The federal government has an $82 billion – that’s billion, with a ‘b’ – information technology budget this year. And much of that will be wasted, according to David Powner, director of IT management issues for the U.S. Government Accountability Office:
“IT projects too frequently incur cost overruns and schedule slippages, and result in duplicate systems while contributing little to mission-related outcomes. Additionally, projects sometimes fail or operate inefficiently, at the cost of billions of dollars.”
Let’s put that in perspective. If you add up all the IT spending from Apple, Google, Microsoft, IBM, and Oracle, it still doesn’t come close to what the federal government spends. Washington actually accounts for about 10% of total U.S. IT consumption, according to data from Forrester Research.
Think about that for a second. The government is big, I grant you that. But it’s not that big. It’s nowhere near that big. And its IT spending is out of control because the bureaucrats running the show have no idea what they’re doing.
If you listen to Powner’s testimony before a senate subcommittee – and yes, that is as masochistic and mind-numbingly boring as it sounds – you get the distinct impression that, if the people running our government agencies were competent executives that worked together as a leadership team, they could easily cut that spending in half.
There appear to be loads of costly issues, but these are the biggest:
Decentralized IT operations. There are 27 different government agencies all operating independently. The amount of duplicative spending is enormous. For example, the government has thousands of data centers that operate at 10-15% capacity – far below the industry average of 60%. Powner says billions could be saved by consolidation.
Could you imagine if corporate America had never learned to centralize IT, human resources, sales, communications, and other functions? Didn’t we do that like in the '80s and '90s? Granted, the downsizing was painful, but had we not done it, no American company would be competitive in the global marketplace.
Enormous open loop projects. Apparently, nobody in Washington knows that you don’t just come up with a huge project, hire a zillion people and a bunch of contractors, turn them loose with a blank check and say, “Let us know when you’re done.”
Now imagine 750 major projects that are probably being run just like that. You can see them all at itdashboard.gov.
According to Powner, there are “too many big bang projects that don’t deliver anything for years and therefore run a high risk of failure.” For example, he says the reason why the Healthcare.gov launch was such a disaster is that there was more or less no incremental or beta testing, project management, or executive oversight.
I guess that’s just how the feds like to role.
Administrative bureaucrats running the show. In a New York Times interview, Powner gave a scathing assessment of how government agencies run IT:
“We don’t define well what we want up front, we don’t have good executive-level management. We don’t identify risks well, or escalate them up the chain in a timely way when things start to go wrong. We don’t have a good skills mix of engineers and architects to have a technical discussion with vendors.”
In the senate panel Q&A, Powner said that agency CIOs are generally not empowered with the authority they need to effectively manage IT projects that are supposed to be their responsibility. So who exactly makes all the critical budget and project management decisions? Clueless bureaucrats.
That’s yet another critical management lesson we learned decades ago in the corporate world: to put decision-making responsibility in the hands of the right people – those with the expertise and information to effectively manage projects and budgets and make the right call as quickly as possible.
All this wasteful spending is great for investors and employees of IT vendors, but for taxpayers, not so much. But you want to know what gets me the most? With thousands of data centers and who knows how many servers, they still managed to lose all Lois Lerner’s emails for the investigation of IRS targeting conservative groups. You buying that? I didn’t think so.
Steve Tobak is a management consultant, columnist, former senior executive and author of the upcoming book, “Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur." Contact Tobak. Follow him on Facebook, Twitter or LinkedIn.