State IT Structure Landscape Changes Dramatically

There's no IT project more daunting than transitioning a state’s entire technology structure. Nevertheless, since early 2016, 30 percent of state governments have done exactly that. We review who has made the change.

by , / January 14, 2019

The Center for Digital Government* has been tracking the status of state projects revamping and rebuilding their IT structures since early 2016. In just three years, the landscape has changed dramatically. Comparing then and now gives us a chance to assess successful efforts as well as document the ways that IT infrastructures (both in tech and personnel) have shifted over time. 

There is no IT project more daunting than overhauling a state’s entire IT structure. More than an initiative or a realignment of resources, these reorganizations change a structural component of government operation across every agency. 

To track changes, we put states into three categories: centralized, hybrid and decentralized. Once a system strays far enough to escape easy classification as mostly centralized or mostly decentralized, it is a “hybrid” system. 

Centralized state IT is characterized by a single consolidated IT organization which provides most IT services to the other agencies. This main agency provides IT governance, strategy and oversight as well as most IT services, support and personnel for other state agencies. For years, this has been considered the most advanced and desirable form of IT structure. Centralizing IT generally results in simplified and more comprehensive governance and security, along with significant cost savings. 

Decentralized state IT is a structure where individual agencies have internal IT departments which provide most of their support, systems and strategy. A state or central IT agency may also be present, but it does not provide services or staff, instead focusing on policy and possibly even oversight of large projects and procurements. This structure is usually characterized by siloed systems and data across the agencies. It is also significantly more expensive and is difficult to maintain consistent security and quality. 

Hybrid state IT structures are a mix of the two, either by design or because the state is transitioning towards a fully centralized structure. Hybrid IT provides options and agility while still allowing the state to benefit from some of the cost-savings of a fully centralized system. 

Here's what the landscape of state IT systems looked like in 2016:

And here's what it looked like at the end of 2018:

Since our 2016 analysis, 15 states have transitioned to a different IT structure. Almost half of these states (seven) were originally decentralized. 

A total of 13 states shifted toward centralization. Eight states — Alaska, Connecticut, Illinois, Maryland, Nebraska, North Carolina, Tennessee and Washington — moved into the centralized category. Another five — Hawaii, Idaho, Massachusetts, Nevada and South Carolina — transitioned from a decentralized to a hybrid system.

Interestingly, two states broke the mold by backing away from centralization. New Jersey moved from centralized to a hybrid system. Meanwhile, Oregon abandoned its centralization attempt and continues its legacy decentralized structure. 

Only Illinois and North Carolina fully moved from decentralized to centralized within the time frame of this ongoing project.

While the centralized system has been commonly viewed as the ideal, states seem to be trending toward hybridization instead of complete centralization. In addition to the five states that transitioned into hybrid structures, 10 more states retained their hybrid designation over these three years: Alabama, Arkansas, California, Florida, Georgia, Iowa, Kansas, Kentucky, Mississippi and Montana. 

Flexibility is a major reason hybrid modeling may be appealing over full centralization. If agencies have widely varying day-to-day infrastructural needs, a nimbler system may allow for better responsiveness and specialized skills. Purchasing and equipment refresh may also be expedited where larger contractual/purchasing oversight is in place, but individual agencies retain some purchasing power. Whatever the underlying reasoning, state IT structures are changing; over the last three years, 30 percent of states have shifted their IT governance structure.

This research was informed by data gathered from state websites, the Digital States Surveys, and original research by the Center for Digital Government.

*The Center for Digital Government is part of e.Republic, Government Technology's parent company.

Ethan Bagdanov Researcher, e.Republic Inc.

Ethan Bagdanov is a researcher for e.Republic. Graduating with a B.A. in History from Missouri's Columbia College, he is passionate about improving the world through quality research, innovative leadership and technology.

Nicholas Gibson Research Analyst

Nicholas Gibson is a research analyst with the Center for Digital Government.

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