Blog: Nebraska’s Consolidation

I was honored to be asked to provide the Keynote address for Central IT SLED Pack this month regarding Nebraska’s Consolidation effort.  While preparing for this engagement I realized that I needed to define what exactly took place in Nebraska .  I once defined our consolidation as a “hybrid consolidation” but it became much more after four years of continued development, reaching all levels of government (city, county, and state). It is now closer to a full consolidation.

What do we mean when we say Nebraska is a “Consolidated State”?  

  • One network – one domain.
  • Centralized management of Active/Hot Standby, geographically separated data centers.
  • Hardware managed by the Office of the CIO.
  • Servers located in only the State’s two data centers managed by the Office of the CIO.
  • Enterprise applications managed by the Office of the CIO.  (What is an Enterprise App? More than one Agency uses it.)
  • Applications that are specific to an Agency are managed by the Agency business teams, but the technical infrastructure is managed by the Office of the CIO.


Ed Keynote


What were the events that led up to the consolidation? 

The Governor did not mandate the consolidation. He asked that we demonstrate to the Agencies the value of the project through enhanced quality, greater speed to market and lower costs.  No appropriated funds were received from the legislature to upgrade aging hardware.  No outside consulting firm was hired to manage or provide guidance for the effort.  It was entirely funded from our budget which was in place before consolidation was initiated. Consolidation itself resulted in $30M+ annual savings.

To give some background, here is what I believe contributed to our success. Both Governor Ricketts and I worked at Ameritrade during a time when the company orchestrated several successful mergers and acquisitions.  From February 2001 to October 2004, Ameritrade acquired and merged with seven other organizations. In January 2006, they merged with TD Waterhouse from Toronto-Dominion Bank and the combined company was renamed TD Ameritrade.  During this time I grew professionally and learned from each experience. 

I am fully aware that a merger or acquisition is not the same as a State Agency consolidation, but there are many similar characteristics necessary for success which I borrowed from my former career to apply them during consolidation:

  • Support from executive leadership;
  • A consolidation leader who “must be the most excited and optimistic person in the room”;
  • A published roadmap with timelines for each phase required;
  • Build-off and celebrate successes in each phase, adjusting for issues discovered in the previous phase;
  • Transparency, communication and trust between all groups involved throughout the process;
  • Prior due diligence-- a thorough evaluation of the technology and resources must be completed prior to execution;
  • “Follow the Money”, meaning:  it has to have a good business plan with calculated potential savings;
  • Executes with structure and speed to align technology standards and platforms.   


With our playbook and a roadmap in place, the Nebraska team was prepared to manage each step.

State 1

Credibility was essential to our success. I spent my first nine months as the State CIO getting our house in order, focusing on the fundamentals. We needed to ensure that the correct processes and procedures were in place in our organization first. 


State 2

We used Benchmarking to baseline our environment.   Workforce numbers mean very little with no objective standard to measure them against.  We utilized Gartner Public Sector IT key metrics data to support the vision of the end state resource model.   Saying we were overstaffed was not enough, we had to determine where and by how much and then commit to bringing the numbers in line with industry benchmarks.

During step 2, we had to communicate our findings clearly with each of the agencies.

State 3

For every Full Time Employee (FTE) consolidated, one FTE or Contractor position was eliminated via attrition.  From my experience with mergers/acquisitions I found that not everyone on the team wants to change, that rate was 20%.  Our experience with the state agencies followed the same math, either via transfer within the State, new employment opportunities or retirement. 

State 4

In Step 3 we had to prove the value of our efforts and prove it quickly.  We did not hire consultants as we knew the structure we needed.  Each organization needs to do their own cost analysis, but don’t wait until you have every detail planned out…80% is good enough.

State 5

We began to execute the plan and celebrated at the completion of each stage.  Our Transformational change was iterative with several well-planned phases. Although the phases overlap, the order of execution mattered.  We had to begin with the consolidation of the network and supporting resources prior to the next phase of hardware consolidation and virtualization.

State 6

State 7

Making our business case, we reduced response time and increased depth of support. By utilizing Agency technology support positions that were located outside of the Capitol area of Lincoln, we had enough resources to meet staffing benchmarks to support 8 separate “Service Centers”. This allowed us to locate technical support closer to the customers and gained the ability to recruit from multiple rural areas of the State of Nebraska.  We improved Service Levels and standardized processes across the State with integrated tools and automation.

State 8

Consolidation allowed the State of Nebraska to deliver a unified technology vision.  We focused on improving staff utilization and reducing cost from duplication in applications and infrastructure.  Reducing the technology footprint lowered the overall risk and complexity allowing for automation of server and desktop management via statewide standardization.  We exceeded our expectations of focusing only on the cabinet agencies by branching out to non-cabinet agencies, commissions, boards, counties and even cities.

We also benefited from something that was not in our initial business plan, optimizing our vendor portfolio.  We built strategic relationships that act as an extension of our team utilizing more managed services particularly in areas where resources are increasingly hard to attract and retain.  These partnerships gain efficiencies for us while reducing overall costs through simple economies of scale.  We can negotiate improved SLA’s, better customer service, and shorter delivery lead times with an established and defined supply chain.  We have seen an increased adoption of IT Governance in the areas of Architecture, Security and Cloud review processes.  This led to better oversight of statewide enterprise projects to ensure adherence to the statewide technology plan.

We followed our business plan. The cost savings and enhanced customer experience were expected and advertised.  Our ability to remain on task allowed us to efficiently meet the State’s technology demands that were present during the pandemic. This was an unexpected bonus that made the transition to work from home much less complex and costly than I hear from my peers and read about in the media.

Where are we today?  We have moved beyond our initial goal.  We have consolidated and support 71 State Agencies, Boards and Commissions, 88 of 93 Counties, provide infrastructure as a service to the city of Lincoln and sell storage services to the city of Omaha.

As always, I appreciate your continued efforts to provide quality services to the State Agencies and the Citizens of Nebraska!

Ed Toner