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TRANSCRIPT
State & Local: Finding Growth in a Moderating MarketPresented to GovMark CouncilOct, 2nd, 2008
Rishi SoodVice President, Government
2© 2006 Gartner, Inc. All Rights Reserved.
Presentation OutlineState & Local Market Environment•Major Headlines
•Market Segmentation and Solutions Map
•Four Maxim Orientation
Key Technology Issues•User Data: Major Business Issues
•User Data: Leading Technology Priorities
•Leading Agency Solution Summaries (A/F, HHS, PS/J, TR)
•Major Solution Dynamics
IT Forecasts and Major Vendors•Total IT Spending
• IT Spending By Agency
•Competitive Landscape
•Agency Scorecard Evaluation
•SLG Opportunity Map
3© 2006 Gartner, Inc. All Rights Reserved.
State & Local: Major Headlines
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Economic Slowdown Impacts SLG
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New Governors, New Strategies
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Federal Transfers on the Decline
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Budget Imbalances Driving Priorities
SLG Key Issues Government still represents second-largest
vertical market SLG Elections can represent new direction While horizontal opportunities provide new
business, agency domains unlock market Solutions orientation trumps technology
4© 2006 Gartner, Inc. All Rights Reserved.
State & Local Government:Market Segmentation
A/F TR PS CJ HHS NR PW OT
•Admin. & Finance
•Tax & Revenue
•General Services
•Budget
•Assessor’s
•Treasury
•Transportation
•Roads
•Motor Vehicles
•Ports
•Public Safety
•Sheriff’s
•Police
•Fire
•Criminal Justice
•Courts
•Corrections
•Probation
•Parole
•Health
•Human Services
•Social Services
•Youth Services
•Human Resources
•Labor
•Worker Comp.
•Natural Resources
•Environment
•Conservation
•Land
•Water
•Forestry
•Public Works
•Interior
•Other Agencies
•Economic Development
Governor/Mayor
Legislature City Council
Decentralized Market
•50 states
•3200+ counties
•19000+ cities
Source: Gartner Dataquest
5© 2006 Gartner, Inc. All Rights Reserved.
State & Local Government:IT Solutions Map
A/F
•Int. Tax Systems
•Financial Mgmt.
•Purchasing
•Records Mgmt.
•HR Systems
•Retirement
•311
•Other
HS
•Case Mgmt. Systems
•Eligibility Assessment
•Fraud Detection
•Child Welfare
•Child Care
•Child Support
•UI Systems
•WC Systems
•Other
HL
•Medicaid
•WIC
•Electronic Lab Systems
•Disease Surveillance
•Records Mgmt.
•BioT Info. Systems
•Environ. Health
•Other
PS
•CAD
•RMS
•Biometrics
•MDTs
•Mugshot
•Crime Analysis
•Video Surveillance
•Mass Notification
•Other
CJ
•CJIS
•Jail Mgmt.
•Inmate Tracking
•Jury Mgmt.
•Court RMS
•Court Automation
•Other
TR
•ITS
•CAD/CAE
•Fleet Mgmt.
•Driver’s License
•Vehicle Registration
•Project Mgmt. Systems
•Port Security
•Other
PW
•GIS
•Project Mgmt.
•Operations Mgmt.
•CAD
•HR Systems
•Other
NR
•GIS
•Permitting
•Envir. Systems
•Water Resources
•Forestry Mgmt
•Land Mgmt.
•Hazard Waste
•Other
Source: Gartner Dataquest
6© 2006 Gartner, Inc. All Rights Reserved.
State & Local Government: Market Environment
Key Issues
•Continued impact of budget imbalances
•Renewed Focus on Cost Containment/Avoidance
•New CIO Structures
•Increased demand for performance management, data analytics, BI tools
•Hot Agency Segments: Health, Human Services, Transport.
Major Impacts
•Accelerated/Uneven Demand
•Four Maxim Planning
•SLG Elections
Key Outliers
•Length/Depth of Economic Slowdown
•Future Fiscal Issues (Health, Pension, State Specific)
7© 2006 Gartner, Inc. All Rights Reserved.
