22nd Alaska State Legislature
News from the House Finance Committee
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair

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Rep. Eldon Mulder
State Capitol, Room 507
Juneau, AK 99801-1182
Phone: (907) 465-2647
Fax: (907) 465-3518

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Rep. Bill Williams
State Capitol, Room 511
Juneau, AK 99801-1182
Phone: (907) 465-3424
Fax: (907) 465-3793

Outsourcing IT Could Mean Big Savings
Pennsylvania's Success Points Way for Potential Alaska Effort

Released: November 29, 2001
Contact: Representative Eldon Mulder at (907) 269-0265
Senator Gary Wilken at (907) 465-3709

(ANCHORAGE) Alaska could improve government efficiency, expand public service and realize better return on its technology investments by following Pennsylvania's example and contracting elements of its information technology operations to private industry, a Pennsylvania official told a House Finance subcommittee today.

"Alaska can learn much from Pennsylvania's example," said Rep. Eldon Mulder (R-Anchorage), co-chair of the House Finance Committee, and chair of its Information Technology subcommittee. "Alaska has never come through with a solid statewide telecommunications plan. As we face continuing needs to upgrade and expand state technological capabilities, we could do well to study Pennsylvania's bold - and by all accounts, successful - experiment."

In 1995, then-Gov. Tom Ridge initiated Pennsylvania's strategic program to expand its use of technology to make measurable improvements in government operations. The state hired a national auditing firm to do a year-long, $1.1 million study of state data centers, then built on its results to ultimately outsource 18 mainframe data processing functions into a single "Data PowerHouse" run by computer industry leader UNISYS, according to Curt Haines, director of the state's Bureau of Consolidated Computer Services.

The consolidation has brought several significant benefits to Pennsylvania, Haines said, including eliminating redundancies and incompatibilities between different state agencies' computer systems, saving hundreds of millions of dollars in personnel costs, and allowing hundreds of state workers to redirect their energies to expanding and modernizing citizen-friendly services such as online permitting, licensing and tax paying.

Haines said Pennsylvania worked long and hard with its contractor and the federal government to design a data processing system that would be a model for other states considering outsourcing their IT functions. If Alaska undertakes such an effort, he encouraged Alaska to plan thoroughly, consult early and often with public employee unions, coordinate with federal agencies to preserve privacy and data compatibility, devote adequate resources to the consolidation process, ignore resistance by entrenched interests and focus on the long-term strategic benefits.

"The state of Alaska has enjoyed some success in using technology to serve its citizens, but as our state planning drags on, others states are passing us by on their way to a brighter technological future," Mulder said. "We should seriously consider borrowing Pennsylvania's IT roadmap and seeing whether we couldn't use outsourcing as a shortcut to a better future for Alaska."

The Information Technology subcommittee is charged with reviewing Alaska's technology investments, reviewing inventories of computer assets and their capabilities, and providing a means of evaluating how well state departments are spending their technology resources.

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Outsourcing IT Could Mean Big Savings

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