Nation wide we should take a hard look at shifting from “hardware-centric, expensive, proprietary silos of data trapped in old databases” into new systems with more of the same obsolete systems architecture. These proprietary systems are difficult and expensive to maintain and cannot be easily integrated with other systems.

This is how I described what is happening in Virginia’s Information Technology Agency VITA in an email to Governor Kaine and forwarded to Jeff Schapiro of the Richmond Times-Dispatch earlier this month.

Unless the VITA contract leads to a Relational Database Management System RDMS solution the present $2.3 billion contract between VITA and Northrop Grumman will be the biggest ever boondoggle in State Information Technology.

In response to my email I received on September 4, 2009 a letter of explanation from Leonard Pomata Secretary of Technology of the Governor’s office. The letter referred to some of the accomplishments that have been achieved so far in the contract along with a list of the current investigations under way. The investigations center on missed contract milestones and cost overruns.

Virginia hired Northrop Grumman the giant defense and systems-management company in 2005 under a controversial 10-year, $2.3 billion contract to run its computer and communications networks providing IT services to 90 agencies. But the state also pays the contractor for work outside of what the contract covers:
Covered: Supplying new equipment, including laptops and services; running the state data centers; maintaining and repairing computers; and running a help desk.
Not covered: Specialized software that only one agency needs.

It appears that the VITA, Northrop Grumman contract does not include a provision for the development of a centralized IT system. So far NG has spent a good deal of funds on linking all of the Virginia Agencies with a new protected email system and the question of centralized application software and database development is still up to the individual agencies. This has prompted state legislators to ask just what is the state getting for its money.

VITA’s new chief information officer George F. Coulter has sacked or reassigned several senior executives of the Virginia Information Technologies Agency, according to state government sources. The casualties apparently include critics of Northrop Grumman. The shakeup is an attempt to extract VITA from months of political turmoil and put back on track a shift to privately managed information-technology services beset by delays and mounting costs. Since the RDMS solution is the best and most cost effective solution Virginia’s VITA appears to be floundering making it the biggest ever boondoggle in State Information Technology.

WASHINGTON STATE
In a related situation the question of what the IT architecture should be for the Washington State Centralized Data Center has also surfaced. In a letter to Gov. Gregoire, State Rep. Reuven Carlyle and Rep. Hans Dunshee urged the Governor to seek a second opinion before selling the construction bonds. They want her to take a hard look at shifting from “hardware-centric, expensive, IBM proprietary silos of data trapped in old databases” to newer technologies such as the Cloud a proprietary system from Microsoft.

In an email to Governor Gregoire I suggested that Carlyle and Dunshee were correct if the new architecture did not provide for an integrated system then the $180,000 cost for moving the old systems to the new Data Center would be a loss. I ignored the Carlyle and Dunshee proposal for the proprietary Cloud system for the more flexible RDMS. It now appears that Washington State is considering the RDMS which I proposed.

GEORGIA
Georgia signs $1.2 Billion IT Outsourcing Contracts with Last Vendors Standing
By Paul W. Taylor
On November 21, 2008 Georgia Technology Authority Director Patrick Moore was alongside Governor Sonny Perdue to announce the signing of a pair of contracts totaling 1.2 billion intended to consolidate and outsource the state government’s IT operations. The larger of the two, worth $873 million over eight years, was awarded to IBM to take over infrastructure — from the raised floor data centers, mainframes, services and disaster recovery to PC and laptops. The other will pay AT&T $346 million over 5 years to manage network services for the state. Both contracts have two one-year renewal options.

IBM and AT&T were effectively sole bidders after two other companies withdrew their bids before the apparently successful vendors were announced.

This has all the appearances of another boondoggle in the making since IBM is unlikely to propose a RDMS.

TEXAS
The above award comes on the heels of a decision late last month by the state of Texas to suspend an $863 million outsourcing project with IBM to transfer state records to a centralized computer system. In a letter to state IT officials, Governor Rick Perry said the company had failed to backup the data of more than 20 state agencies.

This Texas boondoggle appears to be just ending.