STV: The New Maxims of SLG
1. Cost Containment 2. Cost Avoidance
3. Revenue Maximization 4. Revenue Generation
•Financial Mgmt. Systems (ERP)
•Budget Projection & Decision-Making Tools
•Outsourced Services
•Eligibility Verification & Fraud Detection
•Medicaid Cost Recovery
•Technology Consolidation
•Integrated Tax & Auditing Sys.
•Toll/Ticket Collection Services
•HHS Reimbursement Practices
•Web Self Service
•Economic Development Services
•Privatization of Gov Assets
Source: Gartner Dataquest
8© 2006 Gartner, Inc. All Rights Reserved.
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
6.8
6.0
5.0
3.8
3.6
Reduce Operational Costs
Enterprise Focus
Increase Collaboration
Program Accountability
Outsource Noncore Processes
Question: What is the level of priority for each of these business issues for your organization (scale 1-7, with 7 = highest priority, 1 = lowest priority)?
State & Local: Priority of Major Business Objectives
Source: Gartner Dataquest
9© 2006 Gartner, Inc. All Rights Reserved.
State & Local: Technology Ratings
6.0
5.8
4.8
4.8
4.8
4.6
4.6
4
0 1 2 3 4 5 6 7
Security
ERP
CRM
Wireless
Business Intelligence
VOIP
Biometrics
Open Source
Q: What are the most important technology priorities for your organization (7=most important, 1=least important)?
Source: Gartner Dataquest
10© 2006 Gartner, Inc. All Rights Reserved.
State & Local : Technology Opportunity Areas
Mid Term Business Intelligence & Video Fraud Detection/Compliance Federal Impacts: Public
Safety, Transportation/DMV, Health
Long Term Major Agency Transformation SaaS, App Outsourcing, and
Utility Computing Web 2.0 & Government
Short Term Infrastructure: Centralization,
ITO, and Networks BPO: Medicaid, Eligibility, Toll Solutions: HS Case, ERP, Tax,
and Agency CRM
11© 2006 Gartner, Inc. All Rights Reserved.
Agency Snapshots: Key IssuesTax
State & County Driven
Rich Agency: Central Revenue Source
KI: Integrated Systems
KI: Audit/PM
KI: BPO Extensions
Messaging: Maximize revenue collection, investigate new sources, automate/privatize services
Transportation
State Driven Opportunity
Rich Agency: Fed Funding & Gas Tax
KI: ITS Reauthorization
KI: Real ID Act/Biometrics
KI: Port Security
Messaging: Improve transport funding models, intermodal connectedness, new terrorism requirements, next generation driver’s license
A/F
State, County and Local Opportunities
Rich Agency: Main IT shop
KI: IT Governance
KI: Focus on Rationalization
KI: ITO Leader
KI: On-Going ERP & New CRM investments
Messaging: Citizen Centric Services, Operational Efficiency, Four Maxims
12© 2006 Gartner, Inc. All Rights Reserved.
Agency Snapshots: Key IssuesPS & J
Local Gov Driven Market
Rich Agency: e-911, Crime, and New Court Fees
KI: Interoperability & Fusion
KI: Major Cuts to Fed Funding & DHS twilight
KI: Increased video surveillance and biometrics
Messaging: Save Lives, Business Process Centric, One Data, Video, Video, Video
Health
State Driven Opportunity
Poor Agency: Limited funds outside of Medicaid
KI: Medicaid Modern. & MITA Certification
KI: Greater CHIPs Roll-out
KI: New EMR Technology
Messaging: Reduce operational costs, increased prevention, integration with Homeland Security
HS
State Driven & County Operated Opportunities
Rich Agency: Major Federal Matching Funds
KI: SACWIS, TANF, Entreprise Case
KI: New Fed Matching
KI: Eligibility BPO
Messaging: Fraud Detection, Case Efficiency, Outcomes and Policy Driven Implementation
13© 2006 Gartner, Inc. All Rights Reserved.
