Navigating the Shift: From Private Sector Efficiency to Public Sector Impact

Hosted by Megan, our Business Development Manager, this episode spotlights Robert's journey from being a Private Sector CIO to making a substantial impact in the Public Sector. Megan explores the essence of Robert's transition, uncovering the motivations, obstacles, and valuable insights he's encountered. The conversation highlights how Robert leverages his private sector expertise to drive technology initiatives that benefit the public, addressing the unique challenges and opportunities within the public sector.
This engaging session is perfect for professionals curious about the intersection of technology, leadership, and public service. Be sure to tune in for an inspiring story of change and impact.

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Transcript

So everyone happy Wednesday and welcome to the Avero Advisors live stream where I'm joined by Mr. Robert Kornovich, who is our director of advisory services. Hey Robert, how are you?

Hey, good morning.

Hi. I'll let Robert introduce himself and tell his story a little bit in just a little bit in more detail. But if you're joining us today, please let us know where you're joining from. We love to hear your comments and your questions and we love for these to be interactive. And if you are new to our live stream, I'll tell you a little bit about Avera Advisors. We are an independent third party consulting firm, leading public sector entities through it, strategic planning business process, re-engineering and any and everything ERP from strategy to selection through implementation. So that's a little bit about who we are. Again, let us know where you're joining from and real quick, I'm going to let Robert introduce himself and tell you a little bit more about his background. So Robert, you have the floor.

Thank you. I'm going to do brief little comments here because I think there's a slight internet lag here, so I don't want to lock up in the middle of a conversation, but I came from state and local government. In fact, I'll quickly tell my story as to how it relates to this topic. I started off in state government when I was a student at state university. Actually went to the private sector for a while in an architecture firm, all in information technology based job roles, and then wound up going back to local government after two years and then now I'm back in the private sector again. So I've bounced back and forth several times and the differences between those are not what people think and they can also be substantially different if you don't have an idea as to what you're getting yourself into. And we see this occasionally with clients as well. Someone's been brought in from the private sector, which is great, lots of innovation, lots of thought leadership and things like that. And then as we're going to talk about in a little bit, they run into procurement and their life changes very quickly.

Yes, I think this is an exciting and unique topic and I love that we have your perspective, Robert, because you've lived it. Right. So let's talk about the transition or an overview of the transition really quick. So how did your goals and objectives change when you moved from the private sector to the public sector, and then how did you have to adjust along the way?

Change management was the largest difference. It was a lot easier in the private sector to enact an idea and the paperwork was minimal. In some cases, I was just handed a credit card by the principal of the firm and go out and buy it and have it delivered tomorrow. And especially in the architecture practice because they lived on the cutting edge of technology, they were always waiting for more resources, faster devices, better storage, better backup systems. So the minute something new hit the market, they would purchase it at a high cost, have it delivered as quickly as possible, and then our orders were get this implemented in 24 hours because you're losing money on what you're spending for staying on the cutting edge by letting technology age by a couple of days, let alone weeks, government doesn't always move that fast. There's a procurement process and a purchasing process that needs to be followed and there's change management that needs to occur before you do that.

So it's easy to get frustrated going into the public sector and go, why all these requirements? Why do I have to jump through all these hoops just to purchase something and what do you mean I can't just get the budget for this, I actually have to go back to a counselor or my governing body and get an increase in funding. Those are sort of the blind spots that you run into. And if you're not prepared for at least willing to dive into why that's there and what you need to do, maybe talking to the controller or the CFO and say, Hey, I'm new to this. Please tell me how this is done. You're going to find yourself really frustrated for quite a long time, and if you follow the learn by trial and error process, it's going to take you even longer. You really need to embrace someone in the organization, whether it's in procurement or finance, and say, Hey, how does this work? Explain how this is going to work specifically for this environment.
Would you say that your leadership style changed moving from private to public?
Yeah, because for the very reason of you cannot enact new ideas with urgency, I shouldn't say urgency, with the immediacy that you can in the private sector, something comes up a variable, serious variable, even maybe something major in IT, infrastructure failure. When I was in private sector, I had access to a whole list of vendors that I could call in and say, I need you to come in here tonight and take care of this. I never had to worry about getting a sign off on a PO or anything. Again, government doesn't work that way. You have to plan for a lot of that in advance. You can do through a procurement process, you can get a lot of your vendors lined up so that if you need to bring in someone for cybersecurity, you already have that identified that you've already done bid postings, that you have a list of vendors that are approved that you can cut a PO with in an emergency situation. So the homework that you have to do in advance front loads a lot of that thought leadership that you have. You can't just react immediately to the thought leadership going into local government. And so it changes your leadership style and you have to plan a lot more and you have to prepare a lot more. And that permeates into everything you do during your regular day as well.
Right. Would you say that there are always silos when you're talking about an IT department versus any other department? I know that we talk about silos a lot in the local government space, but how is it in the private sector? Can you compare the two? Can you hear me, Robert? We lagging still. Hey Robert, can you hear me? I don't know guys.

