6 minute read 26 Oct 2020
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How will the power of emerging technology help reframe your future

By Chris Estes

Ernst & Young LLP (EY US) US State, Local & Education Market | General Government

Orchestrating EY capabilities that accelerate growth and innovation for governments and helping to enhance citizen interaction with emerging technologies. In my free time I enjoy slalom water skiing.

6 minute read 26 Oct 2020

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  • How will the power of emerging technology help reframe your future? (pdf)

State governments that build more resilient enterprises will be poised to move forward in the post-COVID-19 environment.

In brief:

  • The publication focuses on emerging technology governance, which includes survey data and quotes collected from state chief information officers (CIOs)
  • Addresses challenges states face when integrating emerging technology into their information technology infrastructure and digital transformation efforts.

 

This report has been done in collaboration with National Association of State Chief Information Officers (NASCIO).

State chief information officers (CIOs) are under increasing pressure to deliver a seamless, digital experience to citizens while providing key IT infrastructure support for state agencies. And they will likely be asked to do more with less as state governments face ongoing budget pressure, especially in light of revenue shortfalls related to the COVID-19 pandemic.

In addition, as emerging technologies such as artificial intelligence (AI), robotic process automation (RPA), augmented analytics, low code/no code, blockchain, and autonomous vehicles become more prevalent environments, state CIOs face the added challenge of trying to integrate them into their IT infrastructure in ways that align with their overarching digital transformation. Several state IT departments are following commonly accepted governance practices to minimize risk, lower costs and reduce exposure to cybersecurity risks.

The answer is mixed for other states according to the first NASCIO/EY survey on emerging technologies. While nearly half the states said that they either have an effective governance model in place or were developing one, the rest did not have a mechanism for monitoring the review, adoption and deployment of emerging technologies. In addition, nearly two-thirds did not have policies or procedures in place regarding the use of emerging technology within their organization. There is no one-size-fits-all approach to governance.

This creates a level of risk for many organizations, as well as a lost opportunity. In the survey we found that states that have a sound governance model for emerging technology are driving true innovation by aligning new technologies with the broader goals of their state’s digital transformation. Conversely, states that lack effective governance models run the risk of higher costs from rogue IT deployments that fail to mesh with overall goals.

The definition of what constitutes emerging technology has changed significantly in just five years. In 2015, 53% of state governments were still exploring internet of things (IoT) and now that technology has largely entered the mainstream. The pandemic pushed emerging technology into mainstream and now AI, RPA and virtual assistants or chatbots are preparing to take center stage. In five years, emerging technologies such as augmented reality (AR)/virtual reality (VR), autonomous vehicles, blockchain and quantum computing could emerge while others cycle and enter the mainstream. 

In this report, we will discuss survey results and detail how forward-looking state CIOs are advising their state governments on ways to integrate new technologies into the digital services they deliver to citizens. We will also focus on the other issues they must address in harnessing emerging technology as they seek to reframe the future of government as a digital enterprise.

Disruption can be a time of opportunity for public entities as well as multinational companies. State governments that build more resilient enterprises – and successfully optimize emerging technology – will be poised to move forward in the post-COVID-19 environment and reimagine their future and deliver higher levels of service to all citizens.

There’s no one-size-fits-all approach to governance

State CIOs employ a variety of methods for determining where to allocate scarce resources for new IT deployment. It is the same discipline and process needed when deciding on approving new, emerging technology projects.

A state’s procedure for adopting an emerging technology often depends on its IT operating model. Most states run a shared services model for other agencies offering networking, computing, storage and telecommunications services. In past years, as these operations aligned, states would enjoy synergy and cost savings while consolidating on common technologies. Now, these same benefits are being realized as states adopt cloud services and consider emerging technologies like edge computing, 5G and software defined networks.

When we think of emerging technology, we think of it as an innovation function. Our business units show up with innovative ideas. They show up with something from a pilot project and it’s brilliant and we need to jump on it and assist them.
Steve Nichols
CTO for state of Georgia

The review boards help to create synergies in enterprise IT, which provides relief to an already stretched state budget by reducing  one-off expenditures and ultimately reducing shadow IT expenditures and the hidden costs that often result from legacy/outdated services.

PA enterprise architect model

In 2017 the Commonwealth of Pennsylvania adopted a shared services model to balance the demand for resources, people, and money and establish a clear set of guiding principles for better decision making. With the FEAF (Federal Enterprise Architecture Framework) as the guiding industry standard, they use a customized version to look for all demand for IT resources.
John MacMillan
Deputy Secretary for Information Technology and CIO, Commonwealth of Pennsylvania
Commonwealth innovation architecture framework

Pandemic pushed emerging technology into mainstream

Just as the lockdowns related to the COVID-19 pandemic accelerated the digital transformation of many private companies, the pandemic also forced many state governments to rapidly deploy IT solutions that would address the need to provide online access to state services.

Survey results

State emerging technologies
Adoption of emerging technology
Measurable improvement

Barriers to adoption

Not surprisingly budgetary concerns ranked high as a significant barrier to adoption. This will not get easier in the years ahead as states try to recoup revenue shortfalls caused by the pandemic in addition to ongoing cost pressure. Other issues ranked as obstacles include aligning use cases to technology, legacy IT infrastructure, a lack of necessary staff skills and organizational silos.

Still, CIOs also listed a lack of skills as another area of concern. This is made even more acute by the “talent tsunami.” The aging workforce in state governments has and will create significant challenges for IT organizations over the next several years. Many states report that more than 20% of their workforce is eligible for retirement in the next several years and many of these older employees are the ones most familiar with the infrastructure on which many systems are built.

Survey results

Significant challenges
Key concerns
Level of confidence

The way forward: CIO as broker of IT services

Across the board, we found that most CIOs are eager to embrace emerging technology, provided they can align the technology to projects that advance the state’s overarching digital transformation. In many ways, emerging technologies represent the natural evolution of the state CIO’s role from caretaker of the IT infrastructure to an overall broker of services, in this case one who takes a holistic approach to managing the state’s digital transformation.

That’s not to say that CIOs no longer need to care about keeping the lights on and ensure that core IT functions such as storage and network operations, among others, run smoothly. As CIOs integrate  emerging technology into their organizations, they will need to consider a number of actions that will optimize their digital transformation and minimize risk to their organization.

  • Adopt emerging technology by design, not by default.
  • Include emerging technology in the enterprise architecture.
  • Fund emerging technology through an innovation fund.
  • Seek procurement waivers for emerging technology. competitive RFPs.
  • Organize vendor demonstrations of emerging technology.
  • Facilitate emerging technology cross-agency pilot projects.
  • Avoid the top-down approach to emerging technology. 

Click here to download the full report.

Summary

State chief information officers (CIOs) are under increasing pressure to deliver a seamless, digital experience to citizens while providing key IT infrastructure support for state agencies. And they will likely be asked to do more with less as state governments face ongoing budget pressure, especially in light of revenue shortfalls related to the COVID-19 pandemic.

About this article

By Chris Estes

Ernst & Young LLP (EY US) US State, Local & Education Market | General Government

Orchestrating EY capabilities that accelerate growth and innovation for governments and helping to enhance citizen interaction with emerging technologies. In my free time I enjoy slalom water skiing.

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