ITMODERNIZATION IN STATE AND LOCAL GOVERNMENT: WHAT YOU NEED TO KNOW GOVLOOP POCKET GUIDE 2017
GOVERNMENT IT MODERNIZATION PROGRAMS OFTEN THE UPGRADE, INT OR REPLACEMENT
LEGACY APPLICA
N COVER TEGRATION T OF
ATIONS
FOREWORD FROM WORKDAY Information technology (IT) modernization continues to be one of the hottest topics across government today, especially for state and local governments. IT modernization has transformed efficiency, convenience and effectiveness for all users. That’s why it’s on state and local Chief Information Officers’ (CIOs) top 10 priorities list for 2017. For modernization, cloud technology, upgrading legacy IT systems and consolidation remain top of mind for CIOs at the state and local levels. This is especially important given that state and local governments face challenges with budget 02
constraints and little room to modernize IT. In addition to these economic pressures, state and local governments face growing citizen expectations. In their focus to improve IT systems and service delivery while sustaining core-mission activities, many CIOs are taking a closer look at how they can use smart technology choices to lower operating costs, expand citizen relationships and ensure continued vitality into the future. For employees in state and local government, IT modernization means more efficiently performing the functions that support agency missions.
It’s critical to choose a cloud platform that ensures security, compliance, flexibility and resiliency. That means the old “rip and replace” technique for moving away from legacy systems won’t do. You’ll need to To economize in the best way possible, you need an IT system build a flexible IT foundation. that helps you empower the Workday enables this by helping people and talent behind your workforce; a system that unifies organizations configure their applications to meet diverse financials, human capital and unique needs. Unlike legacy management, payroll, grants and analytics into one modern systems that require conforming platform. Most IT leaders at the to a limited set of rigid hierarchies state and local level understand and implementations, Workday solutions support multiple that cloud computing is dynamic organizational crucial to IT modernization and for future growth. With the structures that empower stakes so high as empowering managers and users to accurately represent and update workforces to meet mission organizations and operations in needs and delivering critical services to citizens, selecting a real time, without the immediate cloud provider is more important need for IT assistance. than ever to government today. With the right solutions, you can modernize larger and more A cloud platform that delivers complex legacy business systems in these areas can improve the public workforce’s mission securely, efficiently and without disrupting critical processes. for greater efficiency in administrative processes, enable Use this pocket guide to learn IT modernization and deliver what you need to know about IT better citizen services. modernization moving forward into 2018 and beyond. You will need to harness cloud and IT modernization strategies that continuously evolve, and align IT with ever-shifting strategies and missions.
03
Identify rock stars before their first hit.
workday.com/truth Workday, the Workday logo, and Built for the Future are registered trademarks of Workday, Inc., registered in the United States and elsewhere. Š2017 Workday, Inc. All rights reserved.
Say goodbye to HR data that’s hidden in personnel files. With Workday, you can identify the people in your institution that have the skills you’ll need in the future. And that sounds pretty great.
CONTENTS Foreword
02
Executive Summary
07
Defining IT Modernization in State and Local Government
08 06
State and Local Modernization by the Numbers
10
Today’s Landscape of State and Local IT Modernization
12
Industry Spotlight: Modernizing to Transform Human Resources
14
How Two Agencies Transformed Their Talent Management
16 20
Cheat Sheet
EXECUTIVE SUMMARY Today, state and local governments are burdened with the growing cost and risk of aging technologies. CIOs and IT leaders must leverage emerging IT services and deployment models to modernize legacy applications, improve organizational performance and make progress toward digital transformation. One of the main ways that IT shops are modernizing is by implementing cloud technologies. According to recent reports, about half of state and local agencies have integrated cloud into their strategies as of 2017. That’s not surprising. The benefits of
cloud-driven IT modernization include regular and undisruptive upgrades, mobility for caseworkers and citizens and easier-to-use services. The impetus for IT modernization is clear: improved productivity, efficiencies and services that all combine to better serve the public. This new pocket guide from GovLoop will give you an overview of IT modernization in state and local government, why it matters and how you can best leverage IT modernization. Additionally, we’ll use case studies and how-tos that will help you get to where you need to be today and in the future.
