A Discussion on the IT Budget -- 2

Bob Evans, senior vice president and content director at TechWeb, and I have been discussing federal IT spending -- too much, not enough, or how do you know? It was prompted by a blog item he posted on Jan. 5. We started the e-mail discussion shortly after.

Below is the latest exchange, which took place jan. 8. Below that is the start of our discussion, which was lifted from the earlier Tech Insider post. We plan on keeping the discussion going as long as it has legs and we invite you to comment as well.

Allan (2:48 pm, Jan. 8): Thanks Bob. Seems to make sense and it would be great to save a few billions of dollars - real money even in Washington.

But I wanted to raise a point that a Tech Insider commenter brought up in our previous post, and that is the federal government is performing some of the most complex and burdensome missions in the world, dwarfing, in many ways, what any one corporation does. And these missions are expanding - big time. Take the Defense Department, which accounts for about half of all federal IT spending, and gobbles up tens of billions of dollars more in the "black IT budget" for intelligence. Defense is fighting two wars now and is gearing up to expand its presence in Afghanistan. That has to be supported by more IT, and that means more spending.

Bob (4:13 pm, Jan. 8): Some great points there, Allan -- you've clearly got some smart readers. But I'm not going to accept those core premises of inevitability and perpetual increases because that just doesn't wash. I'd recommend this: take the Defense Department IT budget and strip it out completely from the rest of the federal IT operations -- it is clearly a different beast with radically different needs. Those include, as you say, the black IT budget for intelligence, the know-how behind advanced weapons systems R&D, and what had better be the world's most sophisticated logistics and supply chain operations. So rather than let the presence of that big and opaque and radically different ingredient distort the whole mix, let's strip it out completely rather than allowing it to give undeserved cover to all the less-esoteric IT operations.

Allan (2:48 pm, Jan. 8):And I think we will probably see more IT spending when President Obama unveils his fiscal 2011 budget soon. The failed Christmas Day bombing attempt caused Obama to call for more technology solutions. Homeland Security Department Secretary Janet Napolitano said yesterday that the department would increase nearly 10-fold the number of those unpopular full-body scanners in airports. The Social Security Administration needs a new (expensive) database center, too. And let's not forget the push for technology in the health care sector. So, there are a lot of new efforts that need IT support and that costs money. You may be disappointed that the 2011 budget proposal will be a double digit increase from 2010. For sure, there is a lot of IT redundancy, but is there enough savings in consolidating these duplicative systems to pay for all these huge new programs? I'm not so sure.

Bob (4:13 pm, Jan. 8): Oh Allan, Allan, Allan! It's not a matter of whether *I* am going to be disappointed or not -- there should be about 270 million Americans (300 million total minus the 30 million in the federal government) who should be disappointed!! Where is it written that just because somebody wants something, he should have it? If businesses were to operate that way, their shareholders would throw the bums out who made such reckless decisions! If private citizens spend what they don't have -- well, until recently anyway -- they eventually have to face a day of reckoning and so we learn not to spend more than we have. Yet for some incomprehensible reason -- and one of your smart folks in the NextGov.com audience, please enlighten me on that -- all of us have allowed the federal government's IT operations to disconnect themselves from the laws of physics, economics, and common sense. What about setting some priorities -- or is that too hard, too daunting, or too unfair? What about requiring rigorous proof of citizen/national value for each project? What about saying that to pay for new Homeland Security stuff, we will cut from (heaven help me) the Labor Department, or the Agriculture Department, or the Interior Department, or somewhere else across the vast federal-government landscape? Or are you telling me and your entire audience, Allan, that there is NOTHING TO BE CUT in all that $76 billion, plus whatever additional largesse that'll be glommed on in the new budget? Are you telling us that each of those $76 billion or $86 billion or $600 billion for 2010 will yield maximum output and maximum value for the taxpayers of this country? Ultimately, decisions about technology are much simpler to make than decisions about strategy, policy, and governance -- and that, my friend, is where CIO Vivek Kundra can make his real mark: by slowing, stopping, and even reversing this ruinous and ultimately counterproductive approach of throwing ever-more billions upon billions of dollars at problems. Because that approach smothers innovation and creativity; it smothers fresh thinking and hard, disciplined thinking; it crowds out the voices of those being served in favor of those being paid; and instead of yielding the new and transparent citizen-driven outcome that Kundra has so eloquently described, it will deliver and reinforce more flab, bloat, waste, inefficiency, and tired, old, and unproductive processes. If Kundra is indeed the new thinker for the new approach--if he's really going to be the leader who drives IT change we can not just believe in but also eagerly invest in--then he cannot afford to enslave himself and the entire federal IT organization to the failed strategy of throwing endless amounts of money plus old and failed ideas at challenges that require new thinking, new technologies, and most of all new leadership.