Yeah, silos. Silos, yeah, are very easy to get yourself into a silo. It is almost a given in local government. You rarely have the time to reach out to other organizations and figure out what they're doing and how they're providing solutions and solving issues. I can,

Okay, well that was like two minutes ago. Are we good now? Okay guys, sorry for the technical difficulties. If you can still see me, it says I'm still alive, but I think we lost Robert, so just bear with me for just a second. Yeah, he lost connection. So sorry for the technical difficulties, if you're still on and you're still joining us, I do believe McKenzie has shared the link to our YouTube channel and our newsletter. Okay. Here's rk. He's a little fuzzy still. Can you hear me okay?

Can we can try this again? Otherwise I might be able to go this audio only. We're still
Yeah, yeah. Okay. We're still live, but that's
Okay. In every essence of the word we're live.

That's right. That's right. Okay. So I want to move into, I don't know if you got to finish your statement about silos and the differences between private versus public. Did you have any final thoughts on that before we move on to procurement?

Yeah, it, it's really easy to get yourself siloed, local government because first of all, you don't have a lot of time to work with other agencies and other municipal entities. And two, there's enough flavor difference between how one city does it versus your city. It's really easy to tell yourself, well, I'm alone in this and so I just need to concentrate on myself. And that's pretty common in government. You reach a point where you feel like I'm the only one doing it this way. I'm the only one that has to follow this particular process, which isn't necessarily true, but it's easy to feel that way.
Sure, sure. So let's dive into procurement. Can you briefly discuss how government procurement works and what the rules and laws regarding seeking new business, how that process works?

Sorry, try that question again. I apologize.
I got a little
Lag here.

Can you discuss the role of compliance and what regulations go into the public sector procurement process?

Yeah, compliance is, and compliance exists in private sector as well, obviously, and there are a lot of comparables to private sector. I think you would agree with your banking background as well. It's the largest liability and enterprise risk that you deal with on a daily basis in some situations, compliance is incredibly important to mitigating those risks and controlling them, especially if you're a housing authority, you're dealing with all this personal information. If you're a public safety entity, obviously there are very strict laws in place with serious consequences that you have to protect criminal data, case information. There's public records laws that you simply just cannot violate. It's, it's not an option to not follow those or follow those in records retention. So the compliance can be very thick to navigate through, especially if your housing authority. But I think a lot of people coming from the private sector, they might be familiar with Sarbanes Oxley or things like that, but they get into public sector and it can be a completely different deal on compliance. And it has a very strong political aspect of it too that you have to navigate.

How does the public sector's emphasis on competitive bidding impact technology or innovation within a local government agency?

So it can really work to your benefit and you can specifically define what you're looking for, which is what we do with our clients. If you're going to be replacing your financial system, let's make sure it's exactly what you need. And so there's a lot of discovery and requirements definition process mapping that we do in advance. I didn't do that in the private sector to be honest. It was usually someone in the firm having a lunch with an ERP vendor and boom, a contract was signed and a new system was implemented. So the private sector for good or bad, and I know our friends who do this, who do what we do, but do in the private sector will say, nah, it's not quite that simple. We do some pretty good process definition and things along those lines. I think that's kind of the exception.

And I also think what happens is a firm that's been bit once or twice by purchasing a system they didn't actually figure out the requirements for before they bought are the ones that are now doing a more thorough procurement process. But in government you have to follow that process. It implementation's going to take two years in some cases, even just doing discovery and getting the RFP ready to go on the street is going to take several months. So timelines are really stretched and elongated and there are budget considerations because you do have to deal with the budget and you're within the realm of public trust. But as we like to say, a lot of these solutions nowadays are very affordable. This isn't just for deep pockets private sector anymore. A lot of these solutions are affordable and work very well for local governments. So the good news is you can have access to the same amount of innovation as the private sector has. Bad news is the timelines are probably going to be a little bit longer and you need to do a little more pre-planning before you go out and just purchase something.
Right. Let's move into budgeting. Can you briefly discuss the differences in budgeting, specifically the recurring versus one-time dollar spent?

