Feds Announce IT Management OverhaulFeds Announce IT Management Overhaul

Government Innovators

The federal government plans to slash the number of data centers it operates by 40% by 2015, and the Obama administration will push for legislative changes to consolidate more IT budget and management authority in the hands of agency CIOs, administration officials said in a speech Friday in northern Virginia.

The reforms, jump-started by the Office of Management and Budget, come as part of a larger set of "structural changes" and other plans to make federal IT more productive and effective. The policy changes will cap a three-pronged strategy to overhaul federal IT that began this summer with reviews of high-risk IT projects and financial systems modernization efforts.

"A productivity boom has transformed private sector performance over the past two decades, but the federal government has almost entirely missed out," federal chief performance officer Jeff Zients told an audience of contractors in his speech before the Northern Virginia Technology Council. He cited statistics showing that government productivity has been growing at only 1/3 the rate of private productivity for the last few decades. "Fixing IT is central to everything we're trying to do. We've got to spread practices that we know work."

The administration's plan, which comes after deliberation with both industry and government, is five-fold: better align budgeting and acquisitions with the technology cycle, strengthen project and program management, streamline IT governance, increase engagement with industry and adopt "light technology" (think cloud computing) and shared services.

The long lead time for federal IT appropriations and acquisition has long made it hard for federal agencies to quickly adopt new technology. "The iPhone was developed in less time than it takes to prepare a budget and get Congressional approval," Zients said, attributing the quote to Department of Defense deputy secretary Bill Lynn. "Agencies need the flexibility to respond to changes in needs and expectations."

To that end, OMB plans to work with agencies and Congress on pilot projects to introduce flexibility into the IT budgeting process, and the administration is spending an additional $158 million this fiscal year to improve the thinly stretched federal acquisition workforce.

In terms of IT project management, most government agencies fill that function on an ad hoc basis with people from other career paths, Zients said, increasing the chance for failure. OMB is now working with the Office of Personnel Management to create a more formal IT project management career track for the federal government, and, going forward, will not green-light any spending on projects that don't have dedicated project management teams.

One of the core structural challenges to federal IT is that it often operates in a bureaucratic, federated model with, as Zients put it, "layers of accountability" that make decision-making tough and "true accountability almost non-existent." However, OMB's TechStat meetings -- statistics-heavy analysis of the goals and obstacles of federal IT projects -- have been bringing all the key constituents in the projects to the table, and OMB plans to develop corollary meetings at every cabinet-level agency.

Among the bright spots in federal IT project management is the Department of Veterans Affairs, where the agency CIO has been given centralized budget and management authority to an extent not seen elsewhere in government (but seen in most successful private sector IT shops), and has been able to slash poorly working projects and require his project managers to be accountable. Legislation may be required to put this type of authority in place at other agencies, which Kundra said would be the "toughest step" of the administration's policy.

Increased industry engagement will entail cutting through misconceptions about government's relationships with industry, Zients and Kundra said. The administration's top procurement official will within the next few months launch a "myth busting" campaign to address how agencies can work with industry and will later develop a broader plan for improving relationships with industry. "Too often, you have procurement officials who think their number one job is just to stay out of jail," Kundra said, digging at what he sees as overly risk-averse practices on the part of federal acquisition employees. As for adopting "light technology" and shared services, Zients said, the administration had settled on a "cloud-first" budget policy for 2012, which will require agencies to explain why they are not going to use cloud services. "We will require agencies to default to cloud options whenever a secure, cost-effective cloud option exists," Zients said. Though short on details, Zients said the government planned to stand up "secure government-wide platforms" for infrastructure, e-mail and productivity suites. Part of this prong of the strategy also includes data center consolidation, and Zients announced that the government had set an ambitious goal to reduce the total number of federal data centers by 40%, from about 2,000 to 1,200, by 2015.

Zients also used the speech to highlight areas where he said the administration has been making progress in improving federal IT. A review of federal financial system projects currently under way has reduced federal budgets by $1.6 billion by scrapping two major projects, accelerating delivery times on three and significantly reducing the scope of five others.

Kundra will expand on the broad outlines of the administration's policy on Dec. 9, when he will release an in-depth 30-page report on the upcoming changes. The administration will start working toward several of these changes in coming months, with the "myth busters" acquisition marketing plan to ramp up in January, and other pieces of the plan to follow. For example, pilots of new budget models are due late next spring, as is a firmer articulation of the administration's cloud-first policy.