Eye on the States: State officials must see value of IT

Thomas Davies

President Clinton recently said: "When times are good and the money is rolling in, you can almost have a lobotomy and be governor." He just as easily could have been talking about selling technology to the states.

Tough budgetary times are making for a tough technology sell. Even veteran tech officials in state and local government are finding the internal sale to be difficult.

For many states, the lack of money is the single greatest obstacle to future sales. No doubt this is what many company executives hear from their sales forces. But it's not the lack of money, per se, that stands in the way, but the mind-set about technology that starts at the top.

The problem isn't that the states spent unprecedented amounts on technology over the past decade. And it's not that the technology didn't work, because, for the most part, it has worked pretty well. E-government implementations have gone relatively smooth. And mission critical systems, such as food stamps, rarely fail. Communication networks have proven to be quite reliable.

The problem is that even after spending all that money, too many state and local officials still can't see what difference it made in terms of performance, quality and cost, especially compared to those communities that didn't make similar investments.

The states no longer accept the assertion that they will be better off by spending more. This is the greatest barrier to future tech sales. Until this thinking changes, even a turnaround in states' fiscal health will not automatically result in a return to the good old days.

One need look no further than the technology budgets being submitted to the legislatures for fiscal 2004. The budgets are less, but not only because there are other, more pressing needs. It's because state and local officials no longer accept that spending more on technology addresses these critical needs. This is the root cause of the selling challenge today.

That's not to say the state and local governments aren't going to spend on technology. They spend more on it with each passing year, and their aggregate IT budgets will soon reach $50 billion annually. But many states are waiting and watching, while others have begun slashing in order to take out costs and streamline IT organizations.

There is plenty of blame to go around. Some would suggest it's just what happens when there is an economic downturn. But you can go as far back as the late 1990s and spending to fix the year 2000 date code problem, when state and local leaders were told the sky was falling, and technology was the key to keeping it in place. Then there was the promise of the e-government "revolution" and all that entailed. Then there was the idea that enterprise software would change how states operate, making them models of efficiency that would rival their commercial counterparts. State and local government has been fed a pretty good line.

It's no surprise, then, that many state officials have real doubts about whether they are better off for having dropped so much cash on technology. Real solutions worth the price will help build the confidence of officials, but it's going to be slow going. IT companies need to accept the states' skepticism and work relentlessly to communicate the value of their solutions, knowing that top state executives, even in tough times, have a way of finding the money for investments they believe in. Getting them to be believers again, that's now what it's all about. *

Thomas Davies is senior vice president at Current Analysis Inc. in Sterling, Va. His e-mail address is tdavies@currentanalysis.com.

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