California puts IT services and acquisition under one roof

California established its new state technology services department last month with a mission: Send a clear signal to agencies and industry that the state is serious about consolidating IT services and functions and leveraging its buying power.California also announced the first of a series of consolidated purchasing initiatives that might eventually encompass servers, software licenses and maintenance agreements, said Clark Kelso, the state’s CIO.“Industry is going to see a more sophisticated buyer of IT goods and services,” he said.The most visible sign that the state has turned over a new leaf was its creation of a new California Technology Services Department on July 11. The move consolidates the Stephen P. Teale and Health and Human Services data centers with the General Services Department’s Network Services Office. They will be under the jurisdiction of the California State and Consumer Services Agency.Bob Austin, chief deputy director and acting director of the Technology Services Department (DTS), said the new department will work closely with Kelso to develop the best strategy for delivering cost-effective IT support to agencies.“We want this new department to be the foundation for supporting the infrastructure of California,” he said.Consolidating the two large general-purpose data centers with the organization responsible for state agency telecommunications will improve efficiency and eliminate duplication of services, Austin said.After the data center consolidation is completed, state officials will explore ways to consolidate other IT infrastructure that state agencies share, Kelso said.The new department will help California strengthen the viability of future projects and approach large-scale, statewide efforts in a much more efficient way than it has in the past, said Mike Keating, vice president for the U.S. West and state and local group at CGI-AMS of Fairfax, Va.“Before, there was [some] doubt about whether these changes were coming and how they would affect potential future procurements. But now that the state has created DTS, I believe it can streamline the way procurements happen,” Keating said.The department was created by a reorganization plan crafted by Gov. Arnold Schwarzenegger (R) and approved by the Legislature. The new technology department differs substantially from its predecessor, the California Information Technology Department, which the Legislature abolished in 2002 following disclosure of questionable contracting practices by the department.“We are going to try to instill in this new department a culture as a service provider,” Kelso said. “DTS is not a control agency, but a service provider.”The creation of DTS does not alter state purchasing policy for IT goods and services, Austin said. Still, the department plans to work with state agencies and the General Services Department to improve software purchasing.“We are exploring [software purchasing] right now with specific companies, so that we buy as a state instead of each department purchasing separately,” he said.The state CIO, a new Technology Services Board and the California Finance Department will share responsibility for the so-called control functions: the establishment of IT policy and strategy, Kelso said. The board comprises the CIO, the director of the Finance Department, the state controller and the secretaries of the major agencies.The Technology Services Board will approve the new department’s annual budget and the rates it charges agencies for services. The board also will advise the department on its annual operating plan, Austin said.Both the Finance and General Services departments have been involved in IT governance and they will play an important role in the new model, CGI-AMS’ Keating said. The new model should bring them into the process in a more collaborative fashion than before, he said.“California is in the process of transition, and it is going to have to work through an effective governance model,” Keating said. “But I would rather see them start now than not start. I don’t think having all of those hands in the pot is necessarily a problem, because they were there before. It is just a matter of getting [the participants] all focused on the same thing now.”