Texas Dept of Information Resources Agency Strategic Plan

Agency Strategic Plan
Fiscal Years 2013–2017
BY THE

Texas Department of Information Resources

BOARD MEMBER DATES OF TERM HOMETOWN

Charles Bacarisse 2/01/2007 to 2/01/2013 Houston

Ramon Baez 5/06/2009 to 2/01/2015 Irving

Rosemary R. Martinez 2/01/2007 to 2/01/2013 Brownsville

Richard S. Moore 8/28/2009 to 2/01/2015 Goliad

Phillip Keith Morrow 3/16/2011 to 2/01/2017 Southlake

Robert E. Pickering, Jr. 5/06/2009 to 2/01/2015 Houston

Wanda Rohm 3/16/2011 to 2/01/2017 San Antonio

Louis Carr, Jr., ex officio 7/01/2011 to 2/01/2013 Austin

Bowden Hight, ex officio 6/01/2012 to 2/01/2013 Austin

Karen Phillips, ex officio 9/01/2011 to 2/01/2013 Austin

Submitted July 6, 2012

Signed: Approved:

Karen W. Robinson Charles Bacarisse
Executive Director Board Chair

Contents

STATEWIDE ELEMENTS.............................................................................................................................1
AGENCY ELEMENTS ..................................................................................................................................5
EXTERNAL/INTERNAL ASSESSMENT
Agency Scope and Functions ..................................................................................................................7
A. Statutory Basis .................................................................................................................... 7
B. Historical Perspective ......................................................................................................... 7
C. Affected Populations ........................................................................................................ 11
D. Main Functions ................................................................................................................. 12
Organizational Aspects ....................................................................................................................17
A. Size and Composition of Workforce ................................................................................. 17
B. Organizational Structure................................................................................................... 17
C. Geographical Location ...................................................................................................... 21
D. Location of Service Populations ........................................................................................ 21
E. Human Resource Strengths and Weaknesses .................................................................. 21
F. Capital Assets .................................................................................................................... 22
G. Agency Use of Historically Underutilized Businesses (HUBs) ........................................... 22
H. Key Organizational Events and Areas of Change and Impact ........................................... 24
I. Use and Anticipated Use of Consultants .......................................................................... 26
Fiscal Aspects .......................................................................................................................................27
A. Size of Budget ................................................................................................................... 27
B. Method of Finance............................................................................................................ 28
C. Per Capita and Other State Comparisons ......................................................................... 28
D. Budgetary Limitations ....................................................................................................... 28
E. Degree to Which Current Budget Meets Current and Expected Needs ........................... 28
F. Capital and/or Leased Needs ............................................................................................ 29
Service Population Demographics ........................................................................................................31
A. Historical Characteristics .................................................................................................. 31
B. Current Characteristics ..................................................................................................... 32
C. Future Trends.................................................................................................................... 32
Technological Development .................................................................................................................35
A. Impact of Technology on Current Agency Operations ..................................................... 35
B. Impact of Anticipated Technological Advances ................................................................ 36
C. Degree of Agency Automation, Telecommunications, etc. .............................................. 37
D. Anticipated Need for Automation (Purchased or Leased)................................................ 37
Economic Variables ..............................................................................................................................43
A. Identification of Key Economic Variables ......................................................................... 43
B. Extent to Which Service Populations Are Affected by Economic Conditions ................... 43
C. Expected Future Economic Conditions and Impact on Agency and
Service Populations........................................................................................................... 43
D. Agency Response to Changing Economic Conditions ....................................................... 44
Impact of Federal Statutes and Regulations ........................................................................................45
Other Legal Issues ................................................................................................................................47

Agency Strategic Plan for FY 2013–2017 iii

Self Evaluation and Opportunities for Improvement .......................................................................... 49
A. Agency Reviews ................................................................................................................ 49
B. Agency Characteristics Requiring Improvement .............................................................. 49
C. Key Obstacles.................................................................................................................... 50
D. Working with Other Government Entities to Achieve Success ........................................ 50
E. Key Resources ................................................................................................................... 51
F. Employee Attitudes .......................................................................................................... 51
AGENCY GOALS...................................................................................................................................... 53
TECHNOLOGY RESOURCES PLANNING .................................................................................................. 57
APPENDIX A. Agency Planning Process ................................................................................................. 65
APPENDIX B. Current Organizational Chart ........................................................................................... 67
APPENDIX C. Five-Year Projections for Outcomes ................................................................................ 69
APPENDIX D. Performance Measure Definitions ................................................................................... 71
APPENDIX E. Workforce Plan................................................................................................................. 81
APPENDIX F. Results of Employment Engagement Survey .................................................................... 95
ENDNOTES ............................................................................................................................................. 97

iv Agency Strategic Plan for FY 2013–2017

STATEWIDE ELEMENTS

Statewide Vision, Mission, and Philosophy

A. Statewide Vision
We must continue to adhere to the priorities that have made Texas a national economic leader:
• ensuring the economic competitiveness of our state by adhering to principles of fiscal
discipline, setting clear budget priorities, living within our means, and limiting the growth of
government
• investing in critical water, energy and transportation infrastructure needs to meet the
demands of our rapidly growing state
• ensuring excellence and accountability in public schools and institutions of higher education
as we invest in the future of this state and make sure Texans are prepared to compete in the
global marketplace
• defending Texans by safeguarding our neighborhoods and protecting our international
border
• increasing transparency and efficiency at all levels of government to guard against waste,
fraud, and abuse, ensuring the Texas taxpayers keep more of their hard-earned money to
keep our economy and our families strong

B. Statewide Mission
Texas state government must be limited, efficient, and completely accountable. It should foster
opportunity and economic prosperity, focus on critical priorities, and support the creation of
strong family environments for our children. The stewards of the public trust must be men and
women who administer state government in a fair, just, and responsible manner. To honor the
public trust, state officials must seek new and innovative ways to meet state government
priorities in a fiscally responsible manner.

Aim high . . . we are not here to achieve inconsequential things!

C. Statewide Philosophy
The task before all state public servants is to govern in a manner worthy of this great state. We
are a great enterprise, and as an enterprise, we will promote the following core principles:
• First and foremost, Texas matters most. This is the overarching, guiding principle by which
we will make decisions. Our state, and its future, is more important than party, politics, or
individual recognition.
• Government should be limited in size and mission, but it must be highly effective in
performing the tasks it undertakes.
• Decisions affecting individual Texans, in most instances, are best made by those individuals,
their families, and the local government closest to their communities.
• Competition is the greatest incentive for achievement and excellence. It inspires ingenuity
and requires individuals to set their sights high. Just as competition inspires excellence, a
sense of personal responsibility drives individual citizens to do more for their future and the
future of those they love.

Texas Department of Information Resources STATEWIDE ELEMENTS
Agency Strategic Plan for FY 2013–2017 1

• Public administration must be open and honest, pursuing the high road rather than the
expedient course. We must be accountable to taxpayers for our actions.
• State government has a responsibility to safeguard taxpayer dollars by eliminating waste
and abuse and providing efficient and honest government.
• Finally, state government should be humble, recognizing that all its power and authority is
granted to it by the people of Texas, and those who make decisions wielding the power of
the state should exercise their authority cautiously and fairly.

