What does Forrester’s IT spend management framework mean for state, local, and educational (SLED) tech leaders? I connected with Yessica Jones, a former State of Arkansas CIO who recently joined the Forrester team, on this topic, and it produced some interesting observations:

  • SLED tech leaders are not expecting funding cuts. In fact, in a recent Forrester survey, 67% of SLED respondents indicated that they expected IT spend to grow in the next 12 months. Yet growth in SLED tech spend is slower than in the private sector, and leaders are telling us that they’re under unprecedented pressure from budget oversight teams to justify their spend. However …
  • SLED tech leaders see a path to spending efficiency. In fact, 80% indicated that they saw opportunities to save 20% or more on spend through application portfolio rationalization. This includes a state Department of Public Safety and Forrester client who identified a multimillion-dollar opportunity to unify fragmented applications into one centralized inventory. This visibility gave the team the confidence to make decisions knowing they weren’t operating in a silo. It can be slow going to drive the change needed to realize these savings due to embedded procurement motions, diverse stakeholders, etc. But SLED IT leaders recognize that the work will be worthwhile, which is huge.
  • When SLED leaders outside of tech were asked why their organizations would be spending more on technology, the top three responses all tied to non-IT leaders taking an active role in technology prioritization and spending decisions.

The last point is particularly important. Forrester’s high-performance IT framework has shown that high-performance IT organizations are more than twice as likely to be collaborating with stakeholders outside of IT to develop tech priorities than non-high-performance organizations. Moreover, entities where IT and non-IT areas collaborate effectively are over 40% more likely to achieve their mission than their peers.

This is the backbone of Forrester’s IT spend nanagement framework: IT and non-IT SLED leaders aligning on what’s really important to their mission, whether it’s better schools, cleaner water, safer cities, or some other objective, then letting their decisions on spend be directed by this collective mission. This is what it means to manage spend versus just cut costs.

The framework splits spend management into three core capabilities — visibility, control and optimization — then defines what maturity within each capability looks like. The framework even spells out what’s happening with the people, processes, and systems in your organization at each level of maturity so that you can pinpoint where you are now and where you want to be.

If you’re ready to launch your own roadmap to spend management maturity, use the IT spend management framework as a guide. And if you want to talk more about how other SLED IT organizations are applying the framework to find savings and better justify spend, feel free to drop me an email at gzorella@forrester.com, or you can set up a guidance session.