Despite tight budgets, state IT spending to rise

State IT spending will rise this year, boosted by increases in federal homeland security and homeland defense funding. But new IT projects will be few, and even funding for critical homeland security projects will be hard to come by.

“It’s extremely frustrating,” said Rizwan Ahmed, whose duties include serving as the CIO of Louisiana’s Department of Natural Resources. Federal homeland security officials have asked his agency to help produce geographic information system (GIS) maps of critical oil and gas pipelines, but his agency isn’t receiving enough funding to do the work. Although the mapping is getting done, “it’s at the expense of some of our own projects,” he said.

One of the most telltale signs of the bleak state spending outlook was offered today by James Kane, president and CEO of Federal Sources Inc. (FSI) at its annual state IT conference. Of the approximately 500 potential IT spending projects that FSI is tracking — in particular, projects that haven’t yet been put out to bid — two-thirds are now on hold.

“That’s pretty significant,” Kane told conference attendees.

McLean, Va.-based FSI said IT spending in the states will reach US$40.7 billion in the next fiscal year and $41.5 billion in fiscal 2005, an increase of 1.8 percent from 2003 to 2005. States are expected to spend $40 billion this year on IT. Most state fiscal years begin in July.

As IT dollars are cut, more and more states are appointing enterprise architects to map out IT and business process strategies, with the goal of reducing system redundancies and costs.

Just over two years ago, only two states had people appointed specifically to serve as enterprise architects. Since then, the number has climbed to 22, said Gerry Wethington, Missouri’s CIO and president of the national organization representing state CIOs, the National Association of State Chief Information Officers. Counties and local municipalities are taking a similar approach.

Enterprise architecture is a process for defining IT and business process principles and standards. It’s also used by federal and state governments to integrate and consolidate IT infrastructures that have been built agency-by-agency in a “stovepipe” or uncoordinated fashion.

Wethington said his state’s use of enterprise architecture planning has given him the means to set common standards and battle agencies accustomed to making their own IT decisions. “If I had not had that chief architect … I would have had eight to 12 different agencies fighting for their turf,” said Wethington, referring to one help desk consolidation project. “I can overcome turf.”

The states are also being pushed into the use of enterprise architecture by the Bush administration, which is tying some funding to enterprise architecture planning. The federal government wants to eliminate redundancies and develop the means to interoperate with state and local systems, said Howard Stern, senior vice president of FSI.

The data-sharing could work like this: When someone submits an address change to the U.S. Post Office, that change could be shared among local, state and federal databases, said Stern. That kind of basic information-sharing isn’t always done now.

One IT manager who says she has solved the problem of redundant systems consolidation is Cathy Maras-O’Leary, CIO of Cook County, Ill., the second-largest county in the U.S. after Los Angeles, with 5.5 million people. In 1998, the county centralized storage, mainframe and network support for its 150 agencies in one center.

“You’re not duplicating cost,” said Maras-O’Leary. “E-commerce for us can be very easy because all our data is residing on our architecture.”