Recommendations of the Texas Comptroller

Create a Program Management Office within the Department of Information Resources

Summary

As Internet use increases worldwide, so does its influence in such areas as communications, business, and government. Consumers now expect to be able to conduct business transactions 24 hours a day, seven days a week, and governments will have to keep pace. Texas should establish a Program Management Office (PMO) within the Texas Department of Information Resources (DIR) to lead the state in establishing effective online services for its citizens and to ensure that agencies adapt their business practices to the requirements of the Information Age.

Background

The Internet is a communications revolution that will affect every facet of modern life. It will become as pervasive as the telephone, but at a significantly faster pace. In 2000, the number of people with Internet access will reach an estimated 304 million worldwide, an increase of nearly 80 percent from 1999. And the amount of information available online has increased tenfold over the last three years, to more than a billion separate pages.[1] A Spring 2000 survey of Texans conducted by the Telecommunications and Information Policy Institute at the University of Texas indicated that two-thirds of all Texans have computers and 60 percent are using the Internet.[2]

This revolution is affecting urban and rural areas alike. Internet technologies are making rural communities less isolated. And the Internet can be a tool for economic development in rural communities, by attracting both businesses and residents that can be connected to the world, regardless of their physical locations.

What does this mean for Texas government? As electronic-commerce and electronic government (“e-government”) become more widespread, they will transform the nature of business and of social interaction in general. And they will present Texas state government with an extraordinary opportunity to transform the way it does business, improve customer service, become more efficient and effective, and further economic development.

Based on e-Texas’ research, one of the major trends in the use of technology in government is a move to a “customer centric” approach, i.e., making a concerted effort to use tax dollars more effectively to increase customer satisfaction through technology. As businesses make more services available on the Internet, government will be expected to follow suit. A recent report by Deloitte Research predicted that the number of customers using the Internet as their primary way to access government services will increase by more than 150 percent by 2002. Deloitte also found that government agencies that interact with the public expect even greater changes. Transportation agencies expect a 380 percent increase in the number of customers accessing their services via the Internet, and revenue agencies expect a 228 percent increase.[3] Citizens will expect to use the Internet to register their cars, renew driver’s licenses, and pay traffic fines and taxes.

While e-government will produce significant improvements in customer service, it also will produce major benefits for government as well, in the form of greater efficiencies that will save state agencies—and the taxpayers who foot the bill—millions of dollars. Putting state purchasing systems on the Internet, for instance, will slash the time and paperwork needed to buy goods and services. By moving its purchasing functions online, IBM estimates it saved $240 million on the $11 billion in goods and services it bought in 1999.[4] In the public sector, the federal Emall, one of the largest government-to-business electronic procurement systems, claims savings of up to 72 percent in administrative costs, along with better pricing from suppliers and a reduction in delivery times from weeks to days.[5] Giga, an information technology (IT) research firm, estimates that the total annual savings attributable to electronic commerce of this kind will reach $1.25 trillion in industrialized nations by 2002.[6]

Many states are also using e-government for economic development by drawing citizens and businesses who want to live and work in a state that promotes the use of technology. These states want to develop and deliver services based on what the customer wants, making it easier to do business with the state. For example, Pennsylvania created its “Pennsylvania Open for Business” Web site to make it easier for business to navigate state government.[7] Users can walk through a series of questions to ensure they receive complete information about opening a new business, receive all of the necessary state forms, and get advice on developing a business plan, hiring employees and business record keeping. Users can also check the availability of a business name and develop a personal “briefcase” where a business user can store information and forms gathered from throughout the Web site. By placing information in this briefcase, the user is saved from having to repeatedly go through multiple pages in the Web site when they want to reference important information or download a needed form.[8] To achieve e-government, many states are focusing on how e-government projects are managed and implemented to ensure that they meet the vision of the state and the needs of the state’s customers.

The transition to a fully electronic government will require major changes in the way the state does business. Traditionally, Texas state agencies have served their customers and developed technological systems more or less independently, rather than collaborating with other agencies. This lack of coordination can result in increased difficulties for taxpayers and unnecessarily replicated costs to develop and implement systems. By coordinating the building of similar systems, agencies avoid reproducing one another’s work, saving both time and money. This “build it once” concept is a key element in the successful implementation of e-government.

The Internet provides an opportunity to consolidate thousands of services and applications. The challenge for Texas state government, then, will be to move toward integrated services and applications that cross agency lines—an “enterprise approach” that focuses on technology development and service delivery as a single, statewide effort in pursuit of statewide goals, rather than individual projects at separate agencies. Information and services from all levels of government must be brought together as a single enterprise that can transact business over the Internet. Areas that lend themselves to coordinated implementation include administrative processes such as purchasing, licensing, accounting, and human resources. Centrally built, common systems will allow each agency to focus on its core mission and legislative mandates, while greatly improving the efficiency of its “back office” functions.

