'Ruthless' cost cutting coming to Navy IT

Thursday - 6/9/2011, 7:40am EDT

WFED's Jared Serbu

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By Jared Serbu
Federal News Radio

The Department of the Navy's chief information officer said Navy and Marine Corps IT managers should expect to see "ruthless" internal cost cutting this year in preparation for significant budget cuts.

"We don't know how much that is yet, but it's going to be a big number," Terry Halvorsen said at the DON CIO's May 12 conference in Virginia Beach, Va. "There's no way it can't be a big number."

Halvorsen's office posted an audio recording of the session on its website this week.

To achieve the cost reductions, he said, he's gotten the word from as high as the Secretary of the Navy that if the department is going to take risks with its IT systems, they shouldn't be the ones that directly provide warfighting capability. Instead, he said, the Navy and Marine Corps need to accept risk in their business systems as they look for ways to do things better and cheaper.

"And I fully understand sometimes it's difficult to separate business IT from the rest of IT and from warfighting IT," he said. "But I think we're going to have to make some attempts to do that. We're going to take risk. The one thing I don't want to do is to take risk when we don't have to in any area that affects, call it the tip of the spear, the edge of the battle, the thing that we are in business to do. It is to kill the enemies of the country. That is the business of this corporation if you wanted to put it in business terms."

He said the DON will take a ruthless approach to finding savings in the short term rather than relying on promises of future cost reductions.

"We spend X amount of dollars today. We are going to spend X minus amount of dollars next year," Halvorsen said. "Savings are what we take away. Does that mean we won't look at cost avoidance plans? No, we'll certainly do that. But when we do that, DON's going to be very ruthless in saying, 'OK, we gave you two dollars. You said if we gave you two dollars, in the next year, you would save us four. Not cost avoid, not maybe. You said you'd save us four. We're taking the four.' We are going to be ruthless, because if we don't do it, I guarantee it's going to be done for us."

The first job is getting a handle on how much the Navy and Marines actually spend on IT, something he said his office has been working closely on with the department's financial managers. But Halvorsen's office has identified cost centers that are prime candidates for efficiency gains. They are the usual suspects in government IT: underutilized data centers, expensive, customized software, exploding bandwidth demands, inefficient software licensing practices and huge numbers of duplicative applications on the department's networks.

"We run at least seven—and maybe nine depending how you define them—records management and tasking systems," Halvorsen said. "We are going to one. It makes no sense. I get that they may be meeting somebody's requirement. The question is, is the requirement for maybe a small number of people worth the additional money that we're paying across the board? Not just in the cost of buying that new system, but the cost of sustaining it, operating it and securing it. I'm going to tell you the answer on that one is no. Records management is important, but if I miss something on records management, do you think anything happens to a Marine in the field? I don't either."

Halvorsen said the Navy and Marine Corps will set specific targets for removing applications from their inventory. As of now, they estimate there are close to 2,000 on the department's three main networks.

"We are going to not just put some controls on applications," he said. "We are going to put a money target that says X percent or X dollars worth of applications come of the system in fiscal year 2012. We're going to call it application rationalization, and it will be maybe one of the more unpopular things that's going to happen, but it's going to happen."

The prime targets will be applications or systems that overlap with one another.

"We run multiple systems that basically do the same thing because someone said they can't change their process," he said. "Well, we're going to do the math. And if the math says this 100,000 people are costing us an additional 25 percent against the 1.2 million people we serve, that system is gone. It's a math drill, and we take the money. You are going to see a lot of that this year."