Consolidation. That was the watchword as the nation's top public-sector technologists gathered in Baltimore this week for the midyear conference of the National Association of State Chief Information Officers. The agenda was full of great timely topics, including cybersecurity, the new national broadband plan and what exactly it means to be a good leader (a panel moderated by Governing alum and founder Peter Harkness).

But the word of the day was "consolidation." As the conference kicked off, Utah CIO Steve Fletcher (the current president of NASCIO, polled attendees on what they considered to be their top priority for investment right now. (Everyone in the audience voted using these little wireless keypad gizmos, so of course it wasn't a very scientific poll.) Still, a full 53 percent of the respondents identified consolidation efforts as their No. 1 agenda item.

The intense focus on consolidation is not entirely surprising, given states' current fiscal outlook. While the economy is beginning to show signs of a turnaround, the fiscal pressures are still only beginning for the private sector. Indeed, the effects of the current downturn "will ripple for a decade" in governments, said Ray Scheppach, the executive director of the National Governors Association. "It will be 2012-2013 before states return to 2008 levels. And even after we get out, I think the U.S. economy is probably going to grow more slowly over the next couple decades."

Consolidation of IT efforts can be an effective way of controlling costs. It's the only way to get a handle on exactly where your state IT dollars are going, and it's the only way to coordinate a real solution for plugging financial gaps, said Tony Tortorice, the CIO of Washington State. Tortorice likened unconsolidated IT spending to a leaky faucet. If you've got one leaky faucet in your house, it's easy to ignore. "But if you've got a thousand leaky faucets, you might want to come up with a leaky-faucet strategy. The technology spend is like that, I think. There's no one sliver bullet that can get you where you need to be. You've got to have a coordinated, disciplined, consolidated approach."

Sometimes that means looking for consolidation opportunities in unexpected places, said Tortorice, who  had to help his state find $30 million in cuts for the current budget. For example, IBM had eight separate contracts for the same software with eight different state agencies. The vendor actually approached the state with the idea to consolidate those into one big, easier-to-manage -- and less expensive -- contract. "The only way we knew about that was because IBM came to us," Tortorice said. Now he's going to other vendors that do business with the state, seeing what contracts they have.

There's another kind of consolidation, too, that public IT managers sometimes fail to focus on, said Tennessee CIO Mark Bengel. "We usually leap to things like cloud computing and technological virtualization," he said. "But we often miss the opportunities sitting right under our nose for organizational consolidation and optimized staffing."

When Bengel took over as CIO four years ago, Tennessee's IT agency didn't have any service level agreements with the agencies it worked with -- "so there was no way to know how well we were performing against expectations." The group established SLAs and performance targets, and began posting the performance data for individual employees on the sides of their cubicles. The data dashboards showed in black and white (or green and red, as the case may be) how a given employee's performance matched up to his or her peers'. Performance improved almost overnight. "Almost by doing nothing but measuring this and publishing it, I saw this tremendous change almost instantly."  As a result, Bengel's agency has tripled its workload since 2006, while reducing staffing by 16 percent. And it's saved enough money to fully build and run a new data center.

As the reality of the prolonged fiscal crisis sets in -- the "new normal," as so many people are saying now -- states will continue to look toward IT consolidation as a key solution for meeting fiscal demands.

And hey, just remember: You can't spell "consolidation" without "NASCIO."