Cloud Computing Not Only Way for Feds to Boost Efficiency, Save Money

Ann All
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How Private Sector Best Practices Can Save Taxpayer Money

As I've written a couple of times, most recently earlier this month, government procurement appears to broken, a problem that is contributing to the spiraling federal debt. Just how bad is the problem of runaway procurement? Check out a stat from a recently-published Federal Cloud Computing Strategy paper authored by federal CIO Vivek Kundra: The Department of Agriculture has 21 different e-mail systems.


As Bernard Golden, CEO of consulting company HyperStratus, writes in a CIO.com commentary containing his views on the paper, consolidating e-mail at just this single agency could offer significant efficiency gains and cost savings.


The Technology CEO Council created a list of eight money-saving ideas it says could cut the government's technology spending. Many of the tips focused on consolidating IT assets and creating shared services, two strategies employed to good effect by private companies.


Kundra recommends a government shift to cloud computing as a logical way to achieve these goals. Haphazard procurement practices have contributed to the government's infrastructure utilization rate of less than 30 percent. If agencies can aggregate demand and standardize IT offerings, the paper predicts utilization rates would increase to over 70 percent. According to the report, some 30 cents of every dollar invested in federal IT was spent on data center infrastructure in 2010. A shift to cloud computing could reduce data center spend by 30 percent.


In addition to efficiency gains, the paper says moving to a cloud infrastructure would also result in agility and innovation gains. Golden zeros in on its mention of helping government IT "shift focus from asset ownership to service management." He writes:

... The report posits that organizations that make the mental shift will manage systems toward output metrics (e.g., SLAs) rather than input metrics (e.g., number of servers). The impact of this shift cannot be overestimated, as it directs behavior toward outcomes rather than inputs. It also has the side effect of pressuring providers to deliver high-quality service, as the inevitable implication of a service orientation is an indifference as to service sourcing and a focus on service benefit. In a word, service orientation means competition.

A focus on outcomes has long been a struggle for government agencies. In my post, I cited remarks from IT consultant Gary Bettis, who noted government procurement tends to focus too much on specific technical requirements rather than desired business outcomes. Thus vendors get no opportunity to offer more cost-effective solutions to deliver desired outcomes.


While consolidating duplicative technology certainly offers ample opportunities for saving money and improving performance, the feds could get some pretty huge benefits simply by reducing duplicative people and processes. In a report that could become a reference point akin to the Department of Defense's $600 hammer, the Government Accountability Office reveals a shocking amount of redundancy in government services.


Some examples, listed in a Washington Post story: More than 100 programs deal with surface transportation issues, 82 monitor teacher quality, 80 address economic development, 56 are devoted to "financial literacy," and 15 agencies or offices handle food safety. Drilling down in a specific example: More than 6,000 workers at five agencies within the Transportation Department oversee some 100 funding streams for highways, transit systems, rail and safety. The overlap costs $58 billion annually, the GAO report estimates.


Oh yes, the GAO report also mentions the government's technical infrastructure. It says the number of government data centers grew from 432 in 1998 to 2,100 today. Consolidation could save taxpayers up to $200 billion in the next decade, according to the report.

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