With unemployment across the nation hovering at 9.5 percent, ominous clouds of a double-dip recession loom over the horizon. Most state budgets are shrinking, and one can only imagine the angst through procurement offices and boardrooms across the nation as they struggle to decide which IT initiatives to approve in this economic climate. However, all is not lost. With a newfound mantra of 'consolidation' whispered within the corridors of the powers that be, states are now taking this opportunity to examine IT portfolios, rationalize current enterprise applications and systems, identify areas of shared functions and needs, and attempt to stretch existing IT budgets to encompass a growing plethora of needs and services.

As observed in INPUT's State and Local Information Technology Market 2010-2015 report, authored by Chris Dixon, state and local government initiatives that focus on "streamlining and performance management across the government enterprise are integral to long‐term budget cutting." In the forthcoming years, states will "look for major programmatic consolidations that will drive IT integration projects."

Examples of such consolidation efforts and initiatives include:

New York City and Centralized Accounts Receivables and Payments Marketplace: The city of New York currently deals with numerous types of invoices such as parking, red light and traffic violations, permits, and taxes that are handled by disparate systems. In an attempt to consolidate billing and customer functions, streamline and improve processes, and reduce overall costs, the city has decided to centralize management of all these functions within the Department of Finance. The city is currently seeking feedback from vendors with solutions for best practices, associated costs, and information on installing new and improved billing, payment collection, and cash application programs.

New York State and Consolidated Statewide E-mail Platform: The state of New York is currently in the process of consolidating various e-mail platforms across 40 different agencies onto a single e-mail platform to gain operational efficiencies. By consolidating all state agencies' e-mail operations on a single platform, the state anticipates a gain in operational efficiencies, which will result in an annual savings of $4 million dollars once fully implemented.

Michigan State, Cloud Computing and Consolidated Data Center: The Michigan Department of Technology plans to build a massive 80,000-100,000 square foot data center that provides cloud computing services to state agencies, cities, counties, and schools across the state. Not only will the initiative spur economic development within the state, but it will also reduce duplicate systems operated by cities, counties and state agencies. This could potentially save these organizations a significant amount of taxpayer dollars. Lastly, the plan is to position the infrastructure for private companies to view the data center as a potentially secure alternative to offshore application hosting and storage, all based in the U.S.

The U.S. Department of Education (DOE) awarded nine states and the District of Columbia with $3.4 billion during Round Two of its Race to the Top (RTTT) competition on Tuesday, August 24, 2010. Delaware and Tennessee were the recipients of Round One funding. The Race to the Top Program encourages states to develop ambitious, yet achievable plans for education reform. The ten awardees received the highest scores on their applications and were selected from a pool of 36 applicants.

The Round Two awardees are as follows:

District of Columbia - $75 million (INPUT Opportunity 58681)

Florida - $700 million

Georgia - $400 million

Hawaii - $75 million

Maryland - $250 million (INPUT Opportunity 58485)

Massachusetts - $250 million

New York - $700 million

North Carolina - $400 million

Ohio - $400 million

Rhode Island - $75 million

In order to receive the funding, the awardees must work with the DOE to meet the criteria established in their applications. DOE has requested an additional $1.35 billion in funding for Round 3 of the competition due to only being able to select ten applicants from several competitive applications submitted.

For more information on Race to the Top, please visit the program's website.

General Colin Powell, as part of the Washington Speakers Bureau's Summer Speaker Series, offered insight on what it takes to thrive as a leader during challenging times. The hour-long presentation was broadcast via webinar on Wednesday, August 18, 2010. Powell spoke candidly about career highs and lows for approximately twenty minutes before taking questions from the live audience and online attendees.

Powell, 73, has a decorated history in leadership. The four-star general was national security advisor during the Reagan administration, chairman of the Joint Chiefs of Staff during George H.W. Bush's presidency, and secretary of state for President George W. Bush. Though retired from political life, Powell still maintains a busy schedule as a public speaker, which he considers his primary business interest. Powell said he enjoys connecting with audiences and that they give just as much back to him as he hopes he gives them.

Powell noted that much of his time was spent outside of the United States while working for past presidents and now he relishes in the chance to get his "fingers on the pulse of Americans and what America is thinking." He said Washington is not always reflective of the true America and he prefers traveling the country while speaking to a variety of people and hearing their views and concerns.

Despite severe economic hardships in the U.S., Powell said most people he encounters are not afraid of the future, and while they may be worried for the time being, "they are confident in our system." He said he tries to remind people how far the nation has come and how strong its people are. Even during troubled times and popularity decline, Powell said the U.S. is "still the land of hopes and dreams and opportunity."

