November 11, 2010 By Matt Williams
An advocacy group composed of private-sector technology executives is recommending that new state government administrations pursue more IT consolidation and overhaul business processes in order to cut costs and drive innovation.
More than half of all states are currently engaged in or are planning IT consolidation. But according to the technology advisory group TechAmerica, “efforts aimed at transforming programs and support operations have not been as widespread.”
New enterprise technologies, combined with business models and approaches that are more common in the private sector — such as managed services and cloud computing — would spur new ways of doing business along with cost savings, the group said in a report of recommendations and case studies released Wednesday, Nov. 10.
The dire financial condition of many states will likely push some of them to pursue further cost-saving measures beyond just simple consolidation, according to Michael Kerr, senior director of state and local government for TechAmerica. Kerr wrote the narrative of recommendations contained in the briefing paper titled Why Think Enterprise? State and Local Government Options for Reducing Costs and Improving Services. The study is available for free download.
“They may want to begin laying the groundwork for actual business transformation by transforming some of the major programs and service operations, and that includes looking at business platforms like shared services and managed services, and cloud [computing] to begin to take out some of the redundancy, complexity and cost,” Kerr said Thursday.
Many of these types of projects can be done concurrently with pure IT consolidation, Kerr said, and many governments are already going down that path. But many states are still running siloed programs, whether it is by choice or because of legislative mandates.
“But the low-hanging fruit has been trimmed in most states, and to realize significant savings, they will need to begin to look at things like removing duplicative HR departments across state agencies, and moving to shared services, and finding ways to move more online to increase the amount of business that’s conducted electronically,” he said.
Given the bleak budget projections for many state and local governments over the next few years, Kerr said the time is now to consider new approaches. TechAmerica will be reaching out to new state and leaders, encouraging them to work with their new CIOs and private-sector partners to take a hard look at major programs — many of which have been operating the same way for decades.
The TechAmerica briefing paper includes 14 case studies which demonstrate best practices in state and local government for topics like business analytics, IT governance, virtualization, cloud computing and others. The case studies were contributed by TechAmerica’s state and local government clients. The Ohio Shared Services center that has brought back-end business functions of state government under one roof and the IT consolidation done by Massachusetts are among the profiled projects.
“This report is being delivered at a time of serious financial distress for many state and municipal governments,” TechAmerica President and CEO Phil Bond said in a statement. “While budget shortfalls are predicted for the foreseeable fiscal future, there is a strong imperative to ‘get more bang for the buck’ by better managing government spending and to find more efficient ways to run programs and support services.”
Every dollar spent on support activities and overhead could be diverted and spent on other mission-critical activities or to balance a budget deficit, TechAmerica said.
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