Does NC need a new department of Information Technology?

Published April 8, 2015

by Sarah Curry, John Locke Foundation, April 7, 2015.

In Governor McCrory's Recommended Budget for the 2015-17 biennium, he suggested the creation of a cabinet-level department, the Department of Information Technology (IT). Whenever the government suggests creating a new department or agency, it must weigh the cost of creating the department, including the addition of new bureaucracies, with the potential benefits. Some areas may need to be consolidated into a department to achieve budgetary savings or government efficiency, while others may benefit from minor organizational changes.

The first formal examination of information technology in state government was in 1969.  Governor Bob Scott signed an executive order that created a committee to look into the effective use of computers and related equipment in state agencies. After much debate and concern over the growing use of technology, the Division of Information Technology and the position of State Chief Information Officer (CIO) were created in 1999. Today, state government has thousands of information technology systems, including multiple customized versions of the same systems in different locations, despite various attempts to consolidate IT over the last 15 years.

Every year the State Controller issues a report detailing expenditures on Information Technology in the state. This is necessary because, unlike other areas of state government where similar functions are housed and budgeted within the same department or agency, IT operations are independent entities.  Total IT expenditures in North Carolina for fiscal year 2013-14 were approximately $1.5 billion. The chart below shows the breakdown of IT expenditures in North Carolina.

Efforts to consolidate or coordinate the state's information processing resources have been discussed since 1983, when the first Computer Commission was created. In 2013, Gov. McCrory issued an executive order to "fix and modernize IT governance in cabinet agencies by collaborating as one IT." In December of 2014, State CIO Chris Estes recommended that the General Assembly restructure the state's IT resources by establishing a cabinet-level agency, the Department of Information Technology.  A few months later, he included details of the proposed agency in the biennial state IT plan, which was submitted in conjunction with the governor's budget for the 2015-17 biennium.  According to the proposed budget, the new Department of Information Technology would replace the Office of Information Technology Services and the Office of the State CIO.

Should the state create a new department for IT?  Since the early 1980s there have been two recurring themes during discussions of information technology needs -- consolidation of IT functions and spending IT funds wisely.  Information technology demands an immediate response with the state's extensive reliance on technology and the potential for security breaches.  There have been many attempts to manage the state's IT through commissions and the creation of its own division, but comprehensive reform cannot be accomplished under the existing constraints. The creation of a Department of Information Technology would consolidate disparate operations and break down current bureaucratic barriers between agencies, while also creating ways for increased government efficiency and cost savings.

The John Locke Foundation suggests lawmakers and budget writers consider:

  1. IT in the state could be restructured by creating a new Department of Information Technology.  This new department will address the root cause of North Carolina's IT challenges by defining one source of accountability and authority to accelerate change, reduce costs, and more effectively manage IT resources. In addition, the new department will improve citizen satisfaction, increase efficiency, reduce complexity, and improve the state's ability to attract, retain, and reward IT talent by expanding training opportunities and paying closer to the market rate for high-demand skills.
  2. A coordinated and centralized effort may save the state money. It has been estimated that states that move to a unified structure have saved an estimated 10 to 20 percent of their initial operating budget over five years.  Currently, 74 percent of the state's IT projects come in over budget and behind schedule. A unified department will create an aggregate buying power for contracts and also identify shared solutions across agencies.
  3. Security to protect private citizens' data is a fundamental state responsibility.  The current IT system is spread across multiple agencies and there is a potential security risk with old software.  South Carolina experienced a data breach and has spent millions to fix and secure citizen data. With a new unified structure, North Carolina can avoid a potential security breach.
  4. No major shifts for state government employees or a new work location are necessary.  Minimal reductions in staff levels may occur through attrition and as open positions are re-evaluated.  All current cabinet agency IT professionals will work for the new department.

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April 8, 2015 at 9:51 am
Richard L Bunce says:

Sounds like a good opportunity to outsource...