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Press Release: Tom Salonek, Intertech CEO Sunday Business Forum author of "Business forum: Deficits can be the mother of invention"

Business forum: Deficits can be the mother of invention

Tom Salonek

Published Mar. 2, 2003

With tight budgets and Incredible Hulk-sized deficits, everyone in Minnesota is looking for a "magic bullet" that will keep state services available at current levels while cutting costs.

First the bad news: There is no magic bullet (admit it, you already knew that).

Now the good news: Our current fiscal strain is just the push we need to start using technology to save money and make the delivery of state services more efficient.

Gov. Pawlenty has noted that our current circumstances represent the perfect opportunity to redefine government. Bringing the delivery of government services into the 21st century through the use of proven technology that can cut costs and increase efficiency should be at the top of the governor's list.

Investments in technology can yield an impressive return on investment. Just ask the folks at the Department of Education who, through the creative use of Internet-based software, are saving taxpayers more than $100,000 annually. This technology investment also allows the department to license new teachers in a fraction of the time previously required. I know the details because my company worked on this project. From our experience, it is clear that there are many opportunities for other state departments -- and other private companies -- to increase government efficiency and lower costs through prudent applications of technology.

But they will require an up-front investment -- and that can be tough when deficits call for cuts. But there's more than one way to tackle this problem, and creative thinking about how to get things done should be item No. 2 on the reinvent-government list.

For example, creative partnerships -- among state agencies, between state agencies and the private sector, and between Minnesota and other states -- can amortize or lower the initial investment for cash-strapped state departments. The key to success will hinge on involving people on the front lines, such as experienced department heads with proven track records, and encouraging an entrepreneurial environment within state agencies.

Where to start?

State agencies should look at the innovations happening in the private sector for proven technology products and services. What we don't need is more research teams, think tanks, or blue ribbon committees. The technology exists today; government just needs to begin using it. Some examples:

• Eliminate the need for "bricks and mortar" service delivery through Internet-based self-service, such as issuing licenses online. The licensee takes the time to complete the forms, verifies the accuracy of the data, and pays online. In return, he or she saves the trip, stamp, and potential frustration of waiting in line -- and the state saves hundreds of thousands of dollars.

• Integrate systems. Today, the Internet provides a cheap national network that enables computers to "talk" directly with one another, eliminating the need for expensive human intervention.

Another Department of Education example: a system currently being built by our company will digitally capture fingerprints of teachers applying for licenses in Minnesota. Because the department can send a digital fingerprint to the FBI for background checks instead of a paper copy, the investigation process that used to take several months will be reduced to several days. Not only will this make it easier for schools to hire new teachers, it will reduce risks to school kids.

• Sell or license our solutions to other states in areas where we are ahead. Federal mandates mean the states share many similar rules and policies. Likewise, the systems that support these rules and policies are similar. Minnesota's streamlined teacher licensing system is now being marketed to other states. If one or more states decide to purchase the system, our state will gain revenue.

• License from other states in areas where we are behind. Any custom-built product is the most expensive. If the cost of developing that product is amortized across many consumers, the investment per capita is less.

• Look for opportunities to privatize. While this may seem self-serving, privatization offers multiple benefits for taxpayers. The most obvious: State departments use only the services they need, when they need them. Privatization also allows the state to shift risk to the service provider by insisting that payment be tied to measurable results. And not incidentally, competition increases customer service and lowers price.

Low-hanging fruit

With each new administration come new commissioners and other new state employees. While a fresh perspective is invigorating, it's important that we maintain the continuity that longer-term department directors can provide. They often can quickly identify the old processes or technologies that cost tax payers time, patience and money. This "low hanging fruit" represents our best opportunity for reducing costs and improving service.

Staff requirements for routine processes can be reduced through technological innovations, allowing state employees to focus on higher-value work. Technology also can reduce future staffing requirements through attrition and voluntary retirement.

The governor and his commissioners should involve state department directors by engaging them in brainstorming and encouraging them to develop project proposals that can deliver a return on the state's investment.

Throughout every level of state government we need to engender an entrepreneurial spirit stressing partnerships, creative thinking, leveraging investments and partnering with vendors and people in other states.

The bottom line: Any technology innovations embraced by the state should be simple and deliver a clear and measurable benefit to the people of Minnesota. That's an investment that makes sense in hard times and good times.

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