Two new reports shed light on how the economic downturn and declining revenue will affect state and local IT departments this year.
Public Technology Institute identified pressing issues for 2009, while research firm Government Insights issued top 10 predictions. Both share common themes around staffing and shared services.
“Local governments are feeling more pain than is being reported in the press,” says Alan Shark, executive director of PTI. “Every area of their revenue source is down significantly. It’s a very sad spiral.”
IT leaders can expect further cuts to full-time staff, notes the PTI report. Local governments may need to hire part-time or contract workers to carry out key IT functions. What’s more, the pendulum is swinging away from union dominance because with unions it’s harder for cities to reduce the cost of services. The city of Phoenix has six or seven unions alone, for example.
On the other hand, retention will be less of a challenge because IT staffers will likely postpone retirement because of hits to their investment accounts. Still, Government Insights forecasts that the right government IT talent won’t be in place to meet new demands.
As budgets are slashed, every project will be closely scrutinized. One area of IT spending that may be impervious to cuts is public safety IT. Fraud detection will be important, and in terms of federal spending and aid, programs that support economic recovery, citizen health and welfare, and energy management will be favored.
Shared services will also gain momentum. PTI notes there will be new and increased opportunities for collaboration among cities, counties, school systems, libraries and other government organizations.
“Instead of having four GIS systems or four credit card processing areas, we can have one,” says Shark. “People are looking at radio services and wireless and ways in which they can share as opposed to everyone doing their own their own thing.”
Thom Rubel, global government programs practice director with Government Insights, says there have always been excuses not to move toward shared services, such as cultural issues or the desire to control information. “We think the budget picture is so bad in state and local that it will finally swamp those arguments,” he says. The two most traditional shared services are human resources functions and financial management.
Government Insights expects infrastructure programs to move to hosted, pay-as-you-go models, and notes that state budget shortfalls will force renegotiation of outsourcing contracts.
One possible bright spot: Federal stimulus spending may give state and local governments an influx of funding to improve their economic outlook. Also, the appointment of a federal chief technology officer may help to champion the cause of using technology to serve citizens.