Gov. Tim Walz is living every CEO’s nightmare.
The new governor described last week how the prospect of a state government technology collapse costs him sleep, one notable quote in an article about the daunting challenge of managing the state government’s underfunded and aging information technology.
It’s tempting to think that if our state were only run more like a business this wouldn’t be a problem, but that’s just nonsense. I’m certain that information technology worries routinely occupy the late-night thoughts of executives at Minnesota corporations.
Every constraint and challenge the state faces is present throughout Minnesota’s business community — including not ever having quite enough money dedicated to technology to feel completely caught up.
The state of Minnesota’s government could be thought of as a $42 billion holding company, bigger than 3M Co. but not as big as Target Corp. in annual revenue. And it’s been in business longer.
The governor lamented that there’s no real constituency championing more IT investments, at least until something goes wrong. But that’s hardly a problem unique to state governments.
A corporation’s information technology generally doesn’t earn revenue from customers, so it’s often viewed as just a cost. Business-unit managers can be vocal and demanding customers of their internal information technology departments, right up until the annual budgeting process when it becomes clear there won’t be enough capital or expense money to go around.
That’s when the formerly demanding customers of IT propose chopping its budget.
Still relying on old computer systems on their last legs? That’s a problem in business, too, particularly for companies that have been around for decades. “You’d be surprised how many green screens there still are” in use in corporate operations, explained St. Paul technology consultant Allen Debes, referring to the green text on black screens that once dominated business “data processing” before graphical user interfaces took off many years ago.
Within state government the licensing system known as MNLARS has been long in coming, expensive and a mess when finally rolled out. At the Capitol, a report from the legislative auditor is expected soon, although it may identify so many issues that those who hope to put the blame on one person or agency may be disappointed.
Similar drivers’ and vehicle licensing system upgrades have almost slid into the ditch in other states. But these are minor compared with some of the disasters that have hit big companies.
One well-known example comes from Avon Products, which first rolled out a new ordering system in Canada it had worked on for years. Avon soon learned that reps found it so hard to use that many just quit. Avon had to write off more than $100 million when it finally killed the project at the end of 2013.
The list of stomach-churning data breaches in the recent past is dominated by some of the biggest Blue Chippers in corporate America.
The state government also has an information technology agency, called MNIT, but with a very decentralized structure of departments, agencies and other units with their own systems. The Minnesota Management and Budget agency lists 103 separate units from A to Z, starting at the board of accountancy and ending with the Minnesota Zoo.
A legislator pointed out last week that managers at some of these agencies don’t cooperate with the technology agency.
Big companies are also decentralized with lots of different business units, profit centers and the like, making one tech system difficult to implement. Not long ago Cargill tried with something called project Tartan, and when the plug was finally pulled in 2015, the after-tax write-off was about $170 million.
A terrific window into the kind of hardheaded CEO it takes to get all parts of an organization on one technology platform came from a Google memo that was accidentally posted to a public website some years ago. The writer, senior Google engineer Steve Yegge, showed us a little of what it was like inside Amazon.com, where he had previously worked.
Yegge didn’t miss working at Amazon one bit, describing founder and CEO Jeff Bezos as “Dread Pirate Bezos” who “makes ordinary control freaks look like stoned hippies.”
But one of the handful of advantages Amazon had over Google seemed to make a big difference, and it came straight from Bezos. Every technology team at Amazon had to use what’s called a service interface, opening up data and the functions of every system to other parts of Amazon and even to third parties. No other linking, data sharing or communication would be tolerated.
This created one technology platform for Amazon instead of pieces that didn’t always work that well together. That’s likely one reason for its explosive growth, but what Bezos demanded here is less important than how he got it.
As Yegge remembered the Bezos edict, item six was, “Anyone who doesn’t do this will be fired.” Item seven from Bezos was, “Thank you, have a nice day!”
“Ha ha!” Yegge continued. “You 150-odd ex-Amazon folks here will of course realize immediately that number 7 was a little joke I threw in … Number 6, however, was quite real, so people went to work.”
The governor needs technology leaders with a little Jeff Bezos in them, but it’s emblematic of the governor’s challenge that he’s still looking for a tech agency commissioner weeks after his team took over. We have to assume that the challenges are so great and the odds of success so low that nobody can get talked into taking the job.
When Target hired its chief information officer in 2015, he received about $10 million in salary, stock-based pay and other compensation.
The governor can offer his CIO about $150,000.