Stretching your IT dollars

Ask federal information technology managers about their budgets, and you will likely hear a heavy sigh. Although the government's IT budget is more than $60 billion a year, a large chunk of that money goes to maintaining existing systems. Furthermore, IT money is embedded into some programs' budgets, making it hard to figure out exactly how much is available.

To get ideas from some of the best and brightest workers in the federal IT world, Federal Computer Week invited a group of federal and private-sector executives to a roundtable discussion of what works and what doesn't when it comes to budgets. We asked them to share their experiences with their colleagues, and we sought their ideas about how to share resources without stepping on anyone's toes or playing Robin Hood by taking from the rich agencies and giving to the poorer ones.

The group examined myriad issues, such as the influence of the President's Management Agenda on the budget process and how to handle existing systems, a necessary and draining part of agencies' budgets.

Judi Hasson, an editor at large at FCW, moderated the discussion.

Q: Will you need to find a way to cut costs, or are you in a good space right now? Are you looking to eliminate redundancies? Are you looking to partner with other agencies?

Edward Meagher, deputy chief information officer at the Department of Veterans Affairs:

Well, we certainly have to do cross-government collaboration, and we have very, very active programs with the Defense Department, trying to get our collective acts together in terms of sharing data. I think we're really making some real progress.

In terms of the other government-to-government initiatives, we're certainly very active with the authentication and others. We all probably think this, but the VA is a little unique in that our money comes with restrictions in that we can only service veterans. Not every citizen, obviously, is a veteran, so we have to be very careful about what initiatives we'd get financially involved in because Congress has been real clear with us that that money goes strictly to veterans. So we are not as active, given our size, as we might otherwise be in some of the other, especially customer-facing, citizen-facing, initiatives.

Kimberly Nelson, the Environmental Protection Agency's CIO:

You need to work with other agencies whether it's a tight budget year or not. People might be more inclined to share in a tight budget year. The fact is, at least from our perspective, that we can't achieve our mission without partnering with others — both internally and externally.

I liken a lot of what we do in our integration efforts to just managing an ecosystem. We have air, water, waste programs, and we have to manage that ecosystem. There's only one way to do that and that is if you fully integrate your information and you partner with lots of other people who have your information, like the Interior Department. A large amount of the information we need to understand the condition of the environment comes from Interior, the U.S. Geological Survey and other agencies.

So we can't effectively achieve the EPA's mission without those partnerships. Ultimately, those solid partnerships will reduce our costs and make us more efficient and effective.

Q: Has the government always looked for ways to bridge budgets from one agency to another?

Randy Hite, director of IT architecture and systems at the Government Accountability Office:

I think plans to bridge across agencies existed for quite a while in pockets throughout the government. It's on a more solid footing since the e-government initiatives have come about. But I think that's always been the case in a number of arenas, DOD being the prime example, not only between organizational components within the department but also the department and the intelligence community, for example.

So I think it has been recognized for some time that no entity is an island, and in order to perform effectively, organizations must collaborate. The scope of that is expanding, and with the expansion of that scope and the awareness of it come some obstacles. And the biggest one is negotiating these binding agreements between organizations about what information we are going to share, what information we need and what kind of format that's going to be in.

I think that's one of the biggest challenges the Homeland Security Department has right now because its mission basically spans the entire federal government, state and local governments, and the private sector.

Implementing this cross-entity collaboration, information sharing, is not occurring on any bigger scale than it has at DHS.

Q: How do small agencies, with far less money, deal with getting what they need from industry?

Brett Bobley, CIO of the National Endownment for the Humanities and co-chairman of the Small Agency CIO Council:

Well, right now, the government has a SmartBuy initiative going on, and SmartBuy kind of took off on what small agencies were originally doing, which was to have large contracts that many agencies could take advantage of. But I think the SmartBuy people have found that this is much more difficult than they originally anticipated.

Q: Is there a disadvantage in being the largest agency when you negotiate prices with vendors?

Bobley: I've found that most vendors don't look at the government as one big company. We're not like Boeing. We are the Energy Department and Transportation Department and National Endowment for the Humanities, and they treat us as such, generally speaking.

Stephen Fletcher, the Education Department's deputy CIO and chief technology officer:

And I think their pricing would state that they would want to keep it that way, that they would like to negotiate individually with each agency.

Craig Harper, vice president of federal operations at BMC Software:

If the government could truly act as one entity, there would be a clear cost savings in industry saying, "OK, you know, let's operate that way, and we can create licensing based on that." But it hasn't been practical to do that. There isn't an entity that's been able to bring everyone together. SmartBuy is an effort in that direction, and I think it's a great concept. But more horsepower needs to be put behind it to figure it out and have it make sense for all parties, because I think there is a win-win situation there.

