In the Commonwealth of Pennsylvania, the Governors Office of Administration (OA) serves 12.5 million citizens by supporting more than 80,000 employees across 40+ state agencies, boards and commissions. OA includes the Office for Information Technology (OA/OIT) which coordinates an annual portfolio in excess of $1 billion in IT services for commonwealth government. 

From processing drivers licenses, conducting elections, testing water samples and providing insurance to low-income children to making sure that up-to-the-moment criminal histories are available to law enforcement officers in their cars at the touch of a button, OA/OITs efforts are a strongyet often invisiblethread through the government services delivered to Pennsylvanias citizens.

The shared services initiativean immense and innovative OA/OIT projectidentifies IT tasks, systems and operations required by every state agency to function on a day-to-day basis. Examples include mainframe administration, server support, email and web platforms as well as transactional processes such as finance, budget, procurement, supplier relationship, plant maintenance, payroll, travel and more. 

The goals for the initiative include but are not limited to: 

- reducing the overall cost of administering government services so that scarce resources can be channeled toward direct citizen services and away from overhead;

- increasing flexibility across all agencies by better identifying slack capacity and allowing for balancing processing loads within a common framework; and

- more directly connecting citizens to government services.

As a crucial part of the initiative, the commonwealth consolidated 17 agency data centers into a single Data PowerHouse and outsourced management of this state-of-the-art center to Unisys. The reliable and cost-effective facility provides agencies with highly secure, 24/7/365 operational support for mission-critical mainframe, mid-range and open systems computing.

Additional parts of the shared services initiative include:

- Email: In 1999 the commonwealth migrated 47 individual e-mail systems to a single statewide Exchange messaging environment. The result: one of the largest state-hosted Microsoft Exchange systems in North America, which provides secure, consistent, reliable and centrally administered services to 90,000 accounts. The system was recently upgraded to Exchange 2007 to allow for increased storage, the ability to send larger e-mails, improved server performance and more.

- Enterprise Resource Planning (ERP): Implemented in 2002, the SAP ERP system efficiently and securely supports more than 53 state agencies. It processes millions of finance, budget, procurement, supplier relationship, plant maintenance, payroll, travel, human resource and employee self service transactions monthly. 

- Web Platform: A significant strategic priority by 2010 is phasing-out an antiquated technology and converting commonwealth agencies web presences to a powerful new portal platform. OA/OIT is committed to ensuring that citizens are just a click or two away from key government services and that similar services are grouped together in multi-agency web presences for citizen ease.

- ESF: The "enterprise server farm" was established with one application and two servers. Today it supports more than 47 agencies, houses nearly 1,800 servers in support of 650+ applications. It is the standard bearer for secure and highly reliable web hosting. The ESF is currently being upgraded to incorporate significant virtualization to increase efficiency and capacity.

Pennsylvanias citizens hold their government to a high standard. They expect a significant return on their investment, which includes FY 2008-2009 state operating budget of about $28 billion. By putting funds in budgetary reserve and undertaking several cost-saving initiativesthis shared services initiative among themstate agencies are spending 1.5 percent less today than in 2002-2003. Had administrative expenses increased at the rate of inflation, taxpayers would have paid $293 million more to operate their state government this year.

The shared services initiative's fundamental premise is that careful transitions from legacy systems to properly structured and broadly applied new technology can capture synergies, save money, increase efficiencies and free-up resources that state agencies can redeploy toward direct citizen services.

The initiative has evaluated, integrated, deployed and adapted a wide range of technological solutions to:

- consolidate 17 individual state agency data centers into a single Data PowerHouse,
- consolidate 40+ individual e-mail systems into a single statewide Exchange messaging environment, 
- consolidate individual legacy transactional processing systems into a single ERP system,
- transition from an antiquated web content management system to an updatable, scalable industry-standard web portal platform, and
- expand shared infrastructure across state agencies via an enterprise server farm and additional network infrastructure. 

This initiative is so comprehensive that it is difficult to succinctly list every hardware and software component that provides its technological foundation. A noteworthy part of the initiatives success, however, has been making strategic determinations about which parts of the project should be staffed internally and which should be outsourced. Decision factors included but werent limited to the nature of the technologies used, the array of skill-sets needed on full-time and intermittent basis, the necessity of 24/7/365 support, the expected pace of technological evolution and more.

