Labor Moves to the Cloud

The Labor Department has moved its entire financial system to what an agency contractor describes as a cloud-based application, the contractor, Global Computer Enterprises, announced on Thursday.

The White House is encouraging agencies to shift their inhouse hardware and software to a shared online environment, a.k.a. "the cloud," to save money and increase efficiency. President Obama has acknowledged that upfront costs may be high but the returns on investment should be higher by renting rather than owning the technology. GCE's seven-year contract with Labor, worth $50 million, marks the department's first financial management overhaul in more than 20 years, according to the company.

This may be the first cabinet-level department to launch an agencywide financial system without buying hardware or software. Officials at GCE, a small business that offers financial management services, said they deployed the application in 18 months. The pre-built system is based on Oracle Financials Release 12.

"Agencies can focus on their core mission-challenges and do not have to invest in hardware, software, and staff to run massive technology solutions," GCE Chief Strategy Officer David Lucas said in a statement. "GCE and DOL have set a high standard for other Federal entities looking to modernize their financial management system and drive good government."

Labor officials declined to comment on what financial functions are in the cloud -- or compare the cost of accessing the new setup to the cost of running its old financial system. Officials also would not say whether the consolidation would affect any federal jobs.