Whether speaking to thousands of people in an auditorium or eight people in a hotel room, Powell is passionate about his mission to share, inspire and help others succeed. He shared his preferences for venues and said his favorite places to speak are old, refurbished movie theaters from the '20s and '30s.

"There ain't no old movie, just me. There's nothing more exciting for me as a speaker than to wander those old movie stages ... all eyes on me," he said.

Powell shared tips for those still adjusting to the speaking circuit. He noted the importance of connecting with an audience.

"People enjoy you opening the door to your life and sharing stories. It breaks the tension," he said. "Have a little fun and warm up the audience ... the atmosphere lightens and people want to hear more."

Oftentimes, companies provide an outline of what they want you to speak about in hopes of motivating and educating attendees. Powell said to always take client needs into account when preparing a speech and incorporate personal experience that relates to the organization's goals. By doing this, you are "talking with them and for them."

To be a successful and respected leader, you need to invest time and energy into understanding your organization. While stress and outside concerns can sometimes steal focus, Powell said it is imperative to always remember the positive nature of your company and its employees.

Further, Powell explained the importance of acknowledging all members of your team, regardless of their level in the company. He recalled being in a parking garage and speaking to the workers about their daily duties. When Powell asked how they determine the order of handling the incoming cars, they shared that those who roll their windows down and acknowledge their presence get better service.

Another essential quality of an effective leader is the ability to delegate responsibility. Powell spoke about a time when he met with President Reagan to share some problems he was encountering. While speaking, Powell noticed the president was distracted by squirrels eating nuts in the rose garden. Even after raising his voice, the president maintained focus on the squirrels outside the window. It was then that Powell realized it was not his place to bring his issues to the president, and by not acknowledging his concerns, the president was actually saying, "I will listen to you for as long as you want, but you are not my problem ... you come see me when I have a problem."

Powell explained that when you are hired as a leader, someone is entrusting you to take on that role and not rely on them for an easy fix.

"Keep unto yourself those things that you have to do and delegate responsibilities," said Powell.

Powell also stressed the importance of embracing diversity. He said America's melting pot is what keeps the nation thriving and that minorities will eventually be the majority.

"We have to learn to get along as a diverse society ... it will be an inspiration to the rest of the world," he said.

Powell, a son of Jamaican immigrants and raised in New York City, spoke about an encounter he had with an immigrant hot dog vendor. After asking the man how much he owed, the man replied, "You don't have to pay me. I've already been paid ... America has paid me. I'm here."

Powell noted that this country is still the same country that welcomed his parents and offered them hope years ago.

"America will always remain leader as long as we keep those dreams alive," he said.

Though the U.S. is still a dominant global force, Powell said the nation should be careful not to rest on its superpower status.

"America is still number one. We still have that title of leadership, but we can't treat the world like they're 13, 14 and 15," he said. "We need to look at them as two, three and four."

After 40 years of public service, garnering several honors, and speaking to patrons around the world, Powell found it hard to comment on his greatest achievements when asked by an audience member.

"I don't really think of my life in those terms. I'm a product of everything. My successes and my failures," he said.

Now, Powell enjoys balancing his speaking engagements, nonprofit work, and family life outside of the political spotlight. When asked what he hopes to be remembered by, Powell kept it short and simple: "Good soldier. Served well. Great family."

State governments' fiscal health has always been more cyclical than the federal government's. States have experienced several recessions since World War II, but the Great Recession, though economists tell us is officially over, is different. It's different because of the length of time the fiscal crisis has lasted and the simultaneous negative impact it's had on states' largest revenue streams -- personal income, property and sales taxes. Rainy Day funds have been exhausted and almost all the budget gimmicks have been used. The unprecedented number of new governors that will take office after the November elections will be forced to make some hard decisions about the future viability of many state programs. That leads to a bigger question. What should be the role of state government?

GovManagement.com posted a link this week to a Denver Post article entitled, "DU Study Tackles State Governments' Roles in the Future" that got me thinking about the role of state government in our multi-tiered system of governance. Any state government watcher knows the balance of power between state governments and the federal government swung the feds way during the Bush Administration. Many called the then Republican-led Congress the Imperial Congress.

