US Government makes big cut to IT spending

The US government is reducing IT spending by $2.5 billion.

With a bipartisan interest in tackling the mounting debt and spending of the United States, the Office of Management and Budget announced on October 24 that they were cutting billions of dollars in IT spending.

In a post on the OMB’s blog, Deputy Director for Management Jeffrey Zients said that the government would save $2.5 billion over the course of the next three years by improving how agencies use IT resources. Zients explained that the savings would be the result of streamlining redundant projects, cutting programs that were proving themselves to be ineffective and buying technology in bulk. The goal is to not only reduce spending, but also increase the efficiency and effectiveness of the government’s ability to serve the American public, according to Zients.

The savings were identified as a result of a project called PortfolioStat, the latest in a long line of governmental projects aimed at reducing IT costs. According to the blog post, PortfolioStat collected 13 types of IT information from multiple agencies, including data on infrastructure, business systems and enterprise IT, in order to identify the areas in which agencies could reduce costs and improve operations.

The blog post highlighted efforts from the Department of Treasury as an example of how agencies can use technology more efficiently. By consolidating financial management systems, the department will save an estimated $90.3 million and reduce operational inefficiencies created by data redundancy.

The OMB expects savings beyond the $2.5 billion spending cuts that PortfolioStat provides directly.  According to a Federal Times article, by cutting failing projects and streamlining duplicated projects, agencies are free to reallocate resources to improve legacy systems and reinvest in more modern technology. The article reported that PortfolioStat will enable agencies to cut 10 percent of their average budget, which would amount to a $7.7 billion dollar reduction by 2014.

Has the U.S. government done enough to reduce technology spending? Are there any other areas the government could cut down on excess spending?