information Officers, 26 percent of state CIOs said high-level political support was the single most important driver for funding new technology initiatives. And with few exceptions, governors are the single most important factor in any state’s political climate.

Two years ago, 25 governors launched or marketed e-government initiatives in their State of the State addresses. But this year only seven governors mentioned e-government in their State of the State addresses. And only one, Georgia’s Roy Barnes, pledged to implement a specific e-government project in the coming year.

Tune in next January to learn where California’s governor stands.