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From Legacy to Leading Edge: How To Budget for Government IT Transformation


by Jason Taylor, VP, Public Sector Sales

Modernizing IT infrastructure as a state or local government agency can seem risky from the outset. There are the upfront costs associated with taking on new infrastructure and the risk of downtime when shifting systems. Plus, stakeholders may push back on this change, wondering why the costs and risks associated with it are worthwhile. Agencies only get a limited budget to spend on IT, and stakeholders may not enthusiastically welcome or understand the ROI for modernization efforts. 

However, maintaining legacy systems and software can incur even higher costs and risks. Over time, it becomes more costly to operate, support, and maintain legacy infrastructure and maintain. Plus, outdated technology and legacy systems may be unequipped to support evolving technology needs and agency missions, directly impacting an agency’s overall effectiveness. As the skills to maintain legacy systems phase out of the workforce, agencies may struggle to find someone to take these roles, putting the agency at further risk. 

The struggle to decide whether to maintain current systems or modernize them is common in the public sector. A 2019 GAO study found that the U.S. spends $80 billion annually – 80% of total government IT spending – on supporting and maintaining legacy IT systems. Even though maintaining systems seems the path of least resistance today, opting to modernize can mean big savings tomorrow. The Census Bureau provides a great example of this: During the 2020 pandemic, the U.S. census was conducted online for the first time, significantly improving the citizen experience by making the process safer and more convenient and saving the agency $1.9 billion – a win-win. 

So, modernizing can save agencies money in the long run and be worth the upfront investment, possible pushback, upskilling, and other associated risks – but agencies need to be careful with the budget. It’s important to budget conscientiously, phasing in new technology slowly and deeply considering the ROI of each investment. 

Zayo is here to help guide the budgeting process so agencies can take on the most cost-effective technologies and maximize ROI. Here are the steps all state and local government agencies should take when budgeting for IT modernization: 

Understand what’s out there 

The first step in the budgeting process will be to understand what’s available. It may be decades since upgrading underlying infrastructure and other technologies, so it’s important to take stock of what exists in the market today. Do research about technologies at every layer and take this step before the budget-setting period. 

Consider the cost of technologies at each layer of the IT stack including: 

  • The network foundation. Leverage fiber infrastructure that can fulfill bandwidth, uptime, latency, and geographical reach requirements now and in the future. 
  • Cloud solutions. Explore solutions from various providers, the costs and benefits of each, and how they latter up to organizational and budgetary goals. 
  • Cybersecurity. Ensure protection against all kinds of cyber threats with tools like firewalls, access management tools, DDoS protection, and intrusion detection and prevention systems. 
  • Data management tools. Organizing, storing, and managing data is the first step in taking advantage of it. Consider data management tools as a critical component of modernization efforts. 
  • The next generation of technology like AI, IoT, and machine learning tools. If an agency is early in the modernization journey, it’s likely it won’t use these tools now, but it’s good to know what they cost when the technology foundation is set to leverage them in the future. 

Take a holistic approach

Although taking a phased approach to implementation is key to managing costs and easing the process of change, it’s also important to zoom out and view the bigger technology picture and how it aligns with organizational goals.  

Once an agency has established what technologies to take on and what they’d cost, it’s important to figure out what to accomplish with technology by setting realistic and actionable goals. This will help an agency determine the right combination of tools to help reach the desired end state. The right combination of tools will include a network infrastructure backbone, the proper equipment, software, and management to make it work. 

Plus, it’s important to ensure that all of these technologies integrate well together. Ultimately, every piece of technology the organization implements will need to work together for modernization efforts to be successful. 

Seek successful partners and technologies 

Look for technologies and partners with a long track record of success in their space. Reliability and security are paramount in the public sector – it’s important not to compromise either for the sake of modernization. While early in the modernization journey, explore pressure-tested solutions instead of experimenting with new-to-market solutions. When further into the modernization journey, it’s possible to take greater risks and experiment with new tech.  