STATEWIDE ELEMENTS Texas Department of Information Resources
2 Agency Strategic Plan for FY 2013–2017

STATEWIDE ELEMENTS

Relevant Statewide Goals and Benchmarks

The Texas Department of Information Resources adopts the following General Government
priority goals and benchmarks from Strengthening our Prosperity: The Statewide Strategic
Planning Elements for Texas State Government.1

A. Priority Goal
To provide citizens with greater access to government services while reducing service delivery
costs and protecting the fiscal resources for current and future taxpayers by
• supporting effective, efficient, and accountable state government operations
• ensuring the state’s bonds attain the highest possible bond rating
• conservatively managing the state’s debt

B. Benchmarks
• Total state taxes per capita
• Total state spending per capita
• Percentage change in state spending, adjusted for population and inflation
• State and local taxes per capita
• Ratio of federal dollars received to federal tax dollars paid
• Number of state employees per 10,000 population
• Number of state services accessible by Internet
• Total savings realized in state spending by making reports/document/processes available on
the Internet and accepting information in electronic format
• Funded ratio of state pension funds
• Texas general obligation bond ratings
• Issuance cost per $1,000 in general obligation debt
• Affordability of homes as measured by the Texas Housing Affordability Index

Texas Department of Information Resources STATEWIDE ELEMENTS

STATEWIDE ELEMENTS Texas Department of Information Resources

AGENCY ELEMENTS

DIR Mission and Philosophy

A. Agency Mission
The mission of the Department of Information Resources (DIR) is to provide technology
leadership, solutions, and value to Texas state government, education, and local government
entities to enable and facilitate the fulfillment of their core missions.

B. Agency Philosophy
The services we provide to Texas state government, education, and local government entities
will focus on excellence through quality of service, responsiveness, innovation, professionalism,
and teamwork and we will operate in an open, ethical, efficient, and accountable manner, with
high regard for all customers.

We will foster and promote technology leadership by
• providing quality service to our customers
• encouraging strategic partnerships between the public and private sectors

We will foster and promote technology solutions by
• ensuring that business needs drive technology solutions
• ensuring the public trust by securing technology assets and maintaining privacy of sensitive
data and information

We will foster and promote value to our customers by
• encouraging use of managed technology infrastructure and shared services
• delivering value to Texas citizens through the official state portal

Texas Department of Information Resources AGENCY ELEMENTS

AGENCY ELEMENTS Texas Department of Information Resources


Agency Scope and Functions

A. Statutory Basis
DIR was created in 1989 when the Texas Legislature enacted Chapter 2054, Texas Government
Code—the Information Resources Management Act. Since that time, the scope of
responsibilities increased within Chapter 2054 with the addition of subchapters F, I, J, and K,
which address the state electronic Internet portal, and subchapter L that addresses the
consolidation of data center services.

Two additional sections of the Texas Government Code (TGC) address security requirements and
communications technology services:
• TGC Chapter 2059 authorized creation of a network and security operations center and the
provision of network security services by DIR for state agencies and others.
• TGC Chapter 2170 authorized DIR to provide communications services to state agencies.

B. Historical Perspective
The State of Texas recognized the impact of information and data automation as early as 1967
and began a series of organizations and councils with increasing responsibility for information
technology (IT) planning and assets. These early beginnings led to the formation of DIR in 1989.
Significant events in DIR’s history are presented below.

1989 The Legislature enacted the Information Resources Management Act, creating the
Department of Information Resources to replace the Automated Information and
Telecommunications Council (AITC). The Act established a comprehensive information
resources management cycle including components related to strategic and operational
planning, budgeting, procurement, and performance evaluation. The Act required DIR to
• develop a state strategic plan every two years for information resources
management
• compile an annual performance report examining the state’s use of technology
• monitor national and international technology standards and trends
• develop, publish, and ensure compliance with policies, procedures, and standards
related to information resources management by state agencies
• establish an information resources technology evaluation center for use by DIR and
other state agencies

1992 The cooperative contract program began, with $24 million in customer purchases IT
commodities and services in the first year.

1993 The 73rd Legislature required DIR to establish the state disaster recovery facility and
data center in cooperation with Angelo State University.

1997 The 75th Legislature adopted Sunset legislation continuing DIR for 12 years, created the
Year 2000 (Y2K) Project Office within the agency, and added internal quality assurance
assistance to DIR’s duties.

Texas Department of Information Resources EXTERNAL/INTERNAL ASSESSMENT | AGENCY SCOPE AND FUNCTIONS

1999 The 76th Legislature established the Electronic Government Task Force to implement
the state’s Internet business portal.

2000 The cooperative contracts program was restructured so that customers order products
and services directly from the vendor instead of through DIR; the program was
rebranded as the “GoDIRect” program.”

2001 The 77th Legislature transferred the Telecommunications Services Division from the
General Services Commission to DIR and established the Telecommunications Planning
and Oversight Council to oversee planning and reporting functions of the division. Laws
were also passed establishing the Program Management Office and a statewide security
program within DIR, and the TexasOnline Authority to oversee the TexasOnline project
managed by DIR. DIR’s executive director was statutorily designated as the state’s chief
information officer.

2005 The 79th Legislature enacted House Bill (HB) 1516, HB 2819, and HB 3112 implementing
most of DIR’s technology recommendations from its 2004 Biennial Performance Report,
and ensuring a statewide enterprise approach to information resource management
and cyber security.

HB 1516 required state agencies to use DIR’s contracts to purchase commodities and to
use the state data center if DIR determined that agencies’ use was cost-effective. The
legislation also established the Texas Project Delivery Framework for use by state
agencies, to select, control, and evaluate IT projects. HB 2819 authorized DIR to adopt
rules, and provide training and technical assistance to agencies regarding compliance
with access to electronic and information resources (EIR) for people with disabilities.
HB 3112 required DIR to provide cyber security services to state agencies.

2006 DIR amended the contract with its TEX-AN (Texas Agency Network) provider, resulting in
significant technology enhancements and reduced costs for its diverse customer base.

DIR created a shared, statewide Internet protocol (IP) communications platform for
TEX-AN in partnership with service providers.

Representatives from DIR and the other 26 agencies participating in the statewide Data
Center Services (DCS) program developed the request for offer (RFO), conducted the
procurement, and executed the agreement.

TexasOnline, offering more than 800 online services available, achieved financial
“breakeven,” that is, the vendor recouped its initial capital investment in the portal. At
that point, all assets were then transferred to the State of Texas.

2007 On March 31, the Texas DCS contract commenced. The contract established enterprise-
managed services for the state by transitioning employees, hardware, leases, and
licenses to the vendor team. As part of this effort, equipment from the agency data
centers began to be migrated to two locations—one in Austin, one in San Angelo.

2008 The Network and Security Operations Center (NSOC) was opened. The NSOC provides
security services to state agencies, including security event alerting and reporting, event
correlation, and non-intrusive vulnerability scans.

2009 The 81st Legislature strengthened DIR’s cyber security program by authorizing DIR to
develop rules regarding vulnerability testing of network hardware and software.

