High’s advice is to try to think of everything before you commit. Like those maintenance fees and support agreements. “You may not be thinking, ‘OK, that’s 15 percent of $2 million, so I have $300,000 next year that’s going to come out of the operational budget.’ Well, forget it. I’m not going to lay off three people to do this.”

And finally, according to Accenture’s Jim Bard, decisions need to be made collaboratively from the start. “When analyzing cloud-based computing or solutions,” he said, “it’s important for the CIO and procurement group to collaborate early in the process, to define the requirements of the organization, and develop the right acquisition and procurement strategy that will bring the best value to the organization. Having procurement get involved early is key in these complex services that cloud computing represents.”

Build, Buy, Rent or Share?

Strategic sourcing is not cookie cutter — there are no simple recipes for success. Decisions evolve from an analysis of the goals and mandates of the jurisdiction, available resources, unavoidable restrictions, risks, insight and a knowledge of what will give and what won’t when give is all that’s left. Concord and Las Vegas have taken different directions, applied different strategies and found |different ways to keep the wheels turning during tough economic times. Two strategies they have in common, however, are greater use of outsourcing and shared services.

Concord, Calif.

Don’t tell Concord, Calif., CIO Ron Puccinelli that the recession is over. His options have been slashed along with his budget. In the past 36 months, he’s had a 42 percent reduction in staff and a tripling of demand. He can’t offer new hires a competitive salary. But as Puccinelli says, it’s not a problem because he can’t hire anyway. Squeezed between numerous rocks and hard places, he’s playing defense, supporting 500 to 900 city staff members with his own department of 12, and outsourcing everything he can.

Two years ago, Puccinelli started moving systems out of the city to other locations where he didn’t have to build, maintain and own the servers and applications. “We’re calling it the cloud,” he said, “and we have a half-dozen applications out there now. We started with non-mission-critical ones to see if this was going to work.”

The city went live in July with its first mission-critical cloud application, an Accela Automation land management and permitting system. “Accela provides software as a service in a class one facility,” Puccinelli said. “They provide disaster recovery and business continuity so I don’t have to back that data up. I don’t have to worry about hot site/cold site, they do security but I am responsible so I have to check and make sure they are actually doing it.”

The city also just finished the first year of a completely contracted help desk services support system. Puccinelli said that approach is more cost-effective than retaining staff members who have the skill set to handle break/fix issues.

He has more than 200 applications to support, but has no staff members dedicated to any specific application, and has only one dedicated server technician.

“As our systems come up for upgrades or replacement, we do a serious look at do we do it ourselves or put it out somewhere else? It comes down to what’s the risk and can I live with it, and what’s the value? Then we make that decision, and we put the controls in the contract — who owns the data, what’s our exit strategy, who owns the security responsibility, how do we check and verify? We try to cover all the bases. In some cases, you can ask for it, but they may or may not say yes.”

Puccinelli cannot match salaries with nearby Silicon Valley, even if he could hire. By using contract workers, he can bring in experts to work on specific systems like UNIX or Windows for only the time frame that they need to complete a project or solve an issue. “You pay a little bit more to do that, but you have the flexibility to get the skills you need when you need them.”

Puccinelli said that as the economy recovers, he won’t go back to the old ways of doing things. “Requirements change month to month,” he said, “and to have staff members sitting in classes learning new skills would not be a good use of their time.” With flexible staffing, he can pick and choose the most highly skilled contract support.

Concord also is increasing its shared services activities. “I provide radio and telephone service for the entire government agency of a neighboring city, and I do all the police technology support — the radios, the computers in the cars and on officers’ desks, network infrastructure, email, voicemail, all their applications, all their records systems, everything.” A two-county interoperable radio system is under way, the city’s first big shared system that is not city-owned.

Puccinelli’s concerns align with many other jurisdictions that are treading economic waters or simply looking for better ways to do things. “IT organizations have a choice to make: We can deliver the value to the organization and source it strategically so we have some influence and make sure it’s done correctly — with the right security, the right value, the right process and controls — or we get left out of the loop.”

Wayne Hanson  |  Staff Writer and Editor of Digital Communities

Wayne E. Hanson has been a writer and editor with e.Republic since 1989, and has worked for several business units including Government Technology magazine, the Center for Digital Government, Governing, and is currently editor and writer for Digital Communities specializing in local government. Hanson was a juror from 1999 to 2004 with the Stockholm Challenge and Global Junior Challenge competitions in information technology and education. He self-published three books of fiction and lives in Sacramento with his wife, Jeannie.