DOD discovers IT consolidation best practices

New IT investments have played a direct role in the Defense Department attaining a projected $60 billion in operational efficiencies through 2017 — from streamlined business processes and procurement to consolidated IT systems and staff support. Those efforts will be good practice if more drastic budget cuts are handed down.

With the department’s new IT Enterprise Strategy and Roadmap, technology is taking center stage in the effort to save money. But the strategy itself could become a victim of the cuts, thereby jeopardizing its cost-cutting potential.

Many of the strategy’s 26 initiatives require upfront cash outlays, which could prove difficult with the budget ax swinging and Capitol Hill targeting the Pentagon for governmentwide savings. On the other hand, many of the initiatives are already under way or almost sure bets for savings — or both.

DOD officials hope the enterprisewide information environment promoted in the strategy will position the department for savings and greatly improved effectiveness for years to come.

“As we move down toward a more enterprise view and a more enterprise governance structure and architecture that will drive the design of DOD networks, there will be some inherent efficiencies and, ergo, savings at some point,” said Rob Carey, deputy CIO at DOD. “But suffice it to say, there will also be some investments necessary to deliver those more efficient end states. There is an expense. But what we're driving toward will inherently be far more defensible, consistent and secure than what we’ve had in the past.”

DOD spends an enormous amount of money on its networks and technologies, including a requested $37 billion for fiscal 2013, $20.8 billion of which would go into a stovepiped infrastructure cultivated over two decades by the various military services.

“Everyone developed and deployed their own solutions,” Carey said. “It’s like a yard full of dandelions. We have a yard full of systems that work and operate, and now I have to organize, align, consolidate and standardize.”

“We’re moving to an enterprise approach to managing this big environment,” he added. “It’s been left to the military departments, services and the fourth estate to manage, and we’re now enveloping the work they’re doing, combined with the budget as a catalyst to come together into a more consistent future.”

Fire up the jets — or brace for impact?

Should major budget cuts get implemented at DOD, they’re almost certain to have a significant impact on at least some of the strategy’s 26 initiatives. The question is: Which ones will survive as priorities and which will be sidelined indefinitely?

According to DOD’s fiscal 2013 budget proposal, IT consolidation is projected to save the Army, Navy and Air Force more than $4 billion through fiscal 2017. Such measures are already well under way at each of the military services and departmentwide. Therefore, consolidation and its offshoots — which include enterprise messaging, cybersecurity, identity management, cloud capabilities and server consolidation — are some of the current initiatives that are crucial to savings and likely to retain their priority status.

DOD exceeded its target for data center closures in fiscal 2011, ending the year with 55 centers shut down, according to DOD CIO Teri Takai. Currently, DOD has about 800 data centers, and the goal is to get that number down to fewer than 100 by 2017, Carey said.

Donald Adcock, associate CIO for energy IT services at the Energy Department, until recently was executive director of the Army IT Agency, which has handled many of the Pentagon’s physical consolidation efforts. So far, he said the agency has eliminated more than 40,000 square feet of data center space, reduced the cost of user software licenses by 10 percent, increased processor performance by 40 percent and increased server virtualization capacity by 30 percent.

But it’s easier to account for those physical space reductions and resource increases than it is to come up with precise dollar-figure savings. In a September 2011 data center consolidation report to Federal CIO Steven VanRoekel, Takai noted the difficulty in quantifying how much money those efforts have saved.

“Calculating cost savings through data center and server consolidation is a challenge,” Takai wrote. “Many IT expenditures are incurred outside the defined IT portfolio and are difficult to track. Presently, many components in DOD do not capture physical infrastructure and security, building maintenance or other indirect hosting costs.”

Another high-profile effort rooted in consolidation is the enterprise e-mail initiative led by the Army and Defense Information Systems Agency, which is on track for completion by March 2013. DOD officials have recently hinted that the other services are reconsidering their initial reluctance to join the initiative. In fact, the IT strategy outlines plans for all the military services to be part of the platform.

Still, although the Army’s migration to enterprise e-mail is largely already paid for by existing funds, there will be ongoing costs associated with operations and maintenance, not to mention the future expansion of identity access management and other modernization efforts.

Enterprise e-mail is the first real test of agile IT, said Army CIO Lt. Gen. Susan Lawrence at an event in March. In keeping with DOD’s IT strategy, the Army is working on plans for redesigning its security architecture, implementing regional unified capabilities and reforming the way enterprise IT assets are managed.

“How are we going to do this in the day of fiscal constraints? How do we prioritize all that we’re going to do?” Lawrence asked. “The challenge is finding the IT dollars.”

The dangers of going enterprisewide

Although DOD officials have declined to speculate on what initiatives could be in jeopardy if major budget cuts happen, it’s safe to say that some of the more expensive, risky or complex plans could be pushed to the back burner if money dries up.

“When drastic budget cuts come down, DOD leaders are going to look to what they have and how they can use existing funds to make it more secure and efficient or to knit existing capabilities together to provide more with the same or less money,” said Gary Winkler, founder of Cyber Solutions and Services and former Army program executive officer for enterprise information systems. “Those kinds of initiatives are what would be supported.”

In general, any new initiative that doesn’t provide a full return on investment within a year is going to be a non-starter, he said.

Historically speaking, joint programs — particularly joint IT systems — have been difficult to implement because of their complex nature, associated risks and complicated governance structure, Winkler added.

Among the IT strategy’s most ambitious plans are those involving new centralized architectures, which would undoubtedly be expensive and complex in design and implementation.

For example, “the security architecture that exists in the Army is slightly different than the security architecture in the Navy,” Carey said. “As we come up with one architecture that’s based on one of the services, somebody has to change.”

Pinning down the exact costs of those changes is difficult. “There are components of the new architecture that will be different than what anybody has today,” Carey said. “That will require investment. Is it going to cost less than the current structure, more than the current structure or the same? I don’t know the answer yet. The design is under way now.”

The strategy also includes plans for enterprisewide video and voice over IP for both the Secret IP Router Network and the Unclassified but Sensitive IP Router Network. Those features aren’t part of the eight strategies to be executed first, but according to a source who spoke on background, those capabilities would be expensive and need significant bandwidth to run. They would also require the replacement of older telecommunications networks that aren’t compatible, which would entail a major physical and logistical effort.

Applying hard lessons

Whatever DOD leaders do, they must take care to avoid the costly mistakes they have made with enterprise systems in the past, Winkler said.

For example, the Defense Integrated Military Human Resources System, conceived in the mid-1990s, was an enterprise resource planning program for personnel pay and management that was supposed to replace more than 90 separate systems. However, it was plagued by delays and problems with design and implementation, and after an investment of 10 years and $850 million, the system was canceled.

“DIMHRS was conceived during the 1990s, when DOD was going through a contraction after the Cold War and the nation was balancing its budget through defense reductions,” Winkler said. “We’re in a similar contraction now, but two things are different: We’re a more networked world…and the national debt is a threat in and of itself.”

The drive toward joint enterprise services, a joint information environment and joint networks is the right strategy, Winkler said.

“But collectively we’ve all been there before, and we need to see what we did, what worked and what didn’t,” he said. “We need to learn those lessons from the past and do things better this time.”