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Testimony to the Assembly Standing Committee on Government Opperations

By Maggie Moree
November 17, 2009

Good morning.

On behalf of The Business Council of New York State, I appreciate the opportunity to present to the respective Assembly committees as you examine the current structure of New York’s IT workforce and the use by state agencies of both state employees and private sector employees in the maintenance and operation of agency IT systems. 

I am Maggie Moree, Director of Federal Affairs at The Business Council. The Business Council is a statewide business trade organization, representing businesses of all sizes and all sectors. As part of my portfolio at The Business Council, I provide staff support and subject matter expertise to the Council’s Contract Procurement Committee. Many of our members – from the largest to the smallest –provide IT consulting services to state and local governments, and it is in the capacity of representing our members’ interests that I testify before you today.   And to clarify The Business Council role for you – our organization does not solicit grants or funding from the public sector, and our testimony today is purposefully intended to inform on the broader theme of the important role the private sector plays in the development and delivery of critical IT services to government functions.

The Committees have compelled testimony from various state agencies to better understand the dynamic between state employees and private sector contractors within the IT workforce. While the issues posed in the public hearing notice are important for legislators to understand to allow them to do their due diligence in budgetary and public policy matters, I would suggest that a higher-level review of operational priorities, budget and staffing priorities, and the unique mission of each of the agencies needs to be better understood before one could adequately evaluate issues and policy responses on relative IT employee costs. Whether a state agency considers itself a center of strategic innovation in the delivery of government services or a housekeeper focused on cost control and “keeping the trains on the tracks” will impact operational, budget and staffing priorities. And often senior state agency management does not have the luxury of choosing among these priorities.   And it is this balancing act – between innovator and housekeeper – where smart management will use a blended approach to the delivery of IT services and staffing, accessing professional IT consultant resources as an indispensible tool to assuring mission critical government service delivery can be met.

In preparing to better understand and evaluate what is an appropriate balance between the use of private sector IT consultants and state competitive-class IT professionals in meeting a state agency’s technology objectives, I searched for state-specific data points that would have provided a context and/or a baseline from which to provide informed observations to add to the committees’ learning. And while I found information – contracts on the OSC website, an annual report on OFT’s website which speaks to some of the major IT investments underway, useful reports and material from the NYS Forum  – I was not able to find readily accessible, meaningful information that might shed greater light on the questions posed by the committees.

I did find at least one example that might be worthy of further exploration to allow for greater transparency on investments and provide greater insight to public policy makers as they struggle to balance limited and diminishing state resources. The federal government’s site “USA Spending” (www.it.usaspending.gov) launched earlier this year a portion of its site dedicated to IT investments, displaying data by agency and major project. There are numerous components to this IT Dashboard but importantly it includes evaluations by agency CIOs on these major investments, project costs, and schedule information. This dashboard also allows for trend data to be reviewed and for the user to see how IT investments stack up as a percent of agency overall budget and how that relates to the agency core mission.

I also found examples of detailed surveys which could provide a different way for the committees to frame the issues they are seeking to address.

In at least one survey of over 1,700 IT leaders, ten different “critical staff and budgeting benchmarks” were identified which could be useful in understanding certain indicators or drawing broad conclusions. While some of these benchmarks individually may not be startling, understanding the benchmarks in the context of overall agency spending and mission may help drive toward different policy and investment decisions. In this 2007-08 survey, respondents were asked to estimate the proportion of total IT spending devoted to ongoing maintenance and operations versus new spending that has been mandated as well as new spending that is discretionary.

Among government respondents included in this survey, overall, 67% of spending was directed to maintenance; 20% to mandated activities; and 13% on discretionary, tactical and/or strategic investments. In this same survey, government respondents provided the estimated proportion of spending across global budgetary categories. Not surprisingly, the largest spending category was for IT staff salaries and benefits at 35%; followed by 25% expended on hardware, software and license fees; IT consultant services represented about 10% of spending; staff development and management was averaged across respondents at approximately 6%.

