Addressing a packed audience of VARs, integrators, vendors and analysts Wednesday at XChange Public Sector in Jacksonville, a panel of CIOs said that if they're not already embracing managed services, hosted services and cloud computing, the realities of their budget situations are forcing them to do so.
Conrad Cross, CIO for the City of Orlando, said that it was about 2006 when his department first began to experience budget cuts. In the beginning, he said, it was 3 and 5 percent hits, which meant, Cross explained, "pencils and pens and holding off on a few projects."
But the situation is drastically different now. His office saw a 12 percent budget decrease last year, Cross said, and this year will see another 12 percent.
"Necessity is the mother of invention and you have to get real creative, so we started looking outside," Cross explained. "When you have all the money in the world, you're not as cost-conscious. But e-mail was one area where we looked."
The City of Orlando, Cross said, was one of the first major city governments in the U.S. to embrace Google Apps, even before last fall's more high-profile adoption of the Google solution by Los Angeles.
"There was cloud technology on the horizon, and it seems good, so we said, why not give it a hard look," Cross said. "Again, when you're in a crunch, you think outside the box."
Cloud has not been an easy switch for the Commonwealth of Massachusetts, which, as Lisa Moorehead, MIS/IT Director in the Massachusetts Department of Public Utilities, pointed out, hasn't been fast to embrace new technology paradigms.
"We've had cuts for a number of years now," Moorehead said. "Out-of-state travel immediately is gone, then we start with seminars, then it's the office supplies budget, and then, for IT, it begins with the loss of contractors. And since salaries don't often match private sector, you don't get the talent you might. We're trying not to cut further. We've standardized on servers and desktops and software. I mean, if 135 different state agencies and divisions use one of seven different payroll systems, let's get it down to one or two. That kind of move."
Partners who have a deep understanding of those realities are the ones who get public sector business, the CIO panelists said. Managed services and hosted computing options, which several panelists said were off the table even five years ago thanks to wanting to manage IT and data in-house and preserve jobs, are now a reality.
"I know I can't go out and hire the talent myself," said Alan Watson, senior vice president of information technology for Educational Services of America. "Managed services I think will be an absolute must."
"Before it was something we would fight. We always thought we could do it better than you," Cross added. "But we'll gladly hand it over to you, assuming you have a track record. We're much more open. We're losing our staff, but the level of service we're expected to perform is still there."
Financial managers within their organizations are also understanding how technology can replace what's had to be cut, and why strategic investments can save more money in the long-run.
"I've been spending time with our CFO and helping him understand the need for technology, and how it helps with business processes in the centers we run," Watson said. "Financial managers are starting to understand that it's very useful in all aspects of the business and it can't just be about the dollar right then."
Ultimately, CIOs crave flexibility. Mike Conroy, CxPO SE&I Modeling & Simulation Manager at NASA, said that consolidated contract vehicles helped with procurement, but when it comes to things like cloud, he was wary of things that might save money but might end up disrupting productivity.
"Call it my personal paranoia, but when the data starts to move into the cloud and other places, you can get into a kind of twitchy situation," he said. "A lot of the things that save us some money might not help us manage risk."