As the proverbial belt tightens around information technology budgets nationwide, tech professionals are turning to advances like cloud computing and open source applications to help deliver consolidated tech services at a lower cost.
But does the growing trend signal the extinction of expensive integrated systems? Experts think so, but questions remain on when those collaborative approaches will become the standard government IT model. The consensus? It won’t be anytime soon.
While IT departments across all levels of government experiment with various types of cloud-based services and interagency systems, private-sector officials said the transition won’t be fully realized until IT starts to be thought of as a service rather than a product.
“Infrastructure as a service is generally what people talk about [in regard] to consolidation,” said Terry Weipert, a partner with Accenture, a management consulting, technology services and outsourcing company. “It isn’t really about the technology; it’s about the services to develop additional apps.”
To ease the transition into that service-minded approach, Andrea Di Maio predicted that integrators will be in high demand. Di Maio, lead government IT analyst for IT research and advisory company Gartner, said although it’s clear that government wants to rely less on big integrators, the complexity of IT systems won’t decrease, leading to a need for those that integrate different systems. While governments at all levels are undergoing change, he said state and local governments have a greater potential for application and system reuse, so shared services make more sense at those levels.
But history regarding government usage of technology reveals no guarantees for how or when this process will actually occur. “On the other hand, this has always been the case,” Di Maio said, “and not much has happened before now.”
Public-sector officials are on the same page. “I would say we’re going toward more integrated solutions with partners,” said Michigan CIO David Behen. “Those days where a [company] goes in and sells a $70-million system are coming to an end,” he said. “I think with the cloud and [new] technology, we can just do things across boundaries better than we’ve ever been able to do before.”
Utah CIO Steve Fletcher said that it does take a little time to migrate from “those big systems to more flexible ones you can roll out. It is slow to change, but it should change because it is a much better way to go.”
Top federal IT officials are leading the charge to reinvent how IT implementations are done agencywide. Federal CTO Aneesh Chopra explained that while he and the federal CIO have separate roles, both operate under the goal of generating new ideas to use technology cost-effectively and productively.
“We’re changing the model in both directions, and my responsibility is to surface change as the government extends to the American people,” Chopra said. “Conversely my colleague, the CIO, has been looking at the guts of how we run the government. What e-mail systems we are using, why can’t we use cloud-based [platforms], etc. We’re tackling this idea of IT from the external in and the internal out.”
To that end, Chopra outlined three main points that are guiding the federal transformation to a more collaborative IT approach.
The first, “precompetitive research and development,” is centered around connecting innovative businesses and individuals with the $150 billion spent annually by the federal government on research and development. The second involves opening up government data across the board to let people create new apps. The third is developing a voluntary industry consensus standard for data and its transmission.
“The vision is simple — the goal is to effectively invent our way out of the some of the long-standing challenges that confront us,” Chopra said. “We believe that the combination of the entrepreneurial spirit of a Silicon Valley startup and the convening power of the federal government can help us solve the problems that confront us as a nation.”
In regard to precompetitive research and development, Chopra spoke highly of SMART (Substitutable Medical Apps, reusable technologies) Platforms, a project that seeks to recruit and support a new generation of developers by providing a common interface to multiple health IT platforms.
Chopra said that a $15 million grant was issued on a competitive basis to Harvard Medical School researchers, who committed to publishing the first of their application programming interfaces (APIs) by March 2011. The APIs will let other developers connect into their research and create Web apps, such as medication management tools, e-prescribing applications and other programs that provide value to patients, providers, researchers and public health entities.
The first of the APIs was released earlier this year, and SMART Platforms issued a $5,000 challenge to encourage app developers to build off the research and development from Harvard personnel. The quick turnaround is something Chopra says sets a great example for how similar, future technology innovations should be handled.
“[This] might have been a three-to-five year research project that would be in a whitepaper submitted to the National Science Foundation,” Chopra said about how a similar program would’ve been handled previously. “I don’t know whether … products that will compete in this area will be ready for the public in three to six months or a year, but I can assure you it will be much faster than what would otherwise have happened had we not engaged in precompetitive R&D collaboration.”
