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Supply Chain in Crisis: How Can IT Shops Weather the Storm?

When it comes to technology plans that involve hardware and equipment, state and local government IT leaders are feeling the pinch because of global supply chain delays. What can be done as the crisis continues?

Aerial view of a shipping container docked at a port.
When Utah’s IT team placed an order for new networking equipment in August, the vendor said the equipment would be ready in February. A good thing, too, given that the Utah Legislature had passed a construction plan that required IT to move its data center, which contains the state’s network core, from Capitol Hill to another location in the Salt Lake Valley by May 1, 2022.

This construction project is a big deal. The plan is to tear down both the old data center and an office building, build a museum, fix some parking issues and re-envision the entire space in question. May 1 is thus a hard deadline.

So one can imagine the queasy feeling that CIO Alan Fuller felt when, at the end of last month, the vendor said the shipment would be delayed to March. As Chief Technology Officer Dave Fletcher remarked, even if IT moves a lot of things in the data center to the cloud, they can’t do without the networking equipment.

“Frankly, we’re scrambling. We’re scrambling to get the network equipment we need,” Fuller admitted. “We’re asking vendors for options. We’re looking at alternative vendors and whether they have equipment available ... will March [the new delivery estimate] become April or become May? Can we still hit a May 1 timeline with these shock waves of moves in the delivery? It was already bad enough that it was months and months out.”

To add to the pressure, construction costs are going up in Utah with construction components in short supply. If state IT misses its data center move deadline, that would delay the construction of the overall project and put a bigger dent into the state’s wallet.

“Because of those rising construction costs, they estimate it could be half a million dollars per month in additional costs for every month that we slip,” Fuller explained.

As Fuller and Fletcher pointed out, the global supply chain situation wouldn’t be as big of a challenge for Utah if IT didn’t have to move the data center. But even if that larger construction project weren’t happening, the supply chain would still have an impact.

Utah IT prides itself on exemplary service to state agencies. Order delays, however, mean that refreshes don’t happen as quickly as they used to.

“It can really create frustration,” Fuller said. “It hurts our ability to provide good service to our agencies. If they, say, go through our ordering process and order a new laptop and it takes us a couple of months to deliver it, they’re not happy with us.”

To address this issue, Utah IT has changed how it orders equipment like laptops and docking stations. In the past, IT had a “just in time” ordering process that worked well with easy availability of supplies. Put in a order, and within 24 hours comes a machine.

Those carefree days are over.

“Now that the vendor stocks are low, we’ve had to place big orders upfront to make sure we have those supplies on hand [when agencies request them],” Fuller said.

IT in Cook County, Ill., has had to exercise similar foresight in the wake of the supply chain quagmire. Like Utah, Cook County used to order things as needs arose. County IT wouldn’t hold onto inventory due to the chance of the equipment becoming old or unwanted. That is no longer the case, especially with the increase in remote workers, who expect equipment immediately.

“If there are 500 vacancies,” said Cook County Chief Technology Officer Hema Sundaram, “we’re trying to figure out what is the right number … what are the dates that all the departments will be hiring? We’re trying to estimate all of that and come up with a number that we will order way in advance.”

Cook County CIO Tom Lynch mentioned multiple examples of how the supply chain situation has affected IT government business. One of the county’s major projects is increasing fiber capacity in support of a public broadband utility model.

This project is a joint initiative between the county and the state of Illinois and had been budgeted out. But supply chain limitations have thrown a monkey wrench into the process: The cost for network gear like cabling has gone up significantly. With government budgeting, “it’s not easy to adjust when costs increase and you’re not expecting that,” Lynch said.

Massively delayed orders have also forced the county to alter the way it does financing.

“We have orders that have been outstanding now for six months or more … our finance folks have had to make some adjustments to allow funding carryover between fiscal years to keep those POs still active,” Lynch indicated. “Historically, that has not been the practice here.”

Another significant adjustment relates to hiring. Traditionally, hiring in the county drove IT activities; that is, hires were made, then IT met the needs of those hires.

Now, IT has to be looped into hiring so that user expectations can be managed and equipment can be staggered out in a practical manner. This approach has become especially important with the influx of American Rescue Plan Act funds, which is driving a lot of hiring in multiple departments.

Lynch does see one silver lining with the supply chain predicament: The crisis may cause some to look at cloud solutions in a different light.

“It’s not a fix-all,” he said. “It’s not perfect in every scenario, but I will say that folks that may have reflexively bought equipment before are now seeing benefits for cloud adoption because of the timing element. Once they see those benefits in real time, perhaps they realize there are other reasons you would want to use a cloud solution.”

One of the reasons a government organization may want to consider the cloud during this time is improved security and resource management. Curtis Dukes, executive vice president and general manager with the Center for Internet Security, said many organizations, whether public or private, struggle to maintain basic cyber hygiene due to a lack of resources.

Dukes believes small- or medium-sized organizations are having a hard time competing with larger organizations for the talent needed to implement a solid cybersecurity program. Moving to the cloud offers hope on this front.

“If you look at it from a resources perspective, we advocate that organizations that are small or medium enterprises … they should more and more move a lot of their IT infrastructure and put it into the cloud and let it be managed there by folks that have better resources and that would actually give them better security for it,” Dukes said.

Given what vendors have communicated, government IT experts don’t expect the supply chain situation to improve anytime soon. The most hopeful scenario is that things will begin to normalize in late 2022, but early 2023 could very well be the more probable conclusion to the supply chain madness.

Fuller said the state’s industry partners have been upfront about the situation, “They’ve told us frankly, ‘Look, this is not going away in 2022, and it could get worse before it gets better.’ I think they’ve done a good job trying to set our expectations realistically.”

Until normalcy is restored, Fuller plans to strengthen Utah’s relationships with vendors and suppliers by communicating needs and timelines as early as possible.

Sundaram said she’s paying particular attention to the “human element.” Her team’s morale has been negatively affected by users expressing frustration and confusion about delays. As a result, she is working with staff on the importance of early communication with users.

“Technologists, by their nature, may not always be ready to deal with user angst,” Lynch said. “Communications aren’t necessarily the strongest suit of a technologist. It puts them in a really tough position, that people are angry or upset, and it’s not really their fault, and there’s not much they can do about it.”
Jed Pressgrove has been a writer and editor for about 15 years. He received a bachelor’s degree in journalism and a master’s degree in sociology from Mississippi State University.