2061 ROSECRANS AVENUE, SUITE 450 EL SEGUNDO, CA 90245-4929 TEL 1-210-207-4201 Fax 1-910-596-4480 WEBSITE: www bow.ca govlmembersiarton 621 CAPITOL MALL, SUITE 975 ‘SACRAMENTO, CA 95616 TEL 1-916-445-4154 FAX 1-916-325-2668, E-MAIL: Jerome Horton@boe.ca 90. JEROME E. HORTON CHAIRMAN (CALIFORNIA STATE BOARO OF EQUALIZATION July 22, 2015 Mr. Carlos Ramos Director and State Chief Information Officer California Department of Technology 1325 J Street, Suite 1600 Sacramento, CA 95814 Dear Mr. Ramos: ‘Thank you for providing the background (noted in your July 10th letter) for your Department’s decision to extend the CROS project’s procurement schedule. I am also appreciative of the various discussions between you, Secretary Batjer, and our team prior to this letter. Further, I am looking forward to you joining us at the July 28, 2015, hearing to allow the BOE’s Members to publicly discuss your concerns with the CROS project and our path-forward strategies. As you know, the project’s Executive Sponsors and Steering Committee have been concerned about a number of project risks and issues related to the CROS project for quite some time. Over the past year, they have taken a number of steps to address these risks and issues, and many of our mutual concems. For example, they have: + Made adjustments to the procurement team’s organizational structure to ensure the right expertise and leadership were in place, + Strengthened the role of the Executive Business Sponsors to address the expertise needed for the decision-making process in support of good governance, + Evaluated the lessons leamed from other large and complex projects, like FTB’s Enterprise Data to Revenue Project, FISCal, the SCO’s 21° Century Project, and CalPERS’ myCalPERS Project, and + Held collaborative discussions with CalTech’s IT Project Oversight Division’s management on best practices resulting from lessons learned In acknowledgement and appreciation of the roles CalTech and Secretary Batjer play in helping the CROS project succeed, and lessons learned from failed projects, we are = Pinte on Recycled PaperMr. Ramos Page 2 of 2 July 22, 2015 considering other strategies to address the stated concerns and risks. For example, we are: + Considering modifications to the implementation plan, moving from a full replacement to an incremental approach, similar to the Franchise Tax Board’s EDR project and other successful state projects, * Conducting a comprehensive and ongoing evaluation of our organizational capacity to implement CROS considering current and future legislative demands and our operational workload, and * Continuing the functional realignment of our current IT and CROS governance structure to ensure organizational synergy and organizational readiness. Equally significant, with your recommendation that both the Program and the IT departments should have greater involvement with the project, and as the project transitions from the planning phase to the procurement phase, and next to the implementation phase, I plan to recommend that the Chief Information Officer and the Chief Program Officer (or Chief Program Manager, or Executive Program Manager) assume leadership roles on the project with a direct report to the Executive Director. With Board approval and with CalTech’s support of these project adjustments, I am confident that the implementation of the CROS project will result in less politics and more progress. I am equally confident that with your assistance, our Executive Director and her Deputies can create a more collaborative partnership based on mutual respect of our roles and responsibilities, and our common goal of efficiently, effectively and responsively serving the people of the State of California, while protecting the investments of the state and maximizing its return on investments. Sincerely, cc: Vice Chair George Runner, California State Board of Equalization Member Fiona Ma, California State Board of Equalization Member Diane Harkey, California State Board of Equalization California State Controller Betty Yee Ms. Cynthia Bridges, Executive Director, California State Board of Equalization Ms. Marybel Batjer, Secretary, California Government Operations Agency