INDIANA
Ref: Glitches Mar Indiana’s Effort to Outsource Social Services By WILLIAM M. BULKELEY WSJ August 12,2009

Processing of welfare, food-stamp and Medicaid claims in Indiana was plagued with difficulties when the state outsourced the system to International Business Machines Corp. and Affiliated Computer Services Inc. two years ago. The problem hasn’t been resolved since then.
“There’s a myriad of problems,” said Anne Murphy, secretary of the state’s Family and Social Services Administration. “Error rates are too high. We’re not processing claims within federal guidelines.”
IBM, the prime contractor, along with Affiliated Computer and other firms agreed to run the programs for $1.34 billion over 10 years. Ms. Murphy said she ordered IBM to delay a planned roll-out to the rest of the state — about 40% of the population is currently covered — and to fix the problems by the end of September.

Outsourcing critics say Indiana’s problems show why government functions, particularly human services, shouldn’t be turned over to private contractors. Outsourcing of state-government functions remains rare but is attracting growing interest from states anxious to control costs and avoid capital outlays on new computer systems. Many such projects aim to use digital records to replace paper, much as health-care reformers promote electronic health records. Indiana estimated that outsourcing its benefits operations would save nearly $500 million overall.

Note that the Governor and the state’s Decision Makers have all missed the point that substituting one a bad manual system for an obsolete computer system leads to a second failure. What should be done is for the state to develop a State Centralized RDMS and bring back its privatized services.

The problem with outsourcing IT systems is that with an IBM contractor you more likely end up with an IBM solution. So what’s wrong with that? Just this IBM builds their own proprietary systems which can not be integrated with the rest of the states systems in short the same old stand alone systems that most states already have. This occurs because those in charge of letting these contracts are lacking in the fundamentals of RDMS knowledge. IBM and others are taking advantage of them to sell their own proprietary software.

The Maryland voting machine debacle in 2006 is the best example of why Work Measurement should be used in government. True the Diebold touch screen voting machines were flawed they did not posses the paper trail backup needed and being a unreliable computer system means their availability on polling day was unreliable.

Here is the real problem with all touch screen voting machines when used exclusively is that the voter must use the machine during the entire voting process. That means it could take from 5 to 15 minutes or longer for each voter to cast his vote. While the voter only uses the paper ballot scanning machine for a maximum of 5 seconds. It is easy to see that voters using only the touch screen machines could stand in line for hours to cast their ballot.

When you do Work Measurement (In this case a machine utilization study) on this process you will find that the paper scanning machine is as much as 800 times more efficient than the touch screen machine. I could not find any place in all the discussion of why the touch screen voting machines failed did the reason of machine utilization emerge. One of the major reasons this problem went unnoticed is that the touch screens were used in local elections and were thrown out before the 2008 presidential election. If the touch screens had been used there would have been a complete meltdown of the voting process in the 2008 Maryland presidential election. Most states get around this problem by using both the touch screen and the ballot scanning machines.

Example from Foxnews:
Maryland’s recent decision to dump touch-screen voting machines in favor of a paper ballot system could come back to haunt voters, said the lead researcher on a study of voting technology.
The new report found that while every voting system tested had flaws, touch-screen machines — which Maryland uses — met the top criteria of the study: They were the most user-friendly.
Paul Herrnson, the study’s principal investigator and a University of Maryland professor, said that in light of the report, Maryland’s choice to change from touch-screen machines to an optical-scan system is ill-advised.

Second example: Maryland House votes to oust Diebold machines By Marc L. Songini March 10, 2006
The state of Maryland stands poised to put its entire $90 million investment in Diebold Election Systems Inc. touch-screen e-voting systems on ice because they can’t produce paper receipts.
The state House of Delegates this week voted 137-0 to approve a bill prohibiting election officials from using AccuVote-TSx touch-screen systems in 2006 primary and general elections.

The point is that of the personnel buying the voting machines, the election officials using the machines and the legislature voting to scrap the machines; none were aware of the need to do a machine utilization study. This would not have occurred in private industry.

The really big problem is that Work Measurement for staffing purposes is not done in government resulting as much as 10% over staffing. For the state of Maryland this amounts to $132,100,000 from my Article 106. Where do the Government Reform Savings Come From?

