The vice grip on budgets remains tighter than ever as state and local governments head toward the end of the fiscal year in June. As leaders talk about tough choices and the need to control costs, they also see an opportunity to change certain facets of government to make it more efficient and cost-effective.

It's clear some governors and mayors are thinking about how to use technology to make government faster, better and cheaper. CIOs echo that sentiment. A survey last year of 1,500 CIOs by Gartner Group found that while many know overall costs must be reduced, IT executives believe demonstrating the business value of IT is even more important.

Simply cutting back only leads to trade-offs that could hurt in the long run. Instead, organizations should make strategic IT investments that deliver benefits in the form of cost savings and better value. With the economy in the doldrums, it's a buyer's market with vendors offering attractive discounts and flexible buying plans, according to CIO magazine.

That's why now is the time to invest in technology, rather than just arbitrarily slamming on cost controls. More importantly, strategic investments can generate significant cost savings. That's what a number of state and local governments discovered by investing in tried and true technologies, such as Web-based business applications, CRM, electronic workflow and document management systems, as well as outsourcing routine operations, such as maintenance and support.

Sure-Fire Savings

State and local governments have long known that when done correctly, outsourcing certain types of IT operations saves money. For example, Minneapolis recently signed a seven-year contract with Unisys to manage the city's entire IT infrastructure -- from the data center to desktop computers and mobile devices. The deal is expected to save the city approximately $20 million over the life of the contract. Unisys will manage and support 2,700 PCs and more than 100 servers.

The cost savings for Minneapolis are based on projections, but some jurisdictions and agencies have hard and fast numbers to prove their solutions not only work but save taxpayer dollars. In Cook County, Ill., the Assessor's Office estimates the value of 1.6 million parcels of real estate, which generate about $8 billion in annual tax revenue for the county.

Valuations are challenged more than 100,000 times a year, with wealthy challengers often winning because the county's process for assessing properties was, until recently, cumbersome and often faulty. The culprit: tax maps hand-drawn on Mylar. One change on a map meant all other corresponding maps had to be manually updated and compared with lists of statistics. Often, assessors made mistakes with the manual process and had difficulty defending their revaluations in court.

In the mid-1990s, the Assessor's Office began automating the manual system using ArcGIS software from ESRI and a DB2 database from IBM. Today, the entire geo-spatial assessment process is digital, reducing labor needs by two-thirds and saving the county millions of dollars. Additional savings were generated by property tax revenue recovered because the Assessor's Office was better prepared to defend its valuations in court.

The Assessor's Office generated these savings by establishing an electronic workflow, which integrated GIS with the database. The office needs fewer staff to match properties with assessment data to identify recently sold properties that need to be revalued. Further, aerial photography is merged with business data to visually verify information without the time and expense of sending someone to the property to perform those tasks and with a higher degree of accuracy.

Cutting the Jobless Line

For government agencies that experience an upswing in service demands, cost savings may seem like a pipe dream. But when the Division of Employment Security in Kansas' Department of Human Resources experienced a sharp increase in weekly job claims, it not only handled the spike