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Forecast: Rising Expectations Challenge Government IT Leaders

Research firm Government Insights gives its top 10 predictions for federal government IT

With a new federal administration taking over in less than two weeks and prevailing concern over budget cuts and unemployment, citizens and public officials alike are wondering what the future holds for government. On Jan. 9, IDC's Government Insights held a Web conference to address this growing concern.

As part of Industry Insights' series of Top 10 Predictions for 2009 Web conferences, five Government Insights executives highlighted trends for the new year based on analyses of their latest research. Government Insights is a research-based advisory and consulting service that aids in IT business decisions. Moderated by Practice Director Thom Rubel, the organization's presentation also details steps government can take as they plan IT investments for 2009.

With a $3 billion increase in the federal IT budget and 3.4 percent growth rate, the government is the largest buyer of IT. However, the conference addressed four key issues that will impact government use of IT in the coming year. First, the faltering economy will force the government to take up a new business role, stepping in as an overseer of financial institutions. As Rubel explains, the government will have to "become a partner and a manager in a business essentially." This will require public officials to learn a new set of business and IT skills.

Second, the new economic issues and new leadership have created new expectations of government. Citizens insist that the government help to rebuild the economy, and also keep them better informed through a more transparent government. Government will also be focused on economic recovery, creating various programs and even altering its priorities to improve finances.Finally, with this year's tight fiscal environment, investment optimization will be critical to saving money while improving capabilities.

Government agencies will clearly face various challenges in 2009. Below are the executives' 10 predictions for government in 2009, as well as advice for the government in managing its 2009 IT budget.

  1. Government Will Struggle With Its New Business Role Partner, banker, financial manager -- all these roles are new for government. Despite pressure on government to take up these roles immediately and successfully, officials still need to learn the new skills and technologies necessary to master these responsibilities. Rubel predicts that government will look to the private sector for proper business practices and IT solutions. There is a concern in government, however, that private-sector practices are part of what led to the financial situation today. Rubel explains that "the challenge for the vendors serving [government] will be to reinforce and show results that really have worked in the private sector.
  2. Cyber-Attacks Will Threaten Financial Systems Despite security improvements, cyber-attacks will continue, becoming more and more sophisticated. As Government Insights Research Manager Mark Kagan explained, government is a "very attractive target [for cyber-attacks] in terms of the hundreds of billions of dollars" flowing through agencies. The government must plan ahead and prepare for these attacks before they occur.
  3. The Government Talent Pool "Leak" Will Slow, but the Right New Talent Will Be Hard to Find According to Government Insights, the retirement "bubble" will not be such a significant issue due to many officials putting off retirement amid current financial instability. However, finding workers who bring fresh ideas and innovation to meet new demands might be difficult. There is little room for more staff due to tight budgets, especially in state and local governments, where they've had to have more layoffs. However, President-elect Obama has pledged to create 600,000 new government jobs, so finding the right people will be a main focus.
  4. Fraud Detection Will Be Necessary to Protect Health-Care and Finance Programs Because programs in health-care and finance have an increasing budget for 2009, fraud will be a threat that must be prevented from the beginning. Avoidance should be key; officials will want to prevent the fraud from occurring and not
  1. just learn how to react to it. As Rubel explains, the focus should be on "how do we really protect these huge investments that are being made."
  2. Federal Spending Will Flow, but Not Grow as in Recent Years While there will be modest growth in defense, homeland security, and veterans affairs, secondary priorities will potentially lose funding. The most investment in IT solutions will be in programs for economic stimulus, alternative energy sources, health care and welfare.
  3. Obama's Communications Style Will Accelerate a High-Tech Communication Boom President-elect Obama is rarely seen without his BlackBerry, and may be the first president to use a laptop in the Oval Office. His use of technology allows for fast communication and quick action. Obama is also in support of next-generation broadband, which will promote this anytime, anywhere communications style. Federal agencies will have to accelerate their use of newer technologies, which will in turn attract more tech-savvy young employees.
  4. Gov 2.0 Will Be Redefined and Will No Longer Be Optional The 2008 presidential campaign used a variety of social media technologies, such as blogging and YouTube, allowing government to connect with citizens and provide a new level of information access. 2009 will bring a push to make government data universally searchable and accessible, allowing for a more public White House administration. There will also be an acceleration in Web 2.0 technologies in government, including blogs, wikis and social networking tools. Government Insights Research Manager Adelaide O'Brien stated that the use of Gov 2.0 "will improve government decision-making ... by tapping into the shared expertise and shared knowledge of the public."
  5. Infrastructure Programs Will Move to Hosted, "Pay as You Go" Models to Save Money For many government agencies, system and data center consolidation will be a key focus of 2009. Agencies will turn to packaged services such as software as a service and managed or hosted infrastructure as a service. Consolidation will be a priority as well, helping to set up IT software ideologies, and ideally saving the government money.
  6. Use of Shared Services Will Accelerate Due to Budget and Delivery Demands Smaller government budgets and an increased demand for transparency will increase the need for shared services. Agencies will move functions from legacy systems to governmentwide solutions supported by shared service providers and lines of business. State and local governments will also increase their shared services, thus reducing costs.
  7. State Budget Shortages Will Change Outsourcing Relationships States are entering the New Year in dire fiscal conditions, facing with budget shortfalls and cuts. The need to improve service and save money will drive government to renegotiate outsourcing contracts. Vendors now have the opportunity to become innovative partners with state markets, providing states with new capabilities while reducing costs. Rubel sees this as a positive change, stating that "as tough as it's going to be for states, it's really also going to be a good opportunity for trying to see the glass half full ... there are some new opportunities and probably some more flexibility [in these new relationships]."
According to Government Insights, 2009 is going to be a year of technological change in government, from increased shared services to new infrastructure programs to an increase in high-tech communication. To make this transition, the seminar panel offers some essential guidance, such as early integration of social networking tools, which younger workers will expect. Government Insights also encourages agencies to perform an immediate assessment of current IT infrastructure, and to conduct IT and program performance reviews to prevent trouble further down the line.

2009 has clearly been predicted to be a year of budget cuts and shortfalls. Yet the seminar ended on a positive note, with Rubel concluding that "There has never been a better time to focus on IT innovation." With a more open communications style, a focus on Gov 2.0 technologies and a new partnership between vendors and states, 2009 will likely be a year of government change and originality.