From: New Ideas for Innovative Government By Stephen Goldsmith | July 22, 2009 Governing Magazine

Stephen Goldsmith former mayor of Indianapolis, is director of the Innovations in American Government Program at the Harvard Kennedy School.

The search for innovations has just gotten easier with a new resource for better, faster, cheaper government. Today, the Innovations in American Government Program at Harvard’s Kennedy School and Governing are launching a Web site and this monthly e-mail newsletter with one simple goal: to create a marketplace for ideas that will spread the adoption of creative public-sector solutions. The Better, Faster, Cheaper site and this Efficiency newsletter aspire to be the first places public officials will look to learn about innovations.

The Better, Faster, Cheaper site is one of the best ideas have heard of in some time it will be a valuable resource for government employees seeking innovative ideas. Government employees are no different from private industry employees they generate good ideas. But there is a problem in getting the innovations implemented in a bureaucratic government that is not shared with private industry.

I like this idea of a collection point for innovative ideas but it ignores the fact many ideas will never be adopted by a bureaucratic organization especially with a powerful employee union. Innovations that increase efficiency that lead to fewer employees have about as much chance of being implemented as a snowball in hell.

So what type of ideas do bureaucracies like? They especially like ideas that make them look good with the public because it puts pressure on law makers not to oppose an increase the budget that they want. Any innovation that enhances service to the public and makes the bureaucracy look good is a sure thing to be adopted.

The real innovation here is to bury the 19th century bureaucratic structured form of government and replace it with a streamlined downsized 21st century government like that found in industry using the best management practices. On my website I give details and a guide for implementing the reforms using mostly the resources that the state already has.

An example of this is in my Article 116. Private Industry Example of Lean Teams. Each year Fortune Magazine surveys industry employees all over the US to determine the top “100 Best Companies That Employees Want to Work For”. The number one ranked company is NetApp. Headquarters: 495 East Java Drive Sunnyvale, CA 94089. NetApp is one of the best examples of Lean Teams that I have found. You will remember how Toyota and Honda took over the auto industry using TQM from GM and Ford. The American auto industry thought that TQM was just a gimmick which they could use to increase quality and compete with the Japanese it was never fully implemented.

It was never given a fair trial in government either. I was reminded recently that TQM had been tried in government and didn’t yield the efficient results expected. My response was that TQM is almost totally incompatible with bureaucratic government. TQM would only be tolerated by a bureaucracy and would reject any ideas that would actually increase efficiency. Besides most bureaucracies believe that top management should screen ideas for those that make the organization look good and enhance its power and reject those that decrease its employees. The TQM and Work Improvement Team (WIT) name has been renamed the Lean Team which better describes what they actually do.

So what does the state need to change?
1. The Legislature needs to change its method of budgeting to more like that based in the private sector using Work Measurement and bottoms-up budgeting. See my article 113.

2. Lean Teams need to be implemented. This private industry technique has been around in the US since the 1980’s but some form of it is still one of the best ways get efficiency through continuous improvement. See my article 116.

3. Get rid of the bureaucratic organizational structure of government. Downsize to a two tier Steering and Functional management form of government. See my articles 103 and 104.

4. Modernize State Computer systems to a centralized Relational Database Management system. This is necessary to efficiently manage the states resources and to implement a state wide Customer Relations Management (CRM) portal. See my Articles 84, 101, 102, 120, 138, 142, 143, 144, 151, 152, 153, 154, 156, 157 and 158.

After these reforms are in place you will find that the new state government is actually more efficient and effective than privatized services especially because there is no need for them to make a profit. See my articles 112 and128.

When you want to reform government from the toxic bureaucracy of FEMA (see Article 109) to that similar to the top place that Americans want to work, NetApp and Google (see Article 116) you will find resistance. This is a bold broad step that even most of private industry has not yet made. In private industry all you have to do is convince the CEO that the change will bring big savings and innovation to the organization. But in government the state’s governor may not have the clout needed to change long standing bureaucratic agencies.

