Get Set For IT Spending Wave, Illinois CTO Tells VARs
Douglas Kasamis, Illinois CTO and deputy director of the bureau of communication and computer servers, speaking at a CMP Channel public sector for state and local integrators, said the state is about to overhaul and centralize the IT operations and infrastructure of its human resources and finance departments, unleashing millions of dollars in IT projects for small and midsized VARs who call upon state agencies.
Given the fact that Kasamis oversees some $330 million of IT procurement annually means savvy VARs who get to know the state's needs and work their way through the competitive bidding process could profit handsomely.
In addition to the IT procurement Kasamis oversees, the state of Illinois spends an additional $200 million in IT for law enforcement, correctional facilities and other related departments. Kasamis hinted the state that will move to consolidate its entire IT budget under the Communication and Computer Services Bureau in the coming year.
Kasamis, a former Accenture partner with a keen understanding of the channel, also provided advice for state and local resellers looking to expand their business with the state. He offered these tips:
1. Focus on virtualization solutions for the state. Kasamis said the state's tape library has grown to an unwieldy level of 500,000 tapes which makes it difficult to manage or retrieve information. His department is looking for ways to leverage today's virtualization solutions and move away from tape-based storage.
2. Look for "bolt-on application opportunities." With the state about to put out to bid the specifications to overhaul the IT infrastructure for human resources and finance departments, Kasamis said there is ample opportunity for solution providers to pitch security solutions among other applications. Some of these could be sold as part of set-aside contracts or be fulfilled via discretionary budgets controlled by state departments.
3. Go after the loose change. Kasamis told the VARs and vendors assembled the state can purchase up to $31,300 in IT goods from VARs (there are certain restrictions) without having to go through a competitive bidding process. In fact, any single IT project below $50,000 must be set aside for small businesses. VARs and vendors in the audience applauded the state's moves and said it opens up opportunities for them to sell IT services and products. VARs with annual sales of less than $6 million (based on their prior year's tax return) qualify for the set-aside business.
4. Focus on helping the state with shared services. One of the state's biggest IT projects was to consolidate the IT infrastructures of its various departments. Today, the state is looking for ways to share information and services across those departments.
Kasamis' comments echoed those of J. Clark Kelso, California's CIO who said the state was continuing to open up opportunities for VARs to bid on small projects, vie for set-asides or work with a larger integrator that serves as a prime contractor on large state contracts.
In describing the current state of Illinois' IT, Kasamis said: "We basically stopped the hemorrhaging of cash. We run the best and most secure network in the country with 107,000 digital certifications, 108,000 constituents. Anyone who does any internet access at schools, universities or public libraries runs through our bureau's backbone. We have rolled out centralized help desks and we did some good block and tackling."
Kasamis added: "We are now moving to the future which is centered on virtualization, bringing in blades, SAN, VMware to virtualize our distributed environment and continue to consolidate mainframes and drive out great economies of scale. And we are working to standardizing our LAN and networking environment around Cisco gear."
Prior to Kasamis arrival, the state lacked an IT strategy or any governance. State agencies and departments made their own IT decisions resulting in a myriad of systems that were not integrated. His bureau was charged with wringing out more than $100 million costs while improving operational efficiencies and building in shared services among disparate state departments.
"We saved the state and constituencies $150 million by consolidating the state's infrastructure," he said.
Regarding the state's huge IT project for its HR and financial systems, he compared it to the likes of Ohio, which spent some $175 million, Florida which spent some $72 million, and Pennsylvania, which forked over some $260 million taxpayer dollars. "I want to make sure people understand the cost," he said to nodding approval.
Illinois has some 100 financial and nine payroll systems that will have to be consolidates as part of the project. The number of applications that will need to be replaced totals nearly 450 out of 630 in use, he said. Kasamis' statement that "It will be a huge effort to do it," seemed an understatement at best.
The state's CTO, flanked by two lieutenants, offered this advice to VARs looking to avoid the obvious mistakes in selling to the state and his bureau.
1. Match the product set to the state's problem. Kasamis said vendors or IT providers will often pitch him a solution based on their technology and not an IT problem the state is trying to solve.
2. Understand the state's IT budget and process by viewing information contained on www.sell2illinois.gov. The state currently manages more than 400 different IT contracts.
3. Understand that there are no deals. Every contract (over $50,000) must be put out to bid. "Do your homework; know what you want to talk to me about," Kasamis advised. "The code is clear, we have to put things out for competitive bid."