Creative budget-cutting tactics from state CIOs: Part 1, Washington

The federal government may be issuing numbers which suggest the fiscal crisis is waning, but heavy budget constraints persist in state and local governments. State CIOs continue to feel pressure to reduce IT costs and simultaneously find ways to use IT to reduce operational expenses throughout the government.

At a gathering of the National Association of State CIOs in Baltimore the last week in April, government IT chiefs from around the country traded ideas on creative ways to stretch the IT dollar in difficult economic times.

When the IT chief for the state of Washington was faced with a legislative mandate to cut $30 million out of the budget, he found that it's better to use a scalpel than a machete when slashing spending, in today's environment. Agencies differ significantly in the way they employ IT, and in Washington they were receptive to the idea of rooting out wasteful spending themselves, said state CIO Tony Tortorice.

"We were pretty surprised that they said, 'We welcome this,'" he said. "You will find that there's a variety of things you can look at. It starts adding up."

Tortorice discovered a second, surprising ally in his budget-squeezing campaign: Vendors. It started when IBM approached him with a suggestion to consolidate the eight separate contracts it had with the state. While it can be difficult for a CIO to identify exactly where every IT dollar is spent throughout multiple agencies, vendors tend to have a clear idea where their goods and services go, and consolidating contracts may save them money as well. Now Tortorice is asking all of his vendors to help identify contracts that can be merged.  

Going forward, Tortorice is trying to spot contracts being negotiated in agency stovepipes and encourage agencies to agree to share the same systems.

While budget reduction is an imperative in state governments during these difficult economic times, it can have the incongruous consequence of increasing unemployment. This is, perhaps, most evident in efforts to use virtual IT. In Washington, virtualization projects are saving money by reducing the number of employees needed to run servers, but some of those people are being retrained for other IT jobs, especially in the area of security, Tortorice said.

"We're moving to virtualization as fast as we can. It's a lot more efficient," he said. "It's not that much of a shift from being a server administrator to being a security analyst."

Stay tuned for part 2: Georgia and Tennessee

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