Strategic CIO

State of PA Improves Citizen Services Through Digital Transformation Initiative

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I recently attended the PA TechCon event in Harrisburg, PA where John MacMillan, Deputy Secretary for Information Technology and Chief Information Officer for the Commonwealth of Pennsylvania, opened the session with a motivating talk about the need to improve citizen services.

Listening to MacMillan speak about the importance of focusing on the needs of citizens reminded me of a business executive speaking to his staff rather than a CIO whose three-decade career has provided him expertise in areas including application development, system integration, data center operations and facility management, as well as knowledge of statewide programs including public health, education, transportation, rehabilitation/corrections, youth services, tax collection and enterprise ERP.

By the end of his talk I knew I had to meet him. And I did. We scheduled some time to speak about his digital transformation initiative and following is an excerpt from our conversation.

What is driving PA to focus on improving services to its citizens and why is this important for the future of PA?

John MacMillan: We have a Governor in Pennsylvania, Tom Wolf, who is a true believer in transformation and continuous improvement. Before he was Governor, he saved his family’s company from bankruptcy. He had to change the entire business model to compete in today’s global economy and he had to get employees to buy into the changes. We are currently transforming how we are structured to deliver human resources and information technology services. They’re internal functions that significantly impact our ability to serve the public. A lot of other states have gone in the direction of shared services or, like us, are working on it right now. We had previously done a great deal of consolidation in technology infrastructure, such as data centers and telecommunications, as well as ad hoc consolidations of HR and IT organizations. What we had not yet tackled fully were organizing employees to support common business automation opportunities, streamlining funding and associating governance processes and teams with resolving conflicting investment decisions.

To the extent we can reduce the costs of administrative functions like HR and IT, there is more money available to deliver programs and services to the public, such as fixing roads, improving schools, fighting the opioid epidemic and so on.

What is the objective, scope and timeline of the transformation program?

JM: We want to transition to a full shared service delivery center model, governance process and financial model to achieve operational efficiencies and allow agencies to better focus resources on delivering programs and services to Pennsylvania.

The service delivery model is based on the principle that organizing into groups allows IT and HR employees to serve agencies with similar or integrated business processes. We call these groups “delivery centers.”

In terms of scope, we are talking about $1 billion in total IT spend and about 2,400 IT and HR staff. We used a highly collaborative and employee-driven approach. Over 100 employees were involved to plan and design the new delivery center model. We felt strongly about giving our employees a voice in the future model as a way to make them feel invested in its success.

We began planning the transformation in January 2017 and continue to implement in phases. With the consolidation phase complete, we are now focused on standardization and optimization within the delivery centers. While the transformation is targeted for completion in 2020, activities associated with optimization will be continuous and ongoing.

What changes in organizational structure and roles of IT personnel are required for the transformation program to succeed?

JM: The first change occurred in July 2017, when HR and IT employees who worked for individual state agencies all became employees of the Office of Administration and were grouped into delivery centers based on their previous agencies. We had to transition complement, change reporting relationships and select leadership for the six delivery centers supporting state agencies. We also had to reassign personnel into new roles within the enterprise delivery center.

The delivery center concept pools staff and expertise to support agencies. This required a shift in mindset for IT employees who were accustomed to developing solutions for a single agency or individual business units within an agency. An equally important shift in mindset also needed to occur within the departments and business areas served by IT. We are helping to encourage this change in thinking through shared decision-making on investments and priorities through the strategic planning and governance processes.

We also implemented matrixed employee relationships for cybersecurity and technology operations. Although these employees are embedded in the delivery centers, they report to our enterprise security and technology officers rather than the delivery center CIO. For us, this approach strikes the appropriate balance between standardization and flexibility. However, it was also a new concept for many of our employees to understand.

What are the challenges required for IT / agency personnel to start thinking about improving citizen services?

JM: We faced many of the same challenges you see in other large transition and transformation projects, including limited financial resources, resistance to change and limited experience in executing a transformation of this size and complexity. We also had to contend with complex funding models for business and IT services and numerous federal regulations that influence system design and delivery. That is why we chose an approach that relies on the knowledge and experience of our own employees for what could be accomplished.

We also used industry standards to help guide the thinking for reorganizing staff to better serve groups of agencies. We developed performance metrics that demonstrate the value of IT to citizens and its contribution to business outcomes. The metrics will be phased-in based on maturity and ability to automate reporting.

