Government technology is rapidly evolving, and the goals of IT management are also changing. In 2026, making every IT dollar count to ensure a maximum return on investment is critical, especially with cuts in federal programs that put the onus on state governments to cover the shortfall.
Understanding the economic framework of information technology is essential for every department and governing body. To guide these investments, Transform Hawai‘i Government has compiled seven basic rules about IT investments, drawing on insights from research organizations and modern industry standards.
7 Rules of IT Investments
1. Align Technology with Business Outcomes
Technology should never exist for its own sake. Every IT investment should drive constituent services and business results. For example, maintaining legacy mainframe support – which is expensive – may be necessary to continue vital services while applications are being migrated to more modern, lower-cost platforms.
2. Beware of Shadow IT
“Shadow IT” – when departments develop and rely on their own local solutions – lacks economies of scale and creates technical vulnerabilities. Centralized, standardized services (like common office software, or an enterprise IT service desk) are more efficient and effective than fragmented systems.
3. Factor in Total Cost of Ownership (TCO)
A low initial sticker price can be deceiving. True IT economics require looking at all short-term costs (including training, change management, and integration) and full long-term costs (including maintenance, customization, security updates, and infrastructure support upgrades).
4. Make Continuous Investments in Modernization
Modernization is not a one-time event; it is a discipline. It takes continuous investments calibrated by system lifecycles. As technology ages, maintenance costs rise sharply. Deferred investment in areas like cybersecurity or infrastructure increases overall risk and cost, much like neglecting physical infrastructure.
5. Shift from CapEx to OpEx
Many organizations have a “Cloud First” policy, which means whenever possible they are shifting from owning IT assets to “renting” services based on commercial offerings from cloud providers. As they do so, the financial focus shifts from Capital Expenditures (fixed assets) to Operating Expenditures (consumption-based). This allows organizations to scale up or down based on actual usage, ensuring they don’t pay for unused capacity.
6. Pursue Labor Efficiencies via Shared Services
Implementing common platforms enable a shared services approach. A central pool of high-demand technical experts can be leveraged across the enterprise if – and only if – there are standardized systems across departments. This requires a strategic approach to modernization and the work force who support it. Central IT focuses on standardized solutions used by many or all departments, while departmental IT focuses on the unique computing systems that drive the mission of individual departments.
7. Data Management Fuels Efficiencies
Enterprise data management is a primary driver of productivity. Government data are notoriously siloed by department, and a tremendous amount of time is spent on studies that require collating and integrating multiple data sources. Reliable data reduce the time staff spends fixing errors and searching for information, while also allowing for faster insights and better decision-making for citizen services.
Harvesting the “Low-Hanging Fruit”
Maximizing IT value can be compared to an apple tree. The tree must be continuously watered and nurtured over time, and harvesting the fruit takes effort. It’s easier to harvest low-hanging fruit than those on the highest branches. Similarly, organizations seeking to maximize IT value should prioritize short-term efforts to generate immediate savings (or cost avoidance) while still pursuing longer term efforts with significant impact. For example:
- Short Term: Enterprise Licensing: Using a unified approach to acquire hardware and software to gain volume discounts represents the lowest-hanging fruit for many organizations.
- Medium Term: Shared Services and Standardized Training: Using common systems wherever possible allows the state to leverage scarce expert resources and optimize the value of training programs. This requires both time and a strategic approach to application systems.
- Long Term: Legacy System Retirement: Retiring aging and expensive IT assets offers a high yield but often takes years (and sometimes decades). The best example is mainframe retirement projects that never seem to end. It should be noted that this is much more than an IT problem – mainframes often persist because they support complex business applications and processes that departmental owners are reluctant to abandon.
The Bottom Line
As we migrate away from costly legacy systems and embrace a common system approach, our measurement of success remains the same: Value. IT value is measured by the efficiencies gained by the workforce and the tangible benefits delivered to the citizens of Hawai‘i. By following these seven rules, we ensure that our technology budget isn’t just a cost center – it’s an engine for better government.