Yeah, so budgeting in general in government requires a lot of pre-planning. We used to call it budget season, which is about six months after the last budget fiscal year budget was approved by your governing body. You start working on next fiscal year, and in some cases budget season is ongoing The week after 52 weeks in a year, the week after you finally get your fiscal year 24, 25 budget approved, you immediately start working on 25, 26 because it has to go through a number of processes, it has to go through internal review, it has to go with the city manager and executive director's review. And then at some point when all the details have been figured out and the city manager has been able to put a budget together, that doesn't go beyond the expenditure limitation. If you're in a state that has expenditure limitation laws that your budget can only grow by a certain percentage every year or based upon your population.

And along with that, just with the budget requests, there have to be calculations done on recurring revenue, state shared revenue, which is usually based upon your population. If you're in a growing community like we are in Phoenix, the neighboring city probably grew faster than you did. And so guess what? Your share of the pot from state shared revenues, which comes from sales tax and other things is now smaller because that's how the percentages wind up working out. So there's this stance that goes on between revenues, identifying the recurring revenues, what other revenue sources you have, especially with grants. But again, grants don't show up overnight. You usually have to apply for them, you have to do the paperwork, and then it takes a period of time for you to get acknowledgement on that. So you're constantly doing this dance between this is what I need for the next budget year versus this is what I have in terms of revenue and sustainable funding.

And then this distills into the classic one-time cost versus recurring costs. Governing bodies love one-time costs, they love one and done. They love being able to find a source of funding and say, here's $2 million, go and buy me a new ERP system. And the conversation changes when you start saying, yes, that's great, thank you. But there is a cost in year two and year three and year four and year five, they do not like recurring costs and you have to champion that and hopefully who's ever leading your governing body and either it's a commissioner or a mayor or even the city manager's role is there to champion it with you because otherwise you get into a boom bus cycle, I got a new ERP system, it works great, but I'm not putting money into the maintenance agreement or the vendor relationship or keeping it updated. And guess what, three years down the road you're back with an ERP system you don't like and you want to get rid of and then the cycle starts all over again.

Right. So how do the physical year cycles in the public sector affect project timelines?
Yeah, so there's a couple of interesting things that pop up. If you don't know, one of 'em is carryover. It's not that simple. And the procurement and purchasing policies also affect a lot of what you do. So predominantly in my local government organization, state government, we were July one, June 30. A lot of times projects could not kick off at the beginning. They could not kick off in July, August, September, they had to start later in the year and sometimes they were contingent upon some revenue or other funding coming in at the proper time. So if you have a long-term project, you have to plan for that June 30, July one break and make sure that things are covered in the next budget cycle to do that because carryover is not that straightforward and even billing is not that straightforward. Finance directors will hound people about, I need to have this in place and build to us by June 30.

I do not have authority to carry over into the next budget year of purchase that is not encumbered in the prior month or the prior fiscal year. That's interesting times to be honest. Those are when things get hairies the most and you're pushing on the vendor, you need to get this completed, you need to get this in place and you need to be able to invoice me before June 30 so that or the work completed by June 30 so I can get it into this budget year. I don't have authority to pay you the following year. So then you have to make sure you're not running over the project or the people on the project by just trying to hurry up and get it billed that you're still doing what you need to do with the project and that you're following the proper timeline and you're not just paying the vendor because you want to get them the money.

They actually deliver the work. They actually deliver what they promised to. And so when that comes up of this vendor did not perform what they were required to do, I'm not going to pay them. Then the world can stop internally. Now you got to talk to the CFO and the city manager and find out what are we going to do about finding funds to carry over to pay these people when this does get completed because I don't want to pay them now. They didn't complete the work and operating the realm of public trust, it's not fair for me to pay a vendor just because I want to pay the vendor they need to have delivered what they said they were going to deliver.

Sure. Great points. Robert av, I don't know when he posted this comment because we had some lag time there, but he says, what about lack of familiarity with specific product suites that are only available in the public sector, for example, ERP systems? I think probably when we were talking about the procurement process specifically competitively bidding. So do you have comments to his question?

