Making the right IT investments now can mean avoiding painful cost-cutting in the future.
For most municipal governments right now, times are good. Sales tax revenues are way up, and property values are also reaching new highs — thereby increasing municipal revenues. This stands of course in stark contrast to the brutal Great Recession a decade ago, when collapsing home values, unemployment and plunging sales tax revenues forced cities and counties to make painful cost-cutting decisions.
History, however, teaches us some very important lessons. Good times such as these inevitably come to an end. When — not if — recessionary times return, they may end up being prolonged if economists are to be believed. So now may be a time for municipal IT departments to ask themselves, what can we do today to position ourselves for the next downturn? How do we prepare ourselves for a time when the economy goes sour and we begin to hear the drumbeats of budget cuts again? In short, how do we prepare for war in this time of relative peace?
Our research and experiences in Dekalb County, Ga., have lead us to some conclusions that we believe will benefit other governments. Our recent investments in the following strategies are beginning to significantly increase our ability to deliver innovation with a smaller staff footprint. There are four key elements:
1. Invest aggressively in infrastructure — Many municipal IT systems suffer the bane of “deferred maintenance.” They have postponed investing in new hardware because of budget constraints. Now is the time to re-evaluate your entire hardware portfolio, decide on what will stay, and start the process of replacing and updating those components.
The key reality underpinning this thought is that most municipalities do not need to run their own data centers! Networking systems — switches, routers, power backups, etc. — cannot easily be abandoned, but given that they tend to have long shelf lives, upgrading them now will mean significantly reduced maintenance costs later. This leads to the next strategy.
2. Begin transitioning to software as a service (SaaS) for non-differentiated apps — Many governments provide similar baskets of services and therefore tend to use a number of similar application suites. There is no competitive advantage to the software these services use, and many of these products are available via SaaS. This option will provide significant benefits in most cases without any hardware or upgrade-cycle overhead.
While this should be part of a carefully thought-out process, along with investing in any necessary hardware upgrades, it is perhaps the most important investment component a jurisdiction can make. With large companies like General Electric embracing this model, governments should be able to make a strong business case for why now is the time for this approach.
3. Develop an infrastructure-as-a-service (IaaS) strategy — Use multiple large providers to provide long-term scalability and — most importantly for the public sector — elasticity. For applications that cannot be easily moved to SaaS platforms or to buy more time, one step would be to move the municipal data center to an IaaS platform. Using at least a couple of different large providers (e.g., Azure, Google, Amazon Web Services) reduces concentration risk. This move can be done with a much smaller cost footprint and will provide scalability.
In times of crises such as public safety events or natural disasters, governments need the ability to quickly ramp up resource availability. However, when the crisis abates, they need to be able to scale back down to save on cost. This concept of elasticity is easily enabled in an IaaS environment.
4. Increase technical training to raise staff competencies and enable them to learn side by side with consultants — The strategy elements outlined above will more than likely result in the use of a large number of consultants whose services are not cheap. The key for IT managers and CIOs to make the case for the needed investments is reassuring their decision-makers that this will result in long-term cost savings.
One way to do that is to articulate a clear human resource plan that calls for training current staff to work with the consultants during the implementations so that they are ready to take over when these systems are live. It’s important to recognize that the technical competence required for maintenance is vastly lower (especially for SaaS systems and new hardware) than the initial implementation. So most governments should be able to, in many cases, reduce their total human capital footprint. This would be a very good business case for the required upfront investment.
The strategies outlined here all rest on government CIOs and managers making the case to invest now, while tax revenues are robust. This is when investments will promote significantly reduced long-term costs while fostering the ecosystem needed for delivering innovation. Not running your own data center, reducing staffing needs, eliminating upgrade cycles, and keeping up with current versions of software are the long-term benefits of making the investment now. Making that case aggressively while there are strong revenue streams allows governments to be prepared when the lean times begin to roll in.
Good stewardship requires preparing for war in times of peace. Now is the time for action.