07
DEFINING IT MODERNIZATION IN STATE AND LOCAL GOVERNMENT In this section, we’ll define what IT modernization means and how you can apply it to your organization.
08
WHAT IS IT MODERNIZATION? IT modernization is the continuous evolution of an organization’s existing application infrastructure software, with the goal of aligning IT with the organization’s evershifting business strategies.
WHAT DOES IT MODERNIZATION LOOK LIKE IN GOVERNMENT? Government IT modernization programs often cover the upgrade, integration or replacement of legacy applications. This is usually driven by factors such as rising maintenance or operations costs, lack of skills and a need for organizational agility.
Whether through cloud, more sophisticated data analytics and/or artificial intelligence mechanisms, IT modernization can be deployed in a number of ways, so long as the organization becomes more efficient and effective in achieving mission requirements.
HOW DO I DEFINE MY AGENCY OR DEPARTMENT’S IT MODERNIZATION? You can use one of these tactics to define your agency’s modernization strategies: rehost, rearchitect, replace, integrate or migrate.
Rehost
IT managers can shift an application to another platform while leaving the old system and agency-specific customizations largely untouched.
Rearchitect
Software engineers and managers can use tools to recover and reassemble the business-relevant code from legacy applications while eliminating technologyspecific code.
Replace
Managers can switch legacy applications with new ones if the legacy application does not incorporate unique agency data and functionality.
Integrate
Architects can wrap legacy applications (support old systems that can’t be retired) and create a service-oriented architecture (SOA) – a style of software design where services are provided to the other components by application components. This is through a communication protocol over a network. SOA can then be used to operate on a new platform but is implemented by the existing code.
Migrate
For some legacy applications, IT professionals can automate the migration to new technologies without changing the application design.
09
STATE AND LOCAL BY THE NUMBERS CIOs UNDERSTAND THE NEED FOR IT MODERNIZATION What impact can IT modernization have on state and local government? How are states faring in their modernization efforts? These stats will help set the context for why IT modernization is important.
90%
of CIOs considered at least 20 percent of their IT systems due for replacement or modernization. (Source: NASCIO 2016 State CIO Survey)
1/3
of CIOs stated that greater than 10 percent of their budget is allocated to modernization work.
3/4
of CIOs stated that they have developed or are developing cloud migration strategies to migrate legacy systems (drivers include cost, security, efficiency and agility).
90%
of state and local cloud adopters said their agency or institution will increase spending on cloud computing in 2017. (Source: 2016 Meritalk Survey)
10
MODERNIZATION CHALLENGES TO IT MODERNIZATION
HOW STATES ARE DOING IN IT MODERNIZATION
Alignment of IT needs was the third biggest difficulty in managing IT operations for state and local government. (Source: 2016 Clarus Research Group Survey)
Since 2014, use of technology and service delivery has improved in 17 states, declined in 10 and stayed even in 23. (Source: Digital States Survey 2016)
64%
Virginia and Ohio moved up to A designation with the top-performing states while Michigan, Missouri and Utah maintained their A marks from 2014.
53%
A major trend in state government is reducing spending and streamlining operations through consolidation. (Source: HPE Insights 2017)
of all respondents revealed they are still using manual processes to gather information to solve problems.
Florida was the most improved state, rising from C to B+.
of public-sector IT decision-makers feel their organization does not have end-to-end visibility across IT systems to foresee issues ahead of time, and this leads to operation inefficiencies and waste.
44%
cited insufficient IT resources (budget and personnel) as the biggest risk to their organization or agency over the next year.
11
TODAY’S LANDSCAPE OF STATE AND LOCAL IT MODERNIZATION What does IT modernization look like in state and local government today?
IT modernization for government is a must. It’s important to deliver the necessary levels of security, functionality and efficiency to help government employees in their roles. That’s why state and local governments are eager to take advantage of all that modernization efforts can offer. But due to poor management of technology investments, costly IT projects that often result in failure and the delivery of technologies that are obsolete by the time they are completed, government has largely missed the mark on this needed transformation.
