Paul McCloskey

COMMENTARY

To take the next IT step, agencies have to get creative

Consolidation, virtualization, cloud ... they promise the moon: On demand IT services, scaled to meet specific computing requirements; faster services to end users and improved IT economies for management, legislators and taxpayers.

These are powerful claims -- and for government agencies they might turn out to be true. Data center consolidation should lower costs. Server virtualization should make for a nimble enterprise. And cloud computing does relieve organizations of the expense of operating in-house computers and datasets.

But although government is a good candidate for these streamlining technologies, agencies may need to adopt some financial and management practices that are not typical of government if they are to realize these benefits.

Getting these technologies up and running at a time when agency budgets are razor-thin could require creative funding techniques or workarounds, which are not always a government strong suit. And given the decentralization of a lot of government IT, state governments in particular should make it a priority to build electronic accounting systems that can accurately record financials on all IT spending.

As New York State acting CIO Daniel Chan suggests in a story in this issue of GCN, agencies might find a data center on the books that’s actually a wire closet, or vice versa. If agencies don’t know what systems are actually connected with which costs, Chan suggests, they won’t know where to best spend the next dollar of IT investment. Given the current financial environment, agencies need to target their funding where it will have the biggest impact. 

Although Chan is a big believer in cloud computing, his first move as state CIO was not to set-up cloud services in order to save the state money. Instead, his office is focusing on developing  the N.Y. State Financial System, an accounting system that will enable the state to closely track IT spending. Once officials understand their existing IT investment,  Chan argues, they can make the best possible uses of the already tight funding stream available to them.

Other obstacles are in the path of government’s move to the cloud, including a shortage of seed money. Although the new technologies promise to bring down the cost of IT services,  many lawmakers remain hesitant to invest or even offer seed money for these projects.

When the Input market research firm interviewed government executives involved in consolidation projects last summer, nearly two-thirds of them cited a lack of seed money as a major problem in pursuing data center consolidation, according to our story on in this month’s issue.

Without seed money, it’s been necessary for government IT mangers to bootstrap new technologies investments. Part of Chan’s strategy involves pursuing “low hanging fruit” such as e-mail consolidation, to help generate savings that in turn might enable his office to finance bigger, more costly, new technology projects.

In the federal government, similar “cost avoidance” schemes have enabled agencies to generate new funding streams.

A server virtualization project at the Census Bureau, for example, allowed it to close a secondary data center, which in turn opened up floor space it is now offering to other agencies.

Even before cloud computing gets off the ground, its influence is spurring financial and management creativity in some government circles. And in dealing with these powerful new enterprise technologies, there may be no other choice.

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