The public sector is at a pivotal crossroads when it comes to technology. Government agencies are under increasing pressure to modernize outdated systems, bolster cybersecurity, and optimize budgets—all while maintaining seamless service delivery to citizens. With 2025 in full swing, IT leaders must navigate a rapidly changing landscape filled with new policies, emerging threats, and evolving expectations.
In a recent Tech in Translation podcast episode, we sat down with Nelson Moe, former CIO for the Commonwealth of Virginia and current SLED Principal Strategy Director at Iron Bow, to discuss how government agencies can tackle their biggest IT challenges. Drawing from his extensive experience, Nelson shares insights on modernization strategies, cybersecurity resilience, and workforce development.
Why 2025 Is a Pivotal Year for Government IT
While technology challenges in government are not new, 2025 stands out as a crucial moment for transformation. A combination of factors—including federal and state policy changes, shifting funding sources, and the increasing complexity of cyber threats—makes this a defining year for public sector IT leaders.
According to Nelson, the expiration of federal funding programs such as ARPA and the Inflation Reduction Act means states must transition back to traditional budget cycles. Additionally, upcoming gubernatorial elections in several states will likely introduce new leadership priorities that could reshape IT strategies. Tariffs will likely impact the cost and availability of critical goods in the SLED IT supply chain.
“The reality is, we’re heading into a period where agencies will have to do more with less,” Nelson explains. “That means modernization, security, and efficiency need to be top priorities.”
The Persistent Challenge of Legacy Systems
Many government agencies still rely on outdated technology that is expensive to maintain and increasingly vulnerable to security threats. The struggle to modernize stems from complex procurement processes, budget constraints, and the sheer scale of replacing deeply embedded legacy systems.
Nelson likens the modernization process to running a three-track steeplechase: agencies must align budgets, procurements, and IT projects to cross the finish line together. However, many CIOs don’t have direct control over all three areas, making it difficult to synchronize efforts.
Strategies for Modernization
- Prioritize critical services first – Focus on modernizing systems that directly impact citizen services and security.
- Leverage as-a-service models – Infrastructure-as-a-service and software-as-a-service solutions allow agencies to scale efficiently without large upfront investments.
- Engage stakeholders early – Coordinating with procurement officials and budget offices can help align priorities and streamline approvals.
Cybersecurity: Protecting Government Systems in a High-Threat Environment
Cyberattacks on government agencies continue to rise, with ransomware and data breaches posing serious risks to critical infrastructure. While agencies have made progress in adopting Zero Trust models and multi-factor authentication, Nelson emphasizes that cybersecurity must be a collective effort.
“Agencies that operate in silos are more vulnerable,” he warns. “The most effective security strategies are cooperative, where states and local governments share threat intelligence, best practices, and resources.”
Steps to Strengthen Cybersecurity:
- Implement a whole-of-state approach, fostering collaboration between agencies to pool security expertise and resources.
- Adopt Zero Trust frameworks to eliminate single points of failure and improve resilience against attacks.
- Utilize AI-driven security tools to detect and mitigate threats in real time.
- Ensure robust disaster recovery plans are in place to minimize downtime in the event of an attack.
Navigating Tight Budgets: Doing More with Less
With federal relief funding winding down, government agencies need to rethink IT spending to maximize impact. Instead of large capital expenditures, many are turning to consumption-based models such as:
- Cloud services that allow agencies to pay only for the resources they use.
- Managed IT solutions that reduce the need for in-house expertise.
- AI-powered automation to optimize workflows and improve efficiency.
“Government leaders need to be strategic about where they invest,” Nelson advises. “Protect citizen services, prioritize cybersecurity, and embrace technologies that offer long-term scalability.”
The Talent Crisis: Finding and Retaining Skilled IT Professionals
A critical challenge in state and local government IT is the shortage of skilled professionals. Competitive salaries in the private sector often lure top talent away, leaving agencies struggling to fill key roles.
How State and Local Governments Can Attract and Retain Talent:
- Expand internship and apprenticeship programs with local universities and community colleges.
- Offer remote work flexibility to attract a broader pool of candidates.
- Rethink hiring requirements—reducing degree prerequisites in favor of skills-based hiring can open doors to a more diverse talent pool.
- Foster a strong workplace culture where employees feel empowered and engaged.
“People enter public service because they want to make a difference,” Nelson says. “Leaders need to create environments where IT professionals feel challenged, valued, and motivated to stay.”
Looking Ahead: The Future of Government IT
While modernization and cybersecurity remain top priorities, emerging technologies will also shape the future of government IT.
Nelson predicts that artificial intelligence, automation, and smart data strategies will play a larger role in government operations. AI-powered chatbots are already improving citizen engagement, while machine learning is enhancing cybersecurity threat detection. Over time, AI and automation will help agencies optimize workflows, reduce costs, and provide better public services.
“Innovation isn’t about chasing the latest trend,” Nelson emphasizes. “It’s about adopting the right technologies that align with an agency’s mission and deliver real value to the citizens they serve.”
Final Takeaway for IT Leaders
This 2025, government IT leaders must take proactive steps to modernize infrastructure, strengthen security, and optimize resources. While the challenges are significant, the right mix of strategy, collaboration, and technology can drive meaningful transformation.
Nelson’s advice? “Have the faith, have the courage, and keep your eye on the big picture. If you focus on outcomes and empower your team, you’ll find a way to succeed.”
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