12
Many states are left wondering, “What does modernization really look like? Is it the same for every agency? Is modernization even achievable with limited budgets and an uncertain future for state and local government? Who is getting it done right?” The good news is state and local CIOs across the country recognize the importance of IT modernization through efforts like cloud, consolidation and automation. Cities were projected to spend at least $30.9 billion on IT in 2017. Counties in the U.S. are expected to spend $22 billion on IT in 2017, and more than half of counties have budgets that now exceed pre-recession levels.
CLOUD-BASED SYSTEMS
IT CONSOLIDATION
SMART CITIES
One of the main ways that IT shops are modernizing is by implementing cloud technologies. About half of state and local agencies have integrated cloud into their strategies so far.
In addition to cloud, one major trend in state IT is reducing spending and streamlining operations through consolidation. Taking cues from the Federal Data Center Consolidation Initiative, state and local governments are looking for ways to merge government-wide IT functions into a single cloud platform. This allows agencies to improve services processes, increase data reliability and make better use of data for improved budget-making decisions.
CIOs are not focused on technology for technology’s sake, however. IT leaders at the city level are mindful of their mayors’ priorities and how technology can be used to support them.
One of those is Gig Harbor, Washington. With a population of about 7,000, the city on the Puget Sound moved the client-server version of its enterprise resource planning software to one in the cloud in 2014. This has helped reduce the number of servers to deal with as well as undisruptive upgrades, which boosts security.
BROADBAND AND CONNECTIVITY Underlying many of these smart city efforts is sound infrastructure for connectivity. Many municipalities are looking to broadband, which promises speeds that are 50 to 100 times faster than is typical. For government, faster internet connections mean a greater ability to deliver services. Some are even starting to look at that as another utility – like electricity, gas or water – that municipalities should provide.
Smart city initiatives are areas where local CIOs are cautioning not to lead with technology – but to have projects that serve community needs. In Washington D.C., for example, officials have kicked off an ideation series where they talk to residents about what a Nebraska, for example, smart city means to them. Seattle consolidated systems and support hired a Smart City Coordinator teams for both the state network to help coordinate smart tech and the server administration. This projects across city departments has helped improve efficiency and and forge partnerships to improve the quality of state IT services. the quality of life for residents.
AUTOMATION Automation has been key in helping counties account for shrinking workforces. State and local governments are leveraging automation to save costs and help their overloaded employees streamline some manual, tedious tasks. This helps employees to focus on more important, strategic tasks and priorities.
Using an automated system, the department accelerated processing of more than 5,000 human resources and other business contracts in just over a year.
Moving HR talent management and employee workforce programs New York City’s CTO launched and technology to automated and LinkNYC, a communications cloud-based systems represents network that will replace over one easy and effective way to 7,500 pay phones across the five improve employee engagement boroughs with new structures and efficiencies. Tulare County, called links. Each link provides free California, for example, has a public Wi-Fi, phone calls, device Sheriff’s Department with 1,300 charging and a tablet for access to full-time employees. city services.
13
INDUSTRY SPOTLIGHT: MODERNIZING TO TRANSFORM HR An interview with Sherry Amos, Director of Market Development, Education and Government at Workday
14
With IT modernization being a hot buzzword in government, many agencies and departments are in a rush to modernize any time an opportunity opens up. This results in many organizations falling into the trap of using separate technology solutions for each of their issues. But relying on siloed technologies for important mission-related tasks like managing workforce and talent can lead to serious inefficiencies.
This is a particularly critical time for HR professionals in government because a wave of employees are about to retire from state and local workforces. HR professionals face questions like: How are we going to build, recruit and train people for the workforce? How will we transfer knowledge from the exiting workforce? How will we develop leadership and succession talent in time?
“Over the years, with things concerning talent management, recruiting and HR management, government kept adding standalone solutions,” Sherry Amos, Director of Market Development, Education and Government at Workday, said in an interview with GovLoop. “Not only have these IT solutions become unwieldy and expensive, they also prevent the agency from using the data that sits in each of those disparate systems, affecting true decision-making.”
