States want more bang for IT buck

State and local governments in the next several years will move to sharply align their IT investment with desired public policy outcomes in such areas as healthcare, human services and economic development, according to a new study.They also will begin grouping into clusters related government functions in areas such as health and human services to provide more efficient and effective service to citizens and comply with legislative and regulatory mandates.The new method of service delivery will coordinate federal, state and local services that likely will be delivered online and through one-stop centers and involve greater citizen self-service.These were among the government strategies set forth in a 2005-2006 state and local IT market forecast released last month by the Stamford, Conn.-based market research firm Meta Group Inc. The move will require broader deployment of enterprise resource planning and commercial software applications to create the infrastructure necessary to carry out performance and service delivery improvements, Meta Group said."Government is getting more and more serious about IT's impact in achieving policy outcomes and on what it is going to get for its money," said Thom Rubel, Meta Group's vice president for government strategies and one of the authors of the report.IT companies "must be thought leaders in these various areas and start looking at the changes occurring around [commercial, off-the-shelf software] serving as a starting point for standardization and information sharing," Rubel said.Industry officials interviewed concurred with Meta Group's forecast that service clusters are on the horizon and that commercial software applications can help drive standardization and information sharing within and across government agencies. But some of the strategies or trends identified in the report, such as collaborative planning, information sharing and relationship management, are more in the nature of desired outcomes rather than expected outcomes at this stage, said Bob Campbell, public sector national practice leader and vice chairman for Deloitte and Touche USA LLP, a part of Deloitte Touche Tohmatsu of New York. "In the government environment you have multiple stakeholders and daunting challenges associated with long-term planning and long-term return on investments to consider," he said.David Wilson, managing partner for Accenture Ltd.'s government finance and performance management service line, said that a common theme running through Meta Group's forecast is the need to quantify and measure value across the enterprise during government transformations. Accenture is applying concepts such as benchmarking and an approach it calls "public sector value," which measures the level of value derived from government programs and the IT investments made to support those programs. "We need to do a better job of leveraging a lot of things we are already doing in the private sector where we are very much driven by the cost conscious and effectiveness demands of our clients," he said. "We need to apply the same standards in government and use the exact same sorts of business cases for reducing costs and improving effectiveness," Wilson said.Meta Group's discussion of service clusters seems to center mostly on improved service delivery to citizens via delivery methods such as the Web and so-called one-stop centers. But it also evokes the concept of shared services where agencies gain efficiencies by deploying ERP solutions and commercial applications, industry officials said.Shared services has taken hold in the federal government, and state and local governments also are gradually embracing the concept, Wilson said. "We are seeing the service clusters and underlying shared services getting a fair amount of attention in the market right now," Campbell said. The most obvious examples of such steps are in business process functions supporting government, such as ERP systems that link related back-office functions, he said.Still, most governments have yet to apply the same concept to core service delivery and program management, Campbell said. "There are examples where governments are moving to implement the same concepts for program management services, but that is still a somewhat embryonic trend," he said.Steve Kolodney, vice president for strategic business development for CGI-AMS, Fairfax, Va., said that the service cluster concept is part of an ongoing trend toward simplifying and modernizing the structure of state and local government, and is driven primarily by budget pressures and lack of resources. But Kolodney questioned whether the concept will advance as quickly as Meta Group's forecast seems to predict. The same shortage of resources that makes service clusters necessary to provide better service also may delay its roll out, he said. "If there are not enough resources and funds to go around, then the whole process of establishing priorities is tougher and agencies will focus on their own needs first and their companion's needs second," he said.Washington Technology senior writer William Welsh can be reached at wwelsh@postnewsweektech.com.