Preparing for Battle With the Private Sector
- By Paul McCloskey
- Mar 31, 1997
California's move to divest itself of its tangled network infrastructure is a victory of common sense in an environment of runaway network growth, soaring costs and too many dotted lines on the organizational chart. John Thomas Flynn, the state's CIO, should be applauded for a plan that brings order to the state's telecom infrastructure and that will ensure that state workers and California taxpayers are served by an economical system that can keep reasonable pace with technology.
In many ways, California's experiment with network ownership was doomed. As our story in this issue points out, Calnet was set up to gain price and service advantages by aggregating the state's network buying power. But it had a fatal flaw: Calnet was optional for state agencies, which could plug in elsewhere by making the barest of business cases. Indeed, the most common reason given by agencies for jilting the state-owned network was simple distrust of the oversight agency.
But this was more than a turf problem. Calnet was set up to compete for agency business with private network providers and then was stripped of some of the essential tools for surviving in a competitive environment. Among them: insufficient organizational authority to carry out policy, planning and enforcement; a human resources system that could not recruit competitively for highly skilled telecom managers and engineers; and virtually no marketing function that could actively solicit agency business.
The new plan recommends that telecom policy enforcement be handed over to the CIO. Instead, the telecom division would focus on providing telecom service to customers and reposition itself as a customer advocate. Failure to do so "invites agency rebellion and eventual regression to the current situation of redundant private networks," according to the plan. The telecom division must also "begin aggressively marketing and selling its services" and "actively and regularly contact and visit its client agencies. It cannot assume that because it has not been contacted, customers are satisfied."
State, county and city information technology managers nationwide are now facing a wave of outsourcing actions. In some instances, government shops will be invited to compete with the private sector for that business. At least that's the case in Connecticut, which has decided it will compete all government information technology services. At least some shops say they want to compete for the state's business. It will be a difficult challenge. But if they choose to take up the fight, government IT professionals would do well to heed the Calnet example. Their economic future may depend on it.