The second prong, opening government data to innovators, is something Chopra believes can be easily done with startling results. One successful venture he said is first lady Michelle Obama’s Apps for Healthy Kids contest, which was based on a U.S. Department of Agriculture database of 1,000 commonly eaten foods.
A video game to teach kids about nutritional eating habits was created first using a standard government procurement method that, while being developed, didn’t generate much fanfare. But by opening that data to the public and launching a wide-ranging competition, Chopra said 100 apps or games built during the contest spurred a number of startup companies. Sixteen of the apps or games also were awarded prizes.
“What we have done in this second category of open data is to [feed] off the entrepreneurial energy of the American people [to create] their own version of these activities that achieves the mission objective to encourage folks to eat healthier, but … by opening up the aperture and inviting a lot more voices in,” Chopra explained.
In the third policy point of voluntary standards, Chopra iterated an example of how patient medical records from a primary doctor in northern Virginia couldn’t be transferred electronically to another physician in Arizona because there were no technical standards present to allow for safe, secure e-mail.
Within 90 days, 80 companies developed technical specifications for safe, secure authenticated e-mail. Three months later, the same group shared a reference implementation for the standards.
According to Chopra, 95 percent of health-care IT vendors in the marketplace have pledged to adopt the direct specifications. “That means in one year, we’ve gone from nobody really having access to safe, secure e-mail across networks to everybody having access in short order,” he said.
The continued advancement of collaborative approaches on a smaller scale may seem like a death sentence for companies specializing in big IT infrastructure rollouts. But observers are fairly confident that the traditional system integrators can adapt to the changing tech landscape.
When asked about the traditional government IT partners and their future in a more mission-specific IT approach, Chopra remained neutral, but indicated that competition will be more wide open than ever before. “I have great confidence that as we shift our policies, those that have been historically serving the federal government will adapt to that change, because they have to,” he said. “As we move to standardization, open data and R&D collaboration, what is obvious is that we are extending the opportunity for small and medium-sized businesses. That is an exciting but needed change to increase the supply base of companies that can serve the needs of our federal government.”
Accenture, one of those larger companies, welcomed the challenge. Weipert said there was a lot of opportunity, particularly since the first step is cloud computing — right in Accenture’s wheelhouse of services.
Despite Weipert’s confidence, Gartner’s Di Maio said it was certain the big integrators would feel pressure on their profit margins.
“Of course there will be winners and losers in the market,” he said, “depending on how rapidly the big integrators will be able to adapt to the new attitude toward buying, including the preference for smaller contracts, the push toward the adoption of open standards and the need to engage smaller vendors as part of the supply chain.”
Before a permanent change in systems development can happen, analysts agree that the budget cycle and procurement system, particularly that of the federal government, need to change. Specifically government agencies need the flexibility to employ technological changes as they occur, which runs counter to the federal budget cycle that’s essentially a three-year look ahead.
Di Maio said while changing the status quo in the procurement process is likely a difficult transition, it was crucial in order for government IT departments to add value in mission-specific areas, rather than spending resources on infrastructure. “There has to be greater scrutiny in approving spending, more effective portfolio management to prioritize requirements, and ways to promote and enforce reuse and cooperation,” he said.
And while changing the budget system is an obvious step, plenty of “stubbed toes” should be expected that would slow down progress, warned Mark White, CTO of Deloitte Consulting’s Technology practice.
“The federal budget … is a much longer cycle than the pace of innovation and technology,” White said. “How do we improve and evolve the procurement process … to maintain the control, but also to reflect the fact that I have to be able to move in small increments more frequently?”
In addition, state laws, regulations and state leaders’ overall mindset may need to evolve to accept the new model of consolidated IT implementations and shared systems instead of proprietary ones, according to Michigan’s Behen.
“Some of the states have different rules, and we need to get through that as quickly as we can,” he said. “But let me be frank, there’s [also] some control issues. Some say, ‘I have it in my state; my state does it best,’ but the current climate is turning more toward not having that kind of barrier.”
Fletcher had similar thoughts, adding that business-minded folks in government need to change their tune. He explained that if a state went to the federal government and said it was building a Medicaid Management Information System (MMIS) from scratch, the feds would kick in 90 percent of the cost. But if you want to adapt an existing system and combine it to serve as an MMIS, the federal government won’t contribute nearly as much money.
