CIO ‘broker’ role flavors all state technology trends in 2019

Any lingering doubts on the direction of state governments’ technology efforts were eradicated this week with the release of new survey results showing a near unanimous push among chief information officers to expand their “as-a-service” business models as they integrate with the rest of their organizations.

The annual survey released by the National Association of State Chief Information Officers during the group’s annual conference in Nashville, Tennessee, revealed the evolution of business models and other trends that provide a useful compass for those navigating resource-constrained state governments.

If the survey, which got responses participation from 48 states and the U.S. Virgin Islands, had a single theme, it’s how the emergence of the “CIO as a broker” of services — rather than an IT fix-it shop — has flavored nearly every other aspect of how states consume technology. Customer relationship management, for instance, was cited by nearly all survey respondents as being of central importance as CIOs attempt to support agencies, local governments and populations. 

Of the 48 states in the survey, 36 reported having an active CRM initiative, and another six said they’re planning to implement one. Of the remaining six without CRM plans, two said their relationships were already healthy and that a formal program might be counterproductive. But in nearly every case, CIOs are placing paramount value on positioning themselves as “strategic business partners” within their organizations.

Even where technology leaders have statutory power over other agencies and don’t technically need cooperation, they say it’s best to work together anyway. “It simply doesn’t make sense not to build the best working relationships with my agency partners. Dictators are rarely successful in reaching their goals and never last,” one CIO said.

Many states attempt to strengthen their interagency communication by embedding staff members in each of their largest partner agencies. Nebraska CIO Ed Toner said he’s adopted that practice in the IT agency he’s led since 2015.

“My only rule to them is if I hear about a problem from the director of the agency, you’ve failed,” Toner said on stage Tuesday.

The evolving “broker” paradigm is largely a product of the increased reliance on cloud computing. Indeed, one of the survey’s most striking results is that 92 percent of CIOs said they are expanding their “as-a-service” offerings, while 48 percent reported  downsizing state-owned-and-operated data centers.

As technology becomes more integrated into states’ operations, CIOs are finding their cost management models can generate friction. Most states are structured similarly, using “chargeback” or user-fee models that allow the CIO’s office to operate as a broker of services including storage, networking, email, voice and security. While NASCIO found this model may be serviceable for states’ immediate needs, it’s a poor conductor of innovation.

NASCIO also concluded that significant changes to states’ cost management models are “unlikely.” At the conference on Tuesday, NASCIO Executive Director Doug Robinson called it a “conundrum” states are struggling to escape. One workaround states have found is the adoption of technology business management, or TBM, which provides structured taxonomies that are better aligned with states’ broader budgeting processes and provide inroads for agencies that are not fully prepared to be integrated into a centralized IT environment. 

As CIOs become more integral to states’ business processes, they’re also doing more to measure agency, policy and program effectiveness through the use of performance management systems. Fifty-five percent of states reported using performance management systems, with another 18 percent reporting they’re in the planning phases. Among those states with active performance management systems, however, governors largely set the agendas. Just 30 percent of those states ask their CIOs to set the performance-management policies.

Fewer states are reporting new efforts to outsource their IT — only 2 percent, down from 15 percent in 2018 — which NASCIO concluded is because many have already completed their transitions to outsourcing models.

While CIOs broker more services, workforce continues to be a major challenge for most state governments. Twenty-six percent of states reported expanding IT staff, up from 16 percent in 2018, which NASCIO’s called an overdue correction.

“CIOs commented on being drastically understaffed and finally being in a place to bring on appropriate resources with these new types of managed services models in place,” the report reads.

With 22 new governors having entered office this year, there are also many new CIOs, which may be why so many of them — 45 percent this year, compared to 14 percent last year — reported dealing with “cultural” challenges in their organizations. For CIOs arriving from the private sector, slow procurement processes and statehouse politics have the potential to cause cultural impasses.