Texas looks for IT savings

A new Texas law requiring government agencies to purchase hardware, software and technology services through a central technology office could save the state millions of dollars in the next several years.

Signed June 18 by Gov. Rick Perry and set to take effect Sept. 1, the law could save the state $23.7 million through 2007.

It also authorizes the Department of Information Resources "to operate statewide technology centers to provide two or more state agencies, on a cost-sharing basis, information resources services and deployment and development services for statewide applications," according to a May 25 fiscal analysis memo from the state’s Legislative Budget Board to House Speaker Tom Craddick.

The department can charge agencies a fee to recover costs incurred in developing and deploying services. According to the memo, the current annual cost for data-center operations is $106.8 million.

"Based on an analysis of peer organizations, this analysis assumes Texas' costs for operating its independent data centers are approximately 22.6 percent higher than those of its consolidated peers," the memo states. "Texas' data-center operations costs in the consolidated environment would total $82.7 million, resulting in annual savings of $24.1 million in all funds by fiscal year 2010."

The state would incur costs related to capital improvements to data centers and system upgrades, but would achieve savings by eliminating 424 full-time positions through fiscal 2009. However, the department would add staff -- about 55 full-time employees -- during the same period.

The bill exempts the comptroller's office and Department of Public Safety from provisions related to the technology center consolidation.

Additionally, the new law would require agencies to provide the Department of Information Resources with project plans, procurement schedules, business cases, impact analyses and post-implementation reviews for major projects. Larger agencies can absorb such costs, but they could have a negative impact on smaller agencies.