Selling technology is a tricky business; buying it on government’s behalf is even trickier. For Richard Rognehaugh (pronounced Rog-na-HAW), Tennessee’s information technology czar, replacing outdated equipment across the state’s 95 counties is only half the task. Convincing lawmakers and regulators to sign off on often staggering bills for IT spending can make his job as state chief information officer tougher than that of a corporate CIO. But since Rognehaugh took the helm of Tennessee’s Office of Information Resources a year ago, he has largely succeeded in pushing creative ways of funding technology.

Take, for example, Tennessee’s 30-year-old payroll system. Covering 38,000 state employees, it was designed in an era when perforated cards were used to run computer calculations; it has no analog in the world; and the only man who knows how to operate it is expected to retire soon. “I can’t hire somebody off the street to manage it,” Rognehaugh said last December at the quarterly Information Systems Council meeting, a 15-member body that governs his office. The old-school payroll system served as a colorful segue to describing the overall IT needs of the state.

Present at the meeting were Sen. Doug Henry and Finance Commissioner Dave Goetz, as well as representatives from the Oak Ridge National Lab, Tennessee Supreme Court, Tennessee Regulatory Authority and Vanderbilt University. On the table rested a massive binder describing Enterprise Resource Planning (ERP), a system Rognehaugh believes best suited to replace 70 different aging finance systems, as well as 50 other systems that perform various resource functions. Those 120 systems would be unified via the Internet under ERP, allowing state employees to check vital records without contacting multiple departments. Rognehaugh says the new system will improve access to shared data and secure it from unwanted visitors.

However, the up-front costs for the overhaul are substantial. In 2004, it will take an estimated $70 million to deploy the entire system, which includes $30 million required to replace the old human resources and payroll components.

Beyond seeking funds from the state, which is already pinched by mounting TennCare needs, Rognehaugh has commissioned studies to look into bond financing to cover ERP implementation, and his department has also applied for federal grants. Another option at his disposal is the Systems Development Fund, started 15 years ago as an “internal incubator” to reduce the state’s reliance on general fund appropriations. Run by the Office of Information Resources, the fund acts as a self-replenishing lending entity. Currently at $45 million, Rognehaugh hopes to grow the fund to $75 million in the next few years.

A former Pentagon chief technology officer and CIO at Catholic Health Care System in New York, Rognehaugh knows how to push advanced technology into being. Last year, the state information network was named best in the nation by the National Association of State CIOs. (It was in the top four the past three years.) His department has labored tirelessly, albeit not without criticism, to rebuild the old glitch-ridden TennCare network. If the new system gets good reviews, Rognehaugh will gain more credibility among lawmakers and regulators who already see him, in the words of Sen. Henry, as “a precise sort of man inclined to scope things out pretty well before he asks for anything.”

Besides implementing ERP, this year Rognehaugh hopes to enhance the accountability of the state’s social and human support system, which provides aid and food stamps to needy families. This year also will see final deployment of the Title and Registration (TRUST) project, designed to reduce the cost and time of processing official paperwork by replacing the 25-year-old manual batch system with an automated online method.

At meetings throughout the state, Rognehaugh touts his “no PC left behind” policy, which entails the swift replacement of outdated computers on the state network, as a few substandard machines can stump the entire operation.

To those who say it’s not practical to finance high-tech projects over a decade-long period—claiming they quickly become outdated—Rognehaugh points to Tennessee’s 30-year-old payroll system, which is still limping along.