In terms of the Data PowerHouse, it was determined that outsourcing to a single, proven technology and services provider would streamline the project and speed time-to-value. Through a competitive bid process, OA/OIT chose Unisys to help it create a hyper-efficient IT environment by consolidating stand-alone data centers, integrating agency processing on shared infrastructure and dramatically expanding virtualization. 

The original 1999 effort positioned Pennsylvania as an early leader in changing the thinking about state government IT services. At the time, the idea that cabinet-level agencies with dramatically different missions could successfully share computing resources was somewhat revolutionary.

The initial PowerHouse deployment yielded significant cost savings and improved services for the citizens of Pennsylvania. More importantly, however, it proved that technology can serve as the catalyst for ongoing improvements in citizen service, public safety and innovation in state government. 

For example, by bringing multiple agencies together under one roof, critical citizen services are now safeguarded. As part of the projects evolution and a 2008 contract extension, an important service provided by Unisys is rapid disaster recovery, which was not widely available to state agencies before 2000. In an event that might cripple the Data PowerHouse, hosted agencies have an array of disaster recover options to choose from, including an offering that allows them to resume data-processing from back-up sites located safely away from the main facility. Agencies simply didnt have these sorts of disaster recovery options until their separate data centers were moved into the PowerHouse. Few could afford it; few had the manpower to deliver it. 

Recent economic conditions have stressed many states public benefits systems to the breaking point. Dramatically and quickly increasing applications for unemployment compensation, for example, coupled with statutory changes in the program have led to widely publicized horror stories about long waits, lost data and other challenges for vulnerable Americans applying for this crucial assistance.  In Pennsylvania, however, because the Department of Labor and Industry participates in the Data PowerHouse, OA/OIT was able to bring state agencies together and obtain consensus to allow Labor and Industry to be the first agency to utilize a new Z10 mainframe processor.  The Data PowerHouse structure was also instrumental in allowing Labor and Industry to obtain and use excess processor capacity which enabled the department to continue to support citizens in need of unemployment compensation without interruption.

Yes

Yes

Benefits of the shared services initiative are significant and tangible.

In addition to the citizen-service outcomes illustrated above, the Data PowerHouse, for example, has helped OA/OIT save $317 million over the past three years, with an additional cost savings of $240 million expected over the next five. 

The email system allows the commonwealth to communicate with all employees quickly and easily.  Safety issues and policy changes, for example, can be pushed to all employees statewide at the touch of a button. The contacts and calendaring features allow employees to work across agency lines in ways that were previously so cumbersome as to be prohibitive. And, frankly, the culture change associated with every agency being so connected in a day-to-day way is immeasurable.

As part of the shared services initiative, the commonwealth deployed and subsequently manages one of the most efficient ERP systems in the world. In fact, a 2005 survey of more than 100 organizations revealed that, on average, 1.92 full-time equivalents are necessary to support every 100 ERP users. Pennsylvania provides world-class support at a fraction of that, 0.23:100. Andin contrast to several government entities that deploy ERP for various subdivisions of their businessPennsylvania runs a truly enterprise solution, supporting 49 agencies under the Governors jurisdiction as well as 4 independent organizations. The tempo of Pennsylvanias ERP includes monthly transactions such as:

- Electronic paycheck - 192,000
- Travel expense vouchers - 25,000
- Human resources actions - 206,000
- Financial transactions - 1,300,000
- Budget transactions - 1,666
- Procurement transactions (requisitions, purchases, etc.) - 143,000
- Business reports - 25,000

Monthly Transactions - 1,892,666

A current and vivid example of the benefits associated with sharing IT services statewide is evident in Pennsylvanias ability to respond to the new economic stimulus law.  

The legislation provides more than 60 distinct funding streams and places unprecedented requirements for transparency and accountability on states. This means that states must be able to isolate and account for every federal dollar almost to the point that it is paid, for example, to the concrete vendor who is providing supplies to building a specific bridge in a specific rural county. 

