Navy gives IT office financial clout

OPNAV Memo Establishing ACNO-IT

The Navy is revolutionizing how it manages its information technology infrastructure by giving a central group oversight of spending on warfighting and business systems.

The Office of the Assistant Chief of Naval Operations-IT (ACNO-IT), created earlier this year, will eventually control $6 billion worth of IT spending a year.

The Navy's lack of a complete inventory of the servers it owns illustrates the need for such an organization, said Mark Mohler, assistant deputy director of ACNO-IT, in an interview.

During the Navy's Program Executive Office for IT conference in New Orleans last week, Mohler said ACNO-IT will initially manage a servicewide IT budget of $2 billion. He added that such centralized budgetary oversight is a rarity in the federal government.

"Not many [federal chief information officers] have such authority," he said.

A memo from Vice Adm. Albert Church, Navy staff director, said ACNO-IT will use a capital planning process to establish objectives, set priorities, and direct overall planning and programming for the Navy's enterprise IT and information management systems. The group will officially begin operations Oct. 1.

Mohler said the service needs such centralized management — and the financial clout built into ACNO-IT — to develop a federated IT portfolio to replace today's decentralized IT infrastructure, which consists of thousands of applications, networks and databases built without interoperability or cost visibility.

ACNO-IT wants to consolidate those systems and use enterprise software licenses to cut IT operating costs and free up more funds for warfighting systems, Mohler said.

Ralph Szygenda, group vice president and CIO at General Motors, said the Navy's situation is similar to the one he faced when he took over as GM's CIO in 1996. At that time, Szygenda had no way of knowing the number of servers or applications in use throughout the company and its subsidiaries and divisions worldwide.

Since then, Szygenda said, GM has cut its IT budget from $4.5 billion a year to less than $3 billion. Overall, the company has saved $11 billion from IT consolidation. GM officials channeled $6 billion of that savings back into IT and used the other $5 billion to invest in other areas.

The company achieved those savings by slashing the number of IT systems from more than 7,000 to about 2,800 and by negotiating enterprise deals for hardware and software, Szygenda said.

Besides saving money, Szygenda said GM's IT transformation also broke down barriers between divisions and subsidiaries so the company is now "wired together" for its own kind of warfare on the battlefield of global commerce.

"You can't afford to have islands of automation anymore" in business or the Navy, Szygenda said, because "the bad guys are probably interconnected."

Jim Medeiros, vice president of information services at United Parcel Service, said that based on his experience, the Navy needs to build accountability into its IT management by having a single person to lead the effort.

Medeiros, who runs UPS' global computer operations, has one security manager responsible for software patches, even though some subsidiaries install their own. He added that IT architecture development should be separate from operations.

Both Medeiros and Szygenda said they would be willing to share their experiences with ACNO-IT.

Herb Browne, president and chief executive officer of AFCEA International, said giving ACNO-IT budget authority is "exactly the right thing to do for the Navy."