Policymaker Call to Action: Strategic IT as a Government Force Multiplier

In today’s environment of limited budgets, changing federal requirements, and increasing expectations from the public, state and local governments must reconsider their approach to technology funding. Rather than implementing uniform cuts to IT budgets, it is crucial for elected officials and executive leaders to empower chief information officers (CIOs)/technology directors to identify opportunities for cost optimization and to prioritize reinvestment in technology platforms that deliver measurable savings across departments.

Strategic IT investment is not about spending more — it is about spending smarter. When implemented effectively, strategic IT investment frees up resources for direct services, boosts operational efficiency, and reduces long-term risk. Strategic IT investments help to ensure continuity of critical public services, secure sensitive constituent data and prevent additional avoidable costs incurred as a result of delayed system upkeep.

IT as a Force Multiplier: State and Local Government Impact

Technology investments consistently reduce costs across multiple program areas within government. By upgrading eligibility systems, permitting platforms and more, IT enables governments to:

• Improve public service quality and effectiveness
• Automate manual processes
• Reduce error rates and audit exposure
• Improve service delivery speed and accuracy
• Consolidate duplicative systems and staffing
• Enhance transparency and accountability

Across the United States, state and local governments have demonstrated that targeted strategic IT investments produce tangible operational and fiscal benefits. Some examples include:

• Pennsylvania – By modernizing legacy systems and “rightsizing” IT procurements, the state achieved $37 million in annual IT cost savings (January 2026), freeing up funds for priority services and new digital initiatives.
  
• Honolulu, HI – The city’s Department of Planning and Permitting cut residential permit processing times by ~70 percent with a new AI-powered online system, dramatically accelerating construction approvals and reducing backlogs (pilot results, 2024).
  
• Tennessee – The state’s robotic process automation (RPA) program has now automated over 100,000 staff hours of work annually across a dozen agencies (as of 2023), enabling employees to focus on higher-value tasks while saving taxpayer dollars.
  
• Alameda County, CA – A recent digital innovation initiative halved the time required to prepare the county’s budget and boosted staff productivity by ~25 percent, as recognized in the 2025 national Digital Counties Survey. These efficiency gains translated into significant resource savings and more timely fiscal management.
  
• Chicago, IL – By integrating analytics and ramping up proactive rodent control, Chicago saw a 15 percent drop in rodent-related 311 complaints in one year, enabling more efficient and targeted pest control efforts (2013).

These examples make it clear: IT is not merely a cost center — it’s a strategic enabler for smarter, faster and more accountable government. At both the county and state levels, IT modernization enables efficiencies across government. For instance:

• Integrated benefit eligibility systems - Removing silos saves time and effort. A National Academy of Public Administration analysis (2023) found that integrated eligibility platforms help reduce duplicative processes and improve coordination across programs like the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families, and Medicaid, meaning fewer redundant verifications and faster service for families.
  
• Shared cybersecurity operations - Consolidating IT security drives down costs and risk. Virginia’s centralized IT agency (VITA), which serves 65 state agencies, exemplifies how standardized cybersecurity protocols yield cost savings and simplify compliance with federal mandates by enforcing consistent protections (Baker Tilly analysis, 2025).
  
• Cloud-based financial systems - Modern finance platforms strengthen oversight. Since Idaho launched a unified cloud ERP system in 2023, officials report faster, more accurate financial data and greater transparency for real-time budget monitoring.

Strategic Reinvestment: IT as a Savings Engine

Traditional budget strategies in state and local governments often require every department to make the same percentage cuts, regardless of operational context or potential impact to effectiveness. This method overlooks IT’s unique ability to generate efficiencies and avoid long-term costs across departments. Worse, IT budget reductions create waterfall impacts, exacerbating reductions in department budgets and the associated costs for delivering services.

Rather than across-the-board reductions, governments should strategically retain or increase IT investment in areas with high returns. Targeted and strategic savings in IT can save funds for reinvestment, while cuts in areas such as cybersecurity, compliance and training could result in increased organizational risks and costs overall.

Case in Point: SNAP Error Rate Penalties
Under HR 1, states with high SNAP error rates will face steep financial penalties. Beginning in FY 2028, states with error rates ≥10 percent must cover 25 percent of SNAP benefit costs, on top of a 75 percent share of administrative costs. This creates a direct fiscal incentive to invest in technology that improves payment accuracy.

Fiscal modeling shows that targeted IT investments such as eligibility system modernization, predictive analytics, and second-party review overlays could reduce error rates and unlock billions in cost avoidance.
California SNAP Fiscal Impact (Projected)
As illustrated in the table above, should the state rapidly improve its error rates through analytics, root cause analysis and process improvements accelerated by automation, the state stands to avoid a cost liability of $2.48 billion or 48.8 percent as compared to no error rate improvements.
 

Additional State Projections With Modernization

If states invest in AI-powered eligibility validation, real-time analytics, and automation, they could reduce SNAP error rates by up to 35 percent — as demonstrated in recent implementations by Deloitte and others. Here’s how that might translate into fiscal impact:


SNAP error rate improvements are just one of many urgent modernization efforts with substantial ROI potential. Unfortunately, HR 1 and other policy changes are leading government organizations to make tough choices about what can be funded. Policy leaders must understand the risks and costs associated with those choices.