Yeah, I mean the simple solution to that is you're going to need a firm like us to give you the full picture of what's available to you. It's real easy to have a vendor or several vendors call you up, especially if you're a larger state or local government organization and say, Hey, I want to come in and demo to your staff our new system, which is fair. The software vendors obviously need to do that and that's part of their business process. But the part that's missing is the system I've been using is SAP for example, and I've been using it for 15 years. I'm looking at a different product from a different vendor and it looks really shiny and it looks really interesting and they're showing me some really cool and that's better than what I'm currently using. It's real easy to tell yourself, well then this is the solution.

And as we talked about in other videos, that certainly is not the case. There needs to be a proper definition and a script put together and then you put that in front of those software vendors so that they demonstrate to you using your procedures and hopefully your data or some test data that reflects your environment and actually shows you, because again, we operate in the realm of public trust. We have to be efficient with these funds and we have to use them correctly. So I think a lot of places just get impressed with something they see at a conference or they see a software vendor demo and they decide, well, I can just build out the requirements based upon what I saw today because I saw everything. And as we talk about, that's usually not the case. They're showing you the product in its best possible format and environment. And so you have to be skeptical of, okay, that looks good. What would it actually do with my data? And two, that report is really interesting. I like that report, but do you actually need that report because the software vendors kind of banking on the fact that you're going to love the report whether you need it or not and be favorable towards their system.

Yes, absolutely. I think it's very easy to get sucked in at conferences. I get sucked in at conferences with the booths and all the people who are so friendly and they do, they show you all the blinky lights and the great things about their systems, but I think it's important for our viewers to stop and think and take a step back and think about what the outcomes are, right? What do you want the outcomes to be with your new system? And it varies between departments. So I agree, Robert, yes, reach out to someone like Avera Advisors, we'd be happy to help you and help you become more familiar with what's out there and maybe more familiar with what you're doing internally that could be different. I want to turn to open meeting laws. Can you share what open meeting laws are and what it means for the public sector and how it differs from being a CIO in the private sector? Excuse me.

Yeah, so in a lot of states, your governing body has to transact business in an open meeting. They have to do it in front of the public. A lot of times it has to be in a meeting where the public is invited to appear in person and certainly has the right to speak. So what can happen with open meeting laws is there's a lot of procedure that you didn't have to follow. And I saw this last night, the state where we went and were part of a contract approval does not post its agenda until an hour before the meeting. In the state where I am in Arizona, public records law require you to post the agenda two weeks in advance and you cannot add or remove things easily on the agenda. It's going to vary from state to state for a variety of reasons, but you really need to get familiar with that because when you're talking to a vendor, if you don't explain to them how this has to be handled properly and even things like they can't call up a group of your council members and just start talking to 'em and say, Hey, this software is great, that when you have a quorum of your governing body meeting together, a transacting business, it has to be done in a public setting and it has to be announced in advance.

This can even be very simple innocuous things like I send an email to all seven council members and one of 'em hits reply all or one only responds to two or three council members responding to you that can be open meeting law violations. Again, business has to be transacted. Doesn't mean council members can't individually meet and talk to each other or the mayor and a council member or a council member and the town manager. It's when as a governing body you are making decisions. You have to be fair and open with the public on things like that. And you have to be careful of getting into those situations inadvertently because in some states, that's a very serious violation. The state I'm in Arizona, it is a very serious violation if that open meeting law is violated.
And how do you ensure compliance, we're talking about from the role of the CIO, right? And you're bringing people and the public into these meetings. How do you ensure that you maintain your compliance standards?

My suggestion is you get really friendly with other department directors. If you're in the city, get to know the city clerk. They are the ones who deal with a lot of open meeting laws and records retention. They're going to be your best friend on some of these decisions, especially if someone does a public records request for documentation involving you or your department. Your city clerk and your city attorney are going to be your best friend on that. Get to know your procurement director. Find a way for them to make your life easier and you make their life easier and things will go a lot better. It's when at the last minute you walk into procurement and say, guess what? This just changed. I need to pull the RFP and stick this in as agenda or insert a reason here why I need to modify the RFP either before it goes on the street or it's already on the street.
They will tear their hair out trying to explain to you that we simply cannot just make a change on the RFP without posting it in the newspaper. If you're in a municipality that still requires you post public bids or agenda in newspapers, things like that, get to know key people in your organization and become friends with them and figure out a way that you're going to work through a lot these issues when they pop up and your life's going to be a lot easier. Otherwise you're going to have to become a compliance expert and you're going to have to figure out to do it on your own and you're simply not going to have time. You have to have those other departments helping you along in the process.
Kind of along these same lines, Robert, how do you navigate the intersection of technology and policy in the public sector?