Major Solution Priorities by Agency
Admin./Finance•Core: ERP
•Growth: Integrated Tax, Retirement, 311 Systems
Health•Core: Medicaid & WIC
•Growth: Bioterrorism & Disease Surveillance
Human Services•Core: SACWIS, UI, WC
•Growth: Enterprise Case, Eligibility, Fraud Detection
Transportation•Core: ITS and Driver’s Licenses
•Growth: Port Security
Public Safety•Core: CAD, RMS, MDTs
•Growth: Remote Video Surveillance, Mass Notification
Justice•Core: CJIS and Inmate Tracking
•Growth: Court Case Management, Court Automation
Source: Gartner Dataquest
14© 2006 Gartner, Inc. All Rights Reserved.
State & Local GovernmentTotal IT Spend, 2008-2010
$57.7
$54.5
$51.5
$44.0
$46.0
$48.0
$50.0
$52.0
$54.0
$56.0
$58.0
$60.0
$62.0
2008 2009 2010
In US $ BillionsSource: Gartner Dataquest
15© 2006 Gartner, Inc. All Rights Reserved.
Total IT Spend By Agency, 2008
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2008 $10.3 $9.1 $7.8 $7.8 $5.6 $4.9 $2.3 $2.2 1.1
AF HS TR PS HL CJ PW NR OT
Source: Gartner Dataquest
16© 2006 Gartner, Inc. All Rights Reserved.
Top SLG Vendors
Source: Gartner Dataquest
Arrow indicate momentum
SLG
1. ACS
2. IBM
3. Accenture
4. EDS
5. Unisys
6. Northrop Grumman
7. CGI-AMS
8. Deloitte Consulting
9. BearingPoint
10. Maximus
17© 2006 Gartner, Inc. All Rights Reserved.
State & Local GovernmentGartner Views
Short Term View
Bottom Line
Long Term View
•Four maxim methodology will continue to be an important framework to prioritize technology projects•Agency modernization and new solution implementation represent key initiatives in targeted segments: Human Services (Case), A&F (ERP, Tax), Health (Medicaid, CHIPs, HIEs)
•Additional growth will be driven by Public Safety (Remote Video, Mass Notification), Transportation (License, ITS), and ITO/BPO expansion•Looming fiscal issues and lack of clarity in federal funding represent a potential obstacle to continuous growth
•State & Local Government is an excellent vertical market, with loyal client base, large scale modernization requirements, and relative transparency in funding.•Repeatability of solution offerings represents major margin opportunity within the State & Local Government market.•Access to CXOs continues to be a key differentiator in vendor penetration and success
18© 2006 Gartner, Inc. All Rights Reserved.
SLG Major Agency Scorecard
Agency Size Growth Major Solution Activity
Vendor Match
A/F & Tax
Human Services
Transportation
Public Safety
Justice
A+
Health
Public Works
A
B+
B+
C
C
D
B
A
B+
B+
A
B
C
High
High
High
Medium
Medium
Medium
Low
High
Medium
Medium
High
Medium
High
Medium
Source: Gartner Dataquest
19© 2006 Gartner, Inc. All Rights Reserved.
SLG Solution Opportunity Map
Vendor Addressable Factor
Mar
ket
Op
po
rtu
nit
y In
dex
Target OpportunityExpansion Opportunity
Adjacent OpportunityNon-Aligned Areas
HR
FinancialsRetirement Systems
Inspection Mgmt.
Permitting Sys.
Environmental Sys.
Records Mgmt.
MDTs
Identity Mgmt.
Fusion Centers
Video Surveillance
Tax Assessments
HS Case Mgmt.
Disease Surveillance
CJISCourt Automation
Drivers License
ITS
County 311
20© 2006 Gartner, Inc. All Rights Reserved.
SLG Vendors: A Path Forward
Four Maxim Orientation
Targeted Acquisitions
Rich Area Modernization
Building Standardization
New Tech Models
Back to Transformation
Time
21© 2006 Gartner, Inc. All Rights Reserved.
Recommendations
Remain Focused: Utilize targeted tiering, agency, and partnering approach to enhance market presence
Build Strategy, Then Operate Tactically: Once strategy is defined, vendors should focus on specific agencies/ jurisdictions that will deliver the greatest impact
Solutions Orientation: Vendors must align their technology into major solutions areas that resonate with government CXOs
Changing Competitive Landscape: Major acquisitions, COTS extensions into agencies, rise of new technology acquisition models, etc. provide significant change in competitive positioning and partnering