Wasteful government spending in IT, like government spending in most areas, has resisted significant reform across generations of both people and technology. And so taxpayers should probably not hold their breath for real improvements in costs, strategy or ethics. But it is interesting and perhaps instructive to look at the dynamics of the sporadic efforts to change, particularly as they involve grappling with new cloud, mobile, social and analytics technologies.
The Justice Department this week joined a whistleblower lawsuit against CA Technologies that alleges at least $100 million in IT contract overcharges. This is just the latest in a pattern of mismanagement and mis-expenditures that has challenged the U.S. government for decades, and several efforts have been launched to address it. The White House Office of Management and Budget this month enhanced its guidelines for its IT investment portfolio reviews, while the General Accounting Office reported that 30% of the federal IT investments on the OMB’s IT dashboard are classified as needing attention or of significant concern. In a report this week, federal agencies are struggling to meet a 2012 OMB directive to make all email management and records electronic by 2016.
The House and Senate last month passed the Digital Accountability and Transparency Act (DATA Act) on unanimous votes in the House and Senate. The bill is intended to enforce standardize coding for grant and contract spending as a means to enable more transparency and efficiency in government expenditures.
As in the private sector, governments must find the balance between centralizing for efficiency and management—and allowing departmental control to select and manage the best specialized systems for their needs. The House this year passed the Federal Information Acquisition Reform Act (FITARA), which if enacted would strengthen the role of the CIO with more control over personnel and budget, and direct reporting to department heads or commissioners. Although such direct reporting is one positive step, Simon Szykman, CIO at the Department of Commerce explains a dynamic that any enterprise CIO will recognize: “The answer to how you matter really comes down to senior leadership. I think the CIO matters as much or as little (as) the deputy secretary and secretary and CFO think the CIO matters.”
Not just the feds
Lest anyone believe these failures are endemic to the federal government alone, however, there are states that have struggled with their Affordable Care Act exchange websites even more than the feds have struggled. Oregon’s Governor John Kitzhaber this week announced his intention to sue Oracle over their failed health exchange site, which the state last month decided to move to the federal site. Maryland is rebuilding its healthcare exchange with the software developed by Connecticut. Massachusetts has also decided to scrap its site and start again, perhaps leaning on healthcare.gov for a time; and the state has started to look at its broader pattern of IT contract failures.
Efforts at improvement are global. The Open Government Partnership was last month joined by France as the 64th country seeking best practices and shared standards as part of an international consortium.
More than IT failures
More than massive IT failures, the cost of poor IT choices and execution extends to larger operational and human costs. Earlier this year, the Centers for Medicare and Medicaid Services (CMS) was skewered in an Office of Inspector General (OIG) finding of $75 billion to $250 billion in fraud and waste. Former IBM CEO Sam Palmisano made news in 2010 for reporting an offer to cut $900 billion in fraud in this system, for what was said to be “free”, that the Obama Administration in turn was said to have turned down. In a recent, outrageous example with human cost, the Veterans Health Administration was found this week to have registered only one veteran in an eye injury database for which it received $6.9 million in funding from 2010 to 2014 (while the Department of Defense was able to register 23,663 patients in its database in the same timeframe).
A commitment to the cloud and other new technologies
Still, governments forge on with new IT investments. Cloud, mobile, analytics and social technology are all part of new efforts at innovation.
Salesforce.com this week announced that it has received the authority to operate (ATO) its new PaaS and SaaS Government Cloud offerings under the Federal Risk and Authorization Management Program (FedRAMP). Not surprisingly, Vivek Kundra was Salesforce’s front man on the announcement. This ATO status will ease Salesforce’s adoption in numerous government areas.
Kundra had a decade of local, state and federal tech management experience culminating in a two-and-a-half-year stint as President Obama’s first selection as Federal CIO, where he implemented a “Cloud First” policy to encourage cloud use as part of his broader attempts at reform. (Yes, the path from government procurer and regulator to industries procured and regulated remains well trod.) The big prize to date in cloud, however, has been AWS’s 2013 winning of a $600 million multiyear cloud contract for the CIA that IBM disputed for months afterward.
Beyond its all-too-familiar data gathering on American citizens, the U.S. government this week was reported to have rolled out an analytics-based energy savings pilot. Massachusetts has funded a joint university-industry Open Cloud Project to support big data innovation. The U.S. Marine Corps is testing the use of mobile data access with commercial providers and equipment in the field. And the police have been stepping up their use of social media in tracking crime.
Much government innovation in IT is currently focused on improved, citizen-oriented, front-end access to government services. Wyatt Kash’s recent article in Information Week, however, quotes one official’s longer-term vision. Dr. YoungSun Lee, the head of South Korea’s National Information Society Agency, expects by 2020 to achieve “ambient intelligence…when all humans and things are connected together:
He foresees open data leading to a shift in the ways government will function: from an era of e-government, where information is delivered to citizens, to one where predictive analysis will foster a “creative government,” in which “government provides customized services for each individual.”
In short, government IT tends to have more corruption, waste, and general mismanagement than enterprise IT. Still, they have many enterprise problems writ large. And we can see the following government challenges that also afflict the enterprise:
- A tendency to focus more on managing and minimizing IT spending and costs than on the usually larger, attendant, operational and opportunity costs in the suboptimal application of technology.
- A tradeoff between the well-publicized issues (not reiterated here) of privacy, legality, and the sheer volume of developing government data sources and the emerging new capabilities in well-applied data mining and analysis.
- A teetering balance between governance that brings needed standardization and integration among technologies used across departments and the flexibility required to optimize technology’s use in special, departmental situations.
- An immediate emphasis on new front-end, customer-facing applications and capabilities, while increasingly predictive analytics loom as an impending, transformative force.
Like the government, enterprise CIOs would probably be well advised to welcome the transparency and standards that make simultaneously well-managed and more autonomous department-level management feasible. But the management of people is as important as the management of systems, and the larger operational picture is always key to optimizing both spending and new opportunities.