The success of digital government will require a strategic vision for the use of technology to deliver services, coordination among governmental entities to overcome some of the barriers to implementing e-government, strong executive leadership, close monitoring of progress toward statewide goals, and regular reporting to the state leadership. A single focal point to track statewide efforts and share best practices would help ensure the success of the enterprise approach. A program management office (PMO) offers the best promise of providing a single focal point for statewide policy, strategy, and leadership in a state where most previous IT planning and deployment has been uncoordinated.

The Enterprise Approach in Texas

Texas’ performance-based budgeting system was implemented to address planning and budgeting for the state as a whole, and to tie all state money to statewide objectives such as performance reporting, assessing, and auditing. With the exception of the Health and Human Service Commission (HHSC) and the Texas Council on Workforce and Economic Competitiveness, however, most state planning is conducted at the agency level, rather than across agencies.

Texas government generally has not planned or operated technology-related initiatives from a statewide perspective. One exception was the Year 2000 (Y2K) project managed by the Department of Information Resources (DIR). This project involved establishing a Y2K Project Office to spearhead a statewide effort designed to ensure that critical governmental business processes would continue despite possible disruptions due to Y2K computer glitches.

The Legislature appropriated funds to DIR to establish a project office charged with oversight, monitoring, and coordination of the statewide effort, and required all agencies and universities to report to DIR on their progress. The Legislature also appropriated an additional $110 million to agencies considered critical to state operations. The Y2K Project Office worked with a steering committee of agency, university, and leadership office representatives to address an enterprise-wide challenge that posed a technology and a business problem.

Together, the Y2K Project Office and the steering committee established processes to monitor the progress of agencies and universities toward identifying and assessing the risks posed by the Y2K problem to their IT and embedded (computer chip-based) systems. They also developed procedures and policies for contingency and continuity planning, and for the approval of requests for reimbursements from the $110 million appropriated for the effort.

In addition to its efforts with state agencies, the office coordinated its efforts with the federal government, other state Y2K projects, and local governments across Texas, and provided a single contact point for citizens, businesses, and governmental entities seeking information on the Y2K problem. The office disseminated information via the Internet and through numerous in-person presentations on the state’s efforts. It shared best practices and worked through issues affecting the entire state with various agency teams, and provided “just-in-time” training on Y2K-related issues.

State agencies and universities reported their progress to the Y2K Project Office through the Web. The office conducted risk assessments for all agencies and universities, and provided regular reporting to interim committees of the House Committee on Appropriations and Senate Finance.

Texas’ successful transition into the year 2000 was made possible by a tremendous joint effort by state agencies, colleges, and universities. Under the Year 2000 Project Office’s guidance, these bodies worked together not only to correct Y2K problems in their computer systems and equipment, but also to develop contingency plans and crossover plans to address any unexpected problems that might arise. Vital funding from the Legislature helped to ensure that the necessary resources were available to address the problem. However, the most critical elements in ensuring the success of the projects were executive-level leadership and sponsorship, from the Governor’s office and the Legislature down through agency and university management.

According to DIR’s final Year 2000 Consolidated Statewide Status Report, “the Project Management principles and practices applied during Y2K can be used as a framework for statewide coordination of technology initiatives that cross agency and university boundaries...to help formulate a consistent direction among agencies and universities.”[9]

Time for Texas to Coordinate

One of the major success factors behind Texas’ Y2K effort was the existence of a highly visible and immovable deadline. Texas’ present effort to move ahead with electronic government has equally important if less obvious deadlines. Texas is poised to spend hundreds of millions of dollars on IT projects that could and should be coordinated across governmental boundaries. If they are managed centrally with common approaches and common standards for development and implementation, Texas stands to realize major savings, both in efficiency and in taxpayer dollars. If Texas does not coordinate these efforts at the earliest possible opportunity, these projects will move too far along to realize any savings from a centralized approach.

Several ongoing projects are using a statewide approach to save the state money and improve customer service. These include the Texas Electronic Government Task Force, which is creating a statewide Web portal; the Texas Government to Business Coordinating Council, which is implementing a statewide electronic purchasing system for state agencies; and the Health and Human Services Commission (HHSC), which is developing fully integrated electronic functions for the 14 agencies under its oversight.

