What Happened
Cities and towns across the country are finding creative ways to cut information-technology costs by consolidating with other departments, outsourcing, and even becoming “revenue neutral.” Below are some examples, research, RFPs and contracts that might be helpful when considering your own options.
Outsourcing in New Hampshire
To cut costs, the town of Salem, New Hampshire, decided to completely eliminate its information-technology department. Be eliminating the four-person department and replacing it with a private contractor, the town of Salem, New Hampshire, will reduce its budget from $573,000 to $456,000 in 2012. According to recent reports, the firm hired to act as Salem’s IT department is Portsmouth, NH-based Neoscope Technology Solutions. Interestingly, a former systems administrator in the town has filed an ethics complaint related to the outsourcing decision.
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Considerations in East Hampton
East Hampton, New York, recently decided to post an RFP for outside contractors to implement IT services for the town. The RFP came after the finance committee recommended the hire of two additional IT staffers; the town is split on which is the more cost-effective method of providing technology services. A committee of business owners and citizens that was formed to study the IT department concluded that numerous e-gov offerings should be provided by the town, regardless of whether the technology is implemented in-house or not. While this would require an $80,000 investment, annual savings are pegged at $100,000 due to a reduction in staff hours as work becomes automated and moves online. Currently, East Hampton spends about $1 million annually on IT services.
“Comprehensive” Outsourcing in Memphis
The city of Memphis, Tennessee, recently posted a very detailed RFP for IT Infrastructure and Application Maintenance & Support services. The RFP is seeking a “comprehensive” response to managing the city’s “complex” requirements; the winning bid will likely receive a five-year deal worth up $7 million annually. The RFP outlines several key elements of operations including:
- Application Development and Support
- Data Center Operations
- Disaster Recovery and Business Continuity
- Geographical Information Systems (GIS)
- Help Desk and Desktop Support
- Information Systems Security
- Information Technology Officers (Divisional service delivery managers)
- Internet and Intranet Services
- Program Management Office
- Radio Maintenance
- Telecommunications
Memphis currently employees approximately 100 IT employees, who serve more than 4,500 city employees. The RFP details which services will be outsourced entirely, and which will remain in-house.
Self-Sustaining in Mass.
The city of Melrose, Massachusetts, recently got into the IT outsourcing business by building a new data center inside its city hall. The new center is capable of handling IT services for other municipalities, and has a goal of building a self-sustaining IT department by charging for hosting and data services.
Melrose’s IT director, Jorge Pazos, believes his city’s effort to create a regional data center may be the first of its kind in Massachusetts. Prior to launching the new data center, the city reached out to all 351 communities in Mass. to see who may be interested in outsourcing to them. The reaction was surprisingly positive. The town of Essex, for example, recently inked a two-year deal to outsource its data for $6,500 per month to Melrose.
Gov1 was able to get a copy of the Essex/Melrose contract and has posted it here for your viewing. In addition, the department’s Web site includes information on the benefits of regionalized IT departments, including a strategy paper and related resources.
Ongoing coverage of technology issues can be found in the left-hand column of our Web site.