Urgent message to states: Innovate in IT or else :: Editor's Blog at WRAL Tech Wire

Posted Mar. 10, 2010 at 5:10 p.m.

Urgent message to states: Innovate in IT or else

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Editor’s note Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa This article originally appeared in BusinessWeek’s online edition and is reprinted with permission..

By VIVEK WADHWA, Special to Local Tech Wire

DURHAM, N.C. - While Grandma can flip through photo albums on a state-of-the-art laptop or, before long, an Apple iPad, many government agencies and corporations are still entrusting critical tasks to antiquated computer systems that cost a fortune to operate and maintain.

The probtlem is particularly acute at the state level. Each U.S. state has its own unique computer systems to process the same types of information and provide the same services as every other state. Worse, even within states, each division or agency has its own IT department and maintains its own computer systems. We're talking about hundreds of billions of dollars of IT spending every year—on clunky old infrastructure.

Consider California. The most populous U.S. state is more advanced than most, though it faces big IT challenges. It has roughly 130 agencies and departments, each with its own IT staff and computer systems. Each collects its own information and maintains its own databases. The systems of one department are not usually integrated with the systems of another. When they do share data, it is usually through the computer equivalent of Excel spreadsheets. The state has more than 40 separate computer applications to collect the same personal and demographic information about citizens. So, for example, when a business has to update an address, it typically has to inform multiple agencies.

Keeping up with regulatory changes is also a huge burden for the state's IT staff. Simple changes cost tens of millions of dollars and can take years. When President Obama signed legislation extending benefits for unemployed workers in November, out-of-work Californians had to wait as long as two months because the systems couldn't be updated.

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