TexasOnline

The 1999 Legislature created the Texas Electronic Government Task Force to consider the establishment of a common electronic system through which state and local governments can send documents to the public, receive applications for licenses and permits and documents for filing, and accept payments. A demonstration project, “TexasOnline,” was created to test the feasibility of the system.

TexasOnline is a secure, Web-based “portal” for transacting business with the state. The site is a self-supporting online government service, developed in partnership with KPMG Consulting, managed by DIR, and maintained at the West Texas Disaster Recovery and Operations Center in San Angelo. At this writing, the Comptroller’s office, Real Estate Commission, Natural Resource Conservation Commission, Railroad Commission, Department of Licensing and Regulation, Department of Insurance, Department of Transportation, and Department of Public Safety are conducting transactions through the site. The Web site also is designed to allow local governments to transact business through the portal.

KPMG designed the portal to incorporate state-of-the-art security measures to protect all personal data submitted by its users. KPMG and its subcontractors have spent roughly $3 million to establish the technical infrastructure for the site, and expect to recover their costs from transaction fees paid by the site’s users, if the state agencies participating in the site do not choose to pay the costs directly.

Use of the TexasOnline portal is not yet mandatory for state agencies. They remain free to develop their own Web applications, potentially making it more complicated for citizens to do business with the state. Agencies choosing to develop their own independent sites, moreover, may be duplicating work already completed in the TexasOnline project, with no guarantees that the same levels of security will be maintained.

Texas Government to Business (TxG2B)

The 1997 Legislature charged the General Services Commission (GSC) with establishing an electronic purchasing marketplace, including an electronic commerce network to provide a single common access point for state purchases and vendors through the Internet. To achieve these goals, GSC formed a multi-agency task force, the Texas Government to Business (TxG2B) Coordinating Council, with representatives from GSC, the Comptroller’s office, the Department of Transportation, Department of Health, DIR, the Texas A&M University and University of Texas systems, the State Auditor’s Office, Department of Economic Development, Governor’s office, and the Legislative Budget Board.

The council hired a vendor, Syscom, Inc., to conduct the electronic procurement pilot, which began in April 2000 and will conclude in September 2001. The pilot Web site will allow agencies to search for sources of products and services; access existing state term contracts and state-owned inventories; solicit, receive, evaluate, and award bids; receive shipping notices and invoices; and use automated vendor performance management. Costs for the system are being recovered through transaction fees paid by agencies using the system.

State law requires all agencies that are “capable” of doing so to use the TxG2B procurement system, but the law does not define “capable,” leaving a loophole for agencies that do not want to participate in the system.[10] If agencies develop their own purchasing systems, Texas will lose the benefit of a single information source with which to make important decisions on purchasing and pricing. Texas also will lose its potential for tremendous cost and productivity savings that the private sector has proven can be gained from a standardized approach to conducting business over the Internet.

Enterprise Resource Planning at HHSC

Another major initiative is a proposed enterprise resource planning (ERP) project office within HHSC. ERP is an umbrella term for the use of technology to improve financial and human resource accountability for an entire enterprise, in this case the 14-agency HHSC network, which accounts for almost 28 percent of all state appropriations.[11]

HHSC has requested $65 million from the Legislature for fiscal 2002 through 2007 to staff its ERP project office and implement ERP software. The current ERP implementation strategy is agency by agency, starting with the Texas Department of Health (TDH). TDH alone has spent in excess of $5 million through fiscal 2001 for ERP implementation.

The proposed project office would implement ERP under a common plan for all 14 HHSC agencies. Using this coordinated strategy, HHSC estimates savings of $18.5 million over agency-by-agency implementation. In addition, the enterprise approach would limit individual agency customizations to the software, resulting in lower programming costs. Finally, HHSC estimates that a common ERP system would improve the network’s human resource management and planning and reduce the risk of noncompliance with federal accounting mandates, which could potentially cost the state as much as $1 billion in lost federal funds over the next six years.[12]

Other State Efforts

Leadership is all-important to successful e-government initiatives. Clear direction must be communicated from top executives who possess the authority to make firm decisions, and the ability to delegate responsibility to individuals in a position to get things done. Many states have created chief information officer (CIO) positions to provide this sort of leadership. Some states also have created project offices under or in addition to the CIO to coordinate e-government initiatives.

