IT Reform Initiatives Add up to $3.6 Billion in Savings

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Federal agencies saved $3.6 billion from Fiscal 2011 to 2014 as a result of the Office of Management and Budget’s (OMB) IT reform initiatives, according to a new report from the Government Accountability Office (GAO).

Four of the 24 agencies that participated in the IT reform initiative – the departments of Defense, Homeland Security, and Treasury and the Social Security Administration – accounted for 69 percent of the savings, or $2.5 billion.

Two agencies – the National Aeronautics and Space Administration and Office of Personnel Management – recorded no savings.

altGAO said a handful of Federal IT programs are responsible for saving agencies money – the Federal Data Center Consolidation Initiative, cloud computing initiatives, the 2010 IT Reform Plan unveiled by Vivak Kundra, PortfolioStat, and the May 2012 IT Shared Services Strategy.

Data center consolidation accounted for $2 billion of the $3.6 billion in savings, or 55 percent.

Specifically:

Treasury saw “$1.05 billion in cost avoidances between FY 2011 and FY 2014 based on year-over-year reductions in the ratio of IT infrastructure spending compared to overall IT spending across Treasury’s IT portfolio. More specifically, the ratio of spending on IT infrastructure to overall IT spending has declined from about 46 percent to about 32 percent due, in part, to the department’s data center consolidation initiative and related efforts.”

Defense recorded “$260.35 million in cost savings between FY 2011 and FY 2014 from efficiencies achieved, in part, through virtualization and operating system reductions, and facility closures resulting in eliminating staff and reducing the facility costs per square foot.”

PortfolioStat, a tool developed by OMB to help eliminate duplicative spending on commodity IT, helped agencies save $800 million, according to the report, and all other programs also resulted in another $800 million in savings.

While agencies are saving money, most don’t have clear plans to reinvest that savings, according to the GAO report, which calls into question how agencies are using the money saved through IT reform efforts.

“While several agencies have established plans in accordance with OMB’s guidance, most ongoing agency reinvestment plans…are incomplete, which raises questions about whether these agencies are in the best position to reallocate funding to the appropriate investments after savings are realized,” GAO wrote. “Until such plans are completed, agencies will be challenged to ensure that their considerable savings are being used in the most efficient and effective manner possible.”

GAO’s full report and highlights of the report are available on its website.

Bill Glanz
About Bill Glanz
Bill Glanz is the content director for MeriTalk and its Exchange communities. Over the past 14 years, he has worked as a business reporter, press secretary, and media relations director in Washington, D.C.
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