These agencies have power from the state legislature and can out last a governor faced with the need to be elected and with term limits. The key word here is POWER. Bureaucrats love power it is reflected in the various levels of an organization’s career path. With each promotion a bureaucrat gains more and more power over his fellow workers and to make his own decisions. If those who work for him fail to follow his bidding he can always manipulate their performance appraisals. Remember during the Katrina hurricane when mayor Nagin of New Orleans made a plea to FEMA for supplies and he said on national television “all they want to do is to get me to sign off on their org chart”.

The approach I recommend is to look for an opportunity which will provide a chance of successfully bringing change. The best opportunity is in a time of tight budgets such as most of the states are currently going through. State Legislatures across the nation are looking for ways to cut back their budgets. I would start with this small crack in the bureaucratic armor and force the implementation of Total Quality Management at just the bottom level in the agency. This can be done if the head of the agency approves the implementation. He may reluctantly do this at first as a result of pressure from the legislature for reform but he must eventually give his full support to the implementation.

Once Lean Teams are installed at the lower functional level in the agency the door is open to install Work Measurement through Process Flow Charts as I have suggested elsewhere (see Article 103). Work Measurement will provide the budget for the real work that the agency does separated from the management budget. Now the power shifts to the budget committee in the legislature because there is no debate as to how much work there is to be done within the agency.

The reform of the agency is begun by first eliminating one or two layers of bureaucratic management and forming the organization into Steering and Functional Management. When the Steering Management Team is formed over staffing will become obvious when they try to squeeze a large number of managers into a single conference room for the first meeting. This restores budgeting power with solid numbers to the legislature.

See the following: Article 113. Private Versus Public Budgeting Practices

One of the main reasons that government is so inefficient compared with private companies, besides their bureaucratic structure, is found in the way that funding and budgeting is done. When private companies need to fix a problem they select the Department of the company that “owns” the problem and asks them to come up with the most satisfactory solution. That is, to find the least costly solution that can be implemented quickly. Once the Department has identified the solution it is costed-out by industrial engineers or budget personnel, funded by the companies’ management and implemented.

When government encounters a problem it is usually first brought to the attention of the legislature by this time the problem is considered to be significant. There becomes an immediate political problem when each political party may or may not consider the problem worthy of consideration. A specific agency may be thought to have responsibility for the problem but they may or may not be asked to come up with a solution. One party may develop a solution to the problem and those against may come up with their own solution. Nearly all government problems are thought to require funding. Therefore there is an immediate effort to determine the funding needed for the solution even before the most satisfactory solution is known. The amount of funding is dependent on the party in power and their perception of the funding required not on the actual funding needed for the most satisfactory solution which may or may not even be known. Once the “solution” is funded it becomes a part of the budget by law. If the problem is thought to be large enough the Legislature may create a whole new agency as the solution. Otherwise the funds are passed to the most likely agency and the matter is thought solved unless the problem arises again at some later date. Note that once the funding becomes law the state’s budgeting personnel have little or no role in determining the level of funding required.

I call this government process Top-Down budgeting where little effort is put into finding the most efficient and effective solution before funding it. This is the opposite of that done in private industry which I call Bottom-Up budgeting finding the most appropriate solution before funding it. The bottom-up solution is based on Work Measurement meaning that the actual costs in labor and other expenses are known at the time of approval by private companies’ management.

Now let’s examine the same government funding problem after the government reforms I have recommended are put into place. The reforms consist of first breaking down all departments and agencies into Functions followed by implementing Total Quality Management (TQM) and Work Improvement Teams (WIT) for each Function. Later several bureaucratic levels of management are removed and replaced by a two tier organization consisting of a Steering Management team and Functional Management teams.

Problems in the new government organization will be identified first by a WIT within Functional Management which has been trained in TQM techniques for continual improvement of the function’s processes. The WIT “owning” the problem will then develop the most cost effective solution. This solution is then presented to Steering Management. If funding is required budgeting personnel from Steering Management will cost-out the solution. If no funds are available state funds are sought. And if they are not available only then is the solution with the funding required presented to the state legislature. This process provides for solution of all problems big and small and for continuous improvement in the way government operates.