EXTERNAL/INTERNAL ASSESSMENT | AGENCY SCOPE AND FUNCTIONS Texas Department of Information Resources

DIR entered into a new contract to manage TexasOnline, effective January 1, 2010, that
expanded services to customers, utilized new Web 2.0 tools, and delivered significantly
increased revenue to the state.

The Texas Higher Education Coordinating Board, Texas Education Agency, Department
of Insurance, and Department of State Health Services completed print and mail
consolidation in the Austin Data Center, bringing the print and mail consolidation rate to
99 percent.

The Office of the Attorney General and the Texas Railroad Commission completed
mainframe consolidation in the Austin Data Center, resulting in one hundred percent of
the data center mainframes being consolidated.

Through the third quarter of FY 2009, customer purchases through cooperative
contracts generated $893 million, or a 16 percent increase over the same period for the
prior year, while posting a 34 percent increase in cost avoidance in the same
comparative time.

2010 In January, the award for the state web portal contract became effective and the new
vendor assumed responsibility for the portal as a result of the competitive procurement
process.

In June, DIR implemented an owner-operator governance model for the DCS program.
This model involved customer agencies in the decision-making process and established
partner agency groups for communication and representation.

Also in June, TexasOnline was officially rebranded as “Texas.gov.”

Texas.gov received the following recognitions:
• Best of Texas award (Government Technology Conference Southwest) for Best
Application Serving the Public
• ClearMark award for Dynamic Media Public Sector
• Gold Screen Award for Website Excellence
• Web 2.0 and Social Media Award
• Outstanding Government Marketing (GovMark Council)
• Interactive Media Outstanding Achievement

In June, Texas.gov, with more than one-thousand online services available, achieved a
second financial “breakeven” for designated projects, which increases the state’s share
of the revenue for those projects.

In August, DIR notified the existing DCS service provider that all services under the DCS
master services agreement would be reprocured.

In November, DIR released two Data Center Services RFOs. The Service Delivery RFO was
for five IT service delivery components: Mainframe, Server, Data Center Facilities,
Network, and Print and Mail. The Service Integration RFO established a Multisourcing
Services Integrator (MSI) to coordinate and integrate operations, thus ensuring seamless
end-to-end service delivery across the service delivery components.

2011 DIR established the Internal Audit department.


The enactment of HB 1504 (82R), effective June 17, 2011, changed statutory references
from “TexasOnline” to “state electronic Internet portal.”

In August, DIR began implementing legislation from the 82nd Legislative Session, as well
as issues included in the agency’s most recent Sunset review. DIR is committed to
implementing those Sunset recommendations that were not subject to the veto of
HB 2499 and which the agency has authority to execute.

In September, DIR created the Cyber Security Education and Economic Development
Council, as provided by Senate Bill 988, to facilitate public and private partnerships to
improve the infrastructure of the state’s cyber security operations, develop strategies to
accelerate the growth of the cyber security industry, and encourage cyber security
organizations to “call Texas home.”

In October, DIR created the Statewide Information Security Advisory Committee (SISAC)
as part of the statewide IT Enterprise Security and Risk Management program. The
purpose of the committee is to foster collaboration among state agencies on the issue
of information security.

In December, DIR completed the reprocurement for the TEX-AN services resulting in 10
vendors being awarded contracts providing multiple telecommunications-based
services. As a result of the reprocurement, DIR customers now experience expanded
services, lower pricing, and greater visibility into their telecommunication services.

Texas.gov received the following recognitions:
• Gold Screen Award
• Technology Solutions Award
• ClearMark Award
• Best of Texas
• GovMarks Awards
• Best Fit Integrator
• Best of the Web
• Interactive Media Awards

2012 In March, DIR completed the reprocurement of the Data Center Services contracts with
three new service providers. This new DCS service delivery model provides increased
flexibility to allow state agencies to adjust services to better manage their costs with
greater visibility into how services are delivered.

DIR began a public/private partnership pilot to compare cloud services from multiple
providers and provision those services through a central self-service portal. The self-
service portal or marketplace that offers these cloud services is called the Texas Cloud
Self-Service Portal. This portal, the cloud services it provides access to, and the business
and technical infrastructure that supports it, are collectively named the Pilot Texas
Cloud Offering. The pilot program is designed to drive improvements into the pricing
model and the business processes for public entities. It has also allowed DIR to
implement legal, operational, and governance conditions for cloud services.

To date in 2012, Texas.gov has received the following recognitions: the ClearMark
Award and the International Association of Business Communicators – Austin


C. Affected Populations
DIR’s key service populations include the Office of the Governor, the Texas Legislature, oversight
agencies, state agencies, institutions of higher education, local governments, school districts,
political subdivisions, assistance organizations, and the citizens of Texas.

The following table provides an inventory of DIR’s service population served by each strategy
listed for the agency in the FY 2012/13 General Appropriations Act (GAA) and a brief description
of the types of services provided to them.

DIR Service Population

Customer Groups Services Provided GAA Strategy

State leadership, Produce the biennial State Strategic Plan for Information A.1.1
state agencies, local Resources Management and related performance reports and Statewide
government, analyses, issue statewide recommendations, provide a Planning
education technology trends and management practices education forum
for state agency personnel, including information resources
managers (IRMs), and conduct interagency and
intergovernmental workgroups

State agencies, local Develop rules and guidelines that establish statewide A.1.2
government, technology standards and best practices for agencies to Rule/Guideline
education manage and align their technology with their business Development
environments and to guide effective project delivery

State agencies, local Develop statewide security standards for information resource A.1.3
government, assets and support the state’s Homeland Security efforts Statewide
education through technical analysis, training and awareness efforts, and Security
proactive prevention, threat reduction, and response to
information resources security threats

State agencies, local Manage a procurement infrastructure for information B.1.1
government, technology commodities and services, which maximizes the Contract
education state’s volume buying power and enhances the quality of Administration
purchases by negotiating, managing, and monitoring
information and communications technology contracts

State agencies Implement, monitor, and maintain consolidated data center B.2.1
services Data Center
Services

State agencies, local Manage Texas.gov, the State of Texas electronic government B.2.2
government, portal TexasOnline
education, citizens

State agencies, local Implement and maintain shared information technology B.2.3
government, services, comprising either voluntary services as an option to Shared Services/
education agencies or services provided through a Technology Center Tech Centers

State government Maintain and increase the capabilities of the Capitol Complex C.1.1
Telephone System CCTS

State agencies, local Maintain statewide network services and provide a shared C.2.1
government, infrastructure to support converged Internet Protocol (IP) Network
education communications services Services


Customer Groups Services Provided GAA Strategy

State agencies, local Provide converged network security service, including C.2.2
government, telecommunications networks, that encompass network Network &
education assessments and monitoring, as a proactive means to identify Telecom
and remediate vulnerabilities and external network threats for Security Services
participants of the state’s Network and Security Operations
Center and security services for other eligible entities when
requested and approved

Exemplary customer service is a primary goal of every DIR initiative. DIR determines its
customers’ needs through a variety of avenues such as the state portal, point-of-service surveys,
and ongoing customer assessments, as well as through extensive collaboration with other
agencies on every major statewide technology initiative. Customer feedback, from individual
citizens, public school and university educators, and fellow state agencies, is also a key driver in
the design of DIR’s services and products. A more detailed description of DIR’s service
population is included in the Service Population Demographics section.

