In FY27, state and local governments are navigating a complex technology environment amid changes in policy, the accelerated adoption of emerging tech, and the rapid growth of digital services and citizen expectations. Cloud adoption continues to impact technology consumption; AI is introducing challenges around data, security, governance and contracting; and agencies are facing mounting pressures to modernize aging systems while becoming more efficient and generating measurable long-term ROI.

The Defense Health Agency (DHA) recently hosted the 2026 Defense Health Information Technology Symposium (DHITS) in New Orleans, bringing together more than 2,200 attendees to discuss the future of military health IT.  The clear message throughout the event was that technology, data, and digital capabilities are increasingly viewed as a combat support capability directly tied to warfighter readiness. 

Send the right data to the right person at the right time, in a secure, discoverable, interoperable and actionable environment. 

Whether or not you attended DoDIIS this year, that was arguably the defining takeaway from the event's senior leaders and conference sessions.

This year, the DOW has made official its priority to advance its AI dominance across all branch services by “becoming an AI-First warfighting force.” AI technologies such as machine learning, natural language processing, and computer AI-vision are being integrated into military operations to improve decision-making, enhance efficiency, and increase autonomous capabilities. Most revealing, however, are the DoW’s budget requests for AI investment, setting the trend for implementation.

On June 2nd, President Trump signed a new AI executive order, Promoting Advanced Artificial Intelligence Innovation and Security, which aims to strike a balance between AI innovation and security. The order directs federal agencies to strengthen AI-enabled cybersecurity defenses and coordinate with private industry on secure AI deployments.

Navigating the Latest CISA Guidance on Agentic AI

The Cybersecurity and Infrastructure Security Agency (CISA), along with the NSA and international partners, recently issued guidance for the Careful Adoption of Agentic Artificial Intelligence (AI) Services.

On May 7, 2026, the FEMA Review Council released its final report recommending a substantial shift in how disaster preparedness, response and recovery are managed nationwide.

As we approach Sled Fiscal Year End (SFYE), SLED agencies are balancing budgets in a constrained environment, addressing rising constituent expectations, tackling growing cybersecurity challenges and supporting accelerated AI adoption.

For industry, this confluence of factors creates both complexity and opportunity. In today’s environment, success in SLED comes down to connecting IT investments to clear and measurable ROI in operational efficiency, modernization, resilience and cost savings.

The FY27 federal budget request was released on April 3^rd, and is providing an initial look at the momentum and impact IT investments will have in the coming years.

The Department of War’s unprecedented $1.5T request underscores attention on national security and pushing towards next-generation warfighting capabilities, while across the whole of government, there is expected to be a continued mandate to drive efficiency, consolidate systems and align technology investments with administration priorities.

In June 2025, Texas signed the Responsible Artificial Intelligence Governance Act into law, outlining statutory requirements for the state’s use of AI. In response to this, the Texas Department of Transportation (TxDOT) released an updated Artificial Intelligence Strategic Plan in January 2026.