back to the main page

Three Strategies for Winning Government IT Funding Battles in 2008

A new survey of state economic trends sees declining revenues and even budget shortfalls in 2008, which could mean little extra cash for CIOs looking to launch new IT services and leading-edge technologies this year. Fortunately, IT managers have a variety of options for lessening the financial pain and keeping important IT projects moving forward, according to a leading expert in public sector management.

The new round of economic worries, fueled by the housing slump and declining property tax receipts, is reflected in the latest Fiscal Survey of States, just released by the National Governors Association ( nga.org ). The report found only modest revenue growth in enacted fiscal 2008 budgets overall, with budget deficits already arising in some states.

"When legislatures come back into session they’re going to face some tough decisions about resource allocations and prioritization," says Doug Robinson, executive director of the National Association of State Chief Information Officers. "This puts CIOs in a position of having to really work to get the money that they want."

What lessons can IT managers learn from the downturn earlier this decade, when states were forced to impose midyear budget corrections and across-the-board cuts? Robinson points to three main areas:

Expect increased IT scrutiny and delays in discretionary projects. "When it comes down to building a new, $30 million data center or paying for early childhood education," social programs will likely trump IT for funding, Robinson says. "Those are hard decisions for states, and this will put CIOs in a tough position," he adds. His advice: focus on IT "must haves" versus discretionary projects that have a higher chance of being cut by governors.

Build business cases around using IT to lower costs or improve efficiencies. "The imperative for CIOs is to look for ways that technology can save money and cut costs in these tough times," he says. "Focus on what the governor focuses on because that's where the money's going to go."

"Hot button" issues for most states traditionally revolve around healthcare and education, so one funding strategy might be to propose using technology to reduce Medicaid claims-processing costs, where even a modest percentage decrease can yield large overall savings.

Reconsider launches of new multiyear projects. Funding authorities will likely be reluctant to approve new, large-scale measures during times of revenue uncertainty, Robinson says. The good news: ongoing budget commitments already nailed down by CIOs who understand cyclical revenue cycles will likely protect multiyear projects already underway.

Overall, CIOs should think like an entrepreneur to help them decide which funding battles to fight. "It's going to come down to how IT can enable service innovations that need to take place rather than doing IT for IT's sake," Robinson says.

back to the top

The Next Generation of 311 (PDF)

Oracle Solutions for the Public Sector (PDF)

Improve Efficiency and Responsiveness at All Levels of Government (PDF)