• The Florida State Technology Office (STO), within the Florida Department of Management Services, is headed by the state CIO, who is appointed by the governor. STO coordinates the purchase, lease, and use of all IT services for state agencies; assumes management responsibility for all IT systems and services; and works to integrate agencies’ IT systems and services, standardize relevant policies and procedures, and adopt technical standards. Other duties of STO include the coordination of state information technology education and training, the forecasting of priorities and initiatives for the state communications system, and development of a State Annual Report on Enterprise Resource Planning and Management. STO also designs and manages Florida’s portal, myFlorida.com. Florida agencies are reorganizing information technology resources by transferring staff, infrastructure and funding to STO, which will provide support to the agencies.[13]

• “Empower Kentucky,” an initiative launched to introduce fundamental changes in the way the state does business, has created a blueprint for IT in the state, including statewide standards, strategic planning, a CIO, and organizational redesigns. A CIO position reporting directly to the governor has been created to head the Governor’s Office for Technology (GOT). The CIO has oversight for all major IT procurements and major systems implementations, and provides leadership in the development of strategies and policy direction for all aspects of IT. An Office of Consulting and Project Management within GOT is responsible for providing comprehensive systems analysis, design, development services, and consulting services to state agencies.[14]

• North Carolina’s NC@Your Service Project partners with state agencies to integrate their business systems into statewide portals. The Project Office is responsible for developing and managing a master plan for the state’s e-commerce initiatives, reporting progress toward plan goals, and facilitating internal and external communications regarding the state’s e-commerce initiatives. The Project Office promotes a standards-based approach for infrastructure and applications, common business models and processes, and shared technical infrastructure and services. The project is directed by the E-Commerce Steering Committee composed of 11 agency and organization leaders.[15]

• In April 2000, an executive order established a two-year e-Michigan Office within the Michigan Governor’s Office to coordinate electronic government initiatives. An e-Michigan Advisory Council was established to advise the office on best practices, future trends in business, government and education, and the best opportunities for using e-commerce. In addition, the state’s CIO oversees an Office of Information Technology Solutions (OITS) and Office of Project Management (OPM). OITS identifies and integrates technology with the business needs of the state at an enterprise-wide level, acting as a single point of contact for state agencies, developing statewide IT policies, strategic planning, and standards, and providing research services. OPM assists agencies in managing and monitoring their IT projects, including establishing project management methodologies, training, and tools.[16]

• The Pennsylvania Governor’s Office of Administration/Office for Information Technology (OIT) develops and promotes statewide policies and standards governing the management and use of the state’s IT investments. OIT identifies beneficial and cost-effective IT initiatives among state agencies.[17] The governor set aside $20 million to increase the online availability of state services. For example, $500,000 is earmarked for the State’s game commission and fish and boat commission to enable the purchase of hunting and fishing licenses over the Internet. The funding will be provided by agency budgets. [18]

• Utah’s CIO is responsible for spearheading and coordinating the use of IT across state agencies. The CIO’s duties include oversight and strategic planning for IT and telecommunications in state government, acting as the Governor’s IT advisor, membership on the Legislative Oversight Committee, and chairman of the Statewide IT Policy and Strategy Committee.[19]

• Virginia’s Department of Technology Planning is headed by the state CIO, a cabinet level position. Within this department resides the Electronic Government Implementation Division, which works with state agencies to implement electronic government. The Division is responsible for developing and promoting a standard methodology; coordinating the provision of technical assistance to agencies for the implementation of e-government and promoting and coordinating the sharing of resources, applications and application/database development. The department also determines the fiscal implications of developing e-government projects and prioritizes funding needs for e-government strategies and initiatives. It also works with Executive Branch agencies to ensure that their electronic government initiatives, once fully implemented, will result in demonstrable net savings or increases in productivity for the Commonwealth.[20]

• The State of Washington’s Department of Information Services is responsible for IT policy and oversight, computing functions, mainframes, telecommunications (which includes video, voice and data transmissions), video conferencing and multimedia production. The Electronic Commerce Executive Steering Committee develops the management approach to electronic commerce, prioritizes strategic digital government initiatives and recommends changes to state policy for achieving statewide digital government objectives to the Information Services Board, which acts as the policy and planning body, and the governor’s office.[21]

DIR’s Role

As noted above, Texas has enjoyed some success in implementing statewide IT projects. However, the state lacks a single focal point for policy and strategy coordination, a critical element for success.

The Legislature has charged DIR with establishing, coordinating, and directing the use of IT resources by state agencies and to promote cost-effective communication among agencies and residents.[22] DIR’s statewide responsibilities include the preparation of the State Strategic Plan for Information Resources Management, a roadmap for statewide information resource activities; and the Biennial Report on Information Resources Management, which measures progress toward the goals set in the state strategic plan and provides recommendations for agency-specific and statewide technology management issues. DIR is responsible for establishing guidelines for internal quality assurance and is empowered to adopt policies, standards, and guidelines concerning state technology standards. These administrative rules, once adopted by the DIR board, carry the force and effect of law. However, DIR does not have the authority or resources to enforce these standards.