As a side note, when current agencies are funded there is a tendency to assign work by labels. For example John is responsible for Pubic Safety and Harry is responsible for Public Accountability and the budget is automatically charged for two people plus those who work for John and Harry. The amount of work that is to be done in each of these functions is not known leading to over staffing. Under the reformed government, Public Safety and Public Accountability are identified as Functions each with a WIT which actually does the work of the Function. The actual work of each Function is costed-out and staffed using work Measurement resulting in a much reduced budget.

A current example:
Senate Democrats decided to pull $80 million from the war spending request — money Obama had requested to close the Guantanamo Bay detention facility by Jan. 22, 2010. Democrats say “we are not going to do anything until we get a detailed plan from the president”.

The Relationship that Bureaucracy and Employee Unions have with innovation is critical to the understanding of how to get a more responsive and efficient government. Responsive and efficient government comes from reforming the current bureaucratic and employee union structured government to one which allows for continuous improvement through innovation.

See The Following articles:
Article 103. Reforming Bureaucratic Government the Subtle way by Bringing Innovation to Government
Article 104. Down Sizing State Government the Easy and Safe Way
Article 106. Where do the Government Reform Savings Come From?
Article 113. Private Versus Public Budgeting Practices
Article 117. Overcoming Bureaucratic Resistance to Government Reform
Article 123. The Case for Long Term Implementation of Total Quality Management
Article 124. The Core Features of Innovative Reforms

When President Reagan broke the Air Traffic Controllers strike he set a precedence which at the time seamed impossible to deal with. Now we have the New York Transit Strike which has nearly shut down the city. This strike happened because the powerful Transit Union has placed demands that the city has found impossible to meet or are so far out of line that there was no choice but to force negotiation. Currently before the strike union members could retire at half salary at the age of 55 with generous health benefits. The city has determined that it cannot continue to support these benefits and is trying to negotiate a lower benefit package. The Union wants to lower the retirement age to 50 years at half pay and full benefits. The consequences of this strike are far reaching throughout the country transit unions will make similar demands.

Now for the details. Since negotiation has already been tried I would rule it out and fire all union leaders employed by the city because they have instituted an illegal strike. Then I would announce the closure of all public transportation routes that are unprofitable listing each one. The reason for this is to send the message that not all the transit employees will have a job when the strike ends. Next announce the opening of the main trunk line with supervising employees and union members who come to work. Further announce that those union members who come to work on the next day will receive the pay and benefits package proposed by the city (but rejected by the union). On the second day after assessing how many employees actually came to work make the following announcement. Employees who do not come back to work on the third day are fired from their jobs forfeiting all benefits and the right to future employment with the City of New York. On the fourth day the city will begin mass hiring of new employees to replace current striking workers. This is only one way to approach the situation other individual cases will determine how best to get the job done.

Question: “I am a supervisor in one of my states largest bureaucracies, which is charged with dispensing Medicaid support to the public. The number of rules imposed by the Federal and State Governments are phenomenal. My people interview clients determine their eligibility and manage the clients’ accounts. With recent budget cuts many of my current clients are no longer eligible. The paper work takes up most of my people’s time yet I will have to lay off several of them. I am seeking advice on what I should do. I feel like I am stuck in the middle of a maze.”

Use your watch to find an average time to process the most eligible clients that you have separated through prescreening. Try not to focus on putting a time on questionable applications and instead focus on stopping fraud. Separate client visits applications (questionable from routine) and other visits. Time them and count their numbers. From this data you can arrive at a staffing level for your office. A number which you can work with and can be used to justify your annual budget. For more information on how to do this see Article 4. “Finding the Correct Office Staffing Level’ and Article 5. “Government Bureaucracies and Document Turn-Around Time”.

This article is not about union busting but rather how to bring government employee unions into the continuous improvement process.

If the government employee union has strict rules on employee job descriptions similar to that in manufacturing a drastic approach may be required. Manufacturing companies go out of business if they become bloated through too many employees and are noncompetitive. But government agencies never go out of business. Without details the approach to solving this problem leaves too many options on the table for this discussion. This is type of union control is deadly for continuous improvement which requires a flexible work environment.

Question: “I want to bring reform to… the agency I work in but my suggestions have been put aside to focus on more pressing day to day business. My concerns are that my reform suggestions are dead. What do I do to get things started again?”

