Government Tightens its Belt Government Tightens its Belt

considerable investment, and it was more than VITA could afford to pay up front. The state solved this problem by having Northrop Grumman supply the needed funds. "We repay that investment over time through the benefits of what we're achieving in modernization, the first of which is energy," Stewart said. Once the state has used its savings to repay Northrop Grumman, it will keep the further savings that accrue.

Share and Share Alike

In California, about 70 local governments and parking authorities save money by buying parking citation processing services from the city of Inglewood. More than 20 years ago, Inglewood developed its mainframe-based Inglewood Citation Management Service (ICMS) in-house for its own use. "But it was really good," said Michael Falkow, Inglewood's assistant city administrator and CIO.

So good, in fact, that several nearby cities asked to use it. Gradually the service grew to serve municipal customers as large as Oakland, San Diego and Sacramento.

If ICMS didn't exist, most of those cities would have outsourced the job to a commercial citation processing vendor rather than buy their own software, Falkow said. As a nonprofit entity, ICMS could offer better pricing than private-sector competitors. Also, cities could do business easily with Inglewood, since they didn't have to conduct competitive procurements if they gave their business to another government agency, he said.

Since running a mainframe system with in-house staff no longer made good business sense, Inglewood recently outsourced its citation processing work to one of its private-sector competitors, Duncan Parking Technologies of Harrison, Ark. Although it lost a few customers in the move, around 70 cities, airport authorities and universities now pay ICMS for the service.

As a consortium buying services through ICMS, these customers still get a better deal than they would contracting with Duncan directly, Falkow said. "We have about 2.2 million citations that we command across these 70 some-odd agencies," he explained. "They were able to give us an amazing price - a price that probably even Oakland, the biggest of our customers, would not likely have received if they had just gone separate."

ICMS also brokers other third-party services for its citation processing clients, including document imaging for parking tickets from Continental Data Graphics in Cypress, Calif., and collection services from Law Enforcement Systems Inc. in New York.

In Virginia, VITA also is banking on shared services to cut costs. The state agency has invited local governments to use its IT facilities, including its data centers, disaster recovery center and telecommunications networks, said Stewart.

The cost of running a data center is the same no matter how many users it supports, Stewart said. The more users there are, the lower the bill to each state customer. "And the theory on the other end is that those whom you're providing the service to pay less because they're in a much larger, leveraged environment than they are as individuals," he said.

Find Strength in Numbers

Just as several jurisdictions can save by sharing a common technology service, a single government can boost its purchasing power when different agencies buy technology through common contracts.

When Levin became CTO of Los Angeles last year, she noticed the city had many contracts with technology vendors. "We're not leveraging the pricing that we could be getting," she said. "There's a need to consolidate those contracts and really tap into the total buying power of the whole city."

To that end, ITA is taking stock of the technology contracts in place throughout city government. The agency is calculating the collective spend and projecting how much the city will spend on technology in the next two to three years. ITA is also examining various contract vehicles it can use - including contracts negotiated by the city, county, and

Merrill Douglas  |  Contributing Writer