State CIOs combat 2013 budget woes with shared services strategies

With budgets tight in 2013, state CIOs are adopting shared services strategies to keep costs low and client satisfaction high.

Faced with consecutive annual budget cuts and stagnant staffing levels, Brenda Decker might be forgiven for feeling a bit beaten down. Yet the CIO for the state of Nebraska, who also serves as president of the National Association of State Chief Information Officers, sounded more spirited than sapped about what lies ahead for her state and those of her peers. By her estimation, the pressure to do more with less is actually leading to innovative strategies for cost savings, most recently the adoption of a shared services approach that leverages IT resources statewide and in some cases across state borders. "Just because we've been asked to cut a budget, we still have a core set of services that we're expected to provide," she said.

Brenda DeckerBrenda Decker

A list of technology priorities for 2013 from members of the National Association of State Chief Information Officers (NASCIO) shows state CIOs are zeroing in on ways to meet the challenge. Consolidation and optimization, and cloud services were the categories that topped the rankings by 49 CIOs from U.S. states and territories who responded to a NASCIO survey fielded in late fall 2012. "Both look at ways to think of our state governments as enterprises, rather than as a collection of agencies out there doing their own thing," Decker said.

Indeed, the priorities are in sync with those of CIOs in private industry, whose top concerns are rooting out redundancy and exploiting the cost benefits of using cloud computing. For example, cost reduction and efficiency figured prominently in the top 10 IT management concerns reported in the Society for Information Management's 2013 CIO survey. In the same survey, cloud computing was cited as the second most-important technology.

Where state CIOs just might be ahead of their peers in the private sector is that they have banded together to form shared services strategies. Within and across borders, state CIOs have united to take advantage of cloud scalability and costs and to tap into the cost savings that shared services offer.

Breaking boundaries, not bank accounts, with shared services

Take Nebraska, Decker's own state, where there are some 65 separate agencies all touched in some way by IT. The challenge is how to keep every agency supported while keeping costs down.

Just because we've been asked to cut a budget, we still have a core set of services that we're expected to provide.

Brenda Decker,
Nebraska CIO and NASCIO president

To this end, the state has consolidated its mainframe services, saving millions of dollars in the process. A few years back, Nebraska also stopped supporting a cumbersome and costly array of 33 email systems. Whittling down to a single email system not only saved money, it also freed IT workers to concentrate on providing services in their particular agencies, rather than on babysitting a utility function. "Now we're able to say we don't need 65 different data centers or have individual infrastructures to do these things," Decker said.

When it comes to intra-government collaboration, it's helped to "think like an enterprise" in which state and municipal agencies operate like partners in the business, Decker said. In her 77,000-square-mile "enterprise," shared services offer many opportunities to cut costs. One plan is to offer business continuity across government platforms. By sharing space, she said, both parties can save money on renting space in a private colocation facility, which can be costly. Currently only physical floor space is being shared, but discussions are under way about sharing virtual space and services. Eventually the parties could take on responsibility for managing equipment and system recovery.

"We've been very successful with [selling] our business continuity plan, and it leads to more discussions about what else we can share," Decker said. "More people are looking at ways to attach to the wheel rather than reinvent it."

Cooperation brings down cloud costs

This no-cost brand of shared services is being adopted not only within state government but also between states. State CIOs are asking for and finding neighbors willing to house applications when their storage capacity becomes scarce, Decker said.

Read more about 2013 IT budgets and trends

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Where CIOs see best cost-cutting opportunities

IT budgets, project management approaches shifting

Cloud computing, NASCIO members' second-highest priority for 2013, is another area where state CIOs are exploring ways to take advantage of their buying power. Responding to the ongoing need to collect and store data for geographic information systems, the states of Utah, Montana, Colorado and Oregon joined together, for example, creating a comprehensive request for proposals and procuring a private cloud solution to address their vast storage needs. All states are welcome to join. For states seeking the benefits of cloud storage but hesitating to take on the information security concerns sometimes associated with public cloud, the community cloud model is invaluable. "The absolute scale when you have that much buying power behind you is phenomenal," Decker said.

Within states, the cloud is being considered for more than just massive data collection and storage projects. Going to the cloud is a natural progression of the consolidation that North Dakota CIO Lisa Feldner and her IT team have accomplished already. They successfully finished virtualizing their server environment last year, which in turn has given Feldner and her team some room to craft a solid strategy for cloud. "[Already having] a consolidated environment gives us time to research and compare costs," she said.

Decker has taken a similar approach with her cloud strategy. With consolidation efforts like mainframe services and email in the rearview mirror and new shared services strategies under way, her team is looking at what it makes sense to put into the cloud. As long as the cloud is secure, she's eager to take advantage of cloud computing's potential savings and scalability, and leave on-premises only what's necessary. "We want to make sure we're using the infrastructure we have in-house for services that actually need to be within the confines of the state," she said.

Let us know what you think about the story; email Karen Goulart, Features Writer.

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