NASCIO 2019: Biennial Survey Assesses State CIO Customer Relationships

The National Association for State Chief Information Officers released a biennial CIO survey, The Responsive State CIO: Connecting to the Customer, Tuesday during its 2019 annual conference in Nashville, Tenn., marking the 10th edition of the survey. Produced by NASCIO, advisory firm Grant Thornton and tech association CompTIA, the survey features responses from 49 states and territories and interviews with 20-plus CIOs. This survey featured 19 new CIOs.

At the conference on Tuesday, Doug Robinson, executive director of NASCIO, reviewed the highlights of the survey while sharing insight from Grant Thornton Principal Graeme Finley, Nebraska CIO Ed Toner and Vermont CIO John Quinn. Here are some of the highlights from that discussion. 

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Data Centers Owned and Operated by the State Continue Decline

“We have asked the same question almost every year, and we have seen continued data supporting expansion of use of IT shared services and a reduction or downsizing in the number of state-owned and operated data centers, and we saw that again this year,” Finley said.

According to the survey, over the next three years, 48 percent of states plan to downsize state-owned data centers, while 65 percent plan to expand on their IT shared services model. Fifty percent will expand on their outsourcing services model and 92 percent plan to expand models such as Software as a Service and Infrastructure as a Service.

A few years ago, Nebraska went through a hyperconsolidation effort, bringing in more than 60 agencies and 84 counties, along with the city of Lincoln and the city of Omaha. “We barter between the data center in Omaha and our data center in Lincoln,” Toner said. “We have become the state cloud. We get one additional county or city that comes on board every month.” 

The state also has a cloud committee, and if a user wants to buy any type of technology, everything comes through the state’s office for approval. That allows the state to make sure it is not replicating something it already has and to keep out shadow IT.

Being a cloud broker is not without its challenges, however. The survey revealed that the top three obstacles or challenges when acting as a broker for IT services are redefining traditional roles/workforce (57 percent), the current funding or recovery model (51 percent) and effective operational governance (47 percent).

Looking back at how his own organization has handled this, Quinn said it’s been a real challenge. “State government is evolving and understanding that they need to change. Every time we enter into a new contract, it gets better,” he said. “Redefining the roles as we move to that model has been challenging, but I’m confident that we can get there.”

Further, the survey noted that the top skills or roles that are most important in a brokered services model are security (53 percent), customer relationship management (49 percent) and contract management (43 percent).

“We take the time to call our customer to see what we could do better,” Toner said. “That wins us a lot of credibility.”

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Most States Recover Costs Through Chargebacks

The survey asked what framework state CIOs use to measure the cost of IT. Fifty percent use an activity-based costing, 19 percent use technology business management and 12 percent use IT service management and IT infrastructure libraries.

The survey found that 46 percent of states require their organizations to fully recover their costs by charging their customers, and 35 percent get most of their costs from their customers but also recoup their costs through general funds or special fund revenue. 

This means that 4 out of 5 states need to recover all or most of their costs from the chargeback model, Finley said.

“We are a full chargeback state,” Toner said. “We have full transparency to how we identify our rates. Any time we bring in a new service, we make sure to do an open house so that the agencies can see and understand why and how much we are charging them.”

Quinn said Vermont is at about 99 percent cost recovery. “We have to chargeback for everything we do,” he said. “It’s a point of contention with those agencies. It’s a constant back and forth with what they need and what they think they should pay for, what’s allocated across the head count and what’s billed on a demand basis.” 

For example, Vermont spreads the costs across the head count for things like network and desktop support. On the demand side, the state tries to assign a license to a specific user and then help to determine if the license is necessary. “We use Microsoft Power BI to show them where their licenses are being used and how much it costs them to provide that user with the license,” Quinn said.

Looking at how states are helping and collaborating with their local governments, the survey found that the top services they provide are security infrastructure (65 percent), network services (60 percent), data center hosting (56 percent) and backup services (49 percent).

“We hit every box,” Toner said when talking about his state’s collaboration. “It’s the private sector coming out in me. I want as many customers as I can get.”

Check out more articles and videos from StateTech’s coverage of NASCIO 2019 conference here.