Cesar Brea's Weblog

This week I attended the National Electronic Commerce Coordinating Council meetings in Boise, Idaho.  Here’s  my account.

This week I attended the National Electronic Commerce Coordinating Council meetings in Boise, Idaho.  The theme of the conference was “Government in the Digital Age: Myths, Realities & Promises – A Candid Assessment and Road Map for Success.”

(I went on behalf of the E-Government Executive Education (3E) Project at Harvard’s JFK School of Government (KSG), where I am working with Professor Jerry Mechling to develop a new online application called the Compass.  The Compass, built on .LRN with the support of IBM, includes assessment, benchmarking, and library tools which will support both the 3E Project’s executive education programs, and perhaps later other KSG and other programs.  We showed an early version of the Compass to 25 execs gracious enough to give us their time, and their response and feedback were both encouraging and useful.

The first “production” use of the Compass prototype will be for a 3E program we’ll be running in December called “Leadership in a Networked World: The 2005 Leadership Agenda”.  The purpose of the program is to help senior public sector executives and their advisors evaluate and set priorities among IT-enabled initiatives, not only in light of their potential value, but of the political calculus associated with them as well.  After choosing a few to focus on, the program then considers how best to pursue these priorities given their associated political considerations.)

Conferences can be a mixed bag.  This was a good one.  The participants included current and former state comptrollers, auditors, and CIOs.  Vendors were represented by very experienced folks who had themselves been in the roles of the government participants and were well-known and respected.  So in addition to a very collegial feeling there was little of the awkwardness and stiff hype that’s typical of other vendor-customer interactions.

I’d never been to Idaho before.  Boise is a nice town, with some attractive architecture (state capitol, churches) and some incredible views.  There’s a really good, inexpensive Basque restaurant called Bar Gernika across the street from the Grove Hotel where Jerry and I had lunch (lamb-dip sandwich: good) and Dan Combs and I had dinner (lamb stew: great).  Apparently you can fish in the river that runs through town, though I didn’t get to try that.  And of course it took me a bit to adjust to saying “how-do” to passersby, and to wait to cross until the light said I could.

Here’s some of what I heard and learned (not necessarily a faithful transcription of what people said, presented, or intended).

Wednesday morning’s plenary session was keynoted by Peter Harkness, the editor and publisher of Governing magazine. His theme: the e-government revolution hasn’t really happened yet.  My notes:

• E-government hasn’t affected costs yet.

• From 1994 to 2003, the number of federal employees has shrunk from 2.2 million to 1.95 million, but this masks outsourcing to consultants

• Over the same period, total employment by states grew from 4.6 million to 5 million, and local public sector employment grew from 11.7 to 13.8 million

• (I checked: US population grew 16%, or from 240M to 280M from 1990 to 2000.  Per capita, we still have roughly the same number of government employees we used to.)

• So e-gov has not reduced costs, even though “online v inline” is progress…

• The revolution requires integration

• Technology isn’t the obstacle

• Organizational balkanization is the real problem

• The exception that proves the rule is the military

• We’ve seen the power of network-centric warfare

• The real enabler is the elimination of inter-service rivalry in the conduct of warfare

• Balkanization exists in many places in government

• Among local, state, and federal, but also within agencies and branches of government at each level

• Politics impede integration

• Here’s an example of how it’s made worse:

• Sophisticated parties + redistricting = primaries, not general elections are the actual places that public officials get selected with no enduring commitment to a moderate middle; add term limits to the mix and there’s little time to do the relationship building and horse-trading based on trust that allows room to get things done.

• Here’s another example of how the “Politics of Policy” are dividing feds from states and locals:

• FDA doesn’t want to allow importation of prescription drugs from lower-cost places like Canada, having been persuaded by the pharmaceutical industry that the practice is unsafe for consumers.  But Montgomery County, MD, where the taxpayer pays a prescription drug benefit for 80k retired public workers, says they are.  And in an era where federal non-defense discretionary spending is eclipsed by the size of the annual budget deficit, federal ability to influence local practice with funding is diminishing.  So incentives to cooperate on systems to ensure optimal use of drugs by seniors and other beneficiaries are also reduced.  We also see this adversarial relationship in homeland security efforts
  .
• State AG’s have been suing investment banks, mutual fund companies, pharmaceutical firms, utilities & auto manufacturers, and have found themselves in court fighting not only these organizations but the federal government as well (e.g., California’s attempt to impose fleet mileage requirements in the state)

At lunch later that day, David Lewis, formerly the CIO of Massachusetts, gave me an example of the as-yet-unfulfilled promise of e-government.  David observed that a really useful thing would be for DHS case workers to be able to enter some parameters that describe a particular person’s or family’s needs, and then to have that “filtering” return a list of all of the relevant benefits  available to that situation from across 600 -plus programs offered by over 40 agencies.  He noted that the obstacle to this isn’t really technical, but the need to reconcile the words and languages that agencies use to characterize eligibility and relevant benefits. 

Obviously this is a challenging thing to do.  I offered that maybe one approach would be to complement traditional top-down reconciliation with a grass-roots “social entrepreneurship” approach.  This would entail a motivated 20-something grabbing some free software to build a demo, then getting a small grant to pay some moonlighting case workers and program staff to do an 80-20 cut at translating a significant subset of program eligibility requirements and benefits to some formal or de facto standard.  It might only take three months, six at the outside, to have a reasonably useful tool. 

