During the recession and following years, there were no funds available for technology investment at the system office. I understood and we worked with the universities to negotiate economy of scale contracts that were a win-win for the universities and generated revenue for technology investments and operations. Revenues grew at 15% annually for the six years I served as Vice Chancellor. This created the flexibility to respond to the emergent needs of senior leaders without additional funding as well as to invest strategically in information technology.
IT revenues grew at 15% annually for the six years I served as Vice Chancellor.
Internal to my organization, this was a difficult learning experience because:
- There was a naive expectation that the world was structural,
- Clearly what technology was doing was important, nay, strategic,
- Technology would be exempt from the recession and associated budget cuts, and,
- More than adequate resources would flow just when needed.
It is a difficult transition from central funding to revenue-based funding and the accountability and customer service associated with revenue-based funding. It is even more difficult during a recession.
To accelerate revenue growth, we adopted some techniques from industries other than education. Deputy CIO James Squires recruited three customer service representatives to ensure that we had project managers singularly focused on the needs of the universities and delivering results.
We made this transition with the extraordinary Jack Delinsky leading the charge and delivering results. Our typical contract negotiation strategy employed the Dread Pirate Roberts (of the 1987 movie The Princess’ Bride) approach to contract negotiations. You may not be familiar with this approach but it is remarkedly effective.
- All contract negotiations started with Jack and candidly he did almost all the work. At the appropriate point in negotiations, he would mention that the CIO was the Dread Pirate Roberts of contracts.
- If the potential strategic partner could not reach agreement with Jack, then the negotiations would escalate to Jack’s boss who was the Deputy CIO. If the CIO learned of the escalation, he might personally intervene and that would be really, really bad.
- The CIO was the Dread Pirate Roberts of contracts because Jack built me up as a contract negotiator of near-mythical reputation. I would restart contract negotiations insisting that all services should be provided for free. Allegedly, I was well known for taking no prisoners, feared across the technology sector for ruthlessness and negotiation prowess, and predisposed to kill any potential new contract.
This fable enabled the real Dread Pirate, Jack Delinsky, to have his way on contracts and rarely was a contract escalated to the Deputy CIO or to me. At one point, a potential strategic partner, prior to starting contract negotiations, sent me a pewter old-fashioned bomb with the letter “F” welded to the bomb as a preemptive peace offering. They were aware of the stories and wanted no part of the Dread Pirate Roberts of contract negotiations.
You can see the “F-bomb” above. Remember, the F stands for free, the most hated curse word in contract negotiations.
In the last two years, we expanded these economy of scale contracts to the 183 K-12 districts who controlled about half of their funding. This expanded our revenue base and ability to save the state funding and invest strategically.
This revenue growth would eventually pay for the underlying data reporting system for the Board of Regents that is still used today.
I would be remiss if I did not share my favorite contract negotiations story from my time as Vice Chancellor. Like all technology leaders, I receive lots of unsolicited email (about 300 a day). As Vice Chancellor, there was a period that I was dedicating about 20% of my time working with the Vice Chancellor for Economic development to bring new companies into Georgia. Education opportunities in high demand technology fields was an important factor to these companies. So, I would routinely take 30 minute meetings with startup companies or companies considering moving to Georgia. I would always work in donating money to support the university system of Georgia, sponsoring Rock Eagle or Georgia Summit, funding a student scholarship because I loved the look of a sales rep when they realized they were pitching to another sales rep.
One of these meetings involved a company offering prepaid legal services for all students at the 36 public universities because, “wouldn’t you sleep better knowing you were protected against whatever crazy thing one of your college students did?” As in all sales pitches, the cost is not revealed until the very end: $350 million. This sales rep thought I had a third of a billion dollars just sitting around and I was wondering what to do with it. He thought that technology services was the best place to make this pitch. I played along because I am occasionally evil and immediately started negotiating the price down based on economies of scale. I got the price to $250 million in five minutes. Alas, our 30 minutes were up and I respectfully declined the offer.
Each year, we saved more money for the state that our entire annual budget. It just took a completely different approach to revenue generation.
Each year, we saved more money for the state that our entire annual budget. It just took a completely different approach to revenue generation in the midst of a recession, budget cuts, and no funding. We passed most of those savings to the universities, colleges, and K-12 districts. The rest we used to strategically grow and mature our technology services.
If you are progressing through this website sequentially, the next chapter is Success through Shared Governance.