D. Main Functions
Since inception, DIR has been responsible for the state’s strategic direction for technology along
with the development and enforcement of technology policies and standards for state agencies.
The agency has been given additional responsibility to manage and deliver information
technology services. DIR’s main services include Information Security, eGovernment (including
Texas.gov), Communications Technology Services, Technology Sourcing Office, Data Center
Services, and Technology Planning and Policy.

1. Information Security
DIR provides computer network security services to state agencies according to TGC Chapter
2059. DIR manages the state’s IT Security program, which is responsible for the security of
information and communications technology resources, including the physical and logical
security of the state’s data systems and networks. This is a shared responsibility with other state
agencies that requires continuous, coordinated, and focused efforts.

The IT Security program
• operates the Security Operations Center
• conducts technical security and risk assessments for state agencies, institutions of higher
education, and local governments
• maintains secure communication portals and channels to foster information sharing among
state agency information security officers
• provides advanced IT Security and Incident Response training and identifies network and
website vulnerabilities in the state’s critical infrastructure
• provides remediation consulting services to mitigate or remediate vulnerabilities

2. eGovernment
DIR’s eGovernment services division comprises DIR’s internal IT department and a team that
oversees the Texas.gov program and evaluates new technologies to identify opportunities to
enhance public entity IT portfolios.


This division of DIR ensures Texas.gov, the Internet portal for the state, has reliable and secure
service levels including the guidance, tools, and policies necessary for state and local
government to offer Internet-based services to businesses and citizens. DIR established and
maintains the state Internet portal in accordance with TGC Chapter 2054, Subchapters F and I.

Texas.gov is the premier award-winning source for Texas government information and services
provided over the Internet. At the direction of the Legislature, DIR created the portal in 2000 as
a pilot to determine if a state Internet portal could successfully deliver services to citizens in a
public-private partnership model. The business model provides that the vendor invests funds to
develop and operate the portal and applications, and receives a share of the portal-generated
revenue as compensation to reinvest in the program to continue development. The state also
receives a share of revenue, which is deposited into the state General Revenue fund. This
business model was among the first of its kind in the public sector and continues to draw
interest from other states and governmental entities. Eleven years later, Texas.gov continues to
be a highly regarded and successful program.

Texas.gov offers more than 1,000 services in a secure, technical, and service infrastructure. By
sharing the processes and systems of Texas.gov, publicly funded entities are able to reduce
redundancy of effort and leverage economies of scale. One example of this is the enterprise
credit card processing engine and associated infrastructure that supports all online payment
transactions. This infrastructure eliminates the need for each individual agency to contract with
independent service providers and create duplicative processing systems. This is the most cost-
efficient strategy in that it allows the state to aggregate payment transactions for the highest
possible volume discount.

Current Texas.gov initiatives include a new application for the Texas Department of Criminal
Justice, upgrades to the eFiling application used by Texas County, District, Probate, Appellate
and Supreme Courts, and updates to drivers’ license applications for the Texas Department of
Public Safety.

3. Communications Technology Services
DIR procures and provides telecommunications services to state agencies and other Texas
governmental entities as directed by and in accordance with TGC Chapter 2170. DIR manages
the statewide telecommunications network, referred to as TEX-AN, which
• provides a portfolio of local and long-distance voice, video, and data services through
vendor- and state-managed telecommunication networks
• supplies various local and long distance phone services for state office buildings through the
Capitol Complex Telephone System (CCTS)
• provides secure Internet access for all state agencies
• supports customer care for delivered services
• offers contract governance with agency participation

TEX-AN offers expanded telecommunications services and
• supports the needs of more than 700 state and local government agencies
• is adaptable to changing customer requirements
• can rapidly incorporate new and emerging technologies
• provides DIR’s customers with expanded services and solutions that
– are cost-competitive and affordable


– meet their changing telecommunications and system requirements
– are simple to understand, budget, and acquire
– provide transparency into service performance

4. Technology Sourcing Office
TGC § 2157.068, authorizes DIR to establish contracts for information technology commodity
items. This statute designated the department as the central purchasing entity to leverage the
bulk buying power of the state into significant savings on IT investments for governmental
entities, including hardware, software, and technology services. DIR developed and now
manages the statewide contracts for technology commodities and services, now referred to as
technology sourcing contracts. The Technology Sourcing Office comprises the former
Cooperative Contracts division and the former Enterprise Contracts division as part of an overall
consolidation of DIR’s contracting function. Currently, over 750 IT commodity contracts are in
place for products and services, including
• computers
• software
• security hardware, software and services
• networking equipment
• telecommunications equipment
• IT staffing services
• technology-based training

Requests for products and services have increased dramatically since the program’s inception.
This program generates more than $236 million in cost savings annually for DIR customers by
maximizing the state’s volume buying power and streamlining the procurement process for DIR’s
customers. Customers of this program include
• state agencies
• institutions of higher education
• units of local government, including cities, counties, public
• school districts, municipalities, and special purpose districts
• others, including assistance organizations and public entities outside Texas

In addition to direct product/service cost savings, agencies are able to avoid certain costs such as
the expenses of identifying, evaluating, and negotiating for products and services and the cost of
related time delays. The value of significant direct and indirect cost savings also has resulted in
the consistent growth in use of these Total Cooperative Contracts Sales – FY 2011
contracts by eligible customers. State By Customer Channel
agencies and public education, including
higher education, customers now account for Local State
74 percent of all purchases made through Government Agencies
DIR contracts. $407M | 25% $507M | 31%

To better serve its customers, DIR seeks to
understand their purchasing needs and
Other
habits. DIR has implemented program $10M | 1%
Higher Ed
+ K–12
analytics, such as spend analysis and $704M | 43%


business intelligence, to generate greater cost savings and improve the quality of the state’s
investment in technology commodities.

5. Data Center Services
As authorized in statute (TGC Chapter 2054, Subchapter L) DIR manages the Data Center Services
program. Under this program, the data centers of 28 agencies have been consolidated into two
locations, Austin and San Angelo. The consolidation is designed to result in technology upgrades
and improvements in addition to cost savings as a result of statewide economies of scale.

This initiative enables agencies to access data center computing as a managed service and pay
for the amount of services used, rather than invest in hardware, software, and staff to operate
and maintain IT infrastructure at an individual agency level. The data center solution also
provides more transparency into the costs of these services because all participating agencies
have a DCS budget rather than incorporating these costs in agency administrative and capital
expense items.

