Will IT Eat Your Agency?

Posted by Mary Davie
on October 31, 2011

Last week I attended the Gartner Symposium/ITxpo 2011 in Orlando. What a conference! It featured great speakers and great ideas for IT, particularly government IT.

I was especially intrigued by Andrea Di Maio and Jerry Mechling’s predictions for government IT spending, because they spoke to problems GSA is already helping to solve.

Constraints on Government IT Spend

Andrea predicts that by 2013, government financial sustainability will join cost containment as a top driver and constraint for government IT spend. What did Andrea mean by “financial sustainability”, and how does it differ from cost containment? The answer is rather bleak: It’s the survival of the services we’re used to the government providing.

Jerry said IT spend will remain a greater portion of overall budgets, even as budgets shrink overall. In the past, IT investment was a “nice to have.” Now, agencies must keep a laser-like focus on their technology budget to make sure it contributes to their core mission.

Who Decides IT Spend?

Andrea also predicts that by 2014, over half of IT spend will be decided outside the IT department in at least 30% of government organizations. This prediction took me aback. If the IT department isn’t deciding what they spend on IT, who is?

One answer is industry. IT investments will be driven by changes and initiatives in the IT industry, not by IT buyers.

The other answer is tightening budgets. Agencies are considering consolidation and transition to shared services models, which will require the IT department and CIO to take on new roles to make that happen. In the near future, CIOs may need to see themselves more as “Enterprise Program Managers” than as pure CIOs.

How GSA Can Help

We have programs in place to assist agencies facing these trends:

Innovative new acquisition models. Our new IT commodity buying solution is coming online this quarter. We’re leveraging the bulk buying power of the government to offer lower prices for leading IT commodities like laptops and warranty services. We’re issuing blanket purchase agreements (BPAs) off of IT Schedule 70 to leverage existing contracts, and we’ll also be creating a more comprehensive solution that’s not limited by today’s processes and systems. From what I heard at the symposium, we‘ll need that future acquisition model yesterday.

IT consolidation. We can help agencies consolidate both their IT systems and the way they manage their IT programs. Our cloud and data center services solutions enable agencies to fulfill OMB’s Federal Data Center Consolidation Initiative and Cloud First policy. In terms of IT program management, the State Department is consolidating more than 100 existing task orders down to four task orders on our Alliant GWAC.

Innovative shared services. For shared services, agencies can look to TEMS, our telecommunications expense management offering, and USAccess, which provides end-to-end identity management services to 90 agencies and over 620,000 employees. Our Assisted Acquisition Services (AAS) can also manage part or all of the IT acquisition process.

Do you agree with these predictions? What do you think will happen to government IT spending in the next few years? What do you think agencies will need to do to adapt? And how can GSA help you?

3 Replies to “Will IT Eat Your Agency?”

  1. Great posting Mary. From the vendor perspective, it’ll be all about the value that we provide and how that value translates into client cost savings (or containment) and what the value is to all the stakeholder’s across our client’s enterprise. Gone are the days where vendors can only be concerned about their immediate client, but now they need to seriously consider their client’s clients. Solutions that address the needs of many stakeholders – and allow the Government to keep a lid on costs – will be successful. Single client, stove-piped or technologically stale systems can no longer be afforded. Cheers. Pete

  2. Thank you Mary for mentioning our predictions.
    just two additional points.
    On the “IT spend remaining a greater portion of overall budgets”, this will not be the case everywhere. A few weeks ago we published a research that looks at how government organizations may spend more or less (as well as more or less differently) in IT, and although there might be agencies ending up spending more, the real change will be that most have to spend differently (this is where we talk about “smart government”).
    As far as “half of IT spend will be decided outside the IT department in at least 30% of government organizations”, decisions will shift to central bodies that are in charge of shared and centralized services (look at what’s going on in Canada) but also – and I would say primarily – to business executives in agencies: decisions about and the use of consumer technology as well as of cloud computing may be taken directly by the business. So you are right: CIOs need to change their roles and figure out what is the right balance between getting more control of IT spend and supporting the business in making their own safe and reasonable choices.

  3. Great post …
    The concept of the CIO role shift I find very interesting when paired with the comments to your post by Andrea Di Maio concerning the centralization of services.

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