Amos said the answer is through cloud solutions that allow you to predict your workforce and proactively source talent. That’s why state and local agencies are looking into cloud shared services. Cloud solutions through shared services offer modular, interoperable applications that can provide common administrative functions across service areas.
Amos discussed how cloud and shared services can help state and local agencies unify their siloed IT solutions and fully harness the benefits of modernization for their talent management and HR needs. “Shared services within and across the government enterprise are improving organizational, manager and employee productivity,” she said. As a whole, the HR community has benefited from the government’s gradual adoption of cloud technologies, which gained steam with initiatives like the Cloud First policy. It required agencies to show a preference toward cloud solutions when launching new IT projects. “HR was actually one of the applications that was an early mover to the cloud,” Amos said. “If the solution is available in the cloud, agencies now realize they can’t continue to manage everything on premise. They don’t have the IT resources, and it’s difficult to keep up with security and modern technologies.” Additionally, HR specialists are often bogged down with transaction-based tasks like payroll that are now being automated. Amos said cloud and shared services can streamline these tasks and benefit HR departments in four key ways:
1. Better view of overall workforce:
“Full-suite integration across solutions and one capability produce a true 360-degree view of your workforce.”
2. More time to focus on strategic work:
Through automated processes and an integrated system, “HR professionals can go from spending 80 percent of their time on transactions and only 20 percent on strategic activities to completely flipping that around.”
“Cloud solutions through shared services offer modular, interoperable applications that can provide common administrative functions across service areas.” —Sherry Amos, Director of Market Development, Education and Government at Workday
4. Ease of use:
Another benefit of shared services is existing employees can become proficient with standard tools and processes and don’t have to be trained on new systems if they transition to a different part of the organization. “Many are now able to go from a highly decentralized model of having HR professionals in every part of an agency to centralizing certain functions.” Ultimately, Amos said agencies need to harness what Workday calls “the power of one.” That’s managing your agency or department’s needs through one technology and one architecture. “When you have one solution, you have one current vision,” Amos said. “You have one set of business processes. On top of that, you have user-friendly interfaces with mobile capabilities. Those are built right into the business processes, not as add-ons.”
As state and local HR professionals face the impending exodus of seasoned employees, they’ll need to harness the best of IT modernization to expedite tedious hiring and recruiting processes 3. Embedded analytics for better decisionand improve efficiencies. Cloud solutions and shared making: Shared services provide “integrated and embedded analytics, giving managers real-time data services can help HR managers and employees alike when they need it to drive strategic decision-making.” leverage one solution for myriad workforce needs.
15
HOW TWO AGENCIES TRANSFORMED THEIR TALENT MANAGEMENT Learn how the city of Denver, Colorado, and Pierce County, Washington, used IT modernization to address their HR needs. Finding a way to deliver effective HR through IT modernization can be a serious challenge. After streamlining workflows and using the most up-to-date solutions, these two agencies were able to modernize their legacy systems to significantly improve efficiencies. 16
DENVER GOING THE DISTANCE: HOW THE MILE HIGH CITY SIMPLIFIED HR The city of Denver went from having limited user capabilities outside of the HR department to providing employees and managers with a much greater level of self-service. Through IT modernization and Workday solutions, the city saw a huge cultural and technological shift in manageremployee relationships.
CHALLENGES • Served a complex network of independent departments, which created overly burdensome business processes • Worked on old version of legacy software • Had to customize old legacy software, which created an advancement process that was 50 steps just to pay employees • Could not sustain system or afford to implement new releases
OUTCOMES • Re-evaluated business processes and cut out extraneous steps • Handled administrative tasks like payroll through a simpler, unified system • Invested in one system to streamline multiple processes • Helped HR staff meet client needs and automate process of running reports
• Lacked the tools HR staff needed to help clients, as opposed to pushing paper and running reports
17
18
PIERCE COUNTY ACHIEVING A MISSION OF SERVICE WITH ONE SUITE OF APPLICATIONS Pierce County is an iconic location in Washington state encompassing 1,800 square miles from the Cascade Range to the Pacific Ocean. The County delivers hundreds of essential government services ranging from county governance, public safety, to economic development and parks.
