Across the digital nation: The evolution of government software

Fundamental changes over the past 10 years in software capabilities and sophistication, and in governments' software philosophy have drastically altered the public sector market for tier-1 systems integrators. As the market continues to evolve, they must again evolve to survive.A decade ago, state and local governments leaned toward development of agency-specific IT solutions, many of them created on customized software code and tailored to the needs of an agency or jurisdiction. In some cases, functionality was based on custom development by internal staff. But in other cases, tier-1 integrators helped devise proprietary solutions.That all began changing in the mid-1990s when vendors of enterprise resource planning emerged as a force in the market. State and local governments began turning away from the old concept of customized applications and began embracing solutions that provided standardization, modularity and interoperability. ERP software ? once limited to use in areas such as accounting, payroll, personnel and human resources ? also began changing during this period. Its evolution was speeded by tier-1 integrators, responding to market changes by abandoning their old customized software applications and enthusiastically partnering with ERP vendors to drive new business opportunities.In retrospect, it's easy to see that the alliance was, and continues to be, win-win for both vendor groups. Tier-1 integrators were freed from developing software customized for horizontal government functions, and the increased focus on ERP solutions represented a tremendous wave of new technology initiatives.Today, the renaissance of such ERP opportunities continues, but this group of software vendors is pushing into new opportunities, key among them integrated tax systems and case management systems in human services agencies. If these software applications mature and reflect government-specific requirements, tier-1 integrators will again look to partner rather than develop custom code. An alternative to ERP vendors moving into agency-specific solutions ? and one that could be threatened if such ERP-based solutions are successful ? is a group of independent software vendors that have emerged in the market. Each major agency segment of the market has software vendors that are focused on application areas such as computer-aided dispatch and records management systems, integrated justice information systems and fleet management. Many of these vendors have established enterprise-oriented solutions in these niches and have updated their solutions' architecture to reflect changing government priorities.Another emerging alternative to the more complex enterprise solutions is the open-source software movement. Although open source has been relatively slow to gain a toehold in federal government agencies, the maturation of these applications by global public-sector organizations undoubtedly will generate increased interest. Advances in use of open-source software by government agencies in China, Germany and India show the clear potential of open-source software for the public sector.Taken together, these developments demand action by tier-1 integrators, which must actively determine their best strategic path ? or paths ? for the future. Effective strategic planning will consider when it would be best to develop custom code, partner with independent software vendors, join with ERP vendors or mobilize forces around the open-source movement. The heyday of custom code may be nearing an end, but the battle between independent software vendors and ERP vendors is just beginning, and the outcome is no foregone conclusion.Tier-1 integrators, as they plan for the future, would be well served by evaluating the alternatives to be ready to partner with whichever of those software vendors that can deliver the greatest functionality and the best total cost of ownership for the government user.Rishi Sood is a principal analyst with Gartner Dataquest in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.