Friday, November 13, 2009

Mass. state agency cutbacks offer opening for IT consolidation

By Jackie Noblett

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The bleak state of Massachusetts’ finances is forcing state agency information technology departments to lay off staff, put off infrastructure spending and renegotiate equipment and services contracts with the hundreds of IT vendors the state works with.

But Massachusetts’ top IT official says the dire situation is providing an opening to push through long-awaited consolidation projects that will help the state save money as well as improve arcane Web service portals ranging from motor vehicle license and registration renewals to business contract processes.

State IT department budgets took a hit of $7.3 million in the latest round of budget cuts announced by Gov. Deval Patrick last month, a 4.2 percent reduction across all departments. Reductions ranged from less than 1 percent in the Executive Office of Education to 9.1 percent in the Information Technology Division, which oversees all IT strategy across state government.

The cuts come as the IT Division operates under a February mandate from the governor to streamline IT services across the commonwealth — today it operates a patchwork of 183 data centers, 24 separate e-mail systems and 15 major data networks. The process started in 2008 with a strategic information technology consolidation initiative and is expected to take another couple of years to implement.

“We have to not only maintain momentum on this consolidation, but accelerate efforts because we can’t afford to support the environment we have today,” said Anne Margulies, the state’s chief information officer. “The budget crisis presents a lot of challenges, but it also pushes us to move some of these plans more quickly.”

Much of the consolidation will be implementing a singular system or systems across multiple agencies and departments that have similar needs, such as payroll administration or e-mail.
The effort also includes a management change that moves IT budgeting and management up the organizational chart.

Yet for the state to complete this work and minimize staff layoffs, Margulies said, it has “tightened the belt in absolutely every other place of the budget.” She said this includes delaying and deferring planned upgrades and pushing vendors to rework contracts.

What this means to the relationship between the state and its IT vendors is not exactly clear. One of the state’s largest IT vendors, IBM Corp., declined to comment on its relationship with the commonwealth, but some vendors expressed at least an openness to the effort.

“We are always going to work with our customers to best serve their needs,” said Linda Odorisio, vice president of communications at Canadian IT consulting firm CGI Group Inc., which has a large office in Andover. “The commonwealth has been a longtime client of CGI and we will continue to partner with them moving forward.”

But some analysts say federal government stimulus efforts in the health care and education sectors as well as increasing demands on justice and social service agencies will force IT spending upward. Reston, Va., government business consulting firm Input Inc. estimates state and local government IT spending on vendor systems and services will grow to $60.1 billion in 2014 from $49.6 billion this year, an annual growth rate of nearly 4 percent.

IT BUDGETS CUT in Mass.
A breakdown on which sectors took a hit.

Source: Commonwealth of Massachusetts