2006 California State Information Technology Annual Report:
Consolidation of Information Technology Infrastructure Initiative

On March 31, 2005, the Governor submitted a reorganization plan to consolidate the State's two general-purpose data centers into a single "Department of Technology Services." In addition, the reorganization transferred authority over the State's major telecommunications contract (Calnet) from the Department of General Services to the Department of Technology Services in recognition of the convergence of voice, data and video telecommunications and network technologies.

The reorganization proposal was consistent with best practices in the industry and offered the following advantages:

• More efficient, standardized systems capable of supporting multiple agencies;
• Reduced redundancy and variation within the state's technology infrastructure;
• Reduction in cost for common infrastructure services;
• Enhanced ability for data sharing;
• Improved ability to successfully leverage IT procurements;
• Enhanced security and privacy measures for the storage and distribution of electronic data;
• Improved core technology support for all state agencies and departments; and
• More effective utilization and management of technology personnel.

The reorganization formally occurred on July 9, 2005. The first phase of the reorganization - which involved realignment and integration of the three organizations, completion of a common strategic plan for DTS, creation of a common help desk function, creation of a high-speed data link between the two data center campuses, and adoption of single integrated business systems - was completed on June 30, 2006, well ahead of the original schedule. Over the next several years, DTS plans to consolidate its networks, work on consolidating and rationalizing enterprise storage, eliminate some of its facilities, and establish a more robust backup and disaster recovery service, as well as provide new services supporting statewide email and portal functions. At its June 28, 2006, meeting, the Technology Services Board ("Board") approved a $16.3 million reduction in DTS rates, which reflected substantial savings from consolidation and consolidation-related activities during the year. At its January 16, 2007, meeting, the Board approved a further reduction of $26.7 million in DTS rates. Thus, in the first eighteen months of consolidation, DTS has achieved rate reductions equal to approximately 18% of its annual budget. During the coming year, DTS will complete a comprehensive reform of its rate methodology and rate structure, and additional savings and rate reductions are anticipated.