Tech Agency Budget Reflects Modernization, Customer Service Focuses

The California Department of Technology cut its 2020-2021 Fiscal Year budget as the state grapples with an historic downturn brought on by the COVID-19 pandemic, but during the previous fiscal year it had increased its budget to account for customer needs and an ongoing technology modernization.

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As might have been expected in a state contemplating a potential $54.3 billion shortfall in Fiscal Year 2020-2021, California’s technology agency reduced its budget by 4.3 percent compared to FY 2019-2020.

However, in an effort to accommodate ongoing technology modernization, and an unpredictable but rising need for services from customer departments, the California Department of Technology (CDT) had previously increased its FY 2019-2020 budget 9.5 percent. Among the takeaways:

• CDT started FY 2019-2020 with a share of Gov. Gavin Newsom’s first budget that amounted to nearly $402 million – but as the FY 2020-2021 budget revealed, that previous year’s budget actually rose to $460.1 million. This, the California Department of Finance told Techwire via email recently, was largely due to “the additional $50 million one-time expenditure authority granted to CDT’s Technology Services Revolving Fund to support additional procurements of Vendor Hosted Subscription Services on behalf of other entities.” By comparison with its final FY 2019-2020 budget, CDT’s 2020-2021 budget actually decreased 4.3 percent, to $440.1 million.

• The technology agency sought “additional expenditure authority,” it informed Techwire via email, to ensure it would have “the necessary resources to continue current service offerings, accommodate fluctuations in program usage, replace aging hardware, and continue to update software subscriptions as necessary.”

“This adjustment maximizes flexibility for CDT to accommodate the increase in consumption of our Vendor Hosted Subscription Services (VHSS) and Microsoft O365 (Office Productivity) offerings,” a CDT spokesperson said, noting that initial projections for VHSS Office 365 usage by customer departments were “minimal.” Once CDT implemented its cloud first policy and customers grew more comfortable with its offerings, growth increased “significantly” – but that rise “is not predictable or patternable as customers’ business needs may change year to year.” VHSS usage is increasing as it is most often tied to cloud migration and cost mitigation, the official said, and as departments acknowledge the competitive pricing advantage CDT’s VHSS contracts have over independent procurements.

• Among VHSS offerings are Public Cloud - Infrastructure and/or Platform as a Service (IaaS or PaaS), as well as Storage as a Service (STaaS), and Software as a Service (SaaS); and in which CDT has “negotiated and executed contracts for competitive pricing on behalf of the state,” the spokesperson said. Obviously, customers who subscribe can leverage that lower pricing and the ease of obtaining services – using a “simple Service Request (SR) process” rather than embarking on their own procurements.

• The FY 2019-2020 budget increase and its one-time authority empowered CDT to accommodate “increased consumption of Public Cloud, STaaS, e-signature, Salesforce, LMS, and Microsoft O365,” although funds earmarked for VHSS and Office 365 have “mostly been spent.” The expenditure authority was for one time only – but “(a)s customer interest and demand for VHSS/Microsoft O365 increases, CDT may need to request additional expenditure authority to accommodate,” the spokesperson said.

Theo Douglas is Assistant Managing Editor of Techwire.