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2/16/2011
12:40 PM
John Foley
John Foley
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Government Technologist: The $1 Trillion Question

Six powerful CEOs have a big idea for improving government efficiency--but could it possibly work?

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InformationWeek Government Editor John Foley The CEOs of six powerful technology companies took their brash idea for improving government efficiency to the White House on Jan. 31, laying out an eye-popping proposal for saving the feds $1 trillion over the next 10 years. Their proposal demands attention both for its incredible scope--it's 10 times the size of the Defense Department's own austerity plan--and audacious simplicity. But will the plan work?

Not a chance.

To hear IBM chief Sam Palmisano tell it, the tech-driven initiatives the CEOs propose are eminently doable. "This isn't IBM working on Apollo 13 or the space shuttle," Palmisano said during a presentation at the Center for Strategic and International Studies, one day after the CEOs met with President Obama and his cabinet.

Palmisano and Michael Dell first floated their proposal last October. A white paper by the Technology CEO Council (Palmisano and Dell are members) identifies potential savings in seven areas: up to $200 billion through data center and other forms of IT consolidation, another $200 billion by applying advanced analytics, and so on.

It's easy to get excited by such a grandiose plan, but a dose of reality is needed. The business cases behind the plan are flimsy. The authors, for example, say the U.K. government cut $4.8 billion from its annual IT budget, a 20% savings, by adopting cloud computing, but they provide no details on how it did so or how the U.S. could follow suit.

There's also a strong undercurrent of self-interest in the CEOs' vision of tech-enabled "smarter government." Advanced analytics? IBM's a market leader. Data center consolidation? Dell sells servers and storage. Reduced energy use? EMC and Intel are experts.

Don't get me wrong--the tech CEOs are right that Uncle Sam can and must do better in all of the areas they've identified. But the massive challenge isn't as easy as the tech CEOs suggest, and the savings won't be nearly as great. Palmisano, in his presentation at the Center for Strategic and International Studies, challenged the federal government to reduce the number of data centers it operates from 2,094 to 100, and he said that consolidation should entail "months of work, not years of work." On what planet?

Federal CIO Vivek Kundra will be the first to acknowledge the need to accelerate the transformation of federal IT. His 25-point IT reform plan, introduced in December, has six-, 12-, and 18-month deliverables and calls for adoption of "light technologies" that can be deployed rapidly. Kundra is moving a lot faster than his federal IT predecessors to effect real change.

Federal IT leaders are already aggressively pursuing many of the objectives laid out by the Tech CEO Council. What the Office of Management and Budget hasn't done, but must do, is conduct its own rigorous cost-benefit analysis of where federal IT spending will lead to broader cost savings, not just improved efficiencies and services, with an eye on reducing the federal deficit.

No federal IT overhaul or OMB number crunching will approach $1 trillion in IT-related savings. But $50 billion here, $100 billion there--pretty soon you're talking about real payback.

John Foley is editor of InformationWeek Government. To find out more about John Foley, please visit his page.

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