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Wed, Dec 12, 2007 16:36 EST

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Posted by: Stephanie Overby in News Topic: Partner/Vendor ManagementBlog: Talent Show
Current Rating: |
Governor Sonny Perdue finally made it official: the state of Georgia will be outsourcing all of IT.
A comprehensive assessment of Georgia's IT services confirmed that the state's aging IT infrastructure faces challenges in meeting industry standards and could "create serious risk in providing critical services to more than nine million Georgians," Perdue said in a press conference on Tuesday.
Eleven state agencies currently do the bulk of Georgia's IT spending -- two-thirds of the total $617 million annual spend. Perdue plans to restructure the centralized Georgia Technology Authority (GTA) to address that situation first. The new GTA will then bring in IT services providers (plural) to bid on the IT services work. The outsourcing contracts (again, plural) will be awarded late next year.
According the Associated Press, Perdue indicated that he is ordering the change as chief executive rather than seeking legislation to enable it. (The Georgia legislature created the GTA, which became an official government office to oversee the planning, procurement and management of state government’s telecommunications, Internet and computer systems.)
A total of 1,100 state technology workers will be affected by the consolidation and outsourcing moves. Approximately 20 percent of the workforce will be eligible for retirement next year; their positions will disappear. Some employees will be shifted to the private companies who win the GTA contracts. And a total of 200 workers will be without a job.
The announcement likely came as little surprise to GTA employees. I'd heard a year ago from some GTA insiders that outsourcing was on the table. They weren't interested in discussing the plans publicly, for fear of hurting worker morale. So we went to the man at the top. In the CIO interview, Perdue discussed several IT-related issues as well as his plans for more transparency in state government (the latter of which met with varying levels of disbelief in the Georgia state political blogosphere.)
But when it came to whether Georgia would outsource the whole kit and kaboodle that is IT, Perdue remained someone coy (while still leaving himself open to sign IT services deals with abandon): "Georgia is better served with a balanced approach. I believe that GTA can be that internal consultant for IT solutions. From an operations standpoint, the private sector probably has the expertise and experience [to execute our ideas], as long as we know what we want. We do believe we have to retain some IT capability to make sure that we know what the capabilities of the technology are, so that we can put smart RFPs out on the street, and so we can be very clear in communicating what our expectations are. Frankly, I believe that public/private competition is perfectly OK. Whether our citizens can be better served by a public enterprise providing a service or by a private enterprise, they really don't care."
Georgia is not alone in the public sector in outsourcing IT services on a grand scale. Several states and municipalities have taken a stab at it, including Texas, Virginia, the city of Minneapolis, and the county of San Diego, with mixed results. And according to outsourcing consultancy EquaTerra, more will try. Public sector demand for private IT services will continue to grow as baby boomers retire and the sector struggles with attracting talent, says EquaTerra. Key words like "shared services" and "internal transformation" are already on the tongues of every IT services sales teams hoping to seal
Its good that state of georgia is considering outsourcing of its IT
Particularly,for public sector its important that they concentrate on serving the community rather then getting into nitty gritty of IT.
Its a positive statement when purdue says "We're going to limit it to the people who can provide the best value to the citizens of Georgia."
Service provider who will give best value for tax payers money should be given the oppurtunity whether the company is from india or usa or even antartica.
Abhishek,
Elegant MicroWeb
www.elegantmicroweb.com
Dear Abhishek--
I agree that arbitrarily limiting the field of potential bidders is a bad idea.
It's worth noting, however, that Georgia Governor Sonny Perdue's statement that he is willing to seek bids from overseas providers is a bold one. In the past, some states have faced a backlash when outsourcing to offshore providers. Back in 2004, the state of Indiana backed out of a $15 million contract with Tata
for just that reason.
Rightly or wrongly, contracts with overseas providers are viewed with more reticence by government IT workers because, unlike domestic providers, offshore vendors have been less willing to keep existing employees on and "re-badge" them. Of course, domestic providers usually end up laying off workers during outsourcing transitions too, but historically they've kept more on the payroll than their overseas counterparts.
I will be watching closely to see if Governor Perdue stands by his statements.
Stephanie Overby
Senior Editor
CIO magazine and CIO.com
Dear Stephanie,
Outsoucing means something will change and cost-saving directly is propotional to reducing number of staff in IT.
How many people offshore company or inland company lays-off is no doubt a point made by you...and i guess a sensitive issue both politically and popular public opinion wise.
But i guess the link to CNN article you gave makes a good point..that what money local goverment saves on IT by offshoring can be spend on education and other more useful commitments in state(I suggest invest same money to train the young people in science and maths where usa is loosing grip)...so i think offshoring is win-win for everyone even in public sector in long term.
Abhishek
It would be interesting to know what happened of that Indiana project. Tata's bid was $8 million lower than that of nearest competitor. It was supposedly broken into multiple pieces. It would be good to know final story and the lesson for all to learn. Maybe they were able to do it in 15 millions or maybe now it cost them 50 millions or maybe it was scrapped.
Stephanie, could you swing by Indiana to get the truth?
The state can add conditions of throughput (fixing things in a timely manner) in the RFP. That would force the awarded company to keep themselves efficient. This way state can save money and it would make perfect sense for tax payers. Hence the focus should be on the efficiency and not where the company is located.
When it comes to education, Georgia is ranked at the bottom. State need to be creative in this arena. If cost is the prime concern there are other options. One trend is online tutoring. State can contract with elite companies to offer online training to improve the standards in this state. This way our ranks will improve and state can save tax payers money.
Dharmendra Ramachandrappa