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By Mark Henricks
State government CIOs are battening their hatches, tightening their belts -- and freeing their minds. That's the message -- minus the mixed metaphors -- in a new study that found state chief information officers forecasting lower budgets, expanded responsibilities and a new emphasis on creatively finding solutions.
Nearly two-thirds of CIOs surveyed said they expect lower IT budgets for 2011, continuing through 2013. Just 13 percent predicted an increase, while 23 percent expected no change. The primary causes are external: As states' overall budgets decline thanks to lower revenues in a weakened economy, the various agencies who make up state IT offices' customers are reducing their use of IT. That reduces chargeback fees, which represent a key revenue source for most state CIOs.
How are the IT executives dealing with this environment? Staff reductions, consolidation and shared services all ranked high in the survey, which was conducted by the National Association of State Chief Information Officers along with TechAmerica and Grant Thornton. Forty CIOs of U.S. states and territories responded to questions on IT governance, emerging technologies and other issues in spring 2010.
Among the most interesting responses was an indication that CIOs were, in a sense, relishing the challenge of doing more with less. Among the creative approaches were using shared services, renegotiating purchasing contracts to leverage state-sized economies of scale, focusing more on total cost of ownership when making decisions, convincing agencies to share applications across boundaries rather than creating new apps for each, and more.
Three out of five CIOs said they planned to expand shared IT services and managed services. They pinpointed state executive branch agencies and public educational institutions -- from local school districts and community colleges to state university systems -- as most likely to participate in shared IT services.
CIOs also noted that the federal American Recovery and Reinvestment Act of 2009 was providing some additional funds for healthcare-related IT. That is producing increases in budgets in some cases. Seventy-five percent of CIOs said they got ARRA-related funding, and 80 percent said they have benefited in some way from the program.
The CIOs handed out poor grades to their states and themselves when it came to IT governance. Their main complaint was that they lacked authority commensurate with their responsibility for state IT governance. Three of five said their states had a formal IT enterprise portfolio management process, but they gave these processes a "C" for effectiveness.
With regard to procurement, calls for reform dominated. The CIOs criticized lack of alignment between state laws, rules and processes on the one hand, and modern IT industry standards and practices on the other. Specifically, they wanted more procurement authority for themselves, saying that using trained IT procurement officials would improve procurement outcomes.
What is new when it comes to technology trends? Not all that much compared to last year, according to the CIOs. Late in 2009, a similar survey found that cloud computing, social media and green IT were the major trends CIOs were watching. This year, the same three emerging technologies were also named, with cloud computing edging the other two as most valuable for state agencies.
Half the CIOs are investigating cloud computing and a third have active or pilot cloud projects, although some say it's being oversold. Two of three said that agencies are using social media and half use it themselves. Sixty percent said they are preparing social media policies for agencies in their states that use social media. Just under 50 percent said they had policies that mandate green IT, and only 10 percent indicated they weren't considering green technology because of budget worries.
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