President Obama promised states a broader role in shaping local policy, but that hasn't turned out to be the case. A recent NewsWeek article said, "the administration has treated states not so much as incubators of federal policy but as agents of it." And that sums up the situation quite well. The current Administration's style might be less imperialistic but they are coaxing state government behavior using contests for federal funding or the strings attached to economic stimulus cash. Gone are the days when states had the flexibility and the financial wherewithal to be laboratories for policy innovation.

The loss of innovation is noted by INPUT each year when we analyze governors' state of the state addresses. A decade ago, these speeches were, to pardon the pun, all over the map in terms of priorities and policy. Now most of them are similar regardless of the governors' political affiliation.

In some cases, states are their own worst enemy, especially when their budgets are structurally unsound with no relationship between spending and incoming revenues. But no matter the reason, 2011 might be a unique time in history when we start a national conversation about the role of state government. If such a conversation gets started next year, it will certainly accelerate in 2012 during the presidential election season. What might be up for grabs? Should the current federal-state partnership for Medicaid change so that it is strictly a federal program like Medicare? Which level of government is best suited to successfully educate our children and adult learners so that the nation stays competitive in a global economy? Is it time to have a national police force instead of the patchwork of agencies we have today? Should licensing and regulation for certain professions be federalized to make it easier to catch those who skip from jurisdiction to jurisdiction to avoid punishment? The list of possibilities is almost endless.

INPUT's Take

The possibility of the federal government taking over state program wholesale may not be on the immediate horizon, but that doesn't mean federal government vendors shouldn't start paying attention to the opportunities such a takeover could present. On the shorter-term front, opportunities for state and local government vendors still exist. They're just not always in the usual places.

• Between 1979 and 2007 state budgets grew at an average rate of 6.5% annually. Expect a new normal for average budget growth, perhaps only 3% to 4%. States will closely question vendors about the price of their products, services or solutions. The strongest justifications will be the ability to cut costs or make government workers more efficient. Review your marketing materials to ensure they provide messaging that will resonate with your buyers. What worked yesterday won't today.
• States will still want to grow their economies and prepare citizens to compete globally. A skilled workforce is essential and is such a valuable asset that governors will look beyond traditional educational institutions. Can your company help? As an example Microsoft has worked with several states to offer Microsoft training as part of larger worker re-training programs.
• Solutions that can support flexible tax and revenue systems will be in demand. The government's ability to quickly change tax codes and implement those changes will be seen as critical by many governors. How can your company play in this part of the market?
• Cooperative purchasing contracts will become more popular as a way to aggregate purchasing and receive the best value for each dollar spent. Make sure your company stays up to date on likely changes to state procurement laws.
• We're likely to see directives for state agencies to inventory programs and functions and look for ways to share services. Silo-ed activities duplicated across several agencies are no longer affordable. K-12 education is a prime area that could make significant cuts by sharing services across districts. Can your company provide the consulting or analytical services that will be needed during the review process?
• Anti waste, fraud and abuse programs are becoming more important to state policy makers. INPUT's recent report analyzes several opportunity areas for vendors to gain anti WFA business.
• Over 60% of states' general fund revenue is spent on education at all levels and Medicaid. Politicians will examine core services, looking to "bend the curve" on cost increases. These will be unpopular decisions so Wisconsin's model for cutting Medicaid may become popular. Does your company have a system in place to monitor the upcoming changes to programs for which they provide solutions? Will those changes affect your business?
• Expect incoming governors to create panels and commissions to look at streamlining government and evaluating government programs. The best groups will include members from industry. Consider getting your company involved to shape the debate.
• Other than Medicaid, correctional costs are the fastest growing category in state budgets and 75% to 80% of those costs are personnel. Reducing prison populations and closing facilities without jeopardizing citizens is of great interest to policy makers. Does your company provide solutions that can effectively monitor offenders who may be released into the community? Or do you provide services that assist prisoners successfully re-enter society?
• In higher education states are looking at several areas to cut costs. One of interest to technology vendors is greater use of technology to deliver course content.

Don't miss INPUT's upcoming State & Local MarketView 2011 webinar, featuring Doug Robinson, Executive Director, National Association of State Chief Information Officers (NASCIO); Alan Shark, Executive Director, Public Technology Institute (PTI); and Chris Dixon, Manager, State & Local Industry Analysis, INPUT.

As Congress winds down for the election season, they sent $26.1 billion in aid to the states--$10 billion to save teaching jobs and $16.1 billion to cover Medicaid payments in the first half of 2011. President Obama signed the aid into law last night. By way of GovManagement.com, I found the coverage here. Details of the legislation are here.

