IT outsourcing one of three options, lawmakers told

Chief Technology Officer Kyle Schafer told West Virginia legislators Tuesday he has never proposed outsourcing state information technology jobs — he’s simply proposed studying it as an option.

“I’ve not proposed outsourcing,” Schafer told the Joint Committee on Technology. “I’ve proposed evaluating three options.”

Schafer was responding to a series of questions submitted by legislators during a public hearing last month on the possible outsourcing of information technology jobs.

He said Tuesday he has proposed three options for the future of the state’s IT operations:

| Keep the existing system: Schafer said maintaining outdated computers and software will become increasingly expensive, and poses growing security risks as security patches no longer are available for many of the older software programs the state uses.

“I don’t have a choice between option two or three, but I don’t think option one is the way we ought to go,” he said of maintaining the status quo.

| Internal consolidation: Schafer said that would have significant up-front costs and would require legislation to mandate that the 31 agencies that have their own IT operations participate in the consolidation.

| Partner with a third-party provider — outsource: In his written response to the questions, Schafer stated, “The third option is only an option.

“Although [outsourcing] raises employee concerns and would be a significant change to the current environment, it is a widely used practice in both the private and public sectors. Totally disregarding [it] as a viable option to investigate would not be prudent or in the best interest of the taxpayer.”

Schafer said Tuesday that Gov. Joe Manchin is aware of his evaluation, but has not taken a position on any of the three options.

“What the governor has asked us from day one is to look at our effectiveness and efficiencies,” Schafer told the committee.

The issue of outsourcing state IT jobs surfaced this spring, when Office of Technology employees were advised that IBM representatives would conduct a review of the IT operations.

In response, the West Virginia Public Employees Union UE Local 170 has staged several protests and, in September, went to court seeking an injunction to prevent the office from going out to bid for Expressions of Interest from vendors to be the third-party service provider.

On Tuesday, Schafer agreed that states including Texas and Virginia have run into significant problems with outsourcing, but said those states attempted what he called “mega-outsourcing arrangements,” where they turned all IT functions over to a single private vendor.

He said West Virginia is looking at outsourcing only its Application Managed Services, involving development, maintenance and support of business software applications and databases.

Delegate Nancy Guthrie, D-Kanawha, said that, despite options on the table, the conversation seems to be focused on outsourcing.

She asked Schafer to provide the committee with a detailed plan of the costs and benefits of consolidating IT services into a centralized state operation.

Guthrie said the report, which she asked be completed by the December interim meetings, should determine what is the “most cost-effective, and safest and secure system that will maintain jobs for West Virginians.”


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