Across the Digital Nation: Infrastructure consolidation

Rishi Sood

Over the past 10 years, state and local government organizations have made significant investments in technology infrastructure. In many cases, the nature of these investments has been tactical, with each agency setting specific infrastructure initiatives and moving ahead with these procurements.

Within a given jurisdiction, for example, agencies overseeing transportation and public safety would implement server farms throughout the state, creating redundant systems with excess capacity.

But in the end, organizations have been left with a vast array of computing platforms, diverse applications and duplicative infrastructure requirements. This issue has been exacerbated by the siloed nature of government business processes and agency-driven budget allocations.

Given the focus on containing -- and avoiding -- costs, senior executives within agencies have re-examined past choices and forged ahead with more strategic plans. In particular, government organizations nationwide are launching initiatives to consolidate technology investments across the enterprise.

These public-sector entities seek to better understand current investment levels, coalesce around needed resources and maximize technology services. Desktop management, server deployment and converging networking and telecommunications are getting the most attention.

Along with consolidation, a number of state and local enterprises are looking to centralize technology investments and future organizational procurements. Although many agency segments have pushed back against centralization, the trend among government entities is increasing. As the centralization process gains steam, senior decision-makers must demonstrate to decentralized agencies the benefits of this new strategic approach. This must come in the form of tangible cost savings, improved service levels and better business processes within an agency.

The effects of these latest technology priorities are clear. First, new hardware procurements have been tabled as organizations understand the current level of investment and best practices towards consolidation of resources. Second, it's been recognized that centralization of specific technology functions can lead to outsourcing initiatives.

Although the impact of the first effect has led to a contraction in hardware expenditures, the focus of this path appears to be increasingly viewed through the lens of the second effect: Which organizations are best equipped to manage these services?

As a result, hardware vendors suffering from reduced procurements must increase messaging around maintenance and services. Technology services such as desktop support or networking and telecommunications are increasingly leading areas of technology outsourcing.

With expenditures forecasted at $41.4 billion in 2003, state and local governments will have major technology projects move forward this year. From the renewal of large human services contracts -- child support, child care and case management of Temporary Assistance to Needy Families programs are a few -- to the launch of new homeland security projects such as integrated justice, bioterrorism and remote monitoring, the state and local market will provide major opportunities for contractors.

More importantly, given all these issues, the state and local market is ripe for change in the way technology resources are procured, managed and used throughout the organization. Savvy vendors will recognize this immense opportunity to drive behavior patterns and the new mechanisms to support the business process delivery.

This approach must include a strategic segmentation around major decision-makers. Vendors are best served by targeting newly appointment chief information officers with a private-sector pedigree, governors that maintain power to transform the technology organization structure and enterprises that are receptive to new technology management practices.

Rishi Sood is a principal analyst with Gartner Dataquest in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.

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