DIR is involved in a number of specific IT projects, some of which are coordinated by task forces. For example, the Telecommunications Planning Group (TPG), composed of the comptroller, the executive director of DIR, and the executive director of GSC, monitors the implementation of the state’s TEX-AN 2000 network. As mentioned earlier, DIR manages the contract for TexasOnline, the state portal. It is also performing a statewide information technology security assessment with an emphasis on online systems connected to the Internet.

DIR also contracts for statewide IT services for state agencies, and manages the contract for the data and disaster recovery services based at the West Texas Disaster Recovery and Operations Center.

DIR is overseen by a board of six voting members appointed by the governor, with the advice and consent of the Senate, and three ex officio members. In addition, some oversight functions for IT are housed in the Legislative Budget Board (LBB), which has had oversight responsibility for state agency and university IT projects since September 1999. The LBB is responsible for reviewing and approving information resource plans for each state agency and university.

Another oversight group, the Quality Assurance Team (QAT), provides limited oversight of IT projects. However, the oversight authority of the QAT, which includes representatives of the State Auditor’s Office (SAO) and the LBB, is limited to projects worth more than $1 million that have one or more of the following attributes: a year or more needed to reach operational status; involvement of more than one agency or governmental unit; or outcomes expected to materially alter the work methods of agency personnel or the delivery of services to agency clients. Agencies may not spend appropriated funds for such a project without QAT approval. The team’s quality assurance process includes risk analysis, monitoring by the QAT based on the level of risk posed by the project, and a post-implementation evaluation review. If the QAT determines that a project fails to meet its objectives, it may initiate a process to rescind project funding, subject to an agency appeal.

Although DIR’s executive director acts as the state’s CIO, DIR has neither the mandate nor the resources to provide the same kind of strong, centralized leadership demonstrated by the states that have enjoyed the greatest success in implementing e-government.

Texas Needs a Program Management Office

Texas is moving forward with electronic government in a decentralized fashion, with no one organization responsible for ensuring that the state’s vision is met successfully. DIR develops the statewide goals that agencies must use to plan their IT projects. Agencies and universities are responsible for planning for their projects in their information resources strategic plans and biennial operating plans (BOPs), and requesting funding for and implementing IT projects once approved. The LBB approves these plans and the Legislature authorizes the funding. The LBB and SAO provide quality assurance that a project is being implemented successfully for a limited number of projects.

More centralized authority is needed. The trend in both the private- and public- sectors is to implement IT projects at the enterprise level, using a strong CIO or a program management office (PMO) to provide consistent project management and ensure successful implementation. This will require a new way of thinking about service delivery, one that is focused on the customer rather than organizational boundaries—a strategy that streamlines and integrates processes across these boundaries and makes them invisible to the customer. It will require developing more cross-government applications, such as the TexasOnline portal.

Successful e-government implementation will necessarily address many IT issues at the state level, such as customer access, process reengineering, privacy, security, and authentication and the use of digital signatures. And it will require better coordination before IT projects are planned and throughout the implementation of each project. Strong leadership will be essential to address these issues efficiently and effectively.

The HHSC enterprise resource planning initiative provides a good case in point, indicating that the state could save $18.5 million or more through enterprise planning. [23] And, with at least 22 state agencies planning similar ERP initiatives, the PMO could help bring the HHSC benefits to agencies outside the 14-agency network.

Too many major e-government projects in Texas still are being planned and implemented on an agency-by-agency basis, causing unnecessary duplication and unnecessarily high implementation costs. Texas has a strong tradition of decentralized government. A PMO could provide much-needed coordination while still allowing agencies to maintain their autonomy.

Recommendations

A. State law should be amended to establish an e-government Program Management Office (PMO) within the Department of Information Resources (DIR) to guide, promote and facilitate the continued implementation of electronic government within Texas state government and across governmental entities.

Section 2054 of the Government Code, the Information Resources Management Act, should be amended to establish an e-government Program Management Office within DIR. The PMO should be responsible for establishing and supporting standardized business processes and identifying and incorporating best practices in the state’s information technology projects, in such areas as project support, implementation strategies, project planning and scheduling, quality assurance, overall team coordination, status reporting, and technical standards.