6. Technology Planning and Policy
TGC Chapter 2054 authorizes DIR to coordinate and direct the use of information resources
technologies by state agencies. DIR provides technology planning, policy, and standards to
agencies throughout the state and works closely with them to ensure the efficiency and
effectiveness of policies and planning tools. DIR delivers these services through
• Technology Planning and Reporting to improve the management and use of information
resources
• Technology Policy Management to facilitate and guide the development and administration
of statewide and agency technology policies, standards, guidelines, and procedures
• Internal Rule and Policy Management supports DIR’s obligations to continuously monitor
and improve its rule-making and policy development functions in accordance with statute
• Electronic and Information Resources Accessibility to support state agencies in complying
with state and federal requirements and ensuring that Texas government information and
services are accessible to everyone
• Statewide Project Delivery to help state agencies in managing and implementing technology
projects
• Education and Outreach to provide information and guidance through conferences,
briefings, and events on technology areas of interest to information resources managers and
IT staff

E. Public Perception of DIR
DIR is perceived as an agency that enables other government entities to achieve their core
missions by providing knowledge, value, and resources associated with technology. Although the
general public has only an indirect exposure to DIR through the state’s portal, Texas.gov, their
use of the services indicates an experience that provides value.

As the state’s technology leader, DIR establishes policies and guidelines for information
resources management, produces the strategic plan for the state’s technology resources, and
reports on progress to the Legislature. With technology touching almost every aspect of
government, this leadership role is critical.


During the last Sunset Commission review of DIR as an agency, several areas of improvement
were identified that require additional focus:
• developing a more customer-focused organization
• strengthening internal processes and procedures
• breaking down organizational silos within the agency

Continuous improvement is critical for DIR to be fully responsive to its customers’ needs. As the
state technology agency, DIR must provide its customers with access to the most up-to-date
technology and services. This includes
• the protection offered through the IT Security program
• the services and products available through the Technology Sourcing and Communications
Technology Services programs
• the hardware and software provided for Data Center Services
• the shared platform and payment gateway of Texas.gov, which allows state agencies to
conduct state business directly with citizens and businesses
• policy guidance through the Planning and Policy program

Regular satisfaction surveys are conducted at the state agency level regarding the DCS program.
DIR recognizes that state agencies continue to have concerns about the program. With the
reprocurement of the program completed and current efforts to improve and stabilize
processes, DIR believes that customer satisfaction will dramatically improve.

As a part of the continuous improvement process, the agency assessed the 2011 Sunset
Commission recommendations, HB 2499, recent audits, customer satisfaction survey results, and
other reviews. DIR is implementing appropriate provisions in order to be more responsive to the
agency’s key stakeholders. Thorough planning and implementation of appropriate
improvements will include clear baselines and performance measures.

In June, DIR conducted a facilitated focus group session to seek comprehensive input from DIR
customers. DIR is evaluating the results of the focus group, along with the results of the
Customer Service Report, to develop strategies that enhance service and respond to concerns
raised by customers.

Additionally, DIR continues to collaborate with our state agency partners in delivering innovative
technology while providing overall guidance in the implementation and management of the
technology. DIR strives to provide customers with appropriate technology solutions based on
partner agencies’ needs while leveraging cost-effective strategies during difficult budgetary and
economic climates.



Organizational Aspects

A. Size and Composition of Workforce
As of June 1, 2012, DIR has 188 budgeted full-time equivalent positions. The composition of the
agency’s workforce based on required reporting categories is presented below.

DIR Workforce Composition – Actual

Anglo Black Hispanic Other
Reporting Category M|F M |F M|F M|F Total

Official / Administration 8 |8 1 |0 3 |0 12 | 8

Professional 43 | 48 2 |7 1 |9 2 |4 47 | 68

Technicians 12 | 3 2 |2 8 |1 0 |1 22 | 7

Administrative Support 1 |3 0 |4 0 |5 1 | 12

Service/Maintenance 0 |2 0 |0 1 |4 1 |6

Agencywide 64 | 64 5 | 13 13 | 19 2 |5 84 | 101
Source: DIR Human Resources Office (May 1, 2012)

B. Organizational Structure
Governor

DIR Governing Board

Internal Audit
Executive Director/
Texas Chief Technology Officer

Chief Information Chief General Chief Chief
Security Operations Counsel’s Administrative Financial
Office Office Office Office Office
• Communications • Communications
Technology and Strategic
Services Partnerships
• Data Center • Human Resources
Services and
• Technology
eGovernment
Planning and
• Technology Policy
Sourcing Office

Texas Department of Information Resources EXTERNAL/INTERNAL ASSESSMENT | ORGANIZATIONAL ASPECTS

1. Governing Board
DIR is an executive agency governed by a ten-member board with seven voting members and
three ex officio, non-voting members. The voting members are appointed by the Governor with
the advice and consent of the Texas Senate and serve for staggered six-year terms. One
appointed member must be employed by an institution of higher education as defined by
Section 61.003, Texas Education Code. The ex officio members come from two groups of three
agencies, each who serve on the board for two-year terms on a rotating basis.

House Bill 675, as enacted by the 80th Texas Legislature, allows an ex officio member of the DIR
Board to designate a senior agency manager to serve in the member’s place. This legislation also
changed one ex officio member from the commissioner of the Workers Compensation
Commission to the commissioner of the Department of Insurance.

The Internal Auditor reports to the DIR Board.

2. Executive Director’s Office
In addition to the state’s Chief Information Officer, who serves as the Executive Director of DIR,
the office includes the Chief Operating Officer, the General Counsel, the Chief Financial Officer,
the Chief Administrative Officer, the state’s Chief Information Security Officer, and
administrative support staff. The Executive Director’s Office provides overall technology
leadership and direction to the state and the agency as well as coordination of key statewide
initiatives. Additionally, the Internal Auditor, who reports directly to the DIR Board, provides
updates and information to the Executive Director.

3. Internal Audit
DIR’s Internal Audit division’s mission is to assist DIR management by examining and evaluating
(1) the adequacy and effectiveness of the agency’s control processes and (2) the quality of
operations and services performed in carrying out assigned responsibilities. Internal Audit
provides an independent review for the agency, including objective analysis, information, and
recommendations for remediation. The division provides any needed follow-up reviews to
ensure that corrective action has been taken and has gained intended results. Additionally, the
division performs an enterprise risk assessment annually, which is used to develop the board-
approved annual internal audit plan. During the year, the division performs scheduled audits,
board-requested projects, investigations and monitors agency activities. The division also acts as
a liaison between any external audits and DIR.

4. Chief Operations Office
The Chief Operations Office leads the technology operations and service functions within DIR
including: Communications Technology Services, Data Center Services, eGovernment, and
Technology Sourcing Office.

(a) Communications Technology Services (CTS)
The CTS Division manages the statewide communications network infrastructure known as
TEX-AN, which provides voice, video, and data including integrated voice response,
telephony, wide area network, virtual private network, and call solutions to state agencies,
political subdivisions, local governments, independent school districts, certain institutions of
higher education, and assistance organizations. These services are provided to eligible
customers through the operation of DIR networks and through numerous contracts for
related services. DIR manages the Capitol Complex Telephone System, which delivers voice

EXTERNAL/INTERNAL ASSESSMENT | ORGANIZATIONAL ASPECTS Texas Department of Information Resources

and data communications support within the Capitol Complex. State agencies are required
to use TEX-AN and CCTS unless a waiver is granted.

(b) Data Center Services
As authorized by statute (TGC Chapter 2054, Subchapter L) DIR manages the Data Center
Services program. Through this program, DIR has consolidated the data centers of 28
agencies into two locations—Austin and San Angelo. The consolidation is designed to result
in technology upgrades and improvements in addition to cost savings as a result of
statewide economies of scale.

