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Five Ways to Innovate During Budget Cuts

From consolidation to outsourcing, government CIOs accomplish more with less.

by / June 11, 2008

Some CIOs are treating the current fiscal downturn as an opportunity to make changes they have been unable to accomplish previously. Here are the top five changes CIOs are implementing today:

  • Increase efficiency through consolidation.
    Many organizations that previously hesitated to consolidate are now implementing numerous consolidation ideas, which in turn increase efficiency greatly. Sacramento, Calif., CIO Steve Ferguson previously was unable to implement his consolidation ideas, saying, "There's been a culture of departmental IT that has evolved over 20 years and has been very hard to change. But with the budget crisis, the City Manager's Office is definitely more interested." Through actions such as downsizing the number of data centers and consolidating three e-mail systems into one unified messaging system, Ferguson expects to see significant savings in the coming years.
  • Make a budget case.
    With recent revenue shortfalls, organizations have become smarter about how they spend their IT budget. Agencies such as Arizona's Government Information Technology Agency (GITA) work with the organization's IT departments on making a budget case for investments and describing how they fit into a larger state IT strategy. "I inherited an investment justification framework in which departments make a business case over a five-year time frame," explained GITA's Director Chris Cummiskey. "We help them understand the elements they have to look at to be successful."
  • Look more proactively at outsourcing.
    In order to address budget cuts, some CIOs have started to examine the benefits of outsourcing. For example, University of South Florida (USF) Associate Vice President of IT Michael Pearce said his staff has "begun to look at outsourcing where it makes sense. For instance, we have outsourced alumni and student e-mail to Google across all our campuses." Pearce expects to see a savings of about $150,000 a year from this action.
  • Create an IT standards team.
    Organizations such as USF have identified savings by creating IT standards boards that make sure each technology acquisition falls under established standards set by the CIO's office. By maintaining these standards, Pearce has already recognized $200,000 to $300,000 in savings.
  • Improve service offerings.
    By improving service offerings through consolidation, public CIOs have cut spending and made government workers more productive. CIO R. Scott Studham of Tennessee's Oak Ridge National Laboratory consolidated the lab's employees into an IT Services Division. That allowed Studham to add collaboration tools and features to help staffers with work. Studham said IT costs have already dropped from 4.6 percent of the lab's total budget to 4.4 percent.

The bottom line: A smaller budget doesn't mean an end to innovation. Through consolidation, careful budget planning, and other proactive measures, CIOs can increase efficiency and productivity.

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David Raths contributing writer
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