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One Trillion Reasons: One Year Later

In October 2010 one of America’s great outlets of technology leadership thought published an important paper meant to inform government action towards reducing costs. The organization is the Technology CEO Council, which strives to be the information technology industry’s number one public policy advocacy organization. It is comprised of Chief Executive Officers from America’s leading information technology companies. I admire and respect this collective and wish the environment in DC was more receptive to their many suggestions. These are smart folks, and, although it is certainly true that they have agendas and we would never want government leaders to blindly except their every recommendation, it is also true that now more than ever our government needs the advice of great IT leaders.

The document they published in October 2010 is titled “One Trillion Reasons.” I’ve embedded it at the bottom of this post, but you can also get it from scribd: One Trillion Reasons or from the Technology CEO Council website.

The introduction to this paper reads:

America’s growing national debt is undermining our global competitiveness. How we choose to confront and address this challenge will determine our future environment for growth and innovation. By adopting commercially proven best practices to maximize operational productivity, government can save over $1 trillion by 2020, while enhancing the services it provides citizens and laying a foundation for future innovation and growth.

This paper offers seven specific initiatives where technology-enabled productivity solutions can make a material difference. We hope these ideas contribute to the important work being undertaken by the National Commission on Fiscal Responsibility and Reform, the President’s Management Advisory Board, the Chief Information Officer and other efficiency initiatives. We look forward to contributing to any and all efforts.

Hard to disagree with anything there. We are about to be treated to seven specific ideas which can make a real difference if acted upon.

The paper puts forward seven ideas and in a way most CEOs are probably very comfortable with, each idea is presented with a figure for estimated savings. The seven ideas and seven savings figures are:

  1. Streamline Government Supply Chains $500B
  2. Apply Advanced Business Analytics to Reduce Improper Payments $200B
  3. Consolidate IT Infrastructure $150-200B
  4. Monetize Government Assets $150B
  5. Reduce Field Operations Footprint and Move to Electronic Self-Service $50B
  6. Move to Shared Services for Mission Support Activities $50B
  7. Reduce Energy Use of IT Systems $20B

Each of those recommendations is then reviewed, and each comes with examples of how success was found using those approaches in the commercial sector.

For example, when it comes to IT consolidation, examples from EMC efforts to help NYC were highlighted, as well as many other government and industry cases. Technologies like Virtualization and strategies like data center consolidation have had dramatic payoff in the commercial sector and, in some cases, in pockets of government.

Each of the initiatives had plenty of examples and ideas. And the paper concludes with thoughts on business strategy that were a pleasure to read.

Better Project Management & Real-Time Course Correction

Information technology enables meaningful change when coupled with improvements in business processes. It’s not the equipment, it’s the new systems and new approaches they allow. Several management best practices could deliver significant additional cost reduction opportunities if implemented across the Federal government landscape in conjunction with those mentioned earlier. These include:

Business Process Management: to provide governance, methodology and tools with which to provide continuous improvement in the agility and performance of an organization’s process environment. Based on private sector experience, such improvements can be expected to yield savings of up to 5% of sales (or costs).

Organizational Change Management: to provide a framework for managing the effect of new business processes, changes in organizational structure or cultural changes within an enterprise on its employees. While there are not industry standard metrics on the ROI associated with this methodology, it has become widely recognized as a critical success factor in the successful implementation of major transformational programs.

Leadership from the Top: to demand accountability and drive real change. We are seeing this at the federal level. States and local governments demand similar leadership. Today, it is difficult for some states to consolidate their IT infrastructure and applications because they are managed by each individual agency with their own budget and IT staff. Each agency wants to retain their budget because that gives them more “power”. A few states have bills in process, legislation or executive orders to complete consolidation efforts, and there is no substitute for such leadership from the top.

So, the bottom line of this paper: an estimate that these initiatives could save a trillion dollars over the next 10 years.

Now here is the hard part. Although I see GREAT things being done in the federal government by some real heros of IT, many of the things in this report and much bigger than just IT. In fact, I’d say they are all much bigger than IT. Implementing goals this big require leadership from the White House and from Congress. I really don’t want to turn this blog into a political blog, but the fact is, till the political atmosphere changes we can’t expect things like this to be fully implemented.

We can, however, expect that individual leaders should do the best they can with what they’ve got and that is the optimistic note I would like to leave you with. I know so many IT leaders in the federal space who are motivated and action oriented and mission focused and they move out on hard actions every day, regardless of budget issues and hard processes and difficult political environments. My optimistic hope is that those mission focused professionals read the information on the Technology CEO Council site, including this paper on One Trillion Reasons, and find implementable pieces of this that can be put in place now. Then when elected leadership comes to government we will all be better prepared.

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