Federal CIO Touts Shared Services Model - InformationWeek
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5/7/2012
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Federal CIO Touts Shared Services Model

White House's cut-and-invest strategy aims to redirect billions of dollars in IT funding toward shared technology platforms and services.

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With an IT budget that hasn't grown in three years, federal IT leaders are looking for ways to make their agencies more agile and efficient.

The White House's proposed IT budget for fiscal year 2013 is $78.9 billion, a 0.7% decline from the current budget. From FY2009 to FY2013, the federal IT budget's compound annual growth rate has declined 0.0004%, following several years of 7% compound annual growth. If the federal IT budget had continued to grow 7% annually over the past three years, it would stand at $103 billion.

That $24 billion difference between the federal IT budget and what the budget would have been had it continued growing at 7% annually amounts to a "savings" to the government, federal CIO Steven VanRoekel said at InformationWeek's Government IT Leadership Forum May 3 in Washington, D.C. Agencies must adjust to the difference by eliminating duplication and waste from their IT operations and redirecting available funds to new services and applications, or what VanRoekel called a cut-and-invest approach.

Key to the effort is a "shared first" strategy that VanRoekel introduced last October, which calls for agencies to used shared services such as enterprise e-mail. The Office of Management and Budget last week released the new Federal IT Shared Services Strategy, which lays out the plan in detail and provides deadlines for next steps.

[ Learn more about the new, agile approaches to federal IT. See 10 Lessons From Leading Government CIOs. ]

According to the shared-services strategy document, a review of over 7,000 federal IT investments found "many redundancies and billions of dollars in potential services" that could potentially be achieved through consolidation and use of shared services. Agency CIOs should work with other agency executives to identify opportunities to consolidate redundant IT services "at all levels, in all federal sector lines of business, in all program areas, and with all IT acquisition vehicles," according to the report.

Speaking at the Government IT Leadership Forum, VanRoekel pointed to OMB's PortfolioStat program, introduced March 30, as another way to reach the same goals.

PortfolioStat seeks to reduce duplicative systems and services through detailed reviews of agencies' IT portfolios. Using the data gathered, CIOs will establish targets for spending reductions on commodity IT products and services. VanRoekel outlined the steps of the PortfolioStat process: Submit draft plans to consolidate commodity IT by the end of June; hold a first PortfolioStat session by the end of July; finalize commodity IT consolidation plans by the end of August; and transition two commodity IT areas to shared services or consolidated buying through strategic sourcing before the end of December.

PortfolioStat follows earlier OMB-led initiatives, such as TechStat and AcqStat, aimed at reducing waste through improved IT management and acquisition, VanRoekel said.

VanRoekel has been encouraging agencies to operate more like "lean startups" and to tap into the best practices of private sector IT organizations. "We want to scale up the good things, highlight the policies and people who make it easier to inject new thinking into government IT," he said.

Shared IT services, including cloud computing and social media, are less expensive, more efficient alternatives to the IT silos of the past, VanRoekel said.

Where should agencies begin as they look to implement shared services? If an agency has more than one e-mail system, that's an obvious starting point for eliminating redundancy, VanRoekel said. And he advised federal IT managers to have their own ideas for cutting IT expenses and re-investing them into high priority areas. That way, once a PortfolioStat session begins, "we can have that discussion immediately," he said.

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