Using Workday Human Capital Management and employee and manager self-service, the county streamlined the way that payroll, benefits and time-tracking services were delivered to its passionate employees.
CHALLENGES
OUTCOMES
• More than 3,000 employees
• Saw budget savings of at least $100,000 per year
• Coordinating between 27 different HR departments
• Converted paper-based systems to automatic, self-service systems
• Ran HR system on legacy mainframe • Duplicated tracking, had redundant data entries and dealt with manually intensive old system • Lacked real-time information for managers and directors across the organization
• Increased data accuracy • Unified system with streamlined processes and actionable analytics • Employees focused on public service vs. back-office administrative functions
19
CHEAT SHEET 1 2
Use this cheat sheet to help you get started with IT modernization.
BUILD THE BUSINESS CASE
DOCUMENT EXISTING AND FUTURE COSTS AND ESTABLISH A BUDGET
First, CIOs must make it clear that modernizing IT systems isn’t a simple upgrade to new systems: It represents a fundamental technological and cultural shift. Start with documenting the problems of legacy systems, i.e., that they’re costly to maintain and complex to manage.
A move to cloud or any modernized system requires financial planning that analyzes the total cost of ownership over three to five years.
Traditional on-premise investments start with relatively high first-year costs – reflecting procurement of new hardware, software and implementation As you gather and document good reasons to services – but then appear to decline in subsequent modernize, you’ll begin to build a better case for years. In contrast, modernized IT systems – such your department to upgrade or move to the cloud, for as cloud – actually remain consistent throughout example. Some good business cases that you might the life of a contract, but may initially look costly to build include having a user-friendly interface for a senior executives. It’s especially important to apply a website, embedded analytics that give your staff better multi-year perspective when determining existing and capabilities for decision-making or the ability to relieve future costs to make an accurate assessment of legacy IT personnel of infrastructure maintenance duties. versus modernized systems.
20
3
4
Senior decision-makers like CIOs must also understand the potential for IT modernization to more effectively meet mission goals and improve operational efficiency. This is important because the chance to save money isn’t the only reason to consider modernization.
Organizations that have successfully deployed modernized IT systems report a host of benefits that helped garner stakeholder support. Some of these include more sophisticated analytics, enhanced security and easier-to-use services. Additionally, consolidating dozens of manual and legacy processes, which streamlines information flow, can yield immense benefits worth sharing with the public and stakeholders.
LOOK BEYOND THE HARD NUMBERS
Agencies and departments should also consider the “soft benefits,” like whether their system is easy to use, streamlined interactions for citizens and whether the system helps employees and citizens perform tasks more quickly. Finally, make it an expectation with service providers to attain regular updates in order to ensure systems are performing as expected.
TOUT THE BENEFITS AND GET STAKEHOLDERS ON BOARD
Loop in your stakeholders (i.e., senior executives and citizens) by communicating what is happening during the duration of deployment activities. Keep team members involved, and be sure to document wins and successes, no matter how seemingly small.
21
THANKS TO WORKDAY FO SUPPORT IN PRODUCING T PUBLIC-SECT RESOURCE. 22
OR THEIR THIS TOR
About Workday Workday is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, Workday delivers financial management, human capital management, and analytics applications designed for the world’s largest companies, educational institutions, and government agencies. Organizations ranging from medium-sized businesses to Fortune 50 enterprises have selected Workday.
About GovLoop GovLoop’s mission is to inspire public sector professionals by serving as the knowledge network for government. GovLoop connects more than 250,000 members, fostering cross-government collaboration, solving common problems and advancing government careers. GovLoop is headquartered in Washington, D.C., with a team of dedicated professionals who share a commitment to the public sector. For more information about this report, please reach out to info@govloop.com
Governments at all levels are doing everything they can to leverage the efficiency, productivity and costeffectiveness that IT modernization provides.
1152 15th St. NW Suite 800 Washington, DC 20005 P (202) 407-7421 F (202) 407-7501 www.govloop.com @GovLoop