(c) eGovernment
Texas.gov is the official eGovernment website for the State of Texas. As a self-supporting
public-private partnership with Texas NICUSA, the site offers more than 1,000 convenient
online services, including driver’s license and vehicle registration renewals, vital records
retrieval, licenses for concealed handguns, capitol access, and professional occupations and
facilities in a secure technical and service infrastructure for more than 100 public customers.
Since its inception in 2000, Texas.gov has
– had over 200 million site visits
– processed nearly 170 million financial transactions
– collected and processed over $23 billion on behalf of Texas public entities
– contributed over $110 million to the Texas State Treasury

This team also researches and makes recommendations regarding technologies about which
state agencies and/or state leadership have expressed interest. To date, the team analyzed
the potential role of cloud infrastructure in agencies’ IT portfolios and evaluated the pros
and cons of Texas-related top-level domains. Research also continues on the merits and
limitations of opening up the .texas.gov domain to requesting cities and counties; the
resource requirements, benefits, and costs of an enterprise approach to Open Data; and the
feasibility of including third-party mapping capability on Texas.gov.

(d) Technology Sourcing Office
Through the Technology Sourcing Office (formerly known as the Cooperative Contracts and
Enterprise Contracts divisions), DIR provides technology products and services to customers
while leveraging volume discounts. DIR continues to add new products and services to
address the changing needs of its customers. Without this function, state and local
governmental entities would not benefit from the aggregated buying power of the state and
would be required to conduct procurements for each product and service individually,
adding significant costs to state and local government.

5. Chief Information Security Office
The Chief Information Security Office delivers security information management and
vulnerability assessment services to DIR’s state agency partners, local governments, and
institutions of higher education. The office also develops statewide security policies and best
practices, maintains a 24/7 security alert and response system, and promotes security
awareness through training.

6. General Counsel’s Office
The Office of General Counsel provides legal counsel and advice to the board and executive
director, as well as general legal support for DIR staff functions. For all DIR program areas, the


Office of General Counsel drafts, negotiates, reviews, and interprets contracts and other
agreements; supports the procurement process; coordinates litigation with the Office of the
Attorney General; coordinates the rulemaking process; handles matters related to the Public
Information and Open Meetings Acts; and handles legal matters related to human resources and
ethics compliance.

7. Chief Administrative Office
The Chief Administrative Office oversees Technology Policy and Planning, Governmental
Relations, Communications, and Human Resources activities for DIR.

(a) Technology Planning and Policy
State agencies and institutions of higher education invest more than $2.8 billion annually on
technology resources;2 therefore, delivering projects within scope, on time, and on budget is
critical to the state. With legislative and DIR Board direction, along with state agency
collaboration, DIR develops policies, procedures, and standards to guide agencies in
planning, reporting, and managing technology resources. Finally, the Planning and Policy
Office has been charged with coordinating governance among agency programs to facilitate
common practices and clear communication channels.

(b) Governmental Relations
Governmental Relations duties include responding to legislative inquiries or requests
and coordinating agency responses to leadership on issues of interest. Governmental
Relations monitors legislation and ensures implementation of all legislative
requirements after bills are enacted. Governmental Relations reports regularly to the
board and executive director on legislative issues and compliance progress.

(c) Communications
Communications duties include responding to media inquiries and appropriately handling
agency records through records retention management. It also includes a number of
activities to ensure the appropriate delivery of information to external stakeholders, the
public, and within the agency.

(d) Human Resources
Human Resources supports the agency by managing personnel and assisting in recruiting,
hiring, developing, and retaining a diverse and skilled workforce. Human Resources oversees
job classification and employee compensation as guided by the State Auditor’s Office and
ensures compliance with federal and state laws related to employee pay and labor
standards. Human Resources also guides benefits administration, employee wellness, and
employee relations issues through the coordination of various programs and staff
communications.

8. Chief Financial Office
The Chief Financial Office is responsible for supporting DIR’s goals and objectives by providing
agency management and the board with reliable financial information and analysis, and ensuring
compliance with finance-related laws and regulation. The office is also responsible for compiling
and reporting DIR’s performance measures and all finance-related reports, such as the
Legislative Appropriations Request, Annual Operating Budget, and Annual Financial Report. As
DIR is primarily a cost-recovery agency, the office develops cost-recovery administrative fees
that recover DIR operating expenses while ensuring that fund balances are effectively managed.


C. Geographical Location
DIR is located in the W.P. Clements, Jr. and Sam Houston Buildings in the Capitol Complex. DIR
also houses a statewide network and security operation function at a secure facility in north-
central Austin. DIR also oversees the management of the Austin Data Center and Texas State
Data Center in San Angelo. These facilities are used by state agencies and universities and
operated by a private vendor under contract to DIR.

D. Location of Service Populations
DIR’s services are available to public entities in Texas, including state agencies, cities, counties,
universities, school districts, and other political subdivisions. The service population is divided by
the boundaries of their jurisdictions instead of by DIR regions or divisions.

DIR maintains ongoing contact with its customers using both technology tools and personal
contact to engage this diverse population. General contact includes information sharing on
products and services available through the Technology Sourcing Office, the state data center,
Texas.gov, and TEX-AN, and information gathering to enhance services offered. Forums to reach
DIR customers include
• webinars, webcasts, and other Internet-based media channels
• targeted communications to key customer segments (direct mail, e-mail, bulletins, surveys)
• educational events
• customer service representatives
• work groups, focus groups, councils, and committees
• conferences
• partnerships with governmental entities and trade associations that reach DIR’s targeted
audiences
• vendors’ promotion of DIR’s enterprise and cooperative contracts

TGC § 2056.002(b)(8), requires agencies to describe services to specific geographic service
regions (the Texas-Mexico and the Texas-Louisiana border regions). The Texas-Mexico border
region encompasses 43 south and west Texas counties, and the Texas-Louisiana border region
encompasses 18 northeast Texas counties. DIR serves state agencies, higher education
institutions, and local governments that provide services throughout the state and to these
specific geographic service regions.

E. Human Resource Strengths and Weaknesses
DIR’s talented workforce remains its greatest resource. Over the next five years, 45 percent of
key staff members will be eligible to retire. Replacing the institutional knowledge and broad
experience DIR currently has may be more difficult if employment forecasts and the economy
improve. In addition, attracting and retaining employees with strong information technology
knowledge may become more difficult as hiring in the technology sector gains momentum and
private-sector salaries outpace those available in state government.

There are a number of skills that are critical to the agency’s ability to execute its business
functions and legislative mandates effectively and efficiently. These skill sets include leadership,
management, contract management, negotiations, communications technology services,


systems analysis, government accounting, network management, project management, web
administration, information security analysis, and data center operations management and
consolidation.

DIR is dedicated to its role as the chief information resources agency for the state and strives to
hire and retain employees whose knowledge of and experience in information and
communications technology is exceptional. Developing long-term strategies for acquiring and
retaining staff to achieve program goals continues to be of critical importance. In accordance
with the agency’s Workforce Plan (see Appendix E), DIR will continue to identify the critical skills
and competencies needed to achieve desired program results and will refine hiring and training
strategies that can be implemented with available resources.