John Reece, consultant and former CIO at the Internal Revenue Service:

I think it depends a little bit, too, on who the supplier is. For many of the big guys that are equally present in the private sector as in the public, their public-sector business is usually lower margin and lower value to them. So they're a little less willing to negotiate in some cases, and sometimes, even the loss of the business may not be that hurtful to them.

Q: When you look at your budget, are there places where you can say, "Let's share with another agency"?

W. Hord Tipton, Interior's CIO:

Well, I think we're doing all of that. To me, it all starts with the architectural piece of it. If we can't form some common lines in our architectures in the data that I provide for the EPA, if it's not in the right format, if it's not some sort of a standard, some type of a top-down arrangement on that, they're not going to charge to change it to whatever form the EPA needs it. That's just money that doesn't need to be spent in a direction like that.

That's a problem that a lot of agencies have. This has been probably my biggest issue — before I can actually share and do these type of things, I've got to get my own act cleaned up internally. We're spread out across 2,400 offices, and we have a history of everybody being decentralized and creating their own standards and doing their own thing. So I've got data in any type of a format that you choose. I've got operating systems that are all over the map. So when it comes time to bring these all together and to link across government, what do I link? Do I link a single Interior link, or do I link 25?

We've been spending a lot of our time looking at it as a phased operation. My frustration is we've got so much lowhanging fruit out there that we could save money and be more efficient that it's breaking the limbs off the trees.

Meagher: It's a struggle internally to figure out how you pay the bills, cooperate, send people to meetings, buy, invest in these initiatives. They're good ideas. I don't think anybody's against e-government. It's obvious that that's what we have to do. But the mechanisms aren't in place to support us making these cross-department initiatives. You have to be very careful you don't break two things while you're trying to do the right thing.

Reece: There are two levels of trying to make your budget work for you. One is a strategic level. The other is a tactical level. And most of the things we're talking about here are tactical in nature.

The strategic view is absolutely critical to a CIO who's going to make decisions about discretionary spending. So it's got to be some of both levels. The risk of being wrong is so high because if you don't spend the money this year, the odds are you ain't going to get it next year. There's always this cultural challenge in the federal world that most private-sector companies don't face. If I save money, I win points.

Q: If I were to say to you I want you to shut down your financial management system and share another agency's system, what would happen? Is that doable?

Nelson: We're examining those options.

Fletcher: Those are doable. But what you want to be careful about is what constraints you stick out there when you say, "Go do this." What are the constraints? And typically, the major constraints are time and resources. And if you constrain both of those, it's doomed to fail. It will never happen.

You have to be able to be flexible with either your time or your resources. That is particularly true when you start out with a plan. You make projections. But when you get further down the process [and] sometimes things change. Budgets change, availability of resources changes, sometimes, surprisingly, even requirements change.

Therefore, you need to be able to adapt and hone as your estimates become more clear. But that's one of the things — where can we share data? What areas can we examine? Does it still have to be useful and beneficial for both agencies to share that information to be able to do that? If it doesn't benefit everybody, there's no sense in doing it.

So the suggestion about sharing somebody else's financial system, if you assure me that it is going to meet my particular needs and it's going to increase my capability and my access to the data that I need, I would be all for it.

Q: But what if you give up something and another agency gives up something so there is a compromise?

Fletcher: What is the reason for giving it up? Why do I have to give up something? So I can save money?

That's one of the questions when we get the pushbacks that we get from the Office of Management and Budget: Is something for the good of the department or the good of the federal government so we can save money? That's fine, but I still have to achieve my departmental mission and goal. And I don't have a problem with saving money. I don't have a problem with sharing data. But I still have to be able to meet my objectives. And so if you're telling me, "Well, let's share data because it's good for everybody, but you have to take a reduction in your capabilities and your functionality and ability to meet your goals and objective," I really have a problem with that. That is not a good situation for any of the departments or agencies.

Reece: This may be a bit of a problem here in this notion of sharing, because when you stop and think in the IT sense, particularly what sharing is about, it's about economies of scale. And economies of scale come when you can set everything up like an assembly, everything basically produces the same. You can have any kind of Ford you want as long as it's black and it's a Model T, right? That's the ultimate in assembly line productivity and economies of scale.

Tipton: You have to have lots of agreements on this, too, and as Randy said, everything takes a spike on this. I can't tell you how many times I've heard OMB officials say, "Well, we can't give you any extra IT money. Where are you going to be saving money?" OK, identify money where I'm going to save, get this located and then where does that money go? There's no guarantee that you get to keep that or to reinvest that in projects, so you have to kind of work what you can on that front. If you don't, it will be gone.

Every nickel that comes into Interior for IT has to be extracted from programs. I get no money for IT, or maybe this financial project is the only one that's got any additional money put on top of that.