Brooks Patterson and Phil Bertolini of Oakland County Michigan -- the County Executive and Deputy County Executive -- have a piece below that explores what appears to be an all-too-rare form of cross-jurisdictional cooperation.

To repeat their question: what do you think? 

Shared System Investments: How Can We Capture the Benefits?

L. Brooks Patterson – County Executive, Oakland County, Michigan

Phil Bertolini – Deputy County Executive/CIO, Oakland County, Michigan

With revenues declining, when and why should government buy technology?  In tough times, many choose to “hold the line” or “retreat” from technology.  Others see opportunities to leverage technology today in order to save for the future. Who is right?

Oakland County Michigan thinks that this choice -- difficult as it is -- boils down to the business case: if the project makes business sense, it should be done.  The returns must of course be greater than the costs. But if the returns come largely in the future, and the costs come largely today, ways should be found to spread the costs out to better match the benefits. Once justified by a disciplined R.O.I. analysis, we use leasing and capital funding to get over the false barriers that arise when everything must be paid from the annual expense budget.

Perhaps an even bigger and often overlooked problem arises when the barriers preventing good investments are not those between this year and the future, but rather between one jurisdiction and its potential partners. Many technology systems bring large economies of scale: if used by more people, the cost per user goes down, improving the overall R.O.I. Using this principle, Oakland has found ways over the years to capture substantial benefits of scale by encouraging other jurisdictions -- especially the cities, villages, and townships within the County -- to join with us on these projects

As an example, consider our decision this year to invest $6.5 million in a Collaborative Asset Management System (CAMS), to collect and share information on the status and maintenance of roads, bridges, drainage and sewer systems, and water distribution within the county.

The CAMS project is not only larger and therefore less expensive per transaction in collecting the required information, it is creating an environment where the Oakland County Drain Commissioner and local government Departments of Public Works will transparently have access to the information required to “predict” maintenance instead of simply “react” to servicing problems.  This will create huge benefits for citizens in the County. For example, our past history shows that water main breaks and road collapses are enormously expensive, and predicted to cost as much as $20 to $30 million dollars to repair. However, once the guardians of this infrastructure can readily see the age, condition and configuration of these assets, they can fix problems preventively rather than as emergency repairs, saving millions. Oakland's analysis demonstrates the CAMS project will save over $15 million in the next 5 years.

The CAMS project is a partnership between the Oakland County Department of Information Technology (reporting to the County Executive), the independently elected Drain Commissioner’s Office, the independent Road Commission of Oakland County, and the independent local cities, villages, and townships.  The capital funding will be provided by the Oakland County General Fund while the ongoing maintenance costs will be shared by the various stakeholders. 

How did we justify $6.5 million for this project when a $34 million deficit looms in 2010? 

We were successful during policy debates largely because Oakland County has a rich history, under this administration, of investing in similar future-oriented shared technology projects and sharing the ongoing costs of operation.  Enterprise cross-boundary initiatives have become commonplace and expected by IT’s customers. The Board of Commissioners realized that the partnership among the independent units would be invaluable and the Return on Investment was well-documented.  An informed decision was therefore relatively easy to make

In addition to the cost savings, CAMS also provides a “one stop shopping” experience for county constituents that makes government easier to access and more transparent.   

In Oakland County, we look to the future and explore the potential for other "cross-boundary" partnerships to capture the benefits of shared systems investments. Developing and supporting systems to serve multiple institutions has been commonplace in the private sector. We think this approach deserves more attention in government, both within Oakland and in many other federal, state, and local jurisdictions that are looking to make government more efficient and effective during the tough times that lie ahead.

What do you think?

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Follow the link below to come back to the blog and make your comment at the bottom of this entry.

Also, note that there are a few seats available for the June 17-18 program on Leadership and Strategic Management for CIOs. Sign up here: http://ksgexecprogram.harvard.edu/program/lnw3/overview.aspx

All the best

Jerry 

I hope this is of interest.

The Leadership for a Networked World program will run a small online research seminar from April 14 to approximately the end of June. The group will use wiki and other technology and will focus on:

1. What CIOs need to know and do, especially in settings where IT-enabled change is or should be a strategic concern to the organization's senior leaders.
2. The extent to which wiki-enabled collaboration could generate cost-effective improvements in the dissemination of IT-enabled innovation in government.

We seek experienced researchers and/or practitioners able to work online and participate in roughly 5 conference calls. The first call will be Monday April 14 at 3 pm U.S. Eastern Time (UTC-5).

Our research will deepen and possibly modify a framework for public sector strategic management developed over the years at the Kennedy School. A description of how that applies to the work of CIOs can be seen HERE.

The calendar for the course can be seen HERE.

Participants will work with me and others deeply interested in these issues. Will will produce two papers through the work of the seminar, one assessing course materials for CIOs, and the other assessing the value of wiki-enabled research methods. Seminar participants will be recognized in the reports, and specific contributions will also be acknowledged. Participants who complete the work of the seminar will receive a certificate of completion.

Please contact me immediately if you are interested, indicating your interests, background, and skills for this work. There are only a few places still available.

I hope to hear from you soon.

Best regards,

Jerry

P.S. This research will inform and extend work will do will at a Harvard Workshop on Leadership and Strategic Management for CIOs to take place June 17-18 at Harvard. Here is the link to workshop information and registration materials.

 

A recent DOJ decision looks to have completely ignored the long-term impacts of digital data infrastructure on energy conservation and the global climate. I'm speaking of narrowly focusing on music distribution in allowing the merger to proceed between XM and Sirius satellite radio.

According to a recent post of Philip Greenspun -- a friend of my former deputy Cesar Brea -- the new XM/Sirius monopoly will jump the price of satellite data (doubling it or more). This will limit the benefits of mobile data in a wide variety of transport decisions -- giving cars and trucks and airplanes, for example, real-time information on weather and congestion, in some cases along with congestion pricing signals. Monopoly profit maximization will generate negative spillovers through congestion, energy loss, pollution, and global warming.

DOJ allowed the merger when they judged it would not create a monopoly -- for music distribution. It ignored the crippling impact on the public value that would otherwise be created through intelligent transportation.

Here's the link to Philip's post.

Jerry

What do CIOs really need to know?

Come join us at our June workshop on what CIOs need to know