The technology marketplace will also influence the solutions, products and services available to us and other states. Going forward, we want to use business-driven procurements and innovation concepts to enhance the capabilities in our IT portfolio.

What technology changes need to be made to the Infrastructure in order to improve citizen service?

JM: The new delivery model gives us the opportunity to further optimize spending through technology convergence. Our application portfolio contains a significant number of custom and “one-off” systems and we are taking an incremental, methodical approach to reduce them. This approach is based a few guiding principles: align opportunities, reduce business risk, establish better capabilities, develop on similar technology and increase the use of common components while still respecting valid uniqueness.

As online business services become more integrated, the underpinning data, applications and technology architectures must necessarily become integrated. Cloud-based technologies and industry dynamics will influence our decision-making processes and activities. We know that traditional service delivery models must be integrated with cloud-based approaches.

The need to protect citizen and business data in our systems and operate within regulatory requirements and controls are additional factors that will continue to influence our decision-making processes and activities.

What training programs have you (or are you planning) to help IT personnel THINK differently?

JM: As mentioned before, the Governor is a big proponent of continuous improvement, so much so that he established a team within the Governor’s Office to work on this goal. One of the key activities of this office is training employees and managers in lean methodologies. In the past, there was sometimes the tendency to build IT solutions around what were inherently inefficient processes. So, what we want to do going forward is make sure the underlying business processes have been streamlined and optimized before we develop an IT solution to support them. We are also focused on process standardization from a COTS perspective; changing the business process to align to the solutions available in the marketplace. We also continue to train our IT employees on industry standard governance and service management processes. We have also started to train employees on concepts related to design thinking and human centered design. Again, it is about getting the business process right first, then implementing a solution to support it. Future training efforts will focus on leading organizational change.

What are your successes to date? What would you do differently in the future to improve the success?

JM: We are just over a year into the new delivery model and there is a lot to be proud of.

We have implemented an industry standard governance framework for shared decision making, organizational structures and communications. As a result, we have much more clarity now on how decisions are made and who has decision rights and accountability for how IT is used.

The matrix organization structure for cybersecurity and technology operations has helped drive efficiencies, mitigate risks and more evenly allocate resources. We continue to adopt industry standard-based IT processes for managing services: consistent processes to manage change and resolve issues leads to improved customer outcomes.

The new delivery model has also helped to eliminate “haves” and “have-nots.” In the past, different agencies invested various levels of resources into IT, which resulted in inconsistent capabilities and quality of service to the public. By grouping IT and HR together, the agencies benefit from larger pools of skills to resolve incidents in operational environments and support projects.

The shared decision-making process is fostering more cross-agency collaboration. Business, IT, HR and budget resources are now part of the structures that execute governance process activities.

We are uncovering new opportunities to streamline spending and make decisions that benefit the group. We are reducing investments in technology through improved sharing of solutions and complimentary spending. We also expanded the use of solution-oriented Centers of Excellence. For example, we were able to enhance of an existing grants management solution to support multiple agencies and avoid new purchases. We have established consistent organizational structures and, where possible, we have developed common service management roles and responsibilities for IT professionals. Our goal is to improve career mobility by making it easier for employees to transfer or be promoted to positions across delivery centers. It also supports recruiting and retaining people who are focused on delivering excellence.

We have generated about 26 million dollars of savings. While saving money is a core component to the transformation program, increasing value is equally important.

What has been your communication strategy both internal to IT / agency personnel as well as citizens/businesses?

JM: At its core, this is a project involving people – our employees, our customers and ultimately, the public we serve. Employees are the foundation and we made a concerted effort to engage them throughout the process. As I mentioned, many employees were part of the discussions and planning efforts for the new design. Beyond that, we wanted to be as transparent to employees as possible about what was happening and help them to understand why we were doing it. On a more personal level, we needed to provide reassurance that there would be a role for them in the new organization. We held town hall meetings, we created a resource account for questions, we prepared managers with talking points and answers to questions and so on.

We also engaged regularly with the senior leadership of the agencies and many of their key program areas. We spent time educating external suppliers so that they understand the direction in which we are heading. We are now working on our first annual report to highlight some of the key milestones and achievements of the past year.

While we have accomplished a great deal in a short time, I think the best is still yet to come. We plan to mature the delivery model, integrate previously siloed functions and employees and identify new opportunities to improve. It is a really an exciting time to work in IT in the commonwealth.

This article was originally published at CIO magazine.

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