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Cost savings from IT reform are ... nil?

Jul. 23, 2014 - 06:00AM   |  
By AMBER CORRIN   |   Comments
This picture taken 26 December 2011 show
The Senate Appropriations Defense subcommittee has proposed sizable cuts to the Pentagon's IT spending plan in an effort to trim duplicate programs. (AFP/Getty Images)

Think instituting IT reform is going to save you big money? Think again.

Amid budget crunches and increased demand for technology and capability, many federal agencies are looking to IT as a way to save precious funding. IT can do a lot to give organizations more capability, but promises of savings may be an oversell, according to Robert Gates, former defense secretary.

“IT change is always sold on the basis that it’s going to save money. I’ve been at this for the better part of 30 years and I have yet to see a single dollar saved,” said Gates, who retired as Pentagon chief in 2011. “What happens is another good thing—the new capabilities, the new technologies give us the ability to do more better. So you don’t necessarily save money; I’ve very rarely seen real dollars saved through IT. But what I have seen are leaps forward in capability and efficiency.”


Agenices must break bad habits to modernize IT

Gates, who addressed attendees at the Federal Innovation Summit in Washington on July 22, speaks from experience. The leader behind a massive push for efficiencies at the Pentagon—many of which centered on IT reform—expressed regret that some significant efforts failed at great cost to taxpayers.

Among them: the Defense Department’s failed Defense Integrated Military Human Resources System logistics management program and the still-unresolved issue of shared electronic health records with the Veterans Affairs department. Gates called the latter one of his chief regrets.

“When it comes to major government IT projects, history is not encouraging,” Gates said. “In the time it takes federal agencies to figure out what they need, how to collaborate, make decisions and get congressional appropriations, the technology can become obsolete or the costs increase dramatically. And the sclerotic federal contracting system is not a good match for the fast evolving information world.”

Those lessons may be too little, too late, at least as it relates to Gates’ original goal of returning funds cut from overhead costs for reinvestment in capability.

“It was a unique budget-cutting exercise in the Pentagon in the respect that what they identified in cuts in overhead—in tail, if you will—they had the potential to get back as increased tooth,” Gates said. “My guess would be that the $100 billion that I gave back to the services for investment in military capability has evaporated. I’d be amazed if the services actually saw any of that money. I think my effort to try and anticipate the budget cuts, to get in front of that train, was incredibly naïve in thinking that when that train got rolling, having shown the department actually could cut its own overhead and could get more efficient was going to carry [any] weight whatsoever.”

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