By Rachel Eckert
immixGroup, an Arrow company
The market for information technology in the state and local government and education (SLED) market has always been robust. And that will continue in 2018 with spending being driven by technologies like cloud, cybersecurity and internet of things. It’s very similar to what’s driving tech trends in commercial.
In FY18, total SLED spending is $3.3 trillion, with $100 billion dedicated to IT. This is a slight increase over last year’s, and this number should continue to grow, barring any major legislative changes to the federal budget. Some of those impacts could include potential decreases to Medicaid funding and MMIS systems, increased reliance on public-private partnerships for transportation projects and reductions in funding for programs like body cameras.
The largest share of IT spending is at the state level. Here’s what you need to watch in specific technology categories within SLED:
One of the most important changes over the past few years is the rise of the enterprise chief information security officer (CISO) and the fact that governors are more aware of security and the potential issues.
With security elevated, despite many IT organizations still operating under a decentralized or hybrid IT model, there’s no doubt that having an enterprise level CISO helps to ensure commonality among security policies, priorities, protocols, and eventually technology.
An example of this can be seen in Arizona with their statewide dashboard that provides a common platform for enterprise visibility and synchronizes security protocols and technology. But in many state and local governments, gaps remain in training and awareness with employees.
Lack of adequate funding is still a significant issue for many states and that is not likely to change. Regardless, states are moving forward and have been placing more emphasis on data analytics that will help them in detecting, identifying, and protecting their critical assets in more predictive manner.
Not only is this data being used to help prevent future issues, but states are also using these in their metrics reporting. One of the side effects of security being elevated is that the executives and legislature want proof of impact and improvement from activities and funding which means these metrics are becoming increasingly important.
Cloud is becoming more mainstream as more applications are being migrated especially email, collaboration, productivity and storage. As agencies continue to upgrade their aging legacy applications, SaaS continues to be the dominant implementation strategy for these applications, in short, because of its potential to help the state save money. A lack of adequate funding is not a problem unique to cybersecurity, it stretches across IT. Many organizations spend far too much of their small IT budgets on maintaining rather than innovating.
The drive towards cloud usually includes a need for cost savings and increased flexibility, and while many CIOs do report seeing some sort of cost savings from cloud, it’s not widespread and the savings weren’t as significant as they had hoped. The biggest shortfall CIOs have reported in relation to the cloud is that they are not seeing the level of flexibility and scalability they had anticipated. This means that states are likely to be wearier of claims for enhanced flexibility or cost savings unless you have documentation and customer examples.
When it comes to local government, there is less progress. Cities and counties have migrated very little of their environment to the cloud, with most having 20 percent or less, according to the most recent Digital Counties Survey from the Center for Digital Government. Funding is likely a major driver, but there are other reasons many of which will likely correspond to a lack of proof of the benefits expected from cloud-like cost savings and flexibility that still allude state CIOs.
Vendors need to demonstrate with documented examples not only the expected benefits but the proven benefits and a timeline for which they can expect to receive them.
Mobility is not a top priority for many if not most IT organizations, but this is only the case because there are other competing priorities like legacy application migration and cybersecurity. IT shops are still looking at beefing up their mobility offerings, starting with an enhanced digital experience.
When we talk about the digital experience we’re talking about the entire online footprint of a state or local government, be that a website, an app or a phone. There is a push to connect each interaction avenue to create a more seamless and connected experience that establishes online identities and digital assistants that will help improve the citizen experience and engagement. This area of IT is still emerging and much of the activity is still in development as CIOs put together formal strategies but this will be a major focus for CIOs in the coming years.
One of the first steps in creating that enhanced digital experience is creating a mobile-ready environment, but there’s a lack of mobile-ready applications. Organizations will be looking for ways to improve their digital services activities through enhanced mobility capabilities, capabilities that enable anytime-anywhere interaction.
Big data needs industry’s expertise to help government make smarter decisions. The proper implementation of big data and analytics capabilities can play a significant role in an organization’s decision-making, but many organizations are just not using it. The crux of the problem is a “lack of funding” to a lack of strategy. To help battle the lack of strategy, more states are creating the chief data officer position. According to NASCIO’s most recent CIO survey, 50 percent of states have created or are creating such a position.
Most of what these large volumes of data are supporting is the fight on fraud, waste and abuse, mostly in the health and human services market segment. The technology can be used for so much more but the sheer volume of data that states collect is simply preventing them from using it. In response to this, many organizations have turned to the public’s help, sponsoring hack-a-thons, where citizens and private organizations use the government’s data to develop new and innovative apps that solve real problems. States like Virginia and Texas have been successful in using this method.
Internet of things (IoT)
While IoT is a very influential technology driver in the government, it’s still very new to state and local government. With any new technology, it takes a while for government and procurement to catch-up.
Many of the implementations we’re seeing with IoT take the form of smart cities. These projects usually start as pilots, testing the feasibility of one particular application and the reception it receives from the citizens. In the end, most of these smart programs are aimed at improving citizen interaction with the city or community. Before a city or community can roll out a pilot program, however, they need to take into account the underlying infrastructure, network and security of their environment to ensure that the program can operate as intended.
As these pilots roll out and prove successful, they will slowly grow into larger projects. This is one of the areas the assistance funding will come into play. Over 70 cities applied for a Smart Cities grant last year, with Columbus, Ohio, winning the funding.
Part II of this article will run later in the month and cover several other SLED IT trends to watch in 2018. To learn more about selling IT to SLED organizations, watch the on-demand video, “Selling to SLED—Updates and Innovations” from immixGroup’s Government IT Sales Summit.