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Most people don\u2019t realize this, but Northern California actually has two giant technology centers: Silicon Valley and Sacramento. Silicon Valley is the world\u2019s entrepreneurship capital, and Sacramento is California\u2019s State capital. They are less than 100 miles away from each other.\u00a0 But technologically, they\u2019re light-years apart. While Silicon Valley\u2019s workers conceive the next revolution in technology, Sacramento\u2019s workers toil away at maintaining computer systems that were built in the tech equivalent of the Mesozoic era. Both depend on each other: Sacramento workers maintain the State\u2019s infrastructure and public services, and the Valley\u2019s workers generate the revenue to pay Sacramento salaries. The irony is that while the valley entrepreneurs desperately look for problems to solve, Sacramento has problems aplenty and no saviors in sight.<\/p>\n
Witness the problems<\/a> that the state experienced last November when it couldn\u2019t issue checks to unemployed workers whose benefits had run out before Congress authorized a payment extension. Workers had to wait for\u00a0up to two months to receive their checks, because the Employment Development Department<\/a> couldn\u2019t make timely changes to its computer systems. Like most of the State\u2019s systems, these were built in the \u201970s and \u201980s in now\u00a0antiquated computer languages like COBOL, Adabas Natural, Assembler, and PL\/1. They run under operating systems like CICS and IMS.<\/p>\n This is the tip of the iceberg. California has roughly 130 agencies and departments. Each has its own IT staff and its own systems. Each collects its own information and maintains its own databases. These systems are not usually integrated with each other. When they do share data, it is usually through file transfer in batch mode. This is a nightmare for citizens and businesses. Take the simple task of changing a business address. The business owner has to inform multiple agencies, such as Employment Development Department, Board of Equalization<\/a>, Franchise Tax Board<\/a>, Secretary of State<\/a>, and various licensing and certification departments<\/a>. Believe it or not, the State has more than 40 separate computer applications to collect the same personal and demographic information about citizens. Even for mundane things like email, the State maintains more than 100 separate systems.<\/p>\n California isn\u2019t alone in having such legacy systems and challenges. Its systems are probably better than those of any other State, and it is making the investments in reducing costs and improving infrastructure. \u00a0Most large corporations run their operations on systems that were built\u00a0decades ago. \u00a0This is a ticking time-bomb for industry as well as for government.<\/p>\n There was a time when there was a big difference between these enterprise systems and the PC and Web applications that Silicon Valley entrepreneurs build. Enterprise systems require large-scale transaction-processing capabilities, have stringent security requirements, and need to have high availability. But that is not different from what Twitter, Facebook, and Zynga require.<\/p>\n Even fledgling startups in the Valley are building systems that make some enterprise systems seem like child\u2019s play. For example, Real Time Matrix<\/a> has built a facility to create Twitter groups<\/a>. This requires sophisticated real-time analytics and integration with multiple sources such as Twitter, blogs, and live feeds in order to process information \u201cas it happens\u201d.\u00a0 The Web systems that Real Time Matrix has built process tens of thousands of transactions per second and rebroadcast the results to numerous and varied clients accurately and in real time.<\/p>\n What I suggest that the State do as a top priority is to engage Silicon Valley entrepreneurs to rebuild its systems infrastructure. These entrepreneurs can create new systems for a fraction of the cost of patching up old systems. Take the system that processes unemployment checks. The State has budgeted $50 million to upgrade it. At the end of the day, it will simply have a more maintainable COBOL system if it does business the old way. Instead of the big state contractors who typically bid on and win such contracts, the State should reach out to the Valley\u2019s entrepreneurs to rebuild this. Give them the detailed specifications and let them compete for this business (this requires streamlining the bidding process even further \u2013 even VC\u2019s don\u2019t take a year to make decisions). I\u2019ll bet that the Valley\u2019s entrepreneurs could build this system from scratch in less than a year for less than $5 million. That\u2019s right: for less than a tenth of the cost. You can build sophisticated systems in the Web world for a tiny fraction of the cost and in a fraction of the time required for maintaining those old monsters. The new systems will be far easier to use, and cost relatively nothing to maintain. And we\u2019d be boosting the local economy rather than the coffers of big state contractors with strong political connections.<\/p>\n I know that some systems are really complex and intertwined with others and can\u2019t be fixed or replaced easily. The vast majority, however, aren\u2019t like this. Most systems simply perform reporting and analysis \u2013 and these can be rebuilt in months, not years. I know because I started my career writing COBOL\/CICS transaction-processing systems. Later I developed software to automate the process of developing large enterprise systems and co-founded a company to market it. My second startup built technology to automate the process of modernizing legacy systems. I\u2019ve seen the technology world evolve and develop and know that what I am suggesting\u00a0isn\u2019t rocket science.<\/p>\n What is needed is to turn the Valley\u2019s entrepreneurs loose on these problems and let them do their magic. The net benefit to California could be enormous. The modern world now runs on Web-based technology. So can California — and it can reduce its costs in the process. Sacramento has the advantage of having the world\u2019s top-gun techies just a short drive away. They\u2019re itching to help (and they can use the money).<\/p>\n Editor\u2019s note:<\/strong> Guest writer Vivek Wadhwa<\/a> is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa<\/a>.<\/em><\/p>\n![\"Cearadactylus](\"http:\/\/www.stoth.com\/wp-content\/plugins\/wp-o-matic\/cache\/3353a_Fotolia_4030782_XS-180x180.jpg\")
At a talk<\/a> I gave at California\u2019s Executive Institute on Jan 21, I discussed these issues with the 200 IT managers in attendance;\u00a0with State CIO, Teri Takai<\/a>; and with CTO, P.K. Agarwal<\/a>. Most were in agreement that new thinking was needed. IT managers seemed eager to be using the same technologies as their Silicon Valley brethren. Takai and Agarwal described how feverishly they are working to consolidate and integrate departments and move their systems into a more modern era. They are also working on streamlining the procurement processes for funding IT projects. Not long ago, it used to take an average of three years to obtain approval for a project. Today, they can do this in a year (that\u2019s a lifetime in Silicon Valley, but considered fast in the government world). They claim they saved the State $400 million through all these efforts.\u00a0Despite this, Takai and Agarwal have big challenges: they need to figure out how to make a dinosaur fly. Perhaps what is needed is to let the dinosaurs become extinct and be replaced by swift birds and mammals.<\/p>\n