Agencies to cut billions in commodity IT spending

Wednesday - 10/24/2012, 6:43am EDT

Six months after launching PorfolioStat, the Office of Management and Budget is estimating the concept will help agencies save $2.5 billion over the next three years.

In a blog post posted Wednesday, OMB acting Director Jeff Zients said agencies will save the money through reducing duplicative systems, buying more through strategic sourcing and ending problematic programs.

Jeff Zients, acting director, OMB

"Under PortfolioStat, agencies have collected and analyzed baseline data on 13 specific types of commodity IT investments, spanning infrastructure, business systems and enterprise IT," according to the blog post, which Federal News Radio obtained before its Wednesday publication online. "These areas have the most significant opportunities for reducing waste. OMB worked with agencies to review their data and compare their spending to other agencies and private sector benchmarks in order to assess the agency's current state and develop a list of opportunities to reduce inefficiency, duplication, and unnecessary spending."

Federal Chief Information Officer Steven VanRoekel said earlier this month at the President's Management Advisory Board meeting in Washington that he met with 28 agencies in July to go over their plans around PortfolioStat. VanRoekel said agencies submitted plans in August detailing how they will reduce spending on commodity IT.

He told the advisory council the administration estimated at least $500 million in savings, but the analysis of agency plans produced a much higher projection.

"Agencies identified 98 opportunities to consolidate or eliminate commodity IT areas, ranging from the consolidation of multiple email systems across an agency to the reduction of duplicative mobile or desktop contracts," Zients wrote.

Steven VanRoekel, federal chief information officer

For example, Zients wrote the Homeland Security Department will save $376 million over the next three years by using strategic sourcing to buy mainframe and servers.

"Moving forward, we will be holding PortfolioStat sessions, not only to push agencies to execute on their plans in a timely manner, but also to identify additional areas of savings," Zients wrote.

VanRoekel officially launched PortfolioStat in April with the goal of reducing spending on commodity IT. He said at the time it would help agencies find money to innovate while getting no technology budget increases.

Under the approach, agencies still must transition at least two commodity IT products or services to a shared services provider or to a strategic sourcing contract by Dec. 31.

Additionally, OMB is using PortfolioStat to help agencies figure out how they will cut 10 percent of their IT budget in 2014 and where they want to add back 5 percent in their mission areas.

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