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My Cup of IT – A Penny Saved…

By Steve O’Keeffe http://bit.ly/iucaAG

Interesting times for America’s pocketbook. Aging population (count me in – I just joined AARP). Sputtering economy. Declining tax base. More demand for services.

Four solutions.

Euthanasia – unpopular with AARP. Increase the birth rate – unpopular with working moms. Increase immigration – unpopular in Arizona. Innovate – send Uncle Sam to the gym.

But, is it possible to change government’s eating and exercise habits? Is Uncle Sam at the breaking point – can he deliver with today’s budgets? And, if we are committed to change, how and what kind of savings could we deliver?

A recent MeriTalk study – Taxing Times – put these and other government efficiency opportunity questions to 150 Federal finance, operations, and performance management professionals. The net upfront, Feds assert that they can drive meaningful savings – 13 percent or $481 billion – from existing budgets. But, the picture’s not all rosy. Fifty-six percent of respondents do not believe their agencies have the funding required to accomplish their FY2012 goals.

So Feds see the opportunity and realize the pressing requirement for change – but can we get there from here? The straight answer is no.

Four problems.

First, agencies lack the necessary budget analysis and insight. Only 47 percent say their agency conducts analysis on operational costs to identify opportunities for increased efficiencies. Thirty-one percent say that insufficient controls and insight into program performance hinder efficiency efforts.

Second, agencies lack disciplined management practices. Just 31 percent say their agency has a formal plan to identify spending inefficiencies. Twenty-seven percent say that management is not making oversight a priority.

Third, agencies are leaving too many stones unturned. Only 18 percent say they analyze their enterprise IT for savings. Nineteen percent review asset management, 27 percent consider program overlap/duplication, and 27 percent mine acquisition/sourcing for greater efficiency and cost reduction.

Finally, and most troubling, Feds report that they lack incentives to cut costs. Some 40 percent cite use-it-or-lose-it budget mentality as a critical obstacle to realizing real savings.

So, is it all doom and gloom, or is there a way to do better? Feds say they need more granular project information and clear executive direction to realize real savings. Thirty-six percent recommend analyzing spending by project and 33 percent call for the ability to prioritize spending by senior execs.

As the old saying goes, a penny saved is a penny earned. Good old-fashioned common sense and a dash of new business intelligence insight promise real returns for our government.

Join me on Wednesday at 10 a.m. at the Newseum for an executive panel discussion of the study. I’ll be presenting with Owen Barwell, Chief Operating Officer of Loan Programs Office, Department of Energy; Debra Bond, Deputy Controller of the Office of Federal Financial Management, OMB; and Clyde G. McShan II, former Deputy Chief Financial Officer, Department of Commerce.

And, if you’re interested in grabbing an early dinner at Denny’s, I’m buying…

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