InformationWeek

December 22, 1997

Chief Of The Year Runner-Up

Larry Olson, CIO, State Of Pennsylvania--This official runs technology like a business

arry Olson means business. Ever since he left a high-paying job as a management consultant to join the Pennsylvania State Department of Public Welfare in 1992, Olson, today the state's CIO, has taken a private-sector approach to working in government.

Olson, a 45-year-old native of San Antonio, has earned a reputation among government and corporate CIOs as a leader and manager who doesn't let bureaucracy get in the way of innovation and productivity gains. "It's important that we break through the bottlenecks and bring tools to the people who need them," says Olson, named Pennsylvania's first CIO in 1995. "A lot of bureaucrats can stop innovative projects, so when we need to get something done, we ask them to either help us or stay out of the way."

In fact, one of Olson's biggest accomp lishments has been bringing a business sensibility to the job of running the IS group for the state of Pennsylvania. "He's very much a business CIO," says Lowell Starling, VP of electronic commerce and a former VP of IS at Highmark Inc., formerly Pennsylvania Blue Shield, in Camp Hill, Pa. "He's looking at the same things we're all looking at: how to standardize, save money, move faster."

Olson insists that running the state's IT department like a business is only common sense. "Too many people in government say we can't do it this way or that because we're in government, things should run slowly, and we don't need to be accountable for our actions," he explains. "I can't accept that. There's no reason we can't demand from ourselves the same performance that's expected in business."

Chief among Olson's accomplishments are efforts to consolidate 18 state data centers-with an estimated cost savings of $127 million over five years-and the successful rollout of a metropolitan area network that links 40 st ate agencies.

Olson has also earned a reputation for being a relentless negotiator when it comes to representing the state's interests with IT contractors and getting the most out of his $385 million annual IT budget. In addition, he took an advocacy role to make CIOs across his region aware of the year 2000 problem, organizing a conference and testifying before Congress.

Pennsylvania Gov. Tom Ridge says Olson's strong business approach brings a real competitive edge to the process of overseeing the state's IT strategy. In fact, the commonwealth's Web site refers to Pennsylvania as the "state of technology"-a phrase coined by Olson.

Back in 1975, when Olson graduated from Texas Tech University with a degree in architecture, he never figured he'd someday be writing the blueprint for a state's IT strategy. But after working as an architectural and business consultant for 16 years-including four years overseeing development of the Philadelphia Convention Center-Olson wanted to experience government firsthand.

Olson had gained an appreciation and knowledge of IT while working on the convention center, so when he was named deputy secretary of administration at Public Welfare, he was also put in charge of IS. In 1994 Olson was named deputy state treasurer. A year later, he almost returned to the private sector, but stayed on when he was offered the post of CIO and was assured that he could run the state's IT operation like a business.

Early in his tenure, Olson helped form a Corporate Advisory Council of 18 CIOs from major Pennsylvania businesses. They meet four times a year to discuss IT issues and share best practices. "One of the first things he did was call his counterparts in private industry to compare notes, rather than work only with IT people from other state governments," says Frank Dittrich, VP of IT at Westinghouse Electric Co. in Monroeville, Pa., a subsidiary of CBS Corp.

Olson also began taking a hardball approach to vendor negotiations. Charles Gerhards, director of Pennsylvan ia's technology center and Olson's right-hand man, recalls Olson's contract negotiations with a service provider: "We'd gotten a good deal, and they thought the negotiating was over. Then Larry pulled out a list of additional items that weren't necessarily costly to the vendor, but would save us several hundred thousand dollars. They looked at him in disbelief. They were used to dictating the terms of the negotiations."

Incidents like this have some vendors and bureaucrats in the state wishing Olson would leave. But Dan Whelan, president and CEO of Bell Atlantic-Pennsylvania in Philadelphia-which counts the state government as one of its largest customers-likes working with Olson. "He talks our language, so there's a rapid understanding of the state's needs and price/performance goals," says Whelan.

Faster Buying
Olson has also revamped the state's plodding IT procurement process. "If you wanted a phone installed in an agency," recounts Gerhards, "you needed to fill out four copies of a form and send it to a central organization that would decide whether you needed a phone, then send correspondence back and forth. It was taking forever to buy services."

With the purchasing process streamlined, tasks that used to take nine months now take just days. Olson cut the number of meetings, too, and imposed an informal rule that no meeting run longer than an hour.

Gov. Ridge calls Olson an extraordinary resource: "It's like in the movie Ghostbusters. If you have a technology problem, who you gonna call? Larry Olson-he's the guru."

Olson typically gets to his office at 7 a.m. and doesn't leave until 12 hours later. With his ever-present notebook computer running, he's never far out of the loop. "I get E-mails that he sent at 11:30 on a Saturday night," says Thomas Paese, secretary of administration and Olson's boss. "Sometimes I have to tell him to shut off the computer."

CIOs in other states applaud Olson's efforts. "He's provided leadership in areas like year 2000 and has streng thened relations between state and federal CIOs by forcing both sides of the table to talk about common interests," says Steve Kolodney, CIO of Washingtonstate and western regional director of the National Association of State Information Resource Executives.

One of Olson's most significant efforts has been a program to slash costs by eliminating redundant data centers in state agencies. He plans to consolidate 18 data centers into just one or two, and will let the project be managed by outsourcing vendors. The project represents a change in philosophy by emphasizing enterprisewide IT solutions and taking advantage of desktop and network computing technologies.

"I'm impressed he's been able to move so quickly on the consolidation," says Dittrich of Westinghouse. "In the private sector, we wouldmake decisions and move on. But in government, there are lots more political issues."

Perhaps Olson's best-known accomplishment is helping bring the year 2000 problem to the attention of fellow CIOs and s tate and local officials. Olson has traversed the state talking about its urgency and testifying before Congress on the issue. The culmination of these efforts was a year 2000 summit, held in Pittsburgh this past October, at which dozens of state and federal CIOs discussed compliance issues such as data interchange between state and federal systems.

As for Pennsylvania's own 2000-conversion efforts, Olson has made it a top priority to meet Gov. Ridge's deadline of completing all systems conversions and testing by next December. So far, the state's program is on target to meet that goal.

Olson is quick to point out that his accomplishments as CIO would be impossible without an "incredibly dedicated" staff of 154 people and the strong commitment to technology endorsed by Gov. Ridge. Indeed, Ridge's support of IT initiatives have put Pennsylvania on the map when it comes to effective use of IT to improve public services and lure new business.

Olson, who never intended to work for the state for mo re than a few years, expects to eventually take a private-sector job. But he's committed to staying on at least through the current term, which ends in January 1999.

"I'm a change agent," he says.

"I like going in and, with lots of help, turning things around and coming up with new ideas. After that comes maintenance, which I'm not interested in. I'd rather fix things, hand them off, and move on." See related story:
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