Past performance is a good indicator of future success with a lot of foundational technologies. Choose fiber providers, cloud service providers, and other technology partners with a track record of reliable, forward-thinking, secure, and cost-effective solutions. Ask these providers and partners if they’ve worked with agencies in the past and how they’ve enabled success for these organizations. 

Adopt long-term solutions 

The technologies and features considered “modern” today may very well not meet the requirements of tomorrow. Focus on technologies that can scale to meet changing demands over time while ensuring predictability in cost to allow for appropriate budgeting. Modernization is a continuous process, sure, but pivoting and adopting new technologies from new partners every few years to meet changing needs is not sustainable. 

Another part of ensuring solutions are successful long-term is upskilling the workforce. It’s likely employees won’t automatically get the hang of new technologies. Give existing employees the proper training to ensure enthusiastic buy in and hire employees with new technical skills when needed to fill the gaps. 

Explore funding options 

Government funding options for IT projects make it more affordable to modernize.

COVID-19 relief funding like the American Rescue Plan and the Coronavirus State and Local Fiscal Recovery Funds offer options to fund municipal infrastructure builds. Both of these funds have allocated over $300 billion to state, local, tribal, and territorial infrastructure projects to offset the impacts of COVID-19. These funding options drive down recurring network costs due to large upfront asset ownership payments. 

Funding options like these also help state and local governments to create core infrastructure assets to be leveraged by last-mile ISPs participating in Broadband Equity Access and Development Program (BEAD) funding. BEAD funding helps ISPs to expand high-speed Internet access to underserved areas where builds have traditionally been cost-prohibitive.

Before last-mile ISP builds are able to happen, though, middle-mile infrastructure needs to be built to connect long-haul fiber networks to the last-mile networks reaching into rural areas. Middle mile infrastructure funding through the National Telecommunications and Information Administration (NTIA) directly helps to fund this connectivity. Middle mile infrastructure makes it more cost-effective to build out last-mile connectivity to rural Internet subscribers, ultimately leading to greater broadband connectivity reach in previously underserved areas. Middle-mile providers like Zayo – the only national provider to receive funding from the latest NTIA grant funding round – make the existence of broadband in rural areas possible. 

If agencies struggle to fund recurring fiber maintenance and operational costs, contract provisions with ISPs can help alleviate some of these costs. Contract provisions stating that the ISP will maintain and operate the fiber network can mitigate these ongoing costs. 

Collaborate with stakeholders at every step

Getting stakeholder buy-in during the modernization process is key. Citizens, employees, and local businesses should have visibility into the modernization efforts the agency undergoes and why. Don’t take on a technology that stakeholders aren’t ready for. Survey and speak with each group to understand their needs, how they align with agency goals, and how technology can help solve the challenges they’re facing. 

Zayo: A Trusted Partner in the Public Sector

Zayo offers modern technology solutions that enable agencies at the state and local levels to reach their goals, enhance the citizen experience, and prepare for what’s next. Here’s why government agencies across the U.S. and Canada work with Zayo: 

  • Secure solutions. Zayo’s fortified, reliable network guarantees 99.999% uptime. Plus, our managed SD-WAN and SASE solutions offer visibility into and control over the network. 
  • Modern network infrastructure where it’s needed. Zayo offers scalable bandwidth up to 400G on the majority of our U.S. fiber routes which make up the largest independent fiber network in North America. 
  • Dependable, high-speed connectivity for elevated citizen experiences. Deliver the modern, digital experiences citizens are looking for with high-speed connectivity from Zayo, enabling faster response times and greater access to digital services. 

Read our guide to IT modernization for state and local agencies to learn more.

About the Author

by Jason Taylor

VP, Public Sector Sales

IT Guide to Modernization

Modernizing your IT stack is the first step in providing reliable, accessible digital experiences to citizens. This guide walks state and local agencies through the steps needed to reach IT modernization.