February 3, 2005 By Wayne Hanson
Struckman said while federal Web sites are stagnating and customer satisfaction has declined, state and local portals are being refreshed, and some states are rolling out innovative new services such as Utah's 24/7 instant messaging assistance. California, said Struckman, is building a new DMV portal which will be a "launching pad" for a refurbishing of the state portal. He described the next public to be served by government as "millennials" -- young people who grew up with technology, and use it in everything they do. Government will be required to meet their higher expectations, as the demographics change. And government will have less staff to work with.
Seventy-seven million baby boomers will soon begin retiring, said Struckman, with implications for state and local governments' servicing of the public. Governments are planning to spend $100 million just to upgrade retirement systems. Many of the retirees will be government employees, and that alone will continue to drive change and adoption of new technology as the skilled government workforce shrinks.
To meet these new demands, state and local governments are turning to centralization and consolidation of older systems in a third wave of shared services. "Some governments still have 15 e-mail systems out there and multiple networks going to the same points of presence," said Struckman. Trends include data center consolidation and single messaging platforms.
Struckman cited Pennsylvania's IT consolidation under then-CIO Larry Olson, now CTO of Texas. Struckman named 14 states now engaged in significant consolidation projects. He said Michigan's consolidation saved $58 million in purchasing alone. Virginia's consolidation resulted in $100 million in savings. Struckman said the Center's annual Digital State Survey showed that the top-ranked IT states are shifting to shared-services models.
Struckman said that most hospitals are run by counties, and 31 percent of state budgets involve some form of health care. Medicaid cost containment is a growing trend, in such areas as fraud reduction, case management systems and integrated eligibility. Texas will be the first with a fully-integrated eligibility system, said Struckman, and Virginia has a $1.2 billion project in the works. California figures it costs $750 to $1,200 on average to process one application, and that an integrated system will save around $200 per application. Tennessee, New York City, Indiana and Arizona are looking at systems as well.
Medicaid Management Systems are also coming up for rebid, said Struckman. Newt Gingrich's Center for Health Transformation is pushing the Bush administration to move more technology into health care, arguing that medical records should be electronic and under the control of patients, not drug and insurance companies. Rules-based engines can be used to warn about drug interactions, etc. And, said Struckman, President Bush's tort-reform message also addressed health care IT.
Justice and Homeland Security
Homeland security funding at first focused on "boots and suits," and other equipment, but is now turning to technology, surveillance, handhelds, intelligence and case-management systems. And, said Struckman, since intelligence is delivered by officers on the street, the federal systems need to reach down to the local level.
Wireless is a trend in local governments as varied as Philadelphia, and Walla Walla, Washington, said Struckman. And the import is not just wireless, but all the applications that can sit on that infrastructure.