A separate benchmark measured government IT staff as a percent of total staff, with that averaging at 4.4%. And, perhaps the benchmark on IT Staff Time Allocation could be used to understand the role and challenges state agency IT professionals face each day as they provide core mission critical services. Respondents estimated IT staff time across eleven different categories with five categories (helpdesk; desk-side support; network management/administration; application maintenance and application development) accounting for 60% of staff time allocation.

Why is this type of information important in understanding how public policy and public investments can be prioritized in the realm of IT services?  Since government at all levels started using information technology to solve operational problems, overall benefits have included reduced or avoided operational costs, reduced time frames to deliver services and improved services. These outcomes should not be lightly dismissed as most government processes have been operating for a substantial amount of time, having evolved over many years. These processes usually involve many steps, tasks, and activities. Many of the processes that support government programs generally undergo few in-depth reviews or changes. In some cases, this means that state government may not be operating as efficiently and effectively as it could, and therefore could benefit from a reexamination.

Many of these state agency technological advancements resulting in operational efficiencies and improved citizen access to government services and information reflect a powerful partnership between the private-sector IT consultant staff working closely with many dedicated program and IT subject matter experts within the state agencies to design the solution to meet those objectives. State government will find itself under continued pressure to deliver its core services at lower cost. Creative partnerships between the public and private sectors will be more important than ever in meeting this challenge.

Executives in the private and public sector today face two competing demands. They must execute in order to meet today’s challenges; and they must adapt what and how things get done developing “next practices” while excelling at today’s best practices. Think of the real time challenge this presents for state agency professionals who are often asked to draft procurement bids for IT services and systems without having the luxury of time to fully explore how best technology can meet the need they are trying to address. And in situations where they may have longer lead times to design and develop, they often do not have redundant staffing to allow them to maintain existing core functions while designing future systems and processes.

It is in this role where private sector IT consultant services are value-added to the process. The use of private sector IT consultants distinguishes the inherent role of government in the provision of core mission critical services from the means of delivering those services. This allows government to leverage highly skilled private sector IT professionals to provide exceptional services to the public, while not diminishing in any way the role and function of competitive-class state IT professionals.

In many ways New York State agencies are recognized as leaders in the administration of government technology services. This level of distinction could not have been achieved without leadership and dedication from many state IT professionals. As competition for government revenues continue – revenues generated from income and corporate taxes paid by citizens and private-sector businesses which support the very services government is seeking to deliver– it presents the real challenge to policymakers and those tasked with carrying out core services at government agencies. More efficiency must be found in the delivery of services and that must include cost efficiencies. And given the complexity of our State, a “one size fits all” approach will not work.

It is unlikely state agencies will be able to find efficiencies and new solutions to new problems while maintaining existing legacy systems without being supported by a more modern IT title structure. You have had the opportunity to hear from those in the Executive Branch best suited to address issues of procurement, contract management and title restructuring. I believe the biggest challenge to be overcome as you seek to answer the questions you have posed in your hearing notice is the development of a modern, flexible IT title structure.   AnnaLee Saxenian, author of Regional Advantage: Culture and Competition  in Silicon Valley and Route 128, puts it this way:  “Job hopping, rather than climbing the career ladder within a corporation, facilitates flows of information and know-how between individuals, firms and industries.

When combined with venture capital, it supports unanticipated recombinations of technologies and skill.”  Worker mobility gives the tech industry fluidity, velocity and energy – and yet pose significant management problems in a civil-service environment. As the economy recovers, companies will return to the challenge of winning over enough highly capable professionals to drive renewal and growth. And while the landscape of talent management has been transformed by this recession, the youngest and oldest talent cohorts are redefining what constitutes a great place to work. In a highly structured, civil service environment, coupled with limited or diminishing government resources, state agencies will continue to be hampered by an IT title structure which constrains the energy and velocity they will need to maintain and transform their delivery of services.

In closing, I want to thank the committees for providing a forum for the exchange of ideas and welcome the opportunity to discuss further with you how the investment into private-sector IT professionals to augment government staff in the provision of IT services and maintenance and development of systems, can provide the maximum return on investment for our state’s citizens and taxpayers.