Ways to Consolidate Government IT

It tends to come in two forms: a centralized model and a federated approach.
by | November 2010

Consolidation has been a dominant force in government IT over the past decade, but a new survey suggests there’s more than one way to get there. Since the early part of the decade, most state governments have steadily aggregated technology resources and eliminated redundant equipment and operations. The Center for Digital Government -- which is owned by e.Republic Inc., publisher of Governing -- has tracked this and other technology trends since the late 1990s through its Digital States Survey.

The 2010 data, released in September, shows that technology used by state governments is more consolidated than ever. In 2004, 46 percent of states said their technology systems were highly decentralized, with individual agencies operating their own -- sometimes duplicative -- systems. Only about 20 percent considered themselves highly consolidated. This year, those figures are reversed, with 42 percent viewing themselves as mostly consolidated and 21 percent predominantly decentralized.

That movement, by itself, isn’t surprising. The idea of operating multiple state e-mail programs, human resources systems and other common computer applications is less and less acceptable to state policymakers -- not to mention too expensive to support. More interesting is the fact that consolidation activities tended to come in two forms: a centralized model that puts responsibility for nearly all IT equipment, staff and budget under the state CIO, and a federated approach that gives the CIO authority over IT policy and key statewide resources like data centers and networks, but leaves agencies in control of many mission-specific computer applications.

The good news is that either approach appears to work.

Utah earned one of only two A grades in the 2010 survey, which evaluated states on technology efficiency and effectiveness. Utah CIO Steve Fletcher controls all IT resources -- from data centers and networks, to software applications and telephones. The state’s entire technology workforce reports to Fletcher’s office. On the other hand, California managed a B+ using the federated approach. CIO Teri Takai’s office runs major state data centers and computer networks, sets policy, and performs capital planning and review for state IT projects. But state agencies operate specialized computer applications and continue to run their own IT departments.

Both states can point to significant results. Utah now supports statewide IT operations with fewer than 500 servers, down from 1,900 before the consolidation. That move alone shaved $4 million from the state’s operating budget, according to Fletcher. California’s consolidation isn’t as far along, but state officials say they’ve already cut data center space requirements by 75,000 square feet over the past year. The space savings eliminated the need for a new data center facility, cutting more than $40 million in capital costs.

It’s important to note that these initiatives aren’t just cutting expense -- they’re making important state computer systems work better. For instance, Utah sank some of its savings into better equipment and higher pay for IT professionals, Fletcher says. Now the state runs its entire payroll in less than five hours where it used to take 30.

The 2010 survey shows a good number of state governments making similar progress thanks, at least in part, to some flavor of these two consolidation approaches. In all, 13 states earned a B+ or higher under the survey’s grading system -- a respectable feat given the economic turmoil of the past few years.

The news isn’t all rosy, however. State CIOs polled in the survey were pessimistic about their ability to maintain this momentum. Almost half of the respondents said they expect to have trouble finding enough funds to meet their state’s future IT needs. Another 25 percent expect funding to be just “somewhat adequate.” So, while there may be two roads to IT success, it looks like neither of them will get any easier.

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