Federal IT Needs A Cost-Savings Dashboard
We need better measures of government IT reform's payback, including concrete numbers on savings and returns.
Federal CIO Steven VanRoekel credits agencies' IT project reviews over the past 12 months with leading to $932 million in savings and other "cost implications." Sounds impressive, but what does that mean? To judge the success of this and other government IT reform efforts, we need better, more concrete numbers on savings and returns.
VanRoekel and agency CIOs often talk about the need to drive greater efficiencies through effective IT implementation, but assessing their progress is near impossible. The federal IT Dashboard, launched two years ago, provides visibility into agencies' IT spending and their on-time and on-budget performance, but it doesn't show savings, return on investment, or other forms of cost recoupment.
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The best we can do is piece together IT savings information as it becomes available, one initiative at a time. For example, in addition to the $932 million in savings VanRoekel talked about on Dec. 8 (the result of TechStat project reviews conducted by the agencies), the Office of Management and Budget estimates the feds will save $3 billion through OMB-led IT project reviews.
In addition, OMB expects the government to save $5 billion through data center consolidation. That includes $630 million over the next four years through data center closures, with the rest coming in subsequent years as a result of reduced capital spending.
The Department of Defense has set savings targets as part of its IT strategy. Earlier this year, the CIO of the Air Force, Lt. Gen. William Lord, outlined $1.2 billion in IT spending cuts and efficiencies to be realized over five years. More recently, the CIO of the Army, Lt. Gen. Susan Lawrence, disclosed plans to "return" $1.5 billion to the Army budget in fiscal 2015.
These billions add up, but to what? There's no place to track the savings and returns associated with the government's approximately $80 billion in annual IT spending.What's needed is an IT savings and ROI dashboard to complement the IT Dashboard that's in place. It would reflect efficiency gains by agency and over the course of years. The federal CIO's recent recap of TechStat savings included line items on terminated and halted programs ($142 million), reduced scope ($152 million), accelerated delivery ($30 million), and eliminated duplication ($455 million). Those are meaningful metrics; OMB must apply them more broadly.
An IT savings dashboard would also provide transparency into where the money is going. Are costs squeezed in one area being reinvested in another? Or are they being returned to taxpayers in the form of reduced spending?
VanRoekel reports to Jeff Zients, the nation's chief performance officer. It only makes sense that the CPO, brought in to oversee federal cost cutting, would have a way to expose the fruits of that labor. Shining a light on those efforts would serve as a powerful motivator for the IT leaders involved.
Federal agencies face $1.2 trillion in budget cuts over the next 10 years, and IT-driven efficiencies must contribute. We need a better handle on where the savings will come from and how they add up.