The PMO should work with the Legislature, the Governor’s office, the State Auditor’s Office, and the Legislative Budget Board (LBB) to define an “e-government project.” These parties should recommend any changes needed to the instructions for agency information resources (IR) strategic plans and Biennial Operating Plans (BOPs) to ensure that projects that should be coordinated and/or managed centrally are identified. The PMO also should work with these groups to develop selection criteria for the e-government projects it will help coordinate. These criteria should include cross-agency collaboration and implementation, financial exchanges, requirements for authentication and security implications, and the state’s strategic vision for electronic government. The PMO should work with any existing advisory bodies on electronic government. PMO coordination and facilitation of e-government projects should be limited to state agencies only, and not institutions of higher education.

The PMO should coordinate projects involving multiple state entities as well as those involving local governments and the federal government. It also should provide risk management and quality assurance services, in partnership with participating agencies and the Quality Assurance Team.

The PMO, with LBB approval, should identify resource needs for cross-agency projects and opportunities to coordinate agency e-government projects. For such projects, the Legislature should “tag” agency requests for funding and put them under the PMO’s management, to be distributed to the agencies as the project progresses, as with the reimbursement process used in the Y2K project. The PMO should convene cross-agency coordination teams to reduce IT expenditures and eliminate unnecessary duplication.

As the central authority for state technology and business process reengineering, the PMO should establish standards for agencies to follow in implementing projects under its management to ensure maximum savings and cross-agency success through incorporating best practices.

In conjunction with the LBB’s Quality Assurance Team (QAT), the PMO should establish a reporting system for e-government projects and monitor individual projects as appropriate. Using a scorecard approach, the PMO should report at least annually to the Legislature on such accomplishments, including savings; cost avoidance; potential projects or areas for standardization; project status; and improved efficiencies resulting from the office’s efforts.

PMO initiatives should use the West Texas Disaster Recovery and Operations Center (WTDROC) for their data operations. To encourage increased use of this facility, especially among new projects for the TexasOnline Portal, a PMO project manager should act as the state’s primary contact for the WTDROC, working with agencies and the vendor to address agency questions and concerns, and remove obstacles that prevent agencies from moving their operations to the data center.

B. The PMO’s initial projects should include the following, some of which are recommended elsewhere in this report:

The implementation of Texas Government to Business (TxG2B) electronic procurement system, which will provide centralized purchasing options that reduce costs for goods and services, and allow agencies and universities electronic options to streamline their purchasing processes.

Streamline reporting for local governments by standardizing reporting requirements and improving access to state-requested data.

Streamline doing business with the state.

The TexasOnline portal. A PMO project manager should continue to work with the current Electronic Government Task force or its successor and any other advisory committees on electronic government. The PMO should evaluate which e-government projects under development should be part of the TexasOnline portal.

The PMO also should coordinate a number of projects that have implications for the TexasOnline portal, including:

• The Health and Human Services Portal, which would include eligibility criteria, interactive Web sites, and e-mail addresses with a contact person at every state and local service provider, and online applications for up to 50 programs at the Texas Department of Human Services.

• Online licensing, a project to provide online occupational and professional licensing from 22 state agencies.

• The Environmental and Natural Resources Web Portal, a portal on the Internet linking the state’s environmental and natural resource information and regulatory requirements so that consumers can access those services through one “virtual storefront”.

• Electronic reporting, including a state clearinghouse of information and technical assistance regarding the filing and acceptance of reports to state agencies through electronic means.

• Electronic grants, a project to establish a statewide interactive grants management system to increase the state’s access to and allocation of federal and state funding.

For future biennia, the PMO should use the following process for selecting projects:

• The PMO should review agency IR strategic plans and amended BOPs and report to the Legislature the projects it has selected to facilitate in DIR’s Biennial Report on Information Resources Management on November 1 of every even-numbered year.

• The PMO, with the LBB, also should review the agency BOPs submitted after each appropriations bill becomes law and report to the Legislature on the projects it will work with and projects that may not be in line with the state’s strategic vision so that the BOP can be modified accordingly.

The PMO should work with the State Auditor’s Office, LBB, and the Governor’s office to determine a costing model for funding the PMO from the projects selected, including staffing for the PMO. The PMO should report on its products/deliverables during each biennium to establish its effectiveness and cost benefits.

C. State law should be amended to stipulate that PMO projects will be funded by participating agencies.

Agency budgets for IT projects managed by the PMO should be transferred to the PMO. These funds then would be distributed to the agency(s) on a cost-reimbursement basis.

The PMO, with LBB, Governor’s office and Comptroller’s office, of Budget and Planning should establish procedures for approving and reimbursing funds for those agency projects managed by the PMO. The procedures should include a review of the project and an assessment of whether it is meeting its objectives; compliance with standards established by DIR; and overall project progress.