This aid will be instrumental in taking some indirect pressure off of state technology spending--particularly in the primary/secondary education vertical. Keep in mind that INPUT's recent market forecast report is somewhat pessimistic about future stimulus to states and localities. However, the sort of sporadic, occasional stimulus--both as stand-alone disbursals and as part of existing grant programs--that was enacted yesterday is part of the baseline for the forecast period. We simply do not expect to see major new stimulus on par with the hundreds of billions of dollars enacted in 2009 in the absence of a significant double-dip to the recession.

I have long said one of the best forms of intelligence for the state and local IT marketplace is local newspapers. They help you understand the commonality of problems faced by state and local governments, public schools and universities. Newspapers also expose you to unique, non-IT-oriented insights not found in the government IT trade press.

For example, a USDA deputy secretary is visiting a farmer's market that has found a unique way to help its sellers do business with those who are using electronic benefit transfer (EBT) food stamps. Normally, only grocers with credit card capabilities can serve this customer base. Farmers' markets are generally cash only.

If you read INPUT's report on waste, fraud and abuse, you know we recommend increased use of electronic transaction mechanisms to verify incidents of services, pre-empt fraud, and provide real-time transactional data for performance management using business intelligence (BI) tools.

If you read INPUT's report on the governors' state of the state addresses, you know governors are keen to capture as much revenue for local businesses as possible. The use of EBT is a good example of how to capture federally collected dollars for a purely local economic interest. It's a niche-y example, for sure, but one that can open our eyes to the secondary economic development potential of EBT. In times like these, no possible business justification is too small to consider.

On Monday, June 21, 2010, INPUT launched its newest offering within the social services vertical solution: The Women, Infants and Children (WIC) program. WIC is a federal assistance program administered by the United States Department of Agriculture (USDA), Food and Nutrition Services (FNS). WIC provides health care and nutrition for low-income pregnant women, breastfeeding women, and infants and children under the age of five. The program has grown steadily since its inception. In 1974, total participation in the program was 88,000, compared to an estimated 9.1 million in 2009.

Two hot technologies within the WIC program that INPUT is tracking are the WIC management information systems (WIC MIS) and WIC electronic benefit transfer (WIC EBT) systems. Right now, there are 14 states planning or transferring WIC MIS, and 16 states planning EBT systems. This increased amount of opportunities is due to the American Recovery and Reinvestment Act (ARRA) of 2009. The WIC program received $500 million in stimulus funding, with $400 million going directly into benefits. The remaining $100 million went to establish, improve, or administer WIC MIS to include changes necessary to meet new legislative or regulatory requirements.

Funding was released in three waves, with the first totaling $34 million for existing EBT/WIC MIS projects. The second included $8.5 million for new EBT planning and WIC MIS transfer projects. The final wave covered any remaining technology projects, which included planning for new clinic systems, upgrading to Web-based systems, system enhancements to incorporate new program requirements, modernizing for future EBT implementation, equipment upgrades/replacements, etc. In total, 53 technology projects were funded under the ARRA, with 41 states receiving funding.

Talk to your member advisor today to find out more about INPUT's vertical solutions and the new WIC program offering. Recently, INPUT released a report examining the WIC program and the contracting opportunities available to venders. The report, The Special Supplemental Nutrition Program for Women, Infants and Children (WIC), is available here. In concert with the report and product launch, INPUT will host a webinar on WIC on Tuesday, July 27, 2010, at 2:00 p.m. EDT.

The Office of the National Coordinator for Health Information Technology (ONC) established a web forum for health information technology (HIT) stakeholders to open the lines of communication and learn from each other's challenges and successes. The webpage, "Health IT Journey: Stories from the Road," currently includes articles published in professional journals, news outlets, and user stories, including one from Urban Health Plan in South Bronx, New York. It also features a piece from Dr. Russell Kohl of Green County Family Medicine in Vinita, Oklahoma. Dr. Kohl is an Air Force veteran and grew accustomed to the streamlined processes and system efficiencies of the Air Force's medical system while deployed in the Middle East. He worked with the Oklahoma Foundation for Medical Quality (OFMQ) to fund the adoption of health IT at his rural, two-person practice. Dr. Kohl highlights his vendor selection process, which ultimately resulted in a system that uses a universal database technology that simplifies data extraction. The story details implementation issues and the reaction of his community. He concludes with the following recommendations:

• Establish contacts and support with other adopters
• Be 100% committed to implementation
• Funding is available and accessible
• More efficiently tracking patient care will actually result in increased practice income

The forum is a creative way to connect physicians and health care facilities and provide valuable insights on the HIT implementation journey of early adopters. This website encourages open discussion about the adoption process and fosters outreach and education. National electronic health record (EHR) adoption is reportedly hovering around 15% to 25% and is just beginning to extend beyond the early adopters group into the early majority. Continuing to engage stakeholders and address concerns regarding the learning curve, costs, and benefits will help facilitate increased adoption rates.

