Driven by changing business models and rapidly evolving technology, states continue transforming the role of state-level CIO into more of a shared services broker, according to reports from the annual survey from the National Association of State Chief Information Officers (NASCIO).

The 2017 State CIO Survey, released Oct. 3 at NASCIO's annual conference in Austin, Texas, is subtitled "A New Engine: Driving Innovation in State Technology." The report details numerous factors changing both the work CIOs do and how they accomplish it.

The annual survey includes responses from 42 member states and territories, primarily from CIOs but also from deputy CIOs and senior state IT leaders.

More than two-thirds of those, or 29 jurisdictions, also participated in the 2016 survey. However, about a quarter of respondents were new this year due to "normal turnover” in state IT offices, NASCIO authors wrote. The report also includes perspective from in-person interviews with 18 state CIOs.

The report acknowledges that CIOs’ roles and the business models that support them “vary widely” across state governments, but said the trend is overwhelmingly toward CIOs acting as brokers of IT services, rather than as owners and operators of assets.

Sixty percent of state tech leaders, down from 72 percent last year, indicated they plan to expand an IT shared/brokered services model over the next three years, while 19 percent said they intend to introduce such a model. Similarly, 55 percent said they will expand an existing managed services model and 21 percent said they will introduce this model.

AGILE, CLOUD AND PROCUREMENT

State IT leaders aren’t just updating their roles — they told NASCIO they’re changing delivery approaches, service categories and purchasing strategies as well.

More than one-third of respondents (37 percent) reported “widespread” use of agile or “incremental software development approaches,” and another 34 percent said they were piloting or adopting the approach on a trial basis for certain projects.

The use of DevOps, defined by NASCIO as “a culture and practice that emphasizes automating the process of software delivery and infrastructure changes,” is also on the rise.

Nearly half (42 percent) of those surveyed said they’d implemented DevOps in limited use, while 37 percent now have pilots or trials. The percentage of participants not using the practice dropped from 42 in 2016 to 15 this year.

Cloud migrations remain popular, with 83 percent of officials indicating that strategies to move legacy apps to the cloud are either in place or in development.

Three-quarters of respondents said they’d observed adaptability through lowered asset investment thresholds or improved ability to innovate.

But with respect to scalability benefits through enhanced utilization or pay-per-use, while 81 percent expected to see benefits here, only 65 percent actually did.

IT procurement has been a focus of NASCIO and the National Association of State Procurement Officers (NASPO) for more than a year. The two organizations issued joint recommendations last month to states contemplating modernizing their process.

Nearly two-thirds of the tech officials that responded to the survey (63 percent) said they were leveraging enterprise architecture for improved IT procurement.

More than half (58 percent) said they had introduced more flexible terms and conditions, while 29 percent said they’d removed unlimited liability clauses from state terms and conditions.

Respondents said their top three reasons for an increased use of “brokered services” were cost effectiveness, identified by 67 percent of respondents, flexibility (60 percent) and quality of services (48 percent).

At a NASCIO panel discussion, Indiana CIO Dewand Neely echoed those findings, citing cost-effectiveness and quality of services as his two main drivers for the model. He noted the value in bringing in outside parties who can potentially do better work for a lower cost, increasing value overall.

But survey participants identified 11 obstacles to acting as IT service brokers, including their current funding or recovery model, identified by half of resondents; concerns about their ability to deliver highly specialized needs (43 percent); and fragmented procurement or management of IT services (38 percent).

“The trends are to a point that we can safely say that the dominant business model across state government is one of a CIO organization operating as a shared services broker that leverages managed services and outsourcing to deliver on their service portfolio,” the report’s authors wrote.

Utah CIO Mike Hussey spoke to some of those challenges around this shift. As state agencies begin to reach outside governement to find the most effective services, he said, IT must keep "guiderails" on those directions and maintain enterprise guidance, making sure everyone is heading in the same direction.

MOVING TO DIGITAL SERVICES

NASCIO officials this year also documented a broader definition of digital government emerging among respondents, with 40 percent of those surveyed indicating they have a digital services organization and 20 percent saying they intend to create one.

Agency readiness, identified by 52 percent of participants, and budget (48 percent), were the top two challenges IT offices said they face in delivering digital government services.

Neely shared this opinion, saying that "agency readiness is the biggest roadblock to breaking that mold and truly going digital." He added that there needs to be more coordination at the federal level on digital services, which could help eliminate some fear lower-level agencies may have.

But 24 percent surveyed indicated they had a formal strategy and implementation road map in place for delivering digital government services, and that “some capabilities have been deployed.”

Another 14 percent said they had a formal strategy in place, and 45 percent said they’d “informally defined” digital government.

Hussey pointed to his state's moves in this area such as Utah's Amazon Alexa skill to help residents study for their driver's license test.

He said that while residents were surprised by the possibilty of interacting with government in a new way, it "certainly had a lot of adoption." Now they are starting to demand more of these services, particularly among younger generations. At the same time, Utah state agencies are seeing that such apps are a new and maybe better way to interact with citizens.

CIOS TAKE ON EMERGING TECH

This year, NASCIO deepened its dive into emerging IT, and learned CIOs are taking a somewhat expanded look at technologies like Internet of Things (IoT) devices and unmanned aerial systems (UAS).

Asked their state’s status or progress toward managing these types of devices, most IT leaders, or 69 percent, said their states were still in discussion. But the percentage of states that have created a road map to new tech increased significantly from 4 percent in 2016 to 14 percent this year.

Additionally, 21 percent said they were reflecting emerging technology in their IT strategic plans, and another 21 percent said they were “defining management processes and procedures.”

“From a governance perspective, state CIOs clearly see their role in driving or evaluating investments that have networked technology components as one of ‘collaborating or advising’ as opposed to leading,” authors wrote, noting that two-thirds of respondents said their role was to collaborate with agencies or departments in making decisions.

Significantly, many state IT workers who want to lead those decisions feel they aren't. According to NASCIO, 26 percent said they desired to lead the way on tech decisions; 5 percent said they actually are.

Nearly half of participants (43 percent) said IoT would be the “most impactful” emerging IT area during the next three to five years, but 29 percent felt that honor should go to artificial intelligence and machine learning technologies. Another 10 percent said digital assistants would be most important.

Indiana's Neely cited the possibility of digital assistants to help make government available 24/7 for citizens. He said his state is looking into ways chatbots can help with repetitive tasks, both increasing citizen access to services while also freeing up labor to work on other, more in-depth work.

PRIORITIZING CYBERSECURITY

Not surprisingly, security and risk management ranked No. 1 among state IT priorities as identified in the survey. Nearly all (95 percent) told NASCIO their organization had adopted a cybersecurity framework “based on national standards and guidelines.”

Nearly all (98 percent) said their organization either leads or participates in policy-setting for their statewide cybersecurity program. More than 80 percent said their group either sets overall directions or gives oversight in that area. More than half (64 percent) said their cohort is responsible for executing their statewide cybersecurity program.

The No. 2 priority on the same list was consolidation and optimization. Nearly all those surveyed (89 percent) said they’d implemented a defined process and supporting toolset for incident management as an IT service management process; 85 percent said they’d done so for change management; and 70 percent said they’d put a process and toolset in place for service catalog management.