Risks of IT Disinvestment

Cutting IT investment undermines both departmental efficiency and fiscal performance. Without adequate IT investment, agencies are forced to:

• Maintain duplicative systems and staff
• Delay modernization of constituent-facing services
• Absorb higher costs for compliance, reporting and security
• Cut program delivery to meet budget targets

Short-term IT budget cuts often lead to long-term inefficiencies and diminished public impact. Several analyses illustrate these risks:

Delayed System Upgrades: Postponing upgrades of critical back-office systems (e.g., ERP and finance platforms) significantly increases manual workloads and audit burdens. For example, an industry analysis (2025) found that organizations on outdated systems spend up to 30 percent of their finance staff time on manual reconciliation tasks — time that could be saved with modern automation. Government auditors have likewise flagged that many agencies rely on cumbersome work-arounds due to outdated IT, making compliance and oversight more challenging (a persistent theme on the Government Accountability Office’s High-Risk List of vulnerable programs).

Underfunded Cybersecurity: Cutting cybersecurity investment raises risk and costs. The New York State Association of Counties reports that local governments with weak cyber defenses saw cyber insurance premiums double or even triple since 2019, often while getting less coverage. Without proper funding for modern cyber controls (e.g., multifactor authentication, endpoint monitoring), agencies face higher breach likelihood and even struggle to qualify for affordable insurance — a precarious financial position.

Fragmented Data and Compliance Gaps: Agencies lacking integrated data systems frequently struggle to meet federal reporting requirements, risking grant funding clawbacks and compliance penalties. The Congressional Research Service warns that when grant recipients fail to comply with program terms, federal agencies can “recoup” (claw back) awarded funds, a process that is administratively burdensome and financially damaging. Conversely, governments that invest in modern analytics and automation can dramatically reduce errors and improper payments — for instance, a Deloitte analysis (2025) found that states using AI-driven verification tools cut SNAP payment error rates by up to 35 percent, avoiding tens of millions in potential federal penalties.

In short, indiscriminate IT cuts are counterproductive. They force agencies to maintain costly manual processes and duplicative systems, drive up hidden costs (labor, errors, insurance premiums), and undermine both fiscal health and service quality. Strategic IT reinvestment mitigates these risks by automating controls, closing compliance gaps, and preventing costly failures before they occur.

The Risk of Uniform Budget Cuts

Applying flat percentage cuts to all departments — including IT — may seem equitable, but it is inefficient. IT is more than just another cost center; it is the foundation enabling every department to function effectively. When IT budgets are cut indiscriminately:

• Departments must maintain outdated systems
• Manual workarounds increase staff burnout and turnover
• Compliance risks grow, especially as federal mandates evolve
• Projects and service delivery slow, frustrating constituents
• Long-term costs rise due to inefficiencies and audit penalties

Shifting from “equal cuts” toward targeted modernization empowers leaders to achieve smarter budgeting, improved outcomes, and long-term sustainability for programs and services. IT is not only a key enabler for business success, but each dollar spent on IT can create many more in savings and constituent value. The reverse can be true for cuts — cutting spending in IT can disproportionately and negatively impact government missions.

Strategic Reinvestment: What Leaders Should Fund

Leaders should consider targeting cuts to low-impact initiatives and instead fund platforms that deliver cross-departmental savings and resilience. Recommended investments include:

• Business intelligence (BI) platforms to reduce manual reporting and enhance decision-making
• Automation of repetitive workflows such as those in finance, eligibility, permitting, procurement and HR
• CRM tools to improve constituent engagement and reduce call center volume
• Data management platforms and data governance that empower agencies to establish data as a line of business, better positioning them to ensure data usability for decision-making and enable use of artificial intelligence capabilities for further automation

National associations like the National Association of Counties (NACo) and the Government Finance Officers Association (GFOA) have documented multiple county and city case studies where these types of investments yielded multidollar returns through cost avoidance and productivity gains. For example, NACo cited a county’s new AI-based budgeting system halved preparation time and improved staff productivity by 25 percent. A GFOA case study shows an automation project virtually eliminated errors and freed staff for higher-value work. In short, these strategic IT platforms often pay for themselves many times over, delivering a more resilient and efficient government.

Establish an Enterprise Efficiency Accelerator Program

An Efficiency Accelerator Program can provide programmatic structure to identifying, prioritizing and implementing strategic IT platforms that lead to enterprise efficiency gains and improved service delivery, generate cost savings, bridge workforce shortages and reduce governmentwide risk.

• Restructure IT resources into cross-functional teams aligned with departmental clusters (Communities of Interest) such as HHS and Justice and Public Safety, land and environment management or via strategic enterprise platforms leveraged across multiple agencies (e.g., BI, GIS, LCAP, DMS, ERP).
• Fund strategic IT investment beyond core services through interdepartmental cost recovery tied to measurable outcomes.
• Assign performance metrics, such as service-level agreement (SLA) compliance, digital adoption rates, risk reduction, and cost avoidance.
• Re-invest monies saved into additional investments in innovation.

