take a new, and perhaps healthier, approach to financing technology initiatives, Stender said.

"To me it's like balancing your portfolio; we're not relying too much on one source of funds," he said. "It's better that we go out and see what kind of grant opportunities are out there. It's good for us to look at gain-sharing opportunities. It's good for us to look at bonding on certain types of IT projects."

Like most states, Arizona focused more attention on security and business continuity following the terrorist attacks on the World Trade Center and the Pentagon. The tragic event also helped fuel a drive to strengthen Arizona's decision-support systems and improve information sharing among public organizations.

Creating a statewide enterprise IT architecture is key to that effort, Stender said. The state defined a comprehensive technology framework covering networks, computing platforms, security, data and applications over the past year. As Arizona continues to refine the concept, Stender expects the enterprise architecture to deliver a series of benefits.

"Before, we had a disconnect between standards and buying decisions, and now we don't have that," he said. "It also prepares us for better data integration projects, which is the real golden nugget in all of this, because that's where true efficiencies come in. When you talk about really saving money, it's going to be on business re-engineering because of data sharing."

Some of that re-engineering already is underway. For example, a consolidation initiative reduced the number of large state mainframe computer systems from five to three. "That was pretty significant," said Stender. "But we still have work to do in telecommunications consolidation, and we're also looking at server consolidation."

Michigan's IT Overhaul

State CIO Jacque Passino said second-place Michigan is reaping the benefits of a massive portal and IT centralization effort spearheaded by Engler.

"The governor was intent on making progress and allocated money to do it. This year we really were building on the momentum of early investments and successes," Passino said. "At some point, it went from being the governor's e-Michigan initiative to the state's, and everybody really got on board and did a tremendous amount of work. I guess this survey is a reflection of that."

Michigan's IT overhaul began in late 2001 with the development of the Michigan.gov Web portal and the creation of a central information technology agency.

The Cabinet-level Michigan Department of Information Technology opened in the summer of 2001. Passino, appointed state CIO in November 2001, heads the agency and reports directly to the governor. The department oversees all state IT resources, including staff, budget, and hardware and software assets.

Michigan continued its centralization push this year by making the e-Michigan Office - which coordinates the development of online state government services - part of the Department of Information Technology and elevating e-Michigan Office Director Stephanie Comai to a Cabinet-level post.

"What's unique here is that literally every single IT resource that existed in state government is now part of the Department of Information Technology," said Comai. "That was something that was very intentional to make sure we had a unified IT strategy for the state."

The reorganization is paying off in a variety of ways, according to state officials. For example, it put Passino and Comai on equal footing with other state department heads. Combined with strong backing from Engler, that's helping Michigan standardize its approach to e-government.

So far, 100 individual government Web sites have been transferred to the Michigan.gov portal, providing citizens with a comprehensive resource for government information and services.

The portal has proven extremely popular with state residents, Comai said. "Before the launch of Michigan.gov, we had about 1,000 page views a day. That's now between 600,000 and 700,000 a day," she said. "