May 12 2008

IT Leaders Identify Top Issues

Attendees at NASCIO event recognize budget challenges but also view them as opportunities for IT innovation.

As state CIOs gathered at the National Association of State CIOs (NASCIO) earlier this month, budget woes were top of mind.

The challenges are many. States must contend with the weak housing market and declining revenue, and at the same time find the means to shore up Medicare, the State Children’s Health Insurance Program and aging infrastructures.

NASCIO polled IT executives attending the midyear conference about what they deem the most significant challenges facing states today. More than half — 59 percent — cite fiscal/revenue shortfalls. Seventeen percent chose cross-boundary collaboration. Meeting citizens’ health-care needs made the list with 13 percent, 7 percent say maintaining citizens’ trust, and 5 percent identify rising energy costs as the chief challenge.

“Spending growth is slowing, but we’re still seeing growth,” says Scott Pattison, executive director of the National Association of State Budget Officers. He and other budget experts estimate that roughly 23 states face budget deficits, but they pointed out that some states are doing well — mainly those involved in extracting energy from the ground or those with economies centered on agriculture. Other positive news relayed by William Pound, the executive director of the National Conference of State Legislatures, is that tax collections are holding close to projections and that corporate taxes are adding to state coffers.

When asked about the status of major capital-investment projects in their states, more than half of the IT leadership attendees (52 percent) reported that projects are on track, 35 percent cited delays and 13 percent said the projects have been deferred until next year.

IT leaders seemed to recognize the silver lining of the weakening economy, realizing that innovation springs from challenge. Fifty-six percent said the economic outlook brings possible opportunity for innovative solutions. But 22 percent fear it means delay and indecision, and 17 percent anticipate budget cuts and no good news. The remaining 4 percent indicate they’ll be updating their resumes.

Forty-eight percent of respondents said their state legislatures view spending as the key issue for IT in 2008, while 20 percent said the emphasis will be on savings. Fourteen percent said the focus will be security, while another 14 percent said project oversight.

In terms of what they want to do, more than half of respondents (53 percent) would prefer to focus their time and energy on enabling better government. Thirty-seven percent would like to campaign for change using technology as the enabler. Just 6 percent believe the primary agenda should be to reduce the cost of IT, and 4 percent say their main mission is to educate legislators.