As Governor Rick Perry's director of administration and technology, Karen Robinson was charged with finding candidates capable of meeting that challenge. But the only one the chief of staff trusted to take over the Department of Information Resources (DIR) was Robinson herself.

"It was not one of the positions where you say, 'Ooh ooh, take me!'" Robinson, now Texas State CIO and Executive Director of DIR, admits. But through her work with policy analysts and others to assess what went wrong during a public battle between IBM and Texas over their $863 million data-center-consolidation contract, she knew as much as anyone could about how to fix IT outsourcing.

Robinson spoke to leaders of the agencies DIR serves, created an executive leadership committee to guide IT decision making, and launched an 18-month process of rebidding the IT work. "The DIR does so much more than data centers that outsourcing was the only way to go," says Robinson. "But I feared no [vendors] would apply."

Even the ugliest outsourcing efforts often succeed on the second attempt, but to be sure this one worked, Robinson embraced a different approach--the services integrator model. She signed a deal potentially worth more than $1 billion earlier this year, whereby Xerox and its outsourcing division (formerly ACS) will take over five towers of IT service, subcontract some of the work to vendors, including Unisys and Cisco, and Capgemini will be the master service integrator.

It's an unproven tactic--one outsourcing provider managing its real-world competitors' end-to-end delivery. But Robinson felt the potential rewards were worth the risk. "The other model--IBM telling IBM what to do--wasn't working," she says. "This is going to offer more flexibility and visibility. We have Capgemini there to oversee what's working."