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White House officials try new approach to reduce IT waste

Oct. 19, 2012 - 05:57PM   |  

White House budget officials are taking a closer look at agencies’ information technology projects in hopes of reducing waste.

Until recently, the Office of Management and Budget’s scrutiny of federal IT projects has focused on weeding out failing and costly projects.

But this summer, OMB directed federal IT executives to begin using a new approach — called PortfolioStat — to review their IT projects and acquisitions departmentwide in search of duplicative spending and to identify opportunities to consolidate projects.

OMB officials now are meeting with agencies’ senior executives, including the chief information officer, financial officer, acquisition officer and operating officer, to review how they are investing in email, desktop computers, human resources systems and other IT systems, said Andrew McMahon, OMB’s PortfolioStat lead, at a recent Washington event.

OMB uses data collected for these meetings to show agencies where their spending plans have gaps and weaknesses and how to address them, and how to use the data to develop long-term plans to consolidate IT spending and share services within agencies and across government over the next three years. That data has not been publicly released.

McMahon said OMB also used agencies’ PortfolioStat data to draft its 2014 budget guidance, in which it directed agencies to cut a combined $7.7 billion from their IT budgets and propose ways to redirect those funds to other priority projects. The guidance aims to cut duplicative investments, failing projects, help desks and contracts for email, desktops and mobile devices, according to the guidance, released last month.

Cuts for each agency will be 10 percent of their average annual IT spending from 2010 to 2012. The combined cuts would reduce agencies’ IT budgets from $74.1 billion — the figure in the president’s 2013 budget plan — to $66.4 billion for 2014.

Considering that agencies are not going to see increased budgets, they should be using PortfolioStat to free up spending on legacy systems and reinvest funds in more modern IT, McMahon said.

So far, each major agency has held at least one PortfolioStat. As part of the 2014 budget requests, they must document cost savings and avoidance in fiscal 2013 and future years that result from the PortfolioStat exercise.

The administration expects PortfolioStat will help agencies meet goals to consolidate data centers, share services and move services to the cloud.

At the Commerce Department, officials are consolidating 24 human resources systems down to one by using a process similar to PortfolioStat.

“How does one provide good HR management via HR systems that don’t talk to each other or anybody else?” said Scott Quehl, chief financial officer and assistant secretary for administration at Commerce. “Anytime you want to have strategic management information, you have to do a data call.”

Quehl said executives across the department agreed on a shared services model and prioritized the resources. Bureaus now are in the process of adopting the common system.

McMahon said OMB plans to hold the next PortfolioStat review with agencies in the spring, and there will be greater focus on elevating the CIOs’ authorities during these reviews and using investment review boards.

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