Feds could save $1 trillion with smarter tech and practices

The federal government could save as much as a cool $1 trillion by 2020 by embracing several IT efforts such as virtualization and cloud computing, according to newly released report from the Technology CEO Council. Though the projects themselves would likely prove ambitious, the larger challenge — predictably — will be the short-sighted, bureaucratic nature of the federal beast.

In a report titled “One Trillion Reasons” [PDF], the IT industry advocacy group outlines seven broad initiatives that it says would be better suited to address the country’s mounting deficit than “draconian, across-the-board spending reductions — or equally sweeping tax hikes.”

“Our government has an opportunity to dramatically reduce spending and cut the deficit, while also improving its level of service to citizens. By harnessing major technological shifts and adopting best business practices, we can not only make our government far more productive, but also foster greater innovation in areas ranging from healthcare to education and energy — innovation that will generate economic growth and job creation.”

Not surprisingly, recurring themes in the report include “consolidate, eliminate redundancies, and reduce waste.” Some of the proposed initiatives include specific technologies that would be central to achieving those goals, such as massive data center consolidation efforts, smart business analytics to uncover payments errors, and electronic collaboration tools.

For other projects, however, the technology is more supplementary to the necessary organizational and cultural changes to shake up stale practices — such as moving toward shared support services so that each individual government agency doesn’t have its own HR, travel, and legal department, or separate supply chain.

Among the group’s suggestions is to consolidate the government’s widespread IT infrastructure. “The Federal government currently spends approximately $76 billion to support its widely dispersed IT assets,” says the report. “We estimate that at least 20 to 30 percent of that spending could be eliminated by reducing IT overhead, consolidating datacenters, eliminating redundant networks, and standardizing applications.”

Technologies such as virtualization and cloud computing could help the feds reduce the number of data centers they run. Combine the reduction in facilities with techniques such as boosting CPU utilization (the current average for the government is 25 percent) and using smarter, more efficient cooling, and the federal government would see a significant drop in operational costs — including a significant chunk from energy savings — to the tune of as much as $200 billion over the next 10 years.

Speaking of cutting energy use, the board proposes other efforts for reducing the amount of wasted electricity and fuel, as well as resources such as paper and ink. Low-power fleet management systems could replace PCs, cutting energy consumption by as much as 20 percent. Supplementing physical travel with voice, video, document sharing, and collaboration tools could slash related expenses by as much as 20 percent as well. (The report doesn’t mention the green benefits of reducing energy consumption, which would help to shrink the nation’s carbon footprint and strengthen its role as a global environmental leader.)

Also on the report’s list of recommended initiatives: Move more processes to an electronic self-service model — that is, don’t make citizens drive to far-flung offices to fill out paper forms in triplicate that are then mailed elsewhere for approval and so forth. The group says that trimming some of the 173 government field offices and moving the 10,000-plus reports they provide online could save the government $50 billion over 10 years.

Mobilizing the government workforce through a telecommuting effort also would help save the government money, according to the report. The report offers an example of the potential savings: “The U.S. Office of Personnel Management reported that the Federal government saved $30 million a day through teleworking during the February 2010 snow storms. More than 1,200 Defense Information Security Agency employees were able to continue to support the mission through the time the Federal government was declared ‘closed.'”

Yet another suggestion posed by the group is for the government to employ advanced business analytics to reduce improper payments, which totaled an estimated $98 billion in 2009 alone. By applying advanced analytic techniques to audits of large-scale transactions (Medicare, tax refunds, food stamps), the feds could save as much as $200 billion over 10 years.

The report does note that technology itself can only do so much in solving a problem, and real change requires better project management — not one of the federal government’s strong suits with so many greedy or incompetent fingers in the pie.

Also necessary is a shift from a mindset that says all spending is bad, period; investing in technology that can demonstrably reduce costs in the midterm, for example, makes sense.

This article, “Feds could save $1 trillion with smarter tech and practices,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.