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Montgomery County Organizational Reform Commission Discussion o(Privatization Under a full shift to privatization, rather than simply contracting out a particular service, the County would be getting out of the business of providing a service, with the expectation that the private sector would fill the service need. Depending on the service privatized, the County may even sell related assets to one or more of the entities that take over the service delivery. In such a case, the County would no longer oversee the service delivery. However, the County would still be involved through licensing and regulation ofthe given service. In general, candidate services for privatization must generate revenues that exceed expendituresormustatleasthavethepotentialtodoso. Ifnot,thentheserviceisunlikelyto be provided by the private sector unless some form of subsidy by the County or another entity is provided. The ORC work group studying this issue agreed that there are relatively few services provided by the County that meet the above criterion. In these cases, the group focused on privatization options that would, at a minimum, not reduce County revenues and would ideally create positive budget impacts in the long run. Relevant Laws: Depending on the particular service being considered for privatization, there may be local, state, and/or federal laws that would affect if and how such a privatization can be done and/or whether such a strategy would be cost-effective for the County. Information Technology With regard to information technology, the ORC analyzed the possibility of contracting or privatizing in the areas of seat management, Cloud computing, and data center consolidation. The fourth area it studied is that of "thin client computing," an innovation, rather than a contracting/privatization option. County agencies will spend approximately $180 million on information technology in FYIl to support their widely dispersed assets. With a conservative estimate of 10% to 20% savings through consolidation and shared use of resources, the savings to the County could total $18 to $36 million. Background Studies have shown that government costs for operating and managing IT infrastructure are often higher than they need be, in some cases by a factor of more than two. A report recently published by the IBM Center for the Business of Government, Strategies to Cut Costs and Improve Performance, states that at the federal level - at least 20·30% of that spending could be eliminated by reducing IT overhead, consolidating data centers, eliminating redundant networks, and standardizing applications. Our frequent references to the federal government are to provide additional emphasis to the fact that the County has much to learn from the federal experience. - 51PDF Image | Montgomery County Organizational Reform
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