Oklahoma is consolidating the technology departments in 129 state agencies, and in the process officials have uncovered numerous inefficiencies that were wasting taxpayer money.
Oklahoma state agencies currently pay $4.3 million a year to access the Internet through private fiber-optic cables, owned by companies such as Cox and AT&T, said Alex Pettit, the state's chief information officer, who is overseeing the consolidation.
Meanwhile, Pettit said the state owns 940 miles of its own, underused,
“We're paying everyone else for their own networks. That's just nuts. That's just flat nuts,” Pettit said. “Just optimizing what's in the ground right now could save the state $23 million over five years. That's the thing I find so frustrating.”
Pettit is on the front lines of efficiency for the state.
Two years into a plan approved by lawmakers to remove in-house technology departments from almost every state agency and put them under a statewide office, the state already has realized $40 million in savings and cut about 128 information technology positions through attrition.
Rep. Jason Murphey, R-Guthrie, said this is the best example of a process consolidation that needed to happen.
“There were obviously hundreds too many IT employees, and that's where the cost was,” Murphey said. “Much less what could be achieved through consolidation of data services, virtualization of server space, email server consolidation and then just digital hardware.”
With the technology consolidation successfully under way, Murphey said lawmakers are looking at other process consolidations that need to happen. Every state agency has financial service departments to handle accounts payable, accounts receivable and purchasing. Murphey said it might make sense to consolidate those functions to an overall state agency.
Compared to states with similar populations and economies, Murphey said Oklahoma spends far more per invoice for accounts payable. Oklahoma spends about $20 per invoice while peer states spend about $4 per invoice, according to the State of Oklahoma Finance Benchmark Presentation.
He said other processes that are ripe for consolidation are payroll and human resources departments.
Pettit said the challenge is finding the up-front funding required to achieve these consolidations.
It costs about $7 million a year to remove technology departments from state agencies and place them under the purview of Pettit's office. At the current pace, it will take nine years to complete the process.
Pettit said the technology consolidation is self funded, with the money coming from reduction in staff and other savings.
Meanwhile, state agencies are saving money as they lose their IT departments, money that can be redirected to the core service of the agency.
It would take an additional $10 million a year to accelerate the technology consolidation and have state agencies realizing savings earlier.