Whether budget cuts are 12 percent because of sequestration or a few percentage points or remain flat over the next few years, many agencies are figuring out how to squeeze more and more savings out of their technology budgets.
From the Department of Navy’s goal to reduce IT spending by 25 percent over the next five years to the Interior Department’s consolidation of common systems, the Office of Management and Budget wants agencies to “own” their budget cuts.
To that end, the administration is giving agencies several tools to squeeze the IT turnip tighter. OMB issued the Shared Service Strategy Wednesday, which builds upon the PortfolioStat approach, which builds upon TechStat and the IT reform plan.
“They are all under what we’re calling Share First, which is starting to inject this culture mentality of we need to get smarter about the way we are de-duplifying the U.S. government and driving efficiency and effectiveness,” said Steven VanRoekel, the federal chief information officer, after his presentation at InformationWeek’s Government IT Forum in Washington Thursday.
Agencies will find savings first by looking in the mirror
OMB estimates agencies spend $46 billion on redundant systems. VanRoekel said the goal is to take the money from these duplicative efforts and invest them in new technologies.
“Our lowest hanging fruit right now is optimizing agencies by itself,” VanRoekel said. “We can save billions of dollars by just going in and getting these agencies tuned. But I will be as enthusiastic in these meetings around taking these savings and pouring them back into the mission side of IT.”
VanRoekel said the PortfolioStat approach is the lynchpin to the money saving and efficiency gaining effort.
He met with the PortfolioStat leads for each agency earlier this week.
“This session was really about going through the nitty-gritty detail of here’s what we expect and when, here’s how to approach this, here’s what to do and then culturally setting the groundwork with these folks around here’s what outcomes we want to drive,” VanRoekel said. “One is to go in and look at this commodity stuff and consolidate. Two is we’re going to come up with a cut and invest mentality that we want to drive continued investment in in IT in these agencies so as we find savings, this isn’t about ripping money out of the hands of IT. It’s about re-purposing it about way more important stuff.”
He added if an agency has more than one email system, they should just plan to consolidate them all down to one.
“We will find savings and I want them to have a strategy in place of where they are going to invest that so we can have a conversation that day,” VanRoekel said. “Your senior leadership will be around the table, your CFO, your CIO, your deputy secretary so I want to be able to turn to them and say ‘it’s a good idea to go and invest here.’ So it’s thinking in a very coordinated way.”
Several agencies already are taking a portfolio approach to finding savings.
Commerce changing how it buys IT
The Commerce Department over the last year consolidated 100 contracts to buy computers down to one. Simon Szykman, the Commerce CIO, said the cost savings and efficiency gains are significant. He said there are several other products and services the agency is looking at next.
“We are looking at purchasing Adobe products, end point security and we are looking at potentially doing similar things for networking gear,” Szykman said at TechAmerica’s annual CIO Survey conference in Washington Thursday. “We are not limited by ideas and opportunities. We are limited by bandwidth. The opportunities to become more efficient are pretty significant.”
He said Commerce headquarters includes six organizations and each has their own help desk.
“You can start to ask yourself if you were designing a building from a clean sheet of paper, would you put six helpdesks in it?” he said. “If not, maybe we ought to be planning to do some consolidation.”
Commerce also is working on an acquisition strategy to buy mobile devices and services departmentwide. Szykman said each bureau started to go its own way with mobile computing, but he reined them in to take a more collaborative approach.
At the Veterans Affairs Department, Roger Baker, the assistant secretary for information and technology and CIO, has spent the last three years trying to find savings.
Baker said VA has about 50 projects underway to reduce infrastructure spending, including eliminating most personal printers and re-negotiating enterprise software licenses.
The goal, Baker said, is to squeeze money out of infrastructure and reinvest into mission areas.
“What it’s really about is transforming the businesses of government. If you look at the big heavy lifts we are doing right now, the new electronic health records system and the new benefits paperless systems,” he said. “They are huge dollar investments to transform the business of VA. We will spend hundreds of millions of dollars to save tens of billions of dollars on the business side.”
He said Congress must understand that spending money up front will return 10-to-20 times the amount spent over the long term.
But there are several challenges to learning how to innovate with less.
CIOs say it has to be clear that this is not an IT exercise, but a business effort. CIOs play key roles, but the CFO, mission owner or program manager must play a central part in the initiatives.
Secondly, the culture of the agency is another huge challenge because this approach is changing the way agencies buy, manage and use commodity IT, especially when they move to cloud computing services.
Spending cuts backfire sometimes
Baker said he found out the hard way that sometimes moving funding from operations to mission backfires. “When you start recognizing that if you can’t find money, you have to shut down a third of your desktops and return them to the vendor because they are on lease gives you a little bit of a pause in the morning,” he said. “You can hurt yourself badly if your appropriations staff doesn’t understand that because you are leasing those things. We have 350,000 desktops, if I have to return 150,000 of them to the vendor because I can’t make my lease payment, we have a serious problem. And, oh by the way, if I’m paying that, where’s the money going to come from in other things you expected me to do?”
Baker said this is only a government issue because of the way Congress funds agencies.
Szykman added federal accounting standards don’t account for paying for a service based on use. Agencies are used to buying a certain number of widgets and that’s all.
VanRoekel said he’s working with Congress to ensure it understands how approaches such as PortfolioStat will help ensure money is spent with specific, measureable outcomes in mind.