F. Capital Assets
1. State Data Center System
DIR oversees management of the Austin Data Center and Texas State Data Center in San Angelo.
These facilities are used by state agencies and universities and are operated by a private vendor
under contract to DIR.

2. Capitol Complex Telephone System
DIR provides and supports the communications system for the Capitol Complex. The CCTS
program delivers communications technology services to support the needs of the
Governor’s Office, state agencies, the Texas Legislature, and legislative agencies in the
Capitol Complex. It includes a private branch exchange, voice mail systems, automatic call
distribution services, and local and long distance services.

3. Austin Metropolitan Area Network (AMAN)
The network facilitates cost-effective communications access to shared services supported by
DIR such as data center and Texas.gov. In addition, AMAN provides the foundation for the
TEX-AN voice and data services provided to publically funded entities in Austin.

4. Enterprise MPLS Network
DIR manages a robust and resilient platform utilizing multiprotocol label switching (MPLS)
that delivers quality service for data, voice, video transport, and Internet. This platform
provides Internet Service Gateways (ISGs) in 18 locations across the state, including all local
access transport areas. DIR’s customers include the agencies served by the former Health
and Human Services Consolidated Network, which provided the legacy platform that was
transferred to DIR. Additionally, the agency has continued to work in partnership with
interested agencies to further leverage value for the enterprise network solution.

5. Network and Security Operations Center
The NSOC protects the state’s information assets from unauthorized external intervention or
improper use. The NSOC is a secure and resilient facility that provides a cost-effective, first-
priority source of network security services.

G. Agency Use of Historically Underutilized Businesses (HUBs)
DIR’s HUB program has the dual role of increasing HUB participation at the state level through
the Technology Sourcing Contracts program and at the agency level through internal


procurement. At the state level, the program provides significant opportunities for participating
agencies to increase their HUB utilization. DIR’s internal policy is to use HUBs for goods and
services whenever feasible.

As of August 2011, of the 691 technology sourcing contracts that are managed by DIR and
utilized by state agencies and local governments, 200 (29 percent) are prime HUB vendors.
Additionally, 329 HUB resellers are available through the contracts for a total of 529 HUB
avenues. HUB participation through the Technology Sourcing Contracts program consisted of
$447 million in HUB sales in FY 2011.

Internally, DIR uses the Comptroller of Public Account’s Centralized Master Bidders List, and
each appropriate HUB vendor is given an opportunity to respond to a request for offer. DIR posts
RFOs for 30 days, exceeding the state’s requirement of 14 days in a good faith effort to include
HUBs.

DIR is committed to promoting and increasing HUB contracting opportunities, which include the
following good faith efforts:
• developing prime contractor and HUB subcontractor relationships through DIR’s Mentor
Protégé program
• increasing awareness of DIR procurement opportunities through the agency’s website,
Electronic State Business Daily, local commerce events, and statewide forums
• including HUB coordinator at pre-bid conferences to provide subcontracting instructions
• hosting an annual economic opportunity forum
• coordinating networking opportunities for vendors to meet key DIR staff
• increasing attendance at economic opportunity forums and HUB-oriented trade fairs with
bid opportunities
• identifying and assisting HUB contractors who need certification or re-certification

DIR HUB Activity and Statewide Technology-Based HUB Activity
The following table illustrates the FY 2011 HUB activity as reported for DIR by the Office of the
Comptroller.

DIR HUB Activity – FY 2011

Measure Description Activity

Outcome Measure Percentage of total dollar value of contracts and subcontracts 16.7%
awarded to HUBs

Output Measures Number of HUB contracts and subcontracts awarded 568

Number of HUB contractors and subcontractors for bid proposals 136

Number of Mentor Protégé Agreements executed 4

Number of HUB forums and outreach efforts attended 12

Dollar value of HUB contracts and subcontracts awarded $8,058,451


The following table illustrates the statewide HUB activity through technology sourcing contracts
for FY 2011.

Statewide HUB Activity through Technology Sourcing Contracts – FY 2011

Measure Description Activity

Outcome Measure Number of HUB avenues 529

Output Measures Percentage of dollars awarded to HUBs through Cooperative 27%
Contracts

Number of HUB forums and outreach efforts attended 12

Dollar value of HUB contracts awarded $447 Million

H. Key Organizational Events and Areas of Change and Impact
Four key events have occurred during the last biennium that have changed and impacted the
business operations at DIR. Each has brought positive opportunities that DIR will leverage for the
benefit of customers and citizens alike.

1. Agency Organizational Changes
DIR streamlined operations and staffing levels to better serve our agency partners and reduce
the organizational silos within the agency. First, the agency reduced staff levels significantly to
gain additional efficiencies from staff. Additionally, DIR restructured the agency by creating two
new senior management positions—the Chief Operating Officer (COO) and the Chief
Administrative Officer (CAO). The COO is responsible for leading the technology operations and
service functions within DIR, including Communications Technology Services, Data Center
Services, eGovernment, and the Technology Sourcing Office. The CAO oversees the agency’s
governmental relations efforts as well as all communications to key stakeholders to ensure
timely, relevant information about DIR’s programs is shared with agency partners. Finally, the
Planning and Policy Office under the CAO has been charged with coordinating governance
among agency programs to facilitate common practices and clear communication channels.

2. Texas.gov
The Texas.gov program successfully moved to the TexasOnline 2.0 Master Agreement, the
contract that guides the program until 2016. This transition required the
• re-signing of all 101 Customer Agreements by state agencies, courts, counties and cities
around the state
• establishment of six governance councils designed to provide guidance and transparency to
the developments and operations of the program
• finalization of 15 program plans such as Disaster Recovery and Business Continuity, Security
Management, Portfolio Management, Training, Help Desk Management, etc., that ground
and guide operation and implementation decisions
• development of new reports such as the Application Availability and Reliability Report, the
Customer Satisfaction Report, the Portal Accessibility Compliance Report, the Incident
Report, and the Help Desk Report to feed the performance metrics laid out in the new
contract


During the last two years, the program has
• established a new Service Desk that takes requests, incident reports, and escalations from
external help desks and customers to ensure that solutions are based on a thorough
awareness of issues and problems
• validated Payment Card Industry (PCI) data security compliance in customer agencies
• developed new applications for Concealed Handgun Licenses (for DPS), Vehicle Inspection
Stations (for DPS), Commissary Transactions (for TDCJ), Capitol Access (for DPS), Public
Information Requests (for OAG), Web Analytics Portal (all hosted customers)
• launched successful radio, web, print, and television marketing campaigns that have
resulted in measurable increases in adoption

DIR reviews the governance of the Texas.gov program regularly to assure that Texas.gov boards
and councils are aligned with overall program strategies. Through the review, DIR assesses the
impact of emerging technologies, economic trends, social media, etc., on the program and
identifies opportunities for improvement.

3. Data Center Services Reprocurement
The DCS program enables participating agencies to benefit from shared technology
infrastructure services. These services are required by all agencies; by consolidating to the two
statewide data centers, the state lowers overall operating costs for these basic operations while
ensuring greater visibility into expenditures and service levels.

