It's not surprising, then, that being a technology leader today requires far different leadership strategies than those used when times were better. Unfortunately, there isn't any one simple, or proven, recipe for leading through a downturn that will work in every situation. There are signs beginning to emerge, however, that state and local IT leaders are putting together new playbooks for new times.
"Rent don't buy" is one of the plays. After sizing up the situation facing his city, Karl Kaiser, the new technology quarterback in Minneapolis--and a CIO with extensive experience in the private sector--decided that, while the city needed to retain overall management responsibility, it didn't need to own the technology assets or be responsible for day-to-day services. The city has, accordingly, turned to the private sector and awarded a leading integrator a $56 million contract to manage the city's complete IT infrastructure--from the data center to desktops and mobile devices. With a seven-year contract, the city expects to save $20 million.
"Consolidate and restructure" is another play. This one has been called by Virginia Governor Mark Warner and his secretary of technology, George Newstrom. Newly passed legislation will consolidate under one roof the IT operations of the various independent state agencies. This move is in response to a study that found "tremendous duplication of effort, serious impediments to information sharing, and high costs." While the consolidation is expected to cost $14 million in additional expenses, it promises to produce $23 million in net savings in 2004 general revenues.
What are some of the other plays you can expect to see more of in the year ahead? Here are just a few to look for:
"Leverage" is the preferred strategy for many jurisdictions that don't have general tax revenues to support the IT investments they need to make. Over the next few years, these governments will become increasingly dependent upon both the federal government and the private sector for access to capital. They will work to optimize federal grants to refurbish their state and local infrastructure, and they will look to private industry to help collect the outstanding "account" receivables from uncollected state taxes, fees and fines. Also expect to see the states turn to the private sector for assistance in expense management as shared-savings contracts grow in popularity.
"Legislating" is one play that is often called when there are no immediate funds available to spend on IT. A downturn can provide the opportunity to get state tech policies, governance structures and management practices in order. This is what Clark Kelso, California's CIO, is spending much of his time doing. To make further progress in many critical areas of concern, such as homeland security, states need to put in place legislation that will set security standards, protect privacy and pave the way for widespread information sharing.
"Weeding the garden" is long overdue for most state and local IT portfolios. There are many initiatives that were undertaken in the boom years that are simply no longer needed. Streamlining the many duplicative vendor contracts--such as for hardware, software and services--would be a significant step toward running government like a business. Now is the time to begin weeding out these inefficient business practices and reallocate time and energy to building a new portfolio. After all, IT leaders are unlikely to gain support for new spending proposals until top budget and finance officers are convinced that the excesses of the past have been dealt with.
"Planting new seeds" for what lies ahead is also critical during this period. While fiscal realities dictate a focus on the short term, now is not the time to be shortsighted. Reaching out to newly elected officials and building support for the next wave of investments is essential. Keeping critical initiatives alive, but under the radar screen, can also be an effective way of being ready when the economic tides turn.
All state and local IT leaders share the same dilemma in the years ahead: how to continue to make progress without discretionary monies available for new investments. But they won't all suffer a similar fate. While the hand they are dealt may be the result of their state's economic and demographic destiny, their personal fates as leaders will depend upon how they respond and the plays they call.