Shared financial systems allow most federal funds to be coded as soon as they hit Pennsylvanias books and then tracked with the same rigor as we track all state spending. By carrying stimulus codes through the procurement cycleagain, an option made straightforward and possible by the shared systemPennsylvania will be able to assure proper investment and comprehensive reporting with regard to these funds.

OA/OIT has made it a top priority to be responsive to the changing needs of commonwealth agencies and the citizens they serve. 

According to Michele Sinko, the Director of Enterprise Services at the Department of Labor and Industry, The Data PowerHouse team was very responsive to the demands of the unemployment compensation workload due to the bad economic situation. They were able to quickly bring agencies together and obtain consensus allowing us to be the first agency to utilize the new mainframe processor. The Data PowerHouse team was also instrumental in allowing Labor and Industry to obtain and use excess capacity needed to process the increase in claims. Quite simply, this work meant that vulnerable Pennsylvanians did not have to wait to receive the cash assistance they desperately needed and were entitled to. 

According to Bob McGrath, who oversees IT policy and planning for Pennsylvania's Department of Education and who joined state government before there was a shared messaging and calendaring system, "Coming from a tech savvy private industry, the state appeared to be a Tower of Babel. Over these past 10 years, agencies have delivered much improved government services to citizens. That would not have been accomplished without all agencies accepting a shared service for our own communications, thereby making us all far more efficient and productive. From an IT managers standpoint the Exchange system made all of us look good to our clients in government and to the outside world." 

According to Rhonda Greenstreet, Chief of Pennsylvanias Human Resource Development Division, The unified messaging and scheduling platformthat we refer to as CWOPA for short-handhas changed how we approach the tools available to us as we deliver training to PAs 80,000+ employees. Integration with the commonwealths e-learning platform has allowed for customization, registration, enrollment and tracking options that we couldnt have even imagined 5 years ago.

According to Robert Eismann, Deputy Director of Communications for Governor Edward G. Rendell, Building PA.govthe commonwealths new web presencewas a giant leap forward for Pennsylvania.  The old platform lacked flexibility. Citizens had to have a detailed knowledge of the inner workings of state government in order to find what they were looking for. The new sites technology and architecture allows citizens to use intuition to find what they need. Multiple agencies information appears in a single location and is heavily cross linked and supported behind-the-scenes by portlets and other technological features.

According to Mike Shevlin, CIO for the Pennsylvania State Police, "While we have used the enterprise server farm for a few years, we have recently increased our presence there and I intend to continue to do so. The facility is extremely well-run and the staff has provided us with excellent solutions that meet (or exceed) our standards for reliability and security, which are critical to the State Police. The ESF has supported important public-facing applications like our Megan's Law public website, and brought up Public WebCAD, the site that provides information from our Consolidated Dispatch Center, in very short order for us. In three upcoming implementations  one that allows law enforcement agencies to pre-register evidence for our forensic laboratories, a second that brings a web-based protection from abuse system into the State Police, and a third, our integrated personnel system  the ESF staff saved us over $40,000 through server virtualization. The Pennsylvania State Police strive daily to help citizens and technology allows us to increase the speed, accuracy and availability of the data necessary for that mission. The ESF staff is doing an outstanding job of supporting us in our efforts."

Pennsylvania state government has been decentralized since the founding fathers drafted the Declaration of Independence more than two centuries ago.  In terms of technology, recent decades have seen the growth of redundant levels of operation and service delivery in almost every state agency. The shared services initiative aggressively challenges the status quo and is fundamentally changing government operations in Pennsylvania.  

And its working.  

If that werent enough, many aspects of the initiative are impressive in their own right:

- The Commonwealth of Pennsylvania was one of the first state governments to envision and outsource a project of the Data PowerHouses magnitude. 

- The Commonwealth of Pennsylvania was one of the first states to fully-integrate business processes in an SAP ERP system across all state agencies. 

- The Commonwealth of Pennsylvania upgraded to Microsoft Exchange 2007 including a new centralized infrastructure and migration of 90,000 mailboxes for 47 agencies to the new platform: Microsoft said it was the largest such upgrade in North America in 2008. 