Excellent. It depends upon what the motivating factor is. So I'm giving you the consulting answer. It depends, and a lot of this talks about return on investment too. Some councils, their return on investment is a simple fact that they can announce to the world that they now have this piece of technology. They're willing to spend the money just so that they can announce to the world or to their citizens. We now have this self-service portal. We listen to the developers and we now have this option for them to be able to transact business with the city or the town. Sometimes that's it. That's the only return on investment. That's the only policy that's stated for you when you start delving into areas like public safety, administrative policy, both in the police department, which can be very rich and robust and needs to protect a lot of liability and also make sure that it's being used correctly.

Also intersects with city policy as well as political policy that your governing body is doing as well. And then on top of that is state compliance and policy that you need to do. And especially with public safety, there's also federal layer on as well, because you're accessing federal systems for criminal justice information, it can be very difficult to navigate. There's a lot of help you can get on the outside through if you're in law enforcement. IACP for example, is an organization that will help you with that policy. And what we used to like to do when I was in local government is just steal from another city. I like their policy. It's public record. The public owns the policy anyway. So you just look at another city or talk to another city. And you know what? I like the way you guys structured your policy. I like how you use this. I'm going to steal all this verbiage and now it's going to become mine. Perfectly acceptable, perfectly fine, and you don't have to reinvent the wheel or start from scratch on a lot of this.
So my last question for you, Robert, maybe a little bit of a personal one, but what motivated you to make that jump from private to public sector? And were there any surprises or things that you liked better by being in the public sector?

So I am a public servant at heart, and it's actually one of the reasons why I came to work for Vero many years ago is because that's what we have here as well. We have servant leadership at our heart and it's very, for me, I love the fact of being able to make a change in my community or help out something that in a lot of situations, other organizations would look at, yeah, we'd like to do that, but that's not exactly profitable or that doesn't make sense. Government usually winds up picking up some of those things and being able to work on things like that or trying to improve things. Because there are a lot of people in local government that are, despite the stereotype, they're very hardworking and they want to make change and they want things to change, but it's very difficult and insurmountable at times, especially if you're pushing up against a political agenda.

This governing body does not want to do this. You have to know when to go, okay, I need to stop fighting for this because they're not listening, or this needs to be moved to another opportunity. The balance between that and the private sector is I like being able to look and see what is the best comparisons between the two that I can now cross pollinate. Obviously with us, I get to take a lot of our local government and state government experience and apply it to what we do. Understanding the client's perspective, understanding that throwing out a procurement change requires a discussion well in advance and not just the day before an RFP goes on the street. So I get the best of both worlds here at DeVero. I get to leverage all that local government experience, servant leadership at heart, and then use it to serve clients and be able to provide my perspective and my experience from when I was in local government as well. It's very enjoyable.

Yes, I would agree with that too. I too come from the private sector with a finance background, but I love people and I love leaving them better than when I found them. So with that, Robert, what give us two key takeaways that we can take away from our discussion today.

Takeaways for today, get comfortable with procurement. That's where your initial mistakes are likely going to be, and that's what's going to frustrate you the most. And understand that government procurement is not the same across the board. Some organizations have very strict procurement requirements because they faced bid challenges in the past and therefore they've had to tighten up their language and now require very specific things. Other organizations, their procurement policy is 20 pages or 10 pages. So don't be surprised if you try and go out and study procurement for one organization, but then you wind up being hired by another organization. Don't be surprised when that procurement policy and those procedures are different than the one you were looking at in the other organization. Be prepared for that.

Yes, absolutely. And maybe we come back on and do a part two. I know there's a lot that we didn't get to today, but I think this is a really engaging topic. So I'd love to have you back on for a part two to this topic. So thank you guys for joining us. We go live every Wednesday. If there's something that you would like us to discuss, please reach out. We're available on all social media platforms. Again, McKenzie shared our link to sign up for our newsletter. Those are really fun. Please engage with us and we look forward to seeing you next week. Thanks, Robert. Bye.