November 1, 1999

Rock Regan: Political Considerations Complicate IT Issues
By Marianne Kolbasuk McGee

CIOs in the public sector deal with many of the same issues as their counterparts at large companies, plus one that can be more problematic than glitchy software: politics. Connecticut CIO Greg "Rock" Regan spent the better part of 1997 and 1998 preparing a plan under which the state would outsource the bulk of its IT and telecom operations. But the plan was plagued by what Regan calls "political opposition and turf wars."

A number of labor unions opposed the plan because it would mean state workers would become employees of a commercial company and could lose their jobs. Some legislators didn't like the state handing over control of its IT operations to a commercial company and being paid huge sums with taxpayers' money. The state comptroller and several agencies were against the deal because a handful of smaller outsourcing projects in past years had gone sour, including a multimillion-dollar contract between EDS and the state's Medicaid agency in the mid-1990s.

Regan analyzed proposals from Computer Sciences, EDS, and IBM. EDS won the bid because its plan would improve the state's business processes and help it leverage technology across dozens of agencies. In December 1998, Regan's department revealed it was negotiating the final terms of a $1.35 billion, seven-year contract with EDS. But during final negotiations this past summer, the plan was shelved.

Regan says the main reason the deal fell through was that EDS and the state couldn't agree on pricing and service-level guarantees--without which, he says, the plan would be doomed when presented for legislative approval. Instead, the state's IT organization must tackle integration and E-commerce projects itself.

In hindsight, Regan says, the one thing he would have done differently is to communicate his plans better as they developed. "Communicate, communicate, communicate. That's what I would've done more of: Keep everyone informed," he says. "Instead, we allowed the issue to be framed by other people." Although it's impossible to please everyone, Regan says, having the CIO talk openly about the pros and cons of an outsourcing plan during various steps along the way can help prevent opposing factions from gaining control of the plan's fate.

return to main story, "How To Survive As A CIO"

Photo by Giorgio Palmisano

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