The public sector makes huge investments in computers and telecommunications -- roughly $70 billion per year in direct costs, and an estimated six times that amount in indirect costs -- yet we continue to see major problems in how government handles technology. Why?

WHAT'S THE PROBLEM?

We clearly see that IT has become an agent of change, constantly confronting us with significant choices regarding what we want to do and become. Unfortunately, we're not handling these choices as well as we could. More than half of all reengineering projects have reportedly failed, even in the private sector. In the public sector, technology-related tales of woe are even more endemic. The traditional budget process -- with its emphasis on year-at-a-time, bottom-up, incremental modifications -- tends to overlook innovative IT projects that cross program and budget year boundaries. What can we do to help government do a better job of finding and funding good IT?

To answer this question, we first looked at the views of those at the frontlines of government IT endeavors. Through surveys, we asked them what they are doing, what value they see being created (or not being created), and how hard it is for them to implement their initiatives. Collectively, they considered the highest-value initiatives to be infrastructure and cross-boundary integration, and the easiest to be educating practitioners and using capital budgeting and other multi-year vehicles to fund the creation of multi-year information assets (see sidebar). Perhaps most interesting, they identified two high-value options -- performance contracting and R&D/learning investments -- that are also relatively easy to implement but not yet given high priority.

These are potentially powerful ideas, but what can you do to act on them?

KEY ACTORS HAVEN'T CONSIDERED IT "THEIR" PROBLEM

At some point, after you recognize a problem and identify possible solutions, you need to generate collective action -- a concerted effort toward change. Establishing a task force or team to reform particular government processes can help an agency remove systemic and procedural barriers to better IT funding. The three most important processes to target are the budget process, the IT strategic planning and oversight process, and the IT project implementation process. Improvements in any of the three will help, but improvements to all three will be even better. Budget directors, chief information officers (CIOs) and department heads all have important roles to play.

FOR THE BUDGET DIRECTORS ...

Changing the budget process is often the most powerful way to change how government handles something -- IT issues as well as others. The "team" you will need for budget reform will typically include the budget director, the elected or appointed official the budget director reports to (mayor, department head, governor) and -- at least to some extent -- the budget overseers, especially the legislative overseers who receive, modify and eventually approve the budget.

If the budget director agrees with you, you can usually move forward without much fuss. And, of course, if you are the budget director, the budget reform agenda must be your own. You should ensure that budget preparation gives good guidance and attention to IT-related issues including:

* Infrastructure and standardization;

* "Cross-boundary" data sharing and service integration;

* R&D and learning investments; and

* Funding via nontraditional, nontax levy appropriations (capital funds, revolving funds, user charges, and/or performance contracts).

Budget reform will require you to educate and train every participant in the new concepts and procedures to be used. The focus should not be on technology per se, but on the business results that technology can create. You should be sure that budget proposals requiring IT-related organizational change are made and reviewed primarily by line managers, not technology staff; this will usually require you to prepare the line managers for new IT

Jerry Mechling  |  Contributing Writer