Gov. Gavin Newsom’s ambitious budget proposal for a new Office of Digital Innovation (ODI) under the Government Operations Agency (GovOps) is far from reality, but discussion during a subcommittee hearing clarified its mission and potential early projects.

Techwire Takeaways

• Planned with ODI is a cultural change that would raise the value on innovation and emphasize human-centered design. An Innovation Academy to train executives and the workforce would help drive that cultural change.

• An Innovation Fund, paid for with $20 million in one-time funding, would empower ODI to move fast and confront issues in real time.

• The departments of Motor Vehicles and Consumer Affairs could be two early areas where ODI might work to help the agencies reinvent their process.

A conversation between Assemblyman David Chiu, D-San Francisco, and Richard Gillihan, chief operating officer at the state Department of Finance, wasn't aimed at decisive action; the hearing Tuesday before Budget Subcommittee No. 4 on State Administration was recommended to be “held open.” But considerable details emerged:

• The proposal, Gillihan said at the hearing, is about changing organizational culture, placing value on innovation, investing in the state workforce and delivering services in a way that’s “accessible, meaningful and intuitive.”

“Drive a customer-centric mindset, otherwise known as human-centered design. It’s about improving civic engagement, and it’s not about big IT and big projects, it’s about innovation,” he said.  He noted that while state tech investments were historically “largely one-off, one department, one-solution” approaches, that’s no longer viable. Gillihan said the state hopes, through agile and other related methods, to revolutionize process. He pointed out that similar approaches at the federal level and in the United Kingdom have achieved key successes.

• Financial asks haven’t changed. The Newsom administration still seeks $36.2 million in initial start-up funding; $14.6 million in “ongoing” annual budget; and 50 positions in ODI. The office, Gillihan said, will have the authority “to develop and enforce requirements” for agencies to assess their own service delivery methods and underlying business processes.

The proposal also includes $20 million in one-time funding for an Innovation Fund, intended to allow ODI to “move quickly to address issues and provide solutions in real time,” Gillihan said. He called it a “significant and important change” from the existing budget and processes, which he said add years to timelines and “tend to lead to large project proposals” and risky and costly implementations.

• Asked how the state would onboard 50 new staffers at ODI, and how well they might work with longtime employees, the COO described a “blended approach” that would offer private-sector technologists the opportunity for public service while exploiting a deep well of in-house talent to enable collaboration.

“As we do projects with departments, there’s going to be a natural partnership with the staff at the departments. So, there’s going to be a transfer of knowledge that happens in real time as we go into projects with departments,” he said.

• There is “some apparent overlap” between the proposed ODI and the California Department of Technology’s existing ODI, Gillihan said, but the latter is being renamed to avoid confusion. Currently, Gillihan said, officials don’t see “significant duplication,” but they believe that ODI and CDT will have complementary roles.

• Newsom’s budget — and, with it, ODI — likely won’t be passed by the Legislature and signed before late June at the earliest. But there are already two potential candidate agencies the office might examine — the Department of Motor Vehicles, which Gillihan called “ripe for an entire revisit of how they serve the public”; and the Department of Consumer Affairs (DCA). As processes at these individual agencies are re-examined, he said it’s hoped the creation of an Innovation Academy will help drive a larger cultural change.

• Chiu, a member of the California Legislative Technology and Innovation Caucus, said he thought the vision Gillihan laid out was “fantastic,” but noted: “The devil’s in the detail,” before questioning how these changes could happen quickly. He also wondered what might come next with DMV and DCA given “years of challenges in both instances.”

“When do you expect the DMV to accept credit cards?” Chiu asked near the session’s end, eliciting scattered laughter from the audience.

“More to come,” Gillihan said, to more laughter, having indicated changes at DMV and DCA would begin with a “shift in perspective” to customer-focused business process delivery. 

In fact, the prospect of the DMV accepting credit cards isn't so far-fetched; it's among the suggestions under consideration by a state task force exploring ways to fix the DMV's problems with long customer wait times. 

“Well, you have a lot of work in front of you,” Chiu said at the item’s end, describing himself as “obviously very, very interested in seeing how it applies.”