INPUT's Take:

As this forum continues to grow in content and participation, it will provide a candid look at provider perspectives, which will help EHR vendors better understand market needs. These insights will be valuable in understanding barriers from a technology aspect, such as user friendliness, training, and market positioning.

The Institute of Education Sciences (IES) awarded 20 states with $250 million this week through its Statewide Longitudinal Data Systems (SLDS) Grant Program. The grants, funded through the American Recovery and Reinvestment Act (ARRA) of 2009, provide states with the support needed to develop and implement data systems that track students from childhood into their careers. These data systems will adhere to all privacy and confidentiality laws and will help drive state and local educational systems toward improved student learning and higher student achievement.

Since the program's conception in 2005, 73 grants have been awarded. The May 2010 grantees are as follows:

Arkansas - $9.8 million

Colorado - $17.4 million

Florida - $10.0 million

Illinois - $11.9 million (INPUT Opportunities 56716 and 56712)

Kansas - $9.1 million

Maine - $7.3 million

Massachusetts - $13.0 million

Michigan - $10.6 million

Minnesota - $12.4 million

Mississippi - $7.6 million (INPUT Opportunity 61101)

New York - $19.7 million

Ohio - $5.1 million

Oregon - $10.5 million

Pennsylvania - $14.3 million

South Carolina - $14.9 million

Texas - $18.2 million

Utah - $9.6 million

Virginia - $17.5 million

Washington - $17.3 million

Wisconsin - $13.8 million

These grants are all part of the cooperative agreement program in which awardees will maintain a relationship with the National Center for Education Statistics (NCES) through annual project updates. The cooperative agreement also allows grantees to share useful resources, such as informative documents on the design and development of longitudinal data systems, and non-governmental technical consultants that assist with all stages of the system. The agreement also offers grantees the ability to collaborate with colleagues across states.

Grants awarded in 2010 also include the requirement to expand longitudinal systems from K-12 to P-20 (pre-school through career). New systems funded by the 2010 ARRA grants will match students with instructors and monitor improved academic achievement based on student/teacher placement.

For more information on the Statewide Longitudinal Data Systems Grant Program and abstracts for individual state projects, please visit the program's website.

The New York Metropolitan Transportation Authority (MTA) is currently soliciting bids for Wireless Broadband Services for the MTA Long Island Rail Road and MTA Metro-North Railroad. MTA has estimated this project to exceed $20 million. On May 3, 2010, MTA released Addendum #1, which extends the proposal due date to May 31, 2010. The addendum also provides some long-awaited information on the vendors who responded to the Request for Expressions of Interest (RFEI) that was issued in July 2009.

The vendors who responded to the RFEI include:

• ALSTROM Transport Information and Security Inc
• AT&T
• Cablevision
• EIA Datacom Inc
• Ericsson Inc
• Icomera
• JiWire Inc
• Long Range Communications
• Manovega Communications
• Mastech Enterprises Inc
• Nomad Digital Limited
• PierCon Solutions LLC
• The Railband Group LLC
• Sprint
• SurfLink LLC
• Terminal Exchange Systems
• Verizon Wireless
• WAAV Inc
• WNIS Companies

The vendors who responded to the RFEI and also met with MTA include:

• AT&T
• Cablevision
• Ericsson Inc
• Nomad Digital Limited
• The Railband Group LLC
• Verizon Wireless
• WAAV Inc

The vendors who attended the pre-proposal conference for the current RFP include:

• AT&T
• Bombardier
• Cablevision
• Com-Logic Partners LLC
• Concourse Communications
• Cozen O'Connor
• General Dynamics
• GE Transportation- Intelligent Controls Systems
• Greenberg Trauig LLP
• Interactive Elements Inc
• Mobilite
• Nomad Digital LTD
• Railband Group
• Siemens
• Snyder & Snyder LLP
• Verizon
• Verizon Wireless
• WAAV Inc

As you can see, this project is highly competitive and there is a lot of money at stake. INPUT estimates that a contract for this project will not be awarded until fall 2010. For more information on this project, please see INPUT Opportunity #57465.