Low revenues mean states will have to build strong business cases for IT projects, panel of CIOs says
With budget revenues below expectations in most state governments, getting
information technology projects approved during the next two years will
require a strong business case, according to several experts and chief information
During a roundtable discussion April 9 at the National Association of
State Chief Information Officers' midyear conference in Denver, a survey
of about two dozen chief information officers found that 57 percent said
that building a business case showing a return-on-investment (ROI) strategy
is the single most important driver of new funding for IT initiatives.
Another 26 percent said getting high-level political support was most
important, while 13 percent rated implementing new mandates highest and
4 percent said there were other reasons, although they did not clarify what
those reasons are.
"If you didn't have a strong ROI, you simply didn't get funded," Louisiana
CIO Chad McGee said about how IT projects were handled in his state.
"There is deep suspicion [from the governor and legislature] about any
large expenditures that don't have cost/benefit analyses," Minnesota CIO
David Fisher said.
Ohio CIO Gregory Jackson said he's encouraging vendors to help agencies
in his state to go through that process because many haven't done so before.
Charles Gerhards, the CIO of Pennsylvania, said that it was important
to communicate to state officials that IT is tied to critical business issues
and that it should not be viewed as "another line in the budget."
"IT in state government is not a side activity," said Georgia CIO Larry
Singer. "IT can be used to improve outcomes, achieve public policy objectives."
This year, 45 states are reporting revenues below their expectations
and 37 are forecasting that the situation will carry over into the following
year, said Arturo Perez, senior policy specialist for the National Conference
of State Legislatures, in an earlier panel discussion. He said IT projects
would have to be prioritized and justified just like other state programs.
"I don't have any good advice except that it's a tough sell," he said.
Art Burgess, Wyoming's budget director and a representative of the National
Association of State Budget Officers, said that although the country technically
was not in a recession, revenues would decline slightly or stay flat for
the next 12 to 18 months.
"If you've had IT projects that did not live up to expectations, you're
going to have a difficult sell," he said.
Nancy McCallin, Colorado's planning and budget director, said her state
is projecting at least a $650 million revenue shortfall this year, compounded
by the recession, the decline in the stock market and the effects Sept.
11 had on tourism and company layoffs. She said health care, education and
other mandated costs are "significant drivers" in the overall budget.
Although the budget shortfalls will not affect some of the major technology
projects already begun, such as a state management system and a telecommunications
network, the state will not replace old computers, she said.
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