D. State law should be amended to give the PMO the authority to cancel projects that fail to meet expectations.

The PMO should be authorized, upon consultation with the Governor’s Office of Budget and Planning and the LBB, to rescind project funding for ineffective IT projects in a manner similar to that available to the Quality Assurance Team. The PMO should work with the Governor’s Office of Budget and Planning and the LBB to determine criteria for stopping projects; procedures for negotiating with affected agencies if a project is stopped, and for reinstating it; and what should be done with funding that is rescinded for a project. The PMO should provide quality assurance activities for all projects under the office’s management and also monitor compliance with DIR standards on these projects.

E. State law should be amended to create a legislative advisory or oversight committee to oversee and review the implementation of e-government in Texas through the PMO.

The legislative advisory committee should be composed of six members: three representatives, including the chairs of the House Committee on Appropriations and State Affairs Committee and one member appointed by the Speaker of the House; and three senators, including the chairs of the Senate Finance and Senate Economic Development Committees and one member appointed by the Lieutenant Governor. The committee could employ staff as necessary for the performance of its duties, or request and use staff provided by the Texas Legislative Council or the Legislative Budget Board. State agencies should cooperate with and assist the committee at its request.

The committee should oversee and review electronic government implementation by state agencies, including policies related to fiscal matters and evaluations of the efforts of agencies and the PMO. The committee should make recommendations to the Legislature and DIR’s governing board concerning desirable changes in legislative technology policy. DIR’s governing board should consider any comments of the legislative advisory committee, especially before adopting rules. The committee should have the authority to appoint other advisory committees, as necessary, composed of experts in technology and implementation of technology in state government, to make recommendations on electronic government. The committee should have authority to hold public hearings as necessary.

The legislative advisory committee should review the list of projects the PMO will oversee each biennium, review the budget for the PMO, and be involved in developing reporting criteria for the PMO to use in reporting on the effectiveness and cost-effectiveness of the PMO and its implementation of electronic government. These reports should be made to the Legislature at least annually.

Every two years, the committee should study best practices in information technology and electronic government and report on how those practices can be implemented in Texas.

F. The Department of Information Resources should establish a steering committee to provide ongoing direction in the PMO’s operation.

The steering committee should include representatives of the private sector, state agencies, local government, institutions of higher education, the Comptroller’s office and the Governor’s office. Although institutions of higher education are not under the purview of the PMO, their participation would be valuable for establishing standards and identifying examples of best practices.

This committee should assist the PMO in establishing its procedures and reporting requirements, provide perspective about the PMO’s ongoing work, overall guidance and direction for implementing electronic government, project priorities, and recommendations for the evolution of electronic government in Texas.

G. The PMO should manage enterprise resource planning (ERP) for the state.

The PMO should coordinate with the Health and Human Services Commission (HHSC) and the Comptroller’s office to establish a standardized approach for ERP implementation that builds on the model being developed by HHSC. Any state agency that chooses to implement new or modify existing ERP systems should do so under guidelines and standards developed by the PMO.

H. State law should be amended to require agencies to apply for a waiver from the PMO if they choose not to use the TexasOnline portal for a Web application.

The PMO should promote full use of the TexasOnline portal by state agencies and local government partners, and should give agency waivers only if they have a valid business case for not participating and can demonstrate that a separate Web site would be equivalent to or better than the portal in terms of security, disaster recovery, privacy, and development and maintenance costs, and service.

Fiscal Impact

PMO funding below reflects the amount needed to ensure that the office can be established and begin coordinating with state agencies and overseeing project implementation and contracts for outsourced technology activities. Funding for other projects and their associated costs, such as vendor contracts for the electronic procurement project or the development of online licensing applications, is noted in issues elsewhere in this report, and not included in this estimate. The PMO would require program management consulting services to start functioning as quickly as possible. These services could include the development of project/program management standards; a standardized reporting system for agency projects and related processes, quality assurance processes; and other ongoing assistance for which the PMO may not be staffed.

To ensure that the PMO provides efficient service, its funding should come from the savings it creates. After the 2002-2003 biennium, its funding should come from a percentage of each project budget. The percentage would not be the same for every project and should be derived based on the estimated level of effort required for the project.

As recommended above, the PMO should work with the State Auditor’s Office, the Governor’s office and the LBB to develop a costing model to fund the PMO. For fiscal 2004 through 2006, the cost to participating agencies (see table) would consist of PMO charges to agencies for projects overseen and only covers anticipated staffing needs.