Later in the afternoon, I attended a very interesting presentation by Glen Teal, who is the Portfolio Manager for Citizen & Customer Services for the Manukau City Council in New Zealand.  Glen was in the US at the invitation of Peoplesoft’s J.D. Williams, formerly the Idaho state comptroller (and a very wise and charming man).  His presentation was a thorough and well-organized story of how they had implemented CRM software to permit the consolidation of service interfaces with citizens across a number of different agencies, which then permitted the selective outsourcing of the fulfillment of these services to private firms under different contracting schemes depending on how well-developed pre-existing markets for these services were. 

Two lessons from his talk: first, never outsource relationship management with constituents; second, don’t try to create markets to outsource to where none previously existed.  So, on the latter point, it makes no sense for the government to do engineering services because the private sector has a healthy market for this that can be relied on.  However, private-sector dog catchers mostly do not exist in nature.  Outsourcing this function inevitably leads to consolidation of an initially fragmented mom-and-pop market by enterprising ex-public sector execs.  Once they achieve duopoly or something close, the government is at their mercy:  pay or it’s “Release the hounds!”.  More politely, Glen called it “market capture”.

The theme of opportunities from consolidation, and the structural barriers to it, wove its way throughout a number of conversations I had.  In the hallway between sessions, David Lewis and I chatted with Brian Ridderbush from Unisys about how Medicaid reimbursement rules encourage states to each develop their own benefit structures, which means perhaps $18 billion in additional expenses for variations in related claims processing systems.  Is the variety worth it?  I think we’re unlikely to find out.  The federal money is now allocated in the form of block grants as part of the overall trend toward devolution.  So the feds can’t prescribe any rationalization.  The feds reimburse the states for 90 cents of every Medicaid dollar they spend, so the greater cost of variety is not a place states focus on to save money.

Dan Combs, who was Iowa’s Director of Digital Government, gave me another example of this at dinner.  He described how in Iowa there were 99 counties.  The seat of each was located, when the state was established, at a distance of a day’s ride from the next.  Horses typically traveled about 30 miles a day in 1850, so Iowa has lots of charming but subscale local governments in the era of the automobile.  Does Iowa, with a population of 3M, really need 99 county governments?  Maybe not, there’s some advantages and a lot of tradition in their favor.  I guess it depends on what Iowans feel they can afford.

I talked with a couple of legislative auditors about how the part-time nature of many state legislatures affects the continuity and will they need to initiate and sustain major change that consolidation requires.  They noted that the pool tends to be limited to people who don’t typically have a lot of inclination or experience with the management of large organizations.  Frequently, legislators are attorneys whose firms can cover for their absence while they serve in ways that also indirectly advance their firms’ interests.  Or, they are wealthy ranchers who can spare three months while the snow covers their fields.  This means part of the challenge for the bureaucrats is to try to educate legislators on what’s going on and how to deal with it effectively.  But as one put it to me, “It’s sort of like trying to teach a pig to sing:  it’s not very effective and it annoys the pig.”

So what’s a government to do in the face of all these limitations?

One move is to de-emphasize new technology as the panacea.  Pam Ahrens is CIO of Idaho.  Idaho has been creative and ahead of the curve on e-government issues, but Pam noted that these days especially it’s people and not technology that’s on the critical path to change.  So Idaho is de-emphasizing R&D for S&C – search and copy – while they focus in on people issues.  After all, she notes, “Pioneers get killed, settlers get rich.”  I had the strong sense as a visitor from Back East that I ought to take her word on this.

Another approach is to “zero-base” government.  California seems to be pursuing this more radical approach.  Governor Arnold is quoted as saying in the course of commissioning the California Performance Review, “I don’t want to reorganize the boxes, I want to blow them up.”  Echoing this theme is the approach Michael Bloomberg is taking in New York.  Accenture’s Ken Dircks, who is a leader in the firm’s 311 engagement with New York City, told me Thursday night about Hizzoner’s takeover of the New York City Board of Education.  On hearing an explanation of why change would be tough to implement through a multi-tiered bureaucracy, the mayor simply ordered the physical buildings of an entire layer of the bureaucracy padlocked, effectively cutting “management” in this layer out of the process and forcing a higher layer to deal directly with schools.

Well now.  But part of me feels it’s insufficient.  Colin Powell’s “Pottery Barn” rule likely applies here as well — “You break it, you own it.”  So part of owning it is showing the way ahead.  And a general principle I believe in is that people are better at reacting than acting.  Show them something real they can try out and use and you’ll have more impact than if you describe it to them in principle.

Maybe open-source software can help make this experimentation more feasible and affordable.  Friday morning I attended a session on open-source in government.  The format was a debate between Daniel Greenwood from MIT’s Ecommerce Architecture Program and Stuart McKee, former Washington State CIO and now a government-sector “evangelist” at Microsoft (“advocate for Microsoft to the public sector and vice versa”).  Is open source ready for government, and vice versa?  I won’t summarize the discussion, except to say of course that it depends on the specific need and the specific open-source project under consideration.  But I did find a few recent, interesting articles on Microsoft and open-source in government.  Reading them I’m reminded of Gandhi: “First they ignore you, then they fight you, then you win”.

• “Microsoft is expanding a program to give government organizations access to some of its tightly guarded software blueprints amid growing competition from rivals who make such source code freely available…” Wired 9/19/04 

• “Microsoft chief executive Steve Ballmer told resellers at the European Partner conference that anyone in danger of losing business to Star Office should email him and he would send in the cavalry…” The Register10/6/04

The next NECCC annual meeting is in Boston next November.