Case Studies

Cloud Computing: The Future of Public Sector IT

By Heather Boerner

August 2010

If the experience of Victoria, Australia’s Department of Human Services (DHS) with Oracle CRM On Demand during the devastating bushfires of February 2009 is any indication, more and more public sector customers may be heading to the cloud.

“[The fire] was a learning exercise for other government departments as they watched the Department of Human Services with the cloud service,” says Grahame Coles, chief information officer at the DHS for the state of Victoria. “It certainly started the process of other departments thinking about, 'Is cloud actually appropriate?’ in a positive sense.”

Australia is not alone. Around the world, public agencies are taking a page from the private sector. For years, private companies have been using cloud services to reduce overhead, scale appropriately, and customize solutions. Now public agencies are finding the same benefits.

“The long-term trend in government is to buy IT as a service, and by-the-drink or on demand,” says Mark Forman, principal and performance and technology practice leader for federal advisory services at global professional services firm KPMG. “That’s because the need for IT fluctuates in government. It fluctuates with the economy and with various new regulations. The ability to scale up and down on demand means that you’ll see more and more that how government wants to buy really fits with the cloud computing model.”

Cloud computing’s arrival as a public sector IT solution comes after years of buildup, says David Lucas, chief strategy officer at Oracle partner Global Computing Enterprises (GCE). Lucas and his team built a shared service financial management system for the U.S. Department of Labor using Oracle Financials deployed on GCE’s cloud solution. The project was the federal agency’s first financial management upgrade in more than 20 years and moved to the vanguard of public sector IT deployments.

But IT advances such as the Department of Labor’s requires a careful review of cloud solutions to ensure they can meet the demands of a public agency. For example, broadband internet access must be universally available for a cloud infrastructure to be a realistic solution. Also, public officials must be convinced that the private data of their citizens can be kept safe, even if it’s not stored in their own servers, at their own location. With advances in secure federal technology, the Department of Labor met both of these conditions.

Although cloud computing’s challenges are real, its advantages are undeniable. Lucas knows this firsthand. Before the Department of Labor went to the cloud, its data was still stored on 20-year-old COBOL-based mainframes.

“We’ve replaced that with a state-of-the-art Oracle solution in a clean sweep,” he says. “That’s a huge change in how government operates.”

For government agencies used to building their data systems from the ground up, such near-instant solutions are revolutionary: They save money because they are no longer required to provide the “care and feeding” of an IT infrastructure.

In other words, governments can get out of the IT business, the change-management business, the training business, the hardware business, and the data center business.

“When you move to the cloud, a whole bunch of stuff is put onto the experts that are the service providers,” says Lucas. “You no longer manage by program but manage by service, and you suddenly focus on your mission instead of upkeep.”

For More Information
State of Emergency
Oracle Public Sector Solutions
Oracle CRM On Demand
Video: Victoria Department of Human Services At Work

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