If additional funding is needed, the PMO should recommend its funding needs to the 2003 Legislature.

Savings are likely from building a single data system for all agency ERP applications through WTDROC, and from lower ERP implementation costs for agencies that use the statewide system, but the amount of savings cannot be estimated.

Since the legislative advisory committee would have the option to hire staff or use staff from the Texas Legislative Council or the Legislative Budget Board, the fiscal impact cannot be estimated.

This estimate assumes that funds for projects will be used in the current biennium. However, if projects have multi-year implementations, the Legislature may want to grant authority to move unexpended balances forward.

Endnotes

[1] US Department of Commerce, Digital Economy 2000 (Washington, DC, June 2000), pp. v-vi.

[2 ] Telecommunications and Information Policy Institute, E-Government Services and Computer and Internet Use in Texas (Austin, Texas, June 2000), p. 1.

[3] Deloitte Research, At the Dawn of e-Government: The Citizen as Customer (New York, New York), pp. 7-8.

[4] Ira Sager, “Inside IBM: Internet Business Machines,” Business Week e.Biz (December 13, 1999),

p. 22.

[5] Jill Rosen, “Attention Shoppers: E-Mall Expanding,” Civic.com (March 20, 2000) (http://www.civic.com/civic/articles/2000/0320/web-1emall-03-20-00.asp). (Internet document.)

[6] Presentation by Michael Richardson, vice president of OEM and Field Technology with InterWorld, at the Central Texas E-Commerce Conference, Austin, Texas, September 27, 1999.

[7] (http://www.PaOpen4Business.state.pa.us). (Internet document.)

[8] Office of the Governor, Commonwealth of Pennsylvania, “Governor Ridge: State Business Website Adds New Features,” Harrisburg, Pennsylvania, March 3, 2000. (Press release.)

[9 ] Texas Department of Information Resources, Year 2000 Consolidated Statewide Status Report (Austin, Texas, May 31, 2000), p. 16.

[10 ] V.T.C.A., Government Code §2177.002 (d).

[11 ] Texas Legislative Budget Board, Fiscal Size-up 2000-01 (Austin, Texas, January 2000), p. 85.

[12] Health and Human Services Commission, Biennial Operating Plan (Austin, Texas, August 11, 2000), Enterprise Administrative System Implementation Section, pp. 1, 7.

[13] Florida State Technology Office, State Technology Office Overview (Tallahassee, Florida, October 10, 2000), and Information Technology Agreement (Tallahassee, Florida, October 19, 2000).

[14] Kentucky Governor’s Office for Technology, “Office of the Chief Information Officer” Lexington, Kentucky, January 25, 2000 (www.state.ky.us/got/organization/cio.htm). (Internet document.); and presentation by Aldona K. Valicenti, chief information officer, Commonwealth of Kentucky, at the Renaissance E-Government Conference, May 18, 2000 (http://www.empower.state.ky.us/presentations/ren_e-gov/Rennaissance%20E-Government/sld009.htm). (Internet document.)

[15 ] North Carolina Office of the Governor, “NC @ your service Project Office Overview” (http://www.ncgov.com/projectoffice/overview.html). (Internet document.)

[16 ] Michigan Office of the Governor, “Governor Signs Executive Order Creating “e-Michigan” Office,” Lansing, Michigan, April 6, 2000. (Press release.)

[17 ] Pennsylvania Office for Information Technology, “The Office for Information Technology” (http://www.oit.state.pa.us/oit/cwp/view.asp?Q=15040). (Internet document.)

[18] Pennsylvania Office for Information Technology, “Governor Ridge Announces PA PowerPort Goes Live,” and “Governor Ridge’s Proposed First-in-Nation ‘PA PowerPort’ Highlights 2000-01 Technology Budget,” Harrisburg, Pennsylvania, October 12, 2000 and February 8, 2000. (Press releases.)

[19 ] Utah Office of the Governor, “General Information about the CIO’s Office” (http://www.cio.state.ut.us/399/cio_info2.htm). (Internet document.)

[20] Office of the Governor, Commonwealth of Virginia, Executive Order 65(00), May 24, 2000.

[21] Washington State Department of Information Services, Digital Government; Transforming the Relationship between Washington Citizens and Their Government, (Olympia, Washington, February 2000).

[22] V.T.C.A., Government Code §2054.001 (b).

[23 ] Memorandum from Regina Rousseau, program manager, Department of Information Resources, October 3, 2000.

e-Texas is an initiative of Carole Keeton Rylander, Texas Comptroller of Public Accounts
Post Office Box 13528, Capitol Station
Austin, Texas

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