seen states that have done this in a semi- and sometimes nonconsolidated way. But all of the top finishers managed to aggregate demand and get the best use of taxpayer dollars."

Political and economic pressures have chipped away at turf issues that blocked the sharing of IT infrastructure and applications in the past, Taylor added.

"Turf used to be defined as having your own IT staff, data center and systems. I think most operating agencies are now of a view that they have more mandates and real business than they can handle," he said. "If someone else can provide a hosting environment and reliable network capacity, they'll consider that."

Positive Pressure

Takai said economic pressure has been a constant companion during her tenure as Michigan's CIO, forcing the Department of Information Technology (DIT) and other state agencies to innovate.

"We cut 25 percent from our budget in the first year, but we decided we weren't going to lie down and die," she said. "That meant we had to be more efficient. And it meant that it was important to think about new and different ways of doing business rather than just maintaining the same old stuff."

Ken Theis, chief deputy director of the DIT, said the state worked closely with businesses of all sizes to create the MiTAPS application. The new online service replaced multiple paper application processes for major licenses and permits issued by the state.

"In some cases, it takes months off the processing time for critical permits," Theis said. "That obviously can have an impact on Michigan's economy."

At the same time, ongoing data center consolidation is cutting the cost of operating Michigan state government. "We are going to see some dramatic rate reductions in 2007 as a result of combining demand," said Pat Hale, director of technical and data center services. "We're also focusing on improving our service levels, so there are going to be real benefits from a customer perspective."

Takai said her organization focuses on matching its technology efforts to Granholm's policy priorities. That effort results in high-profile support for IT initiatives from the governor and Cabinet members.

"We aligned ourselves very early with the business, so we had a very clear picture of where we wanted to go," Takai said. "I truly believe that persistence in having a structure that your organization believes in is how you sustain growth year over year -- particularly in state government.

"Now when the governor talks about her economic development plan for Michigan, she talks about MiTAPS," Takai added. "So it's not just us talking about technology. It's a major part of making Michigan ready for new businesses."

Next, Michigan intends to launch an enterprise grant management system that will automate and simplify the process of applying for state funding grants.

"Today a nonprofit organization may be applying for 10 to 20 different grants and doing that in 10 to 20 different ways, so it's a very time-consuming process," said Theis. "Our vision is to have one Web-based application where nonprofits can select the grants they want to apply for and automate the entire process."

Making Progress

Overall, the 2006 Digital States Surveyshowed that states are strengthening their strategic planning efforts. Nearly 75 percent of the 44 responding states said they had created a strategic plan and had updated it within the past two years. Only 60 percent said they had done so in the 2004 survey.

The 2006 survey also evaluated 32 types of online services for citizens and businesses. Online job searches, nursing license renewals, uniform commercial code (UCC) filings and searches, and vehicle registration renewals ranked among the most mature and widely offered electronic services. In many states, the Internet now is the default channel for these transactions.