Audio
Steve Kolodney Speech at CIO Academy
February 7, 2013
MR. KOLODNEY: Well, thank you, Anna, for such a wonderful introduction. My mother would have really liked that.
(Laughter)
MR. KOLODNEY: And a special thanks to Carlos for initiating this and for selecting me as one of the early Hall of Fame members.
It’s a great honor to be here and to be on the podium with people like Mike Howland, who was actually here when I was here in the 1980s, and to stand beside the other honoree that Anna will introduce secondarily, someone who has been my friend for a very long time and has always had my back when I needed him.
I would like to take just a minute and tell you four quick stories about information technology in the 1980s. Remember the 1980s?
There were very few computers in the 1980s. The personal computer wasn’t here. I was in the Department of Finance, and the only computer we had was a 4300 down in the basement.
So that’s the situation I found myself in in 1983, March of that year, when I was appointed by Governor Deukmejian to head the Office of Information Technology.
Two days after arriving at a new job in a new place with new responsibilities, I was called to the capital to the Department of Finance office and ushered in to Chon Juan Gutierrez’s office. People remember Chon.
He sat me down, and he said the director wants to track the budget on a computer, and I want you to go out at lunch time and buy a computer and be prepared to track the budget when we release the May revise two months from now.
I just laughed. I didn’t know any better.
And here we are 30 years later with a project called FISCal at about a billion dollars to track the budget on a computer. So now you know the rest of the story. You know where all of that started.
A few months later, I was visited by a young man, Bob Graves, who wanted to pitch an idea of putting on an educational event in Sacramento on technology for the people of the State.
Now, Bob Graves and Dennis McKenna were at the time publishing a newspaper called Computer News, and they would lead every edition with a horrible story about how the State was misusing computers to the detriment of State programs.
So I told Bob, you know, I’m spending so much time responding to your outrageous and ridiculous stories that I have no time to work on an event here in Sacramento.
The stories stopped. And a year later, we launched the GTC, and from that they were able -- they did well enough in that event they were able to launch Government Technology Magazine. And so now you know the rest of that story.
About a year later, computer stores were starting to open up in and around Sacramento. The PC had just been introduced, and State IT people were very interested in the potential of this technology.
So they would go to all of these stores, and they would spend literally hours talking to the commission-based sales representatives, and when the store would attempt to close the deal, the State people would say, well, we have to go back and write an RFP, and that will probably take a year, but you can bid on it when it’s all said and done.
Well, the salespeople in these stores were not very happy about that.
And so P.K Agarwal suggested that we open our own store and that we use only salaried employees who wouldn’t be commission-based and therefore could spend as much as time as necessary with all of the people in state government.
So we wrote an RFP, and we decided that discount against list would be the evaluation criteria to determine who was going to open the store and run it for us.
Well, since it was discount off of list price for a whole range of products that nobody had ever seen before, the vendors all wanted baseline sales so that they could estimate the discount that they’d be willing to give the state government.
And P.K. and I just made up a number. Said okay, $6 million.
The bid was let. The bids came in.
When they were evaluated, I asked Rick Naylor who was with Businessland, a company who won the first deal, how he could be so much cheaper than all of his other competitors.
He said, “You know, you gave us a baseline of six million, and I said to myself if I can’t do ten million I don’t deserve this business.”
And so he went discount of off of list for ten million worth of sales instead of six million, and he had the contract for years and years and years after that.
Finally, final story. Franchise Tax Board had been -- Franchise Tax Board, FTB --
(Laughter)
MR. KOLODNEY: -- had been trying for years to get an appropriation to improve, upgrade their IT systems, and every year, they were turned down by the Department of Finance or by the legislature because they didn’t want to appropriate General Fund money for that purpose.
So Ralph Schumacher came up with the idea that maybe he could do a benefits-funded acquisition in which the vendor would assume the cost of the project and get paid from the additional revenues that the project produced.
But we didn’t have a procurement methodology to do that.
So we got together, we wrote some language for Sam, call it alternative procurements. We sold it to Finance. We sold it to the LAO. The legislature was agreeable.
And Ralph and FTB used that multiple times to raise billions of dollars of additional tax revenue which went to the coffers of the General Fund of the State of California and to pay the vendor for the risks that were being taken. And since then, many other departments have done similar kinds of things.
So as you can see, there were points in time in the ’80s that really set the stage for the kinds of things that happened in California over the years since then. And now you know the rest of the story.
Did you watch the Super Bowl? Did you see that great ad from Chrysler on God, you know, invented a farmer? That’s where the rest of the story really was.
Okay. Let me tell you that success in your career, as you all know, is a gift. And it’s a gift from your colleagues, and it’s a gift from your mentors, and it’s a gift from people who support you all the way along the line.
So let me recognize here today and appreciate from Finance Susie Burton, Russ Gould, Stan Stancil, who really understood that technology was in California’s future, even as Finance was starting to understand the need to allocate funds to that purpose.
When I became Washington State CIO, I rode behind one of the best teams in IT in any state government lead by Todd Sander and Paul Taylor -- and many of you know Paul Taylor. He’s been here sort of many times.
Gerri Majors convinced me to join AMS when I left the State of Washington, and as I said, she always had my back for the many years since then.
Dennis McKenna from e.Republic has been my friend and supporter since that first GTC when nobody knew if anybody would show up when we opened the doors, and it was hugely successful and a lot of fun.
And finally, a friend of mine, Allen Mills, the CEO of bluecrane who gave me a company to work from in helping Teri Takai put out the State IT plan and the Governor’s reorganization plan which ultimately created the California Technology Agency which is now so ably being run by Carlos and by Anna and by all the staff over there.
So this is a great pleasure. My wife asked me if I could put it on my resume, and since I’m retired, I will do that. And I appreciate being recognized here today, and I appreciate all of you who were here in the 1980s and the 1990s.
Thanks so much.
Transcription by COOKSEY& COMPANY LLC
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