Like hemlines and lapel widths, modes of IT organization have swung in and out of fashion over time. These days, consolidation is the favored style. Among state CIOs, for example, consolidating IT activities for the enterprise is the No. 1 management priority for 2009, according to a survey conducted last year by the National Association of State Chief Information Officers (NASCIO).
"We've seen a general direction toward a higher degree of consolidation, even to centralization, for the last five years," said Doug Robinson, NASCIO's executive director.
Under consolidation, one IT department serves the whole government, charging agencies for services they use. In this model, agencies usually retain their own IT budgets. Under a centralized model, the IT department controls budget dollars.
While consolidation might be all the rage today, developing an enterprise approach to government IT isn't easy. Consolidation initiatives often meet resistance from agencies. Support might wax and wane depending on the current governor, mayor or county executive. And consolidation will succeed only if the IT department running the show is up to the task.
"If you're going to have a central shop providing enterprise services, it better be good. It better be secure. It better be cost-effective. It better be well managed," said Richard McKinney, former CIO of the Metropolitan Government of Nashville, Tenn., and Davidson County.
According to McKinney, who currently serves at infrastructure optimization adviser for Microsoft Public Sector, the last time centralized or consolidated models were in vogue was in the mainframe era, when one large machine provided all of a government's computing power.
Agency officials weren't crazy about that model, McKinney said. "People didn't like that the central shop tried to dictate to everybody how they were going to use the information technology." So when vendors came calling with midrange computers loaded with software for vertical applications, agencies were ripe for change. "Toward the end of the 1980s, government had almost completely gone from being centralized to decentralized," he said.
Then came PCs, networks, servers and the Internet. Suddenly governments found themselves with an unruly proliferation of IT systems, multiple e-mail systems, multiple local area networks and few ideas about how to tie them together. "People began to look at the decentralized model and say, 'This doesn't work very well.' It's really wasteful, it's hard to manage,'" McKinney said. It was also hard to secure. "So people began to talk again about IT consolidation."
Several forces have combined to make consolidation the favored model today, said William Bott, consulting partner at the Change and Innovation Agency in Kansas City, Mo., and former deputy CIO of Missouri. For one thing, it offers economies of scale as governments seek to replace aging IT infrastructure, rein in costs and eliminate redundant functions and systems.
Technology also is driving the trend. "You have an unprecedented time in IT history where a lot of things are playing nicely together that never did before," Bott said. Now that IT systems running on disparate platforms can share data smoothly, it's easier to take an enterprise approach.
From a third perspective, legislators and government executives want to boost IT security and encourage data sharing, Bott said. They see consolidation as a way to enforce standards that safeguard IT systems and still allow information to flow across the enterprise.
Politics also play a role. "There's been a desire on the part of elected officials to try to get control of IT," said David McClure, managing vice president of Gartner Government Research. When large IT projects go awry, critics call for greater discipline and more standards. To many elected officials, that means centralized control, he said.
Beyond simply taking control, officials see consolidation as key to developing a new generation of government services that cut across departmental silos, said Ken Theis, state CIO and director of the Michigan Department of Information Technology. That's been a benefit of Michigan's consolidation, he said: "We are intimately involved with the business side and with the governor directly in trying to redefine the way business gets done."
Though consolidation has won many fans, it also has detractors, especially among agency officials. "If you have a centralized or even a shared service environment, to them that implies loss of control," McClure said. "You're dependent on somebody else for something you think you do a pretty good job of right now."
Besides opposition, federal regulations also can make it hard to consolidate state or local government IT services. "In many states, those services often are procured with federal funds by the programmatic agencies," said NASCIO's Robinson. Federal law -- or at least certain interpretations of it -- might require that those funds be spent within the agency. This creates a complex business environment for consolidation, he said.
One response to these challenges is to take a "federated" or "hybrid" approach to IT. Such a model puts a central organization in charge of infrastructure and enterprise services, such as e-mail and security, but lets agencies control their own business applications. "That's the state I see most of governments trying to move toward, versus big-bang central control," said Rick Webb, chief technology officer of U.S. state and local government at Accenture and former North Carolina CIO.
Missouri took a hybrid approach to consolidation while Bott was that state's deputy CIO. So did Nashville during McKinney's tenure.
A federated model is the best way to avert a tug of war between a central IT organization and departments that want to retain control of their IT, according to Webb. "It allows you to get the economy of scale, the critical mass for those things that are used across the enterprise. It also puts in place a way of decision-making where you get the business unit ownership, and you have some ways to be responsive," he said.
Even when agencies control their own applications, a central IT organization can bring order to software development by enforcing standards, Robinson said. "Maybe with an architectural direction and a set of business disciplines, development standards and common toolsets, that application development can be done in a more rigorous manner across the board."
Whatever balance consolidation establishes on paper between the IT department and the agencies, it won't succeed unless everyone concerned is working toward the same goal in practice. On the state level, Bott said, problems often arise when a central IT shop starts offering services, but the government doesn't mandate that agencies use them. Too often, agencies opt out of consolidation, insisting that they can better manage data centers, e-mail and other services themselves, he said.
"Often there's no true evaluation of whether the centralized service is better than the departments' [services]. And departments do not like to give up control," Bott said. Some agencies win exemptions by arguing that a central IT organization can't understand their specialized needs, he said. "They don't know how the highway patrol system works, and if they mess it up with the highway patrol system, lives are in danger."
How to Deploy Staff
In Nashville, much of the transition to a hybrid organizational model involved hammering out service-level agreements between agencies and the IT department. But the hardest job was determining how to deploy IT staff. At first, many agency employees who were tapped to move to the IT department resented the change, McKinney said.
To sweeten the deal, he offered two weeks of annual training in the area of IT that most interested each staff member. "They liked it that I cared about where their career was going," McKinney said. "And so they bought into it."
Although applications developers in Nashville continued to report to their agencies, Missouri took a slightly different approach to that job position. "That job is so dependent on your network staff, the connectivity that you have, how you're going to do your data storage -- all those things that are thought of as behind-the-scenes IT -- that we decided they all would answer to the same folks," Bott said. "They would all answer eventually to the CIO's office. But they would stay as close to the customer as possible." So even though applications developers would be housed in the agencies, they would work for the IT department.
Even as more governments are figuring out how to consolidate, some people envision a day when there's a swing back toward decentralization. As cloud computing gains favor and governments outsource more IT functions to third parties, the enterprise IT department will stop providing services directly, Bott said. "It becomes a manager of contracts and service-level agreements."
But maybe it's possible to stop the fashion in IT organizations from careening from one end of the spectrum to the other. If so, according to McKinney, a well designed hybrid model might be the best way to achieve that goal. That's what he told agency heads in Nashville as he promoted his government's vision of consolidation. "I tried to get everyone excited," he said, "about the idea that we could stop this pendulum from swinging from centralized to decentralized, and back again, if we could find a balance."