Federal agency CIOs squeeze savings from IT spending

Federal agency chief information officers are chasing down IT cost savings in many different ways this year, while coping with flat and possibly declining IT budgets, speakers said at the TechAmerica Federal CIO Survey Conference on May 3.

Simon Szykman, CIO at the Commerce Department, shared some successful strategies he's used to reduce IT expenditures at his department, something he's been able to do even though “I only control about 1 percent of the IT budget. The other 99 percent is controlled at the program level,” he said.

Szykman said he initially went after easy wins, saving money by consolidating 100 separate contracts for personal computers into a single contract.

“Today, we have a single contract, with significantly better pricing,” he said.

He is considering similar consolidations of contracts for things like purchasing Adobe products, endpoint security and networking gear.

Another avenue for possible savings is consolidation of Help Desk services, starting with Commerce headquarters, where there are six bureaus and six help desks, Szykman said. A help desk consolidation already is underway at the National Oceanic and Atmospheric Administration.

Another example of shared services at Commerce is that the census bureau is now sharing its data center with another bureau, which moved from commercial space and achieved substantial savings for doing so, he said.

Roger Baker, CIO at the Veterans Affairs Department, said his approach is to minimize IT infrastructure costs, while trying to maximize investments in new IT products as much as possible.

At the VA, with so many legacy systems requiring ongoing maintenance, the infrastructure budget would grow ever larger if conscious efforts are not made to reduce it, Baker said.

“If we do not constrain infrastructure cost growth, there will not be any dollars left for investment,” he said.

The department has about 50 cost-cutting projects underway, including “rightsizing” enterprise software licenses and moving printers from the desktop to the network. A printer costs about four times as much to operate on a desktop as on a network, he said.

Investment in improving business systems, including top-priority projects such as electronic health records and the paperless benefits system, will pay dividends in the future, Baker said.

“We spend thousands of millions to save tens of billions,” Baker said. The IT investments generate a return of about 10 to 20 times their initial value, he added.

One of the most difficult aspects of managing a $3.5 billion IT budget is that it is hard to attract top talent while paying salaries much lower than what the IT managers could earn in the private sector, Baker said.

“In my view, we are being penny-wise and pound-foolish,” he said.