Agencies’ initial IT reviews reveal major savings potential, federal CIO says

This story has been updated.

Investment review board meetings aimed at rooting out waste and duplication in government information technology portfolios have turned up $500 million in potential savings at just the six agencies reviewed so far, the federal chief information officer said Wednesday.

Federal CIO Steven VanRoekel plans to hold similar PortfolioStat reviews at 20 more agencies through early August, he told members of the of the President’s Advisory Management Board.

The agencies reviewed so far account for $6.2 billion in IT spending or about 16 percent of the government’s civilian IT budget. The savings estimate was based on reducing spending on particular line items at those agencies to governmentwide averages.

The agencies spent an average of $3,400 per employee on computer mainframes and servers, for example, compared with a governmentwide average of $2,000. Closing that gap would save $376 million, VanRoekel said.

The averages came from high-level IT spending surveys agencies delivered to the CIO’s office in June. Each agency submitted data on 13 types of commodity IT investments, including enterprise IT systems, IT infrastructure and business systems, according to VanRoekel’s presentation.

“These aren’t hard and fast,” he warned of the $500 million estimate. “I’m not setting these as achievable goals. I don’t want to overpromise and under-deliver. But it shows us the front of the envelope from which we can reap savings.”

Agencies will be required to turn the results of the reviews into three-year action plans for “reducing waste and duplication to optimize Federal IT spending.” The plans are due by Aug. 31.

VanRoekel launched the PortfolioStat project in March. It’s based on project-level IT spending reviews initiated by his predecessor Vivek Kundra. VanRoekel has credited the reviews with $4 billion in savings on canceled or rescoped projects.

The agencies surveyed spent 9 percent of their IT budgets on telecommunications compared with a 6 percent government average. Closing that gap would save $187 million he said.

The agencies spent $252 per employee on identity management compared with the government’s $195 average. Bringing that in line would yield $15 million in savings.

VanRoekel declined to name the six agencies he’s reviewed so far. His office hasn’t released the high-level IT portfolio surveys and didn’t respond to a Nextgov request seeking information about the surveys in June.

“The…important thing,” he said, “is we’re building a culture of both looking at the bottom of the IT list and cutting it in favor of putting it in the [new capital investments] side and we’re instilling a culture of getting the key players in a room together to rationalize this stuff.”

Correction: The initial version of this article said initial investment board reviews had identified an estimated $500,000 in savings. The actual estimate is $500 million. The article has been updated to correct the error.