In closing, Allan, I'm standing at the plate, bat in hand, hoping for a hanging curveball or two from you but all you're throwing at me with these questions is a lot of high-and-tight heat and some wicked sliders -- next time, how about tossing me a fat one right down the middle? Go Nationals --- only 6 weeks to spring training!

Allan (1:44 pm, Jan. 6): Hey Bob, enjoyed your post this week on the ever increasing federal information technology budget -- now at $76 billion -- and what Federal Chief Information Officer Vivek Kundra has or hasn't done about it. It reminded me of what Mark Forman, who was the first to hold Kundra's position during the early years of the Bush II administration, asked when the annual federal IT budget weighed in at $40 billion to $45 billion. He wondered if $40-something billion was appropriate. By raising the question, he really meant to send the message that he believed it not to be too low, but rather too high. Forman thought government's redundant networks -- like payroll systems -- could be consolidated, saving billions of dollars. So, I was wondering, how did you settle on $50 billion a year as a more appropriate figure? It's a good exercise to work through what is the right amount.

As an aside, I would come to the defense of Kundra in one respect: Let's not forget Congress' role in budget making. Kundra's purse strings are just so strong, or rather, shall we say weak. Senators and representatives are the ones who have the final say about spending. Through the president's budget, Kundra can only propose what that spending should be. Over the years, I have seen more instances of money being added into the president's proposed IT budget than taken out.

Bob (2:23 pm, Jan. 6): Allan, great questions---let's start with how I came up with $50 billion as an aspirational target for Kundra to pursue. I fully realize that Vivek Kundra did not create this $76 billion monster -- and with a number so huge and otherworldly, it's important to try to think of it in more manageable terms, so we should think of it as about $210 million per day, every day, 365 days/year. There's no viable reason -- none whatsoever -- that it has to be that much, as proven by some of Kundra's early evaluations of projects across agencies and departments that revealed so many disasters in the making.

In the private sector, the message from the CEO to the new CIO charged with overhauling a bloated and inefficient IT operation would be something like this: "Hey, Allan the new CIO, thanks for jumping into this mess -- you're a very brave guy. But you can count on 100% unwavering support from me in your efforts to bring this mess under control. I'll crack heads, move people out, get the CFO to work with you to reset new budgets to more-appropriate levels, or anything else you need. What you need to do is determine what we need to spend to run our organization in a way that lets us give great value to our customers in return for the money they invest with us, and we both know that new number will have no connection with the runaway madness that existed before."

So why $50 billion as a new target? It represents about a 33% reduction from last year's number, and that number is consistent with the amount by which a lot of private-sector CIOs had to cut their IT budgets in 2009. It has been done and it can be done, and more importantly it removes the crutch of just throwing money at what are clearly some horrendous problems.

As for your second question about Kundra's responsibility: you'll get no argument from me on that -- Congress is responsible for rubber-stamping not just the $71 billion from 2008 but adding on an astounding increase of $5 billion. Very very few -- if any -- corporations in the world spend $5 billion on IT in a single year, yet that's the INCREASE granted to federal IT from the just-print-more-money crowd on Capitol Hill.

But as far as I know, there is no law or federal mandate that says that just because Congress larded up Kundra's checking account with $76 billion that he has to go out and spend it -- that money's now under his control, or at least his influence.

Think what a powerful statement that would make about the end of business as usual were our new federal CIO to say something like this: "Everyone in this country, from citizens to corporations, has had to learn to do more with less and we in the federal IT organization need to grasp that same lesson. Therefore, my management team and I have decided to create a federal IT annual budget that allocates the incredibly large sum of $50 billion to run our operations for this year. It is our hope -- make that our promise -- that we will fulfill the mandate we've been given to reduce the cost of government operations while improving the quality of service to our citizens, and we'll achieve that not through the blunt-force drunken-sailor spending of $76 billion but rather by employing new and better ideas, new and better technologies, and new and better communication and collaboration. In the private sector, studies have shown that there is zero correlation between sheer volume of spending and quality of IT operations, and we intend to prove that's true in the federal sector as well.

That's it for now Allan -- Thanks. --bob