Review my articles for those that are relevant which describe in some detail how to approach your situation. Below are several articles that may help.
If you have more questions or concerns e-mail me the details at: lawrence2007@embarqmail.com
Article 12. Which Approach to use in State Government “Cost and Schedule” or “Work Improvement Teams“?
Article 11. Adaptation of Manufacturing Quality Improvement Techniques to Achieve Efficient Government.

Question: “Three weeks after Katrina it appears that FEMA has solved its problems… are you still recommending changes in the bureaucracy?”

What should be done. FEMA needs to be reorganized into a lean organization with teams of personnel trained to fulfill several functions. They should be empowered with the capability of making on the spot consensus decisions in a timely basis as they respond to victim’s needs. Field Teams distributing aid relief should be supplemented by all available personnel who are not needed from the rescue efforts of the first few days after a hurricane. This mobilization should occur smoothly with minimum disruption through preplanning similar to that of first responders. An effectiveness reporting system needs to be developed so disaster relief progress can be monitored by FEMA executives. TV reporters need to hold FEMA executives feet to the fire.
For more information see: Article 36. “Thousand Die due To Bureaucratic Bungling.”
Article 37. “Restructuring Government for Quick Response.”

Question: “I am on the Governor’s staff working to reform our state government… Our state has a number of large Agencies that were difficult for the public to approach to receive services. In response to the public’s demands Commissions were set up by the state legislature to streamline services to the public. We now have more than 150 highly paid Commissioners with staff, which consume a significant amount of the state budget. We proposed the elimination of the Commissions but found that there was not enough support in the legislature for this reform. Do you have any suggestions?”

New culture: The Agencies management is more like that of a Commission with its staff where decisions are driven down into the organization as far as practical.

Government Bureaucracies dominate our lives they are so much a part of our society that few believe there are alternatives. They have been with us since history has been recorded but gained prominence as a government organization during the Victorian era. They are hierarchically structured and naturally designed to maintain maximum control at the top.

Top management receives a monthly Performance report on each of the organization’s functions. This report is used in the Performance Budgeting process to determine where problems have occurred as a performance measurement. It is important to apply the most relevant performance measure keeping the process simple and only as needed. Note that efficiency measures do not apply to functions which have varying processes. For those you should use other measures such as effectiveness. Budgeting functions rather than organizations helps break down the power of a bureaucracy by separating its budget leaving little room for waste and mismanagement.

Question: “I am on the reform staff of… We have decided that the Total Quality Management (TQM) approach to increasing government efficiency best fits some of the areas that we found are in need of reform. But when we approached the senior management of these various organizations we were met with opposition the most prominent rebuttal was that they were already doing what Total Quality Management promises to do. Since we should not proceed with out the senior management’s support, by your recommendations, how should we proceed?”

If you or others are encountering similar problems and this does not answer your question adequately send me a more detailed review of your situation and I will respond, lawrence2007@embarqmail.com. The above is my opinion in response to a general question you may have a better way of approaching the above situation given the personal knowledge of the persons involved and their varying motives.

Organizations have different internal cultures based on their structures. They vary from a historic rigid bureaucratic to a modern loose and open structures. The best organizations are those, while well managed at the top exhibit a kind of “loose” “tight” relationship with its employees. Loose, meaning that “decision-making” is pushed down in the organization as far as practical and “tight” meaning control of expenditures is well managed. The best senior management while delegating decision-making authority is also well aware of what’s going on with employees from the top to the bottom of the organization.

I also recommended that the bureaucratic form of government be replaced by a two tier Steering and Functional Management organization. The Top management Team has the role of guiding and steering the Department while Functional management Teams deal with the day to day operation of each Function. The Steering Management Team is responsible for telling the Functional Management Teams “What to do” but not “How to do it”. This is a loose-tight organization with Steering firmly in control of the budget leaving Functional Management free to determine how best to do the job. Those in industry will recognize this as straight from the book “In Search of Excellence- Lessons from America’s Best-Run Companies” by Thomas J. Peters and Robert H. Waterman Jr., Harper and Row, New York, 1982.