Deloitte: Tech cuts costs

Technology doesn't just cost money — it can also save dollars, says a Deloitte Consulting study. Most public sector chief information officers expect to see cuts in tech spending because of severe budget woes, but they also say technology can ease financial crunches, according to a Deloitte report released July 14.

Out of 40 state, local and federal government CIOs surveyed, 87 percent said their tech budgets will be reduced, but 93 percent said technology is important in addressing budget challenges.

Continued demands for better service and new programs, such as homeland security, are forcing government agencies to work together and integrate technology, said Greg Pellegrino, Deloitte's global industry leader for its public sector practice.

"No one's going to get elected because they're going to say 'I can run the government for a $1.99,'" Pellegrino said. "But people are interested in whether you're providing the right benefits, the right social services, whether you are an easy place to do business with."

Across the board spending cuts may be the wrong approach in this environment, Deloitte researchers argue. Government agencies can become more efficient through sharing services and eliminating redundancies. For example, departments can consolidate or outsource Web servers, data centers and help desks, and implement shared systems and applications, such as geographic information or front office systems.

"The message here is one of standards and interoperability," Pellegrino said, citing Web and Intranet portals as an example. "How do you leverage a common content management system so all executive branch agencies are able to publish with a single tool? That's particularly important when these governments are in a mission of having to respond to the threat of terror and potentially change their services overnight if something occurs."

Economic development might be the first area to see major effort, he said, adding that government will collaborate with key industries to develop an educated workforce, define tax policy as it relates to technology and foster a technology industry.

Pellegrino believes the next five years will see "real change and real reform" in the cost of doing business with state and local government. It takes collaboration among mayors and city councils, and governors and state legislatures, which don't necessarily understand technology, Pellegrino said.

But officials in some states, including Virginia, Maryland and Michigan, are becoming more tech-savvy, he said. Some campaign platforms are going so far as to acknowledge the growing importance of technology, Pellegrino said.