Industry Insight: The Road State Governments Should Take

Many states are discovering that the best things sometimes come in small packages. Instead of giant state bureaucracies running dysfunctional business processes that are broken, many states are concluding they can save money and be more efficient by using technology that can make things work.

Phil Bond is president and CEO of the Information Technology Association of America (ITAA).

You can look across the national map and pinpoint vast changes in the way state government functions. Medicaid is outsourced by many states. So are welfare benefit programs in many places and even application and distribution for many kinds of state regulatory licenses.

Yet there is no magic bullet here. It takes time and dedication to turn a 20th-century model into a 21st-century one, and the states have a long way to go. One size never fits all, but states should be taking advantage of the opportunities to modernize education, housing and health care using the technology that is already available.

The states that are behind the eight ball, especially those with budget problems, should tap into new organizational concepts, modern business processes and today's technologies to improve poorly performing programs. The Commonwealth of Virginia, under the visionary leadership of governors Warner and Kaine, has embarked on an ambitious initiative to improve IT and program performance across the state. With its partners Northrop Grumman and CGI, the reorganized Virginia Information Technology Authority (VITA) is working to consolidate and refresh its IT infrastructure and applications on a pace and scale never before seen in the states. VITA will pull together and modernize the infrastructure across 92 executive branch agencies, for more than 100,000 employees.

While Virginia's all-encompassing effort may be too high a bar for others to clear, states may want to replace or enhance certain program functions or services with private sector offerings. Contrary to the media's focus on some visible failures in major projects, states have seen high levels of success in partnering with the private sector on everything from radio networks to food stamp services for the better part of 50 years. States often do not have the resources to develop technology from start to finish, tailoring them for their own needs. But contractors certainly know how to make a project work for every individual client, and in many cases, they have already worked out the kinks and problems.

There is nothing new about contract support for government services. In fact, a public-private partnership may be the best way to make change effectively and efficiently, long before the political winds change and the seat of power is handed to another party.

Many states have discovered a treasure chest of ideas and answers to their complicated problems. Take Indiana, for example, in the Midwest, a region not always considered to be on the leading edge? But the election of Gov. Mitch Daniels brought better IT management, creating new jobs for Hoosiers, delivering better services to constituents, and realizing savings for the state budget.

It helped that Daniels took many lessons from Washington where he headed the Office of Management and Budget in the first Bush Administration and saw technology working right at his front door. One of the initiatives he spearheaded is a 10-year program awarded to IBM, a $1.16 billion deal to modernize Indiana's welfare eligibility requirements. The modernization plan may well save $1 billion, and it is expected to bring 1,000 new jobs into the state.

The time is ripe for change. States have the ability to redirect their dollars, change their management philosophies and realize the rewards of stronger services for the citizen and more efficient operations for the taxpayer. Only time will tell how many states will follow the handful of states that can really be called leading innovators in IT management. In the mean time, it incumbent upon states' vendors and other private sector partners to help them find opportunities to join the revolution.

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