DIR recently completed the procurement of the new Data Center Services contracts with three
new service providers. The new contracts will provide an innovative, flexible solution to meet
the needs of Texas citizens while better serving our agency partners and delivering improved
services.

4. TEX-AN
DIR completed the reprocurement of TEX-AN services in December 2011, which resulted in
multiple contract awards with an enhanced suite of services based on customers’ needs. The
strategic focus of the reprocurement included the following objectives:
• establish competition to drive pricing down and expand offerings
• improve the customer experience
• establish flexible contract vehicles to take advantage of new technologies
• increase transparency into service performance
• evolve the DIR business structure to support these goals

DIR strives to deploy technology solutions to meet state agencies’ core missions to serve Texas
citizens. As part of this effort, DIR’s IT infrastructure strategy team developed a long-term
approach that includes the benefits of cloud computing to obtain efficiencies and optimization in
both services and delivery.

DIR implemented several systems to align with the procurement solution. These systems work
together to provide service delivery automation for ordering, billing, and managing
telecommunications services while increasing transparency into service performance.


I. Use and Anticipated Use of Consultants
For the past biennium, DIR periodically used consultants to assist agency staff with specific
reprocurement projects. The agency anticipates the continued, but limited, use of outside
consultants for technical expertise with regard to complex procurement and contracting
activities. During the last Sunset Commission review of DIR, the Commission recommended that
DIR develop a policy governing the appropriate use of outside consultants in order to improve
agency oversight. The development of a policy governing the usage of outside consultants will
aid DIR in managing these necessary costs while still delivering technology solutions to agency
partners and key stakeholders.



Fiscal Aspects

A. Size of Budget
FY 2008/09 Biennium FY 2010/11 Biennium FY 2012/13 Biennium

$520,723,125 $606,073,030 $537,516,671

1. Pass-Through Funds
Approximately 86 percent of DIR’s appropriations for the FY 2012/13 biennium consist of
“pass-through” funds designated for payment of consolidated data center services for the 28
state agencies participating in the DCS program and for payment to telecommunications
providers for TEX-AN and CCTS services provided to DIR customers.

2. Funding Model
Since FY 2008, over 99 percent of DIR’s operations are funded through fees collected from
customers via interagency contracts and appropriated receipts. The fees vary depending on the
nature and scope of the services provided to customers. Fees are established based on DIR’s
costs of providing the services.

In addition, DIR is appropriated a small amount of General Revenue (GR) for the operations of
the Texas.gov program. The GR funding DIR receives for the Texas.gov program represents a
small portion of the GR collected through the program. DIR was also appropriated $13.3 million
GR for the FY 2012/13 biennium for the Enterprise Resource Planning (ERP) project under the
direction of the Comptroller. DIR transfers these funds directly to the Comptroller.

Method of Financing FY 2012 Estimated FY 2013 Appropriated

Appropriated Receipts – Clearing Fund $8,964,388 $5,928,424

Appropriated Receipts – Telecommunications Revolving Fund $12,815,822 $12,967,452

Appropriated Receipts – Statewide Technology Account $1,892,286 $1,892,286

Interagency Contracts – Clearing Fund $90,550 $2,540,754

Interagency Contracts – Telecommunications Revolving Fund $77,155,462 $79,753,631

Interagency Contracts – Statewide Technology Account $168,391,294 $150,432,931

General Revenue – Texas.gov $677,739 $677,739

General Revenue – ERP $6,737,961 $6,597,952

Total $276,725,502 $260,791,169

Texas Department of Information Resources EXTERNAL/INTERNAL ASSESSMENT | FISCAL ASPECTS

B. Method of Finance
DIR is funded via interagency contracts and appropriated receipts.

Method of Financing FY 2012 Estimated FY 2013 Appropriated

Interagency Contracts 88.8% 89.2%

Appropriated Receipts 8.6% 8.0%

General Revenue – ERP 2.4% 2.5%

General Revenue – Texas.gov 0.2% 0.3%

Total 100.0% 100.0%

C. Per Capita and Other State Comparisons
DIR estimates that Texas state government, including public institutions of higher education,
spent approximately $2.8 billion on information technology in FY 2010.3 This amount reflects
2.7 percent of total state expenditure. State technology spending is predicted to continue to
grow, from $30 billion across all states in 2007 to $42 billion in 2012. Some slowing of growth is
predicted due to the conclusion of state consolidation and modernization efforts. The primary
drivers of technology spending in the states—consolidation, integration, security, and privacy
issues—are predicted to continue into the future. DIR will update total IT spending figures for
state government in its upcoming biennial performance report (November 2012).

D. Budgetary Limitations
The General Appropriations Act establishes separate accounting funds, along with unique criteria
and restrictions, which apply to each of DIR’s revenue-generating programs. The budget
structure required to meet the GAA requirements and compliance with the associated
restrictions can limit DIR’s ability to meet the comprehensive funding needs for all agency
activities. For example, the costs associated with certain activities mandated by legislation that
are not revenue generating, such as security, technology policy and planning, etc., must be
funded as “indirect” costs via allocation to the revenue-generating programs.

Specific expenditure limitations recently placed on DIR may also negatively impact DIR’s ability
to serve customers. Two of DIR’s primary functions are to deliver data center and
telecommunications services to customer agencies. The majority of DIR expenditures are based
on customer demand for services. It’s possible that customer demand for services could exceed
DIR’s appropriation authority for a given fiscal year. If this occurs, DIR must obtain approval from
the Legislative Budget Board to exceed appropriated amounts in order to provide services to
customers.

E. Degree to Which Current Budget Meets Current and Expected Needs
DIR’s current budget is generally adequate to meet the current and expected needs of agency
operations with the following exceptions:
• The requirements associated with adjusting the Data Center Services cost-recovery
administrative fee limits DIR’s ability to fully recover the DCS program’s operating costs.

EXTERNAL/INTERNAL ASSESSMENT | FISCAL ASPECTS Department of Information Resources

• As cyber security threats continue to evolve, they challenge Texas’ ability to adequately
protect critical information technology including personal information entrusted to the state
by its citizens.
• DIR and the State of Texas must continuously maintain appropriate capabilities to defend
Texas citizens and the state’s critical infrastructure.
• DIR will need to identify sustainable resources that deliver critical enterprise security
operations and services to customers, support the ability of agency and higher education to
protect information resources, and enhance statewide cyber security infrastructure and
processes.

F. Capital and/or Leased Needs
DIR continually reviews the information resources and telecommunication needs of its customer
base. Any necessary capital and/or leased needs will be reflected in the FY 2014/15 Legislative
Appropriations Request and in accordance with Rider 4 (Capital Purchases on Behalf of Other
Government Entities) and Rider 7 (Telecommunications Capital Budget Purchases).

Texas Department of Information Resources EXTERNAL/INTERNAL ASSESSMENT | FISCAL ASPECTS

EXTERNAL/INTERNAL ASSESSMENT | FISCAL ASPECTS Department of Information Resources

Texas Dept of Information Resources Agency Strategic Plan

Texas Dept of Information Resources Agency Strategic Plan

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