Illinois CIO Hardik Bhatt Explains Why and How State Is Consolidating Its IT

A little more than two weeks after Illinois announced that it would merge its different IT functions into one cabinet agency to manage IT choices and procurement, the state’s plans are starting to take shape.

In an interview with StateTech, Illinois CIO Hardik Bhatt detailed why the state decided to consolidate its IT divisions and how the new Department of Innovation and Technology (DoIT) will change the way the Prairie State purchases and uses technology. It will be several years before the plan fully takes effect, Bhatt says, but the process has been in the works for 10 months and will continue apace from here.

“2019 is our goal to have completely revamped IT for the state of Illinois,” Bhatt says.

The Need to Consolidate

Illinois is now the 30th state to consolidate its IT functions or create a department focused solely on technology. Bhatt notes that Illinois had “a bureau in the overall administrative services department that would also focus on technology. In many other states, technology is very decentralized or even worse, kind of a hodgepodge.”

In 2003, Illinois created the Department of Central Management Services (CMS) to consolidate the state’s IT infrastructure and save money by achieving economies of scale in purchasing. However, CMS never consolidated IT applications, and only 60 percent of state agencies’ IT infrastructure was consolidated, Bhatt says.

When Bhatt took over as CIO in March 2015, he realized that the state’s IT costs had spiraled up to around $800 million per year. Agencies whose infrastructure had not been consolidated were spending on different kinds of procurements, and there was no enterprise-level thinking about how to use applications.

Among the top 10 states by population, Illinois is the only one that does not use a unified enterprise resource planning (ERP) system, Bhatt says. There are 62 agencies, boards, authorities and commissions under the governor’s authority, and 86 CIOs in state agencies, according to Bhatt.

After Bhatt brought all of the CIOs together, he realized that around 60 percent of their priorities were the same, including ERP, case management and license management. “We understood that there is no point in doing this in siloes,” he says.

For example, for licenses — including professional licenses, permitting for oil and gas exploration, hunting, fishing and the like — Bhatt says the state should have a consolidated front-end system, where residents can search for the license they want, plus a consolidated payment system for the state, and possibly different back-end IT systems because different licenses might require different documentation.

Changes Coming to IT Structure

The state has a contract with consultancy Deloitte to manage its IT consolidation and make sure it learns the best practices and lessons of states that have undertaken similar transformations, Bhatt says.

A key part of that is a new governance structure for IT. Instead of departmental siloes, Illinois will create within DoIT what Bhatt calls “business verticals” that will be responsible for different functions across multiple agencies. One example is Health and Human Services, which will incorporate Medicare and Medicaid Services, the Department on Aging and other, similar agencies. Bhatt, Deputy Gov. Trey Childress and directors of those agencies will form a board for that vertical that will decide which projects should be funded, and will then pool procurements.

Similar verticals will be set up for public safety, regulatory matters, fiscal issues, transportation and education, Bhatt says. Meanwhile, the DoIT will also support horizontal functions across technologies, including teams on analytics, mobility and other technologies. The state will work to set up this structure by the end of state’s fiscal year, on June 30. The CIOs in the vertical groups will report to “cluster CIOs,” who will drive the technology decisions for the groups, and those cluster CIOs will report to Bhatt.

The state is working to deliver a single ERP system and in the fall will start using technology from SAP for its financial systems, according to Bhatt.

Bhatt says the DoIT is looking to have a well-defined budget by July 2017, ahead of fiscal year 2018. In the meantime, he says the state needs to work on rationalizing its infrastructure and consolidating its data centers, which he thinks will take two to three years. The state will also rationalize the applications it uses, which could take three to four years.

By the DoIT’s second year, Bhatt estimates the state could save 5 to 20 percent on its IT procurement costs by “making sound buying decisions as opposed to just spending money willy-nilly.” The state will also need to train its IT workforce on SAP’s system, mobile applications, data analytics, cybersecurity and other technologies.

The goal is to make the consolidation “very seamless” and not disrupt existing work, Bhatt says, but it is a large undertaking. Bhatt will go from having 500 people in his organization and a budget of $200 million to around 1,700 employees and a budget of $800 million, once the consolidation is complete.

“Very few states have really consolidated at this level,” Bhatt says. “We had to get here because we are so disjointed.”