Individually, the Data PowerHouse, email, ERP, web and enterprise server farm projects have yielded impressive results for the commonwealthbut as a single shared services initiative, these efforts have consolidated standalone IT operations, established efficient computing facilities, developed enterprise-wide architecture and fostered collaboration among state agencies. With opportunities for additional evolution in the shared services initiative in terms of virtualization, telecommunications platforms, and web-based citizen servicessuch as tax administration and emergency alertingit is poised to reap even greater savings and help deliver even more convenient services for Pennsylvania citizens.

Significant obstacles included, but were not limited to: agency perception, security, incongruent technologies, and the paradox of funding silos.

In terms of perceptionseven greater than the typical funding and staffing turf issues that might be expectedmany agency leaders truly believed that the technological aspects of their organizations simply could not be physically separated from their specific business expertise.  For example, it took considerable effort to help agencies feel comfortable with the notion that, in terms of process, cutting a check to and accounting for payments to a health care provider is substantively parallel to cutting a check to and accounting for payments to a paper clip vendor.  

With regard to security, in addition to protecting data from typical external threats, there were fears that data integrity could be compromised from within in the shared infrastructure.   The U.S. Internal Revenue Service and the PA Department of Revenue, for example, had to be assured that the initiative would not compromise information previously housed in free-standing systems. Particular effort was invested in upfront planning for and communicating about risk mitigation and limiting exposure.

Integrating the many separate systemsbuilt, maintained and upgraded over time by diverse agencieswas not easy. Transitioning incongruent hardware and software into a single platform required patience, ingenuity, prioritization, coordination, redundant capacity and many other components that had to be systematically coordinated across agencies. 

And funding proved to be an interesting challengebut not necessarily only in ways anticipated at the beginning of the project.  When each agency supported all of their own IT efforts, IT expenditures and contracts were widely distributed.  Thus, most expenditures were relatively invisible. By way of example, imagine that 20 agencies each paid $25,000 for a specific IT service or component. Even though the total is $5 million, chances are that a series of $25,000 expenditures across different agencies, probably at different times, might well be viewed as routine in the day-to-day purchasing volume of state government. And, frankly, prior to the ERP system, there were myriad ways such purchases could be appropriately coded. 

In a shared services environment, OA/OIT might be able to procure the same services for $4 million. The paradox is that funding silos appear cheaper because it is nearly impossible to forensically trace back similar expenditures to show the $1 million savings. Thus it is easy to perceive that IT expenses actually grew by an eye-popping $4 million.

(See above comments about the obstacles encountered.)

Exceeded

The success of IT shared services initiative has set the stage for similar projects across various other parts of the Pennsylvania state government and has compelled OA/OIT to explore additional opportunities as well seek ways to extend benefits to other units of government in the commonwealth. 

Pennsylvanias human resources leaders, for example, are planning to launch a shared services center to consolidate human resource transactions across all state agencies.  Human resource professionals are using the same model to identify HR tasks, systems and operations required by every state agency to function on a day-to-day basis.  They are building upon lessons learned from the IT shared services initiative as they approach their work with agency leaders as well as develop policies, processes and communications with stakeholders.

OA/OIT is developing another shared service initiative in the telecommunications area. Key components include transitioning to a more centralized services model, reducing the number of stand-alone agreements among agencies, and competitively bidding services by February 2011. Centralizing telecommunications services will help control costs and eliminate redundancies. Pennsylvania will be able to improve the quality of voice, data and security services and deploy more sophisticated technologies than it can today, including Voice over Internet Protocol (VoIP). OA/OIT is also working to extend benefits from the commonwealths telecommunications shared services to other public agencies such as local municipalities and school districts.

While the concept of shared services may have been difficult in the beginning, once deployment began adoption was swift. Not that the process was without glitches and pain points but, by and large, agencies worst fears never materialized. It didnt take long for the day-to-day reality of reliable services without the day-to-day managerial headaches to win even skeptical users over. In several instancessuch as cutting agencies over to the shared e-mail system, for exampleadoption wasnt really an option. Even in those instances, however, the vast majority of users appreciated the improvements these technologies provided in their daily work lives.