Cloud and Innovation


kate - 05/30/2018

The Architecture of Innovation: 

Utah’s ValuePoint Cloud Services Procurement

“Collaboration is one of the best kept secrets in creativity.”

 ̶̶   John Briggs, Fire in the Crucible (2000)

 

In 2017, the State of Utah won NASPO’s Cronin Award for Procurement Excellence for its ValuePointTM cloud solutions procurement.  The agreements cover the three cloud service models that avoid agencies’ having to host and maintain expensive software: software-as-a-service (SaaS, e.g. word processing), platform-as-a-service (PaaS, e.g. developer tools), and infrastructure-as-a-service (IaaS, e.g. storage). The agreements offer services from common office productivity suites to cloud-based phone systems, data analytics, a full range of services for geographic information systems services, and managed services-in-the-cloud to deliver secure and reliable computing and storage infrastructure.  The award nomination highlights the procurement’s novel approaches; this is the backstory of the innovation.

Innovation is creativity whose novelty has been adopted and is widely accepted.  The work of Professor Mihaly Csikszentmihalyi, a creativity researcher since the early 1960s, found that creativity has periods of preparation, incubation, insight, evaluation, and elaboration.  He adds an additional dimension to the architecture.  He found that cross-domain (across bodies of knowledge) and cross-field (among practitioners) collaborations are essential elements of most creative endeavors. This procurement had all of that.

Preparation: Look for and find opportunities.

“Usually insights tend to come to prepared minds, that is, to those who have thought long and hard about a given set of problematic issues.”— Mihaly Csikszentmihalyi, Creativity (2013)

The original idea by the states for a cloud procurement had been to support geographic information services (GIS).  Jeff Mottishaw, contract manager for the State of Utah, was leading the waning months of a ValuePoint portfolio for in-the-cloud storage for large amounts of GIS information. An attempt had been made to leverage the master agreements into a vehicle for cloud solutions, but the scope of the master agreement simply didn’t permit it to gain traction. The presenting problem was a follow-on to GIS; the opportunity was found in the broader discovered problem.

A cloud strategy was evolving on the East Coast. Facilitated by the Center for Digital Government (CDG), and led by New Jersey’s chief information officer (CIO), a group of over 50 representatives from cloud industry and states’ CIOs, finance and procurement met to discuss cloud solutions.  There were a series of meetings, and NASPO ValuePoint’s Dugan Petty, a former CIO and CPO and the fellow for the Center of Digital Government, was involved.

The collaboration ultimately led to a report and model CDG terms and conditions in September 2014. The CDG recommendations cover key sticking points like ownership and protection of data, auditing of cloud-based systems, and breach notification and liability for stolen information.

Have patience: Allow ideas to evolve through a period of incubation.

“You can’t rush creativity.” —Keith Sawyer, Group Genius (2017)

Petty was with Mottishaw in Las Vegas at a supplier review meeting in October 2014. They discussed the possibility of using CDG terms and conditions in a follow-on procurement aimed at providing more cloud solutions.

Near this time, Mottishaw also attended a New York conference on cloud with Chris Hughes, an attorney brought into the Utah state procurement office to focus on terms and conditions negotiations and other legal issues. The conference was largely attended by industry legal counsel trying to understand negotiation of cloud agreements and their terms and conditions. Mottishaw and Hughes were among very few government employees at the conference.

Over the next several months, Petty evolved a masterful strategy: integrating the efforts of state CIOs and procurement teams.  He drafted a charter that framed the efforts of an advisory group known as the Information Communications Technology Advisory Council (ICTAC).

When do busy, talented people find time to incubate ideas?  Some companies have innovation labs. But it’s not practical in government. Yet, conferences permit opportunities for reflection and conversations that can offer a similar benefit.  It did here.

Seize the moments of insight.

“Even when we feel a solitary, sudden inspiration, the origin can often be found in collaboration.” — Keith Sawyer

Sometimes the insight that uncovers the creative spark is described as an “aha moment.” Petty’s occurred in a Dallas meeting of the IT group.  “This opportunity was begging to be a cooperative procurement,” he told me.   “Cloud suppliers were describing ‘one line of code for many’ as the SaaS model.  To me, the cooperative converse was true: aggregation of requirements to achieve more favorable pricing.” Chris Hughes adds his aha moment, “We came at this from different directions, but we all arrived at the conclusion that the CDG terms and conditions—developed with industry—were the way to go.”  Its terms and conditions mitigate the effect of a recurring irritant: inefficiencies driven by negotiation of liability allocation provisions.

While Csikszentmihalyi found that being in the right place at the right time—luck—was often present, many people don’t recognize it. Petty did. In June 2015, Petty was in his RV cruising out West when his phone rang. He had been talking for some time with a Vancouver consultant to British Columbia interested in the ValuePoint model for cooperative procurement. The dialogue had continued for 3-4 calls, and finally Petty asked, “What are you buying?”  The answer, “Cloud”! British Columbia was facing similar challenges with cloud.