This is one of the issues the federal IT officials are aiming to change.
“The problem [the federal CTO and CIO] are experiencing is that they have to get the [U.S. Department of Health and Human Services] to relax those rules and understand that or incentivize the states to do things differently,” Fletcher said. “You have to get the business folks [on board].”
Another hurdle to reusable applications and shared systems is data security. For states to embrace the open data trend, it will require a higher level of comfort and trust in putting what some may view as sensitive information in the cloud for developers to access.
Behen said that education about the cloud and data privacy help remove the hesitation of some local and state governments to get on board with open source development and collaboration.
“A lot of people don’t understand that the stuff they are doing every day on the Internet is in the cloud,” Behen said. “I challenge … governments that data isn’t all that sensitive. We’re too conservative about that, and we need to challenge conventional wisdom on this stuff.”
Despite the roadblocks, the more application-centered and multistate approach has spurred quite a bit of activity among state and local governments in the past couple of years.
Utah has a few irons in the fire. The state consolidated its data centers and virtualized all of its servers, resulting in a 25 percent savings in operating costs. Then Utah opened its state data center to other government, offering to host data and applications for cities, counties and other local agencies.
Fletcher said the state is hosting data for three school districts and a university hospital, but negotiations are under way with six local governments to provide services.
“We are offering services to them to host their data at cloud rates,” he explained. “It’s cheap storage, cheap processing, and we host all of their applications so they don’t have to have a data center or servers.”
Additionally Fletcher said Utah was considering the most feasible way to acquire a new MMIS. He explained that although the optimal scenario would be a regional approach where multiple states use one system, it’s much more difficult than it sounds. An MMIS pulls data from many areas from a state’s data stores, which complicates joint usage and increases the customization and cost such a system would require.
Though still interested in the regional approach, Utah is looking to take parts from other states’ MMIS models.
“We’ve got great discussions [going] with Washington, South Dakota, Michigan and Maine,” Fletcher said. “Each of those states are in a different evolutionary point [with their system development], so we want to get the most mature and reliable one out of each of those states so we can adapt it.”
Michigan is in the infancy stage of partnering with the federal government on a consumer financial protection bureau. If developed, the bureau would be a cloud-based solution that would work with attorneys general to catalog and route complaints and issues to the appropriate personnel.
The idea was one of many collaborations Behen and his staff discussed with Chopra at a meeting earlier this year. Another proposal dealt with Michigan taking part in a health insurance exchange committee.
Although Behen stressed that the two sides had just exchanged points of contact on the cloud-based bureau, he was confident that once it starts to develop, all states could join the program.
“We’re still trying to connect with Aneesh’s team to finalize what [the consumer financial protection bureau] will look like, but if you think about it, all attorneys general across the country are doing the same thing, but probably are using different systems to track that stuff,” Behen said. “So it only makes sense to do it [as a multistate initiative].”
Cities are also getting into a more modern IT approach. Various municipalities are transitioning to cloud-based e-mail and operating under the infrastructure as a service model, and some are bringing in outside personnel to develop apps that can be used by all government entities.
Code for America, a nonprofit that pairs Web developers and cities to create Web apps for citizens, has projects under way in Seattle, Boston, Philadelphia and Washington, D.C. The difference from a typical contractor situation, according to Jennifer Pahlka, founder and executive director of Code for America, is that applications are built without an endgame in mind.
“Government contracts normally require that you know all the functions an application will have and every feature on the front end,” Pahlka said. “But if you look at the platforms developed that had great success in the consumer world, that isn’t how they’ve developed. They’ve started small and evolved to be what people want them to be.”
In Philadelphia and Seattle, Code for America development teams have created platforms to let citizens start initiatives and connect with the city government to solve problems. But unlike conventional app development, anyone can contribute or take the code as it’s being developed. Pahlka also cited Code for America’s contract with the U.S.
Department of Labor as a good example of a new approach to app development. The nonprofit helped devise a jobs database for U.S. veterans instead of building a $40 million one from scratch.
“Our contract is one-one hundredth of that amount,” Pahlka said. “We can build something that helps veterans get jobs, but … we can use [APIs] from Monster.com and other job sites. For us, it’s a success story because we think it is a much better use of taxpayer dollars.”