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Forecast: Cost Cutting Continues

State and local IT show interest in consolidation, cloud computing and collaboration.

"Words ending in ‘-tion' for $500, Alex." State CIOs would ace that category on Jeopardy because tight budgets have them focused on consolidation, virtualization, collaboration, standardization and integration, notes NASCIO Executive Director Doug Robinson.

NASCIO and the Public Technology Institute in mid-January hosted a webinar, "Technology Forecast 2011: What State and Local Government Technology Programs Can Expect." In what should come as a surprise to no one, the fiscal crisis continues in many states and CIOs expect their budgets to decrease. It could take until 2014 for revenue to return to 2008 levels, according to estimates from the National Association of State Budget Officers.

"This puts CIOs in a different position than they've been prior to 2008, which is really focusing more on the cost savings and the operational cost savings," Robinson says.  However, tough times provide an opportunity for IT to drive consolidation. While states have made major progress in reducing the number of data centers, "we still have a number of states with diversified networks, multiple e-mail and messaging systems and collaboration platforms," he says.

Virtualization is by far the most popular IT strategy NASCIO members intend to focus on this year, while cloud computing made dramatic gains to rank as the second highest priority. The findings of NASCIO's 2010 State CIO Survey show that 21 percent of state IT leaders say they're running an active project to move portions of computing infrastructure to cloud computing. Robinson also sees particular interest in software as a service, in part because many states are in need of enterprise resource planning applications.

Alan Shark, executive director and CEO of PTI, says local governments are also interested in cloud computing. Indeed, his report ranks cloud computing as "in" for 2011, while large data centers are "out." However, he notes that over-reliance on cloud is a legitimate concern among members.

Local government IT leaders are experiencing more pressure than ever on their departments, and are working with aging infrastructure. "We've had some major failures [where] we've not replenished equipment or maintained the infrastructure the way we should," says Shark.

One of the largest challenges in local government is a lack of time for strategic planning. PTI research finds that most IT directors' time is spent fighting fires, and only about 30 percent of directors look at things from a strategic standpoint.

The most pressing CIO issues identified by PTI are resource constraints and staffing challenges, managing the expectations of wireless initiatives, continuity of operations and disaster planning, public safety radio communications, regional collaboration and IT governance.

Dismal budgets have ushered in a much greater sense of openness. "We're seeing some very clever endeavors that never would have happened before," Shark says of regional collaboration. He points to the Michigan public safety network as a good example of cross-boundary collaboration. Counties or large cities that have excess capacity in their data centers could reach out to different technology enterprises, from school systems to other municipalities to police, Shark suggests. And Robinson points out that as states virtualize their data centers, there might be interest from local jurisdictions in moving into the data center.

Jan 25 2011

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