There are widely varying approaches among states regarding security issues: data breaches involving Personally Identifiable Information (PII), information security classification frameworks, and risk tolerance, for example. The use by British Columbia of the Cloud Security Alliance tools for identifying supplier security capabilities became a cornerstone of the Utah ValuePoint procurement also. With the CSA tools imbedded in the master agreements, states can assess various security differentiators among suppliers using their certification disclosures, CSA questionnaires, and the CSA Cloud Controls Matrix—a uniform way for states to compare the suppliers’ capabilities.

Accept reasonable risk in the evaluation and selection of novel approaches.

“Because creativity involves taking some risk of failure or embarrassment, creative teams need a supportive climate.”—Roni Reiter-Palmon, Team Creativity and Innovation (2018)

Jennifer Salts, deputy director of Utah’s procurement division at the time, was widely acknowledged by the team to be the expert in state procurement. She framed permissible, innovative procurement approaches for the project. She credits the then-chief procurement officer. “Kent Beers came up with the idea of the two-year refresh. It was born out of our procurement code’s provisions for prequalification, used in construction but never on IT.” When Beers thought a constructive approach was permitted by the code, he was solidly behind it.

Scope of the procurement was a recurring point of discussion. At first, the advisory IT group of senior state chief information officers was envisioning only acquiring software-as-a-service.  But they asked, why only SaaS?  Why not also PaaS and IaaS?  There was even some discussion about opening the solicitation to IT consulting in general.

But by April 2015 the group had decided to broaden the scope to PaaS and IaaS but permit only cloud-related consulting services to be part of the solicitation.  In a sense, the group by this time had developed the internal trust needed for procurement and IT professionals to accept “no” as an answer.  There are policy and legal constraints on the scope of a procurement.

The hard work of elaboration: Leverage the collaboration and keep at it!

“Ideas don’t happen because they are great. . . it turns out that having the idea is just a small part of the process.”—Scott Belsky, Making Ideas Happen (2010)

 

At some point, the horizon of creativity morphs into the landscape of execution. Not all novel ideas become tangible innovations.  Csikszentmihalyi and other creativity researchers call this phase elaboration.

Mottishaw left the Utah office in July 2015 to assume another leadership role in state government. Hughes took over as project lead. This band of experts plainly illustrated what Csikszentmihalyi has identified as present in creative endeavors: cross-domain and cross-field collaboration.  The collaboration included Petty’s cross-domain talent in procurement and information technology; Hughes’ strengths as an attorney; Salts’ well-regarded expertise in identifying the flexibility that existed under Utah procurement laws and regulations.

Initiatives like these can flounder, and collaboration in a virtual environment is particularly challenging. Shannon Berry and her predecessor Paul Stembler, NASPO ValuePoint cooperative development coordinators, provided critical support. They set up sourcing team conference calls on a biweekly basis and weekly at certain critical periods when events were moving quickly. Hughes described it this, way, “It was fluid, they kept us moving forward, supported us when we pivoted as we learned.” Petty prepared 40 ICTAC summaries that consolidated and coordinated current thinking.

Hughes eventually was selected to be Utah’s chief procurement officer, transitioning the project to Solomon Kingston, a state contract analyst. Kingston is leading the technology refresh on the two-year anniversary with the support of Berry and a talented sourcing team. Kingston reminds us of the other part of the cross-field collaboration: “The vendor community has been essential.”  Suppliers have been among the strongest advocates of the two-year refresh approach, for example.

What turns novel and creative ideas into innovation is broad acceptance of their value.  The Cronin Award nomination quoted various senior leaders about the major leap forward that this procurement represented at a critical time for states’ IT needs.  According to Doug Richins, NASPO ValuePoint’s Chief Executive Officer, “The success of this groundbreaking procurement is due to the excellent leadership by the State of Utah, the dedication of a very talented group of state procurement and IT professionals on the sourcing team, and collaboration with state CIOs.”

Talented architects. Solid foundation. Collaborative team. Great architecture!

 

About the Author

Richard Pennington is general counsel to NASPO ValuePoint. He is the author of Seeing Excellence: Learning from Great Procurement Teams.

 

DISCLAIMER: The documents on the NASPO ValuePoint website are for informational/ convenience purposes only. Official documents are maintained by the lead state (or participating entity in the case of participating addenda). In the event of any conflict between the documents on this site and those maintained by the lead state or participating entity, the official documents maintained by the lead state or participating entity govern.

Please note that some documents may be absent or incorrect. Please send all feedback and suggestions for improvement to Kate Offerdahl at kofferdahl@NASPOValuePoint.org

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