Preserve and Scale Professional Development

• Retain learning management systems (LMS) and training programs, or adopt lower-cost alternatives, such as free training or training credits from vendors; integrate existing research and advisory services into workforce development.
• Prioritize free or low-cost online programs and peer learning networks.
• Continue targeted travel for skill-building, justifying it based on outcomes.
• Upskill technology staff on low-code platforms, AI development and use, as well as data tools.
• Establish internal Centers of Excellence for BI, GIS, and automation and/or other strategic platforms.
• Enable employees to self-service data, reporting and process automation.
  

Invest in Strategic IT Planning and Governance

• Fund and mandate enterprise IT governance to align technology with policy and budget priorities.
• Leverage technology standardization where practicable to reduce IT portfolio complexity and achieve economies of scale in contracting, while benefiting from synergies derived from enterprise use of key strategic platforms.
• Use scenario modeling and fiscal impact analysis to guide modernization road maps.
• Legislatures and executive stakeholders should engage in strategic IT investment planning with clear ROI narratives and modernization scorecards.
  

Protect and Modernize Cybersecurity Operations

• Centralize cybersecurity to reduce breach risk and audit exposure.
• Invest in threat detection, endpoint protection, and staff awareness training to prevent costly incidents.
• Align cybersecurity with federal mandates (e.g., IRS Pub 1075, CJIS, HIPAA) to maintain federal funding eligibility.

Force Multiplier Index (FMI)

A tool to prioritize IT investments is necessary as tough choices about investments and cuts must be made. To surface the full potential and impact of a proposed IT investment across the organization, use a Force Multiplier Index (FMI):
Example Scenario: State Eligibility Automation

A state invests $2 million in automating SNAP and Medicaid eligibility workflows. Over the next year:

• Annual Hours Saved: 45,000 staff hours (assume a $30 per hour wage average)
• Cost Avoidance: $3.2 million in benefits cost reimbursement due to reduced error rates and audit exposure
• SLA Improvement Score: 15 percent faster processing, valued at $500,000

For every $1 invested in this hypothetical scenario, the state realizes 2.5x that cost in measurable value across multiple departments.

Use the FMI to:

• Prioritize high-impact IT projects across agencies
• Communicate IT’s value to legislative budget committees and executive leadership
• Identify new savings achievable across divisions through the expanded use of technology
• Justify targeted reinvestment in modernization initiatives

IT as a Risk Mitigator

Strategic IT investment isn’t just about efficiency — it’s about protecting government operations from disruption, noncompliance, and financial exposure. Strategic IT investment strengthens resiliency, agility and responsiveness, improving an organization’s risk profile compared to legacy systems. Modernized systems reduce risk across five key dimensions: cybersecurity, compliance, continuity, workforce stability and public trust.

Risk Profile: Legacy vs. Modernized Systems

Evidence-Based Risk Reduction

Compliance and Grant Risk: Agencies without integrated data platforms struggle to meet federal reporting deadlines, risking grant clawbacks and reputational harm. The Government Accountability Office and Congressional Research Service both cite siloed systems and manual reporting as key contributors to improper payments and recoupment actions.

Operational Continuity: A 2024 Ernst & Young (EY) survey found that while 91 percent of government leaders recognize the importance of IT modernization, only 40 percent prioritize it — leaving many agencies vulnerable to outages, emergency response delays and compliance failures.

Insurance Premiums: Counties with underfunded cybersecurity programs face rising insurance costs and reduced coverage. The New York State Association of Counties reports that premiums have doubled or tripled for counties lacking multifactor authentication, endpoint protection, and formal cyber policies.

Staff Retention and Burnout: Legacy systems increase manual workloads and error-prone processes, contributing to staff turnover. Modernized platforms reduce administrative burden and improve morale — especially in eligibility, permitting and finance operations. The incoming workforce expects more modern technology and self-service capabilities, which can drive talent recruiting and retention and reduce turnover-related costs when provided.

Policy Recommendation

State legislators, county boards, city councils and executive leaders should:

• Direct leadership to work with their CIOs and IT governance bodies to identify cost optimization opportunities instead of imposing blanket cuts, using the Efficiency Accelerator Program model.
• Prioritize funding for high-impact (high FMI) platforms using the Force Multiplier Index.
• Treat IT as a strategic enabler to realizing efficiencies and cost savings and sustainability of programs at scale across the enterprise.

Conclusion

Strategic IT investment is foundational to modern governance. States, counties, special districts and cities that view IT as a force multiplier can unlock cross-departmental savings, enhance constituent outcomes, and build resilience amid fiscal and operational pressures. Disinvestment in IT not only limits innovation — it forces departments to cut services instead of costs. By quantifying IT’s impact and aligning modernization with policy goals, government leaders can foster smarter budgeting through strategic investments in technology, realizing greater cost efficiencies, improved service delivery, and sustainable long-term outcomes.
 

About the Author

Alia Mendonsa has been supporting public-sector IT organizations for over 27 years as an analyst and adviser. She currently serves as a Senior Executive Counselor, team lead at Info-Tech Research Group.