Every business has industry-unique requirements that must be attended to when contemplating a business process change as significant as outsourcing.  State government is no different.

Public sector entities across the globe are turning to outsourcing to address extreme financial pressures, with Continental Europe leading the way.  Domestically, the state government community is showing an increased level of interest in IT outsourcing as a resource to address compressed budgets and mandates to consolidate operations.  Several states, including Pennsylvania, Texas, and Georgia, have already contracted with service providers and several more are currently exploring their options.

Most state agencies currently manage and maintain independent IT shops without taking full advantage of the enterprise opportunities of the entire state.  With increasingly tighter budgets, grave security threats, inadequate disaster recovery capabilities, and an aging workforce, central IT organizations in state governments are turning to the market place for help.

From a financial perspective, it is imperative the outsourcing project team address the current and future budget process and ensure continued participation from all agency funding sources.   The key considerations that will ensure a smooth transition with both the state budget authorities and the federal partners include the following:

• Agency participation in the procurement process to build an accurate baseline, including fund source data
• Approval from the appropriate federal office of the proposed billing methodology and uniform rate structure
• Partnership with state budget office to properly fund participating agency budgets for future requirements
• Alignment with service provider on detailed chargeback data needs and
  proper treatment of assets in compliance with federal funding requirements

Failure to meet these requirements is simply not an option.  The risk of jeopardizing funds is too great to the state agency.