State CIOs call for fiscal caution, technology innovation

Tough economic times are forcing state chief information officers to adopt innovative approaches to contract negotiations and the deployment of information technology, according to a new report released by the National Association of State Chief Information Officers.

Facing the expectation of lower IT budgets and increased demands for new IT-enabled services, CIOs are consolidating applications and data centers, rolling out shared services and managed services models, and embracing emerging technologies such as cloud computing and social media.

Key challenges facing state CIOs are IT governance -- in which they often find an imbalance between accountability and authority -- IT portfolio management, and procurement processes, according to the “2010 state CIO Survey.”

From April to June, 40 state and territorial CIOs or their equivalents took part in the survey, which included questions on information technology governance, emerging technologies and a wide range of other topics. NASCIO conducted the survey in conjunction with TechAmerica and Grant Thornton.

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Two-thirds of the surveyed CIOs expect lower IT budgets in 2011 through 2013. However, they say that tight budgets stimulate creative solutions for increasing IT efficiency and effectiveness.

“We are doing things better, like using shared services, renegotiating contracts and exploiting the state government’s economies of scale when purchasing,” said one CIO surveyed in the report.

“State governments will continue to endure tough fiscal conditions, which makes the state CIO's job even more challenging," said Doug Robinson, NASCIO's executive director. “However, the results of the survey clearly indicate this situation presents opportunities for CIOs to execute on cost-saving strategies, innovative business models, and advance the use of emerging technologies."

The state CIOs emphasized the need to upgrade IT governance and strengthen central IT organizationsto achieve goals for enhanced services and new efficiencies under tightened budgets.

Although most state CIOs are involved in all but the technical review phase of IT investment decisions, most say that their actual authority is limited, constrained by separation of powers and by legislation, the report states.

Therefore, state CIOs have built personal relationships with state agencies and officials in order to influence their decisions.

“By law, many state entities and the counties are independent,” said one CIO in the report. “Enabling legislation is weak, so I have a lot of responsibility, but with zero authority — so I build coalitions with the budget office and legislature.”

Some state governments are moving toward centralizing IT authority, but people skills and political acumen will still be important to the best CIO, the report states.

Cloud computing momentum

The survey included questions about emerging technologies. Cloud computing provides the highest value, according to the surveyed CIOs, followed by green IT and social media.

Cloud computing provides on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

Fifty-four percent of the survey respondents are investigating the use of cloud computing, but as yet have not taken action. Twenty-one percent are running an active project to move portions of their computing infrastructure to a cloud environment. Thirteen percent are embarking on a cloud computing pilot for a portion of their computing requirements, and 5 percent have no formal plans to use cloud computing, according to the report.

Some CIOs say that cloud computing is not new and that it is being oversold. Others say that what makes cloud computing different today is the maturity of the new cloud technology, so that this approach now offers fast response time, access to many applications and quick, agile solutions at a lower cost than many alternatives for on-demand services.

Cloud computing is not as simple as it may seem, and states considering it should develop a well-crafted cloud computing strategy and framework, according to the surveyed CIOs.

“You need to consider what you need to do for consistent, long-term sustainability and what you need to have in place before you start,” one CIO said in the report. “Cloud computing makes a lot of sense, but it needs to be done right. If you don’t manage it, it will manage you.”