Some states have saved IT dollars by getting vendors to bear part of the cost. Arkansas used a "share-and-save" model to get NIC Inc., formerly National Information Consortium, to develop and manage its Web portal at no cost. NIC pockets a fee of a few dollars every time it issues a license via the portal; citizens get the convenience of online service; and the state skips the up-front investment. "Arkansas appropriates no money for the salaries, space, equipment" for these services, says Arkansas executive CIO Carolyn Walton. In one recent month, Arkansas issued 2,200 hunting and fishing licenses online. NIC, which works with 17 states, says its revenue from developing and managing state portals increased 20% to $8.4 million in the past year.

States also are standardizing IT to cut costs. In the client-server heyday of the 1990s, Michigan decentralized IT and deployed 2,400 servers across the state. It's now slashing the number of servers in half and plans to run multiple systems and applications on each one, making the hardware more productive. Michigan also will standardize on Dell PCs to help cut 10% from its $424 million annual IT budget, acting IT director Passino says.

	Ohio CIO Jackson faces turf battles over consolidation.

Florida, even though it's not facing a budget deficit, is requiring agencies to cut spending by 5% to 10% and has set up an oversight board to approve all budget requests. Part of the board's role is to enforce coordination and standardization among agencies. For IT, the net result has been fewer projects: 166 requests were pared down to 33, CIO Kimberly Bahrami says.

But bureaucratic turf wars can frustrate standardization efforts. Ohio faces a budget deficit of $720 million for the current fiscal year, and a $2 billion gap is expected for the coming year. CIO Gregory Jackson sees interagency cooperation as a way to trim IT expenses. Last year, Ohio saved $12 million in Microsoft licensing fees by buying the software centrally. "I've made the case that when we do things enterprisewide, we can save more money than when we do it individually," Jackson says.

Jackson's pitch isn't always persuasive enough. The state is implementing a $1.2 million Web-based eLicense Multi-Board licensing system from Cavu Corp. so 22 state boards that issue licenses can use one system. It replaces commercial and homegrown systems that can require integrating upwards of 40 databases per board. But the state's Education Department wants to upgrade its existing teachers' licensing system, Jackson says, because agency officials consider their situation unique. "What they budgeted for the system and the proposals that are coming back will make them realize they can't afford it," he predicts.