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Can Better IT Management Save Government $5.8B?

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Can better IT management save government $5.8 billion? The federal government will likely spend $90 billion or more on information technology in the coming fiscal year, and with more spending expected on cybersecurity and health IT down the road, total federal tech spending is going to trend upward.

How then, might the government – which spends three quarters of its annual budget on legacy technology – achieve some semblance of savings?

Some agencies have capitalized on data center consolidation, and the Government Accountability Office suggests at least $8.1 billion in savings to be had through 2019. The Office of Management and Budget is less bullish on data center savings in new policy language released earlier this year, but in any case, these savings stem firstly from physically closing energy-guzzling facilities and secondly from a combination of expected efficiencies and labor reduction.

Earlier this week, the nonprofit Technology Business Management Council unveiled a report outlining a series 21 recommendations that may offer the government another avenue for large-scale savings.

The council describes the Federal Commission on IT Cost, Opportunity, Strategy and Transparency, or IT COST, initiative as an avenue to identify and leverage “private sector best practices in technology cost management” and apply them to the federal sector. Implementing the report – the culmination of a year’s worth of work among a coalition of 70 public and private sector IT leaders – could save the government $5.8 billion.

“In more than 300 private sector organizations, the implementation of (technology business management) has led to so much more than cost savings,” said Chris Pick, Technology Business Management Council president. “(It) is a key driver of competitive differentiation, services transformation, cloud adoption and even career progression. We believe that it is our duty to take these valuable private sector learnings and use them to empower our peers in the public sector.”

The $5.8 billion figure the council arrived at comes from applying research conducted by Forrester Research on agency IT spending to TBM methodology, according to a press release. The report emphasizes shared taxonomy – a standardized definition of IT terms like compute, services and business units – for techies, the business side and executives so all stakeholders speak the same language.

The TPM framework appears to be more than just a fancy tech lexicon and may apply as well to feds as it does in industry.

Dave Shive, the General Services Administration’s chief information officer, wrote in a blog post Thursday his agency has used the TPM framework “to implement a standard, generally accepted taxonomy and cost model that uses detailed financial, technical and business metrics to show the value of the use of technology to accomplish business objectives.

“This view of IT spending allows our customers to understand the business value of the portfolio of IT systems, services and tools they invest in through GSA IT, while enabling us to make data-driven decisions and trade-offs between cost, quality and value,” Shive said.

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