When then Georgia governor Sonny Perdue ordered in 2007 that the state's central IT organization turn to the private sector to transform its aging IT infrastructure, it was one of a handful of large public sector outsourcing efforts attempted.
Virginia, Texas, the city of Minneapolis and the county of San Diego had inked high-profile IT services deals, with mixed results. In 2008, the Georgia Technology Authority (GTA) awarded the IT infrastructure business, worth $1.2 billion over eight years, to IBM Global Services and AT&T, with the promise of bringing the state into the 21st century and thus, cutting costs, reducing operational risk, and improving data security.
But, as late as 2011, the outsourcing plan was failing to deliver.
When new governor Nathan Deal took office and appointed Calvin Rhodes as CIO, the overhaul was just 10 percent complete. Georgia was running up against some of the same issues experienced in other public sector outsourcing deals: unrealistic expectations, nonexistent documentation, and complex infrastructure.
But rather than rail against the service providers or reverse course on the private sector deal, Rhodes and his IT leaders chose to take a year off to work with the vendors and get the relationship back on track.
"My marching orders were to come in and focus on this transformation and finish that work," says Rhodes. "In a very political environment like this, it's important not to change things every six months because someone new has decided there's a better way to do things."
IT Calls an Outsourcing Timeout
GTA and its providers had made its planned infrastructure changes to just three out of the state's 14 agencies, but "it had been a heavy lift just to get through those three," recalls Steve Nichols, CTO of Georgia. "We called a temporary halt to the work, and said there has to be a better way."
A major problem was the scale and diversity of the existing IT environment. In 2010 alone, Georgia spent $1.2 billion on IT. With a 2014 budget of $19.9 billion, the state would easily rank as a Fortune 500 company. But it acted more like a holding company with each agency running its own business. They "had firewalled themselves off," says GTA COO Dean Johnson. "It's a very complex infrastructure, and IBM and AT&T had both underestimated the size of the effort. We had to go back to the drawing board."
That IBM had run into trouble with some of its other public sector customers — sparring in court with Indiana over a $1.6 billion contract and ceding its troubled Texas deal to Capgemini and Xerox — was actually beneficial for GTA. "Timing was on our side," says Rhodes. "That gave our service provider the desire to try to work through the issues here."
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