Aug 06 2009

Disruptive Thinking

One view of the future for government CIOs: IT management will never be the same.

Disruptive technology is not a new concept. But what about applying disruptive thinking in an extended way — to IT management, acquisition and project governance?

It’s worth consideration by federal CIOs because “working just a little bit harder for a little bit less is not going to cut it any more,” says David Rimmer, director, global government industry, for EDS, an HP company.

Currently, IT budgets average 6.8 percent of total costs for government organizations, according to Gartner research, with 75 percent of the total going to running current operations, 13 percent to enhancing current operations and 12 percent to transforming how work is done.

Agencies in governments worldwide are finding it harder and harder to fund IT programs, Rimmer says. But there’s also the pressure, he says, to make better use of IT to reduce what he calls the business-as-usual cost.

There are basically two approaches to dealing with these pressures. There’s the virtuous circle, in which CIOs adopt a new mind-set toward technology across the enterprise to reduce business-as-usual costs substantially and free up funds to reinvest in IT. Then there’s salami slicing — the more common approach to belt-tightening — in which IT organizations make cuts wherever possible to meet short-term demands for reduced budgets, after which there is little left to pump back into IT investments.

Where are government CIOs today? “In the last month or so, mindsets have started to change,” Rimmer says. “Two months ago, I would have said that many were still in the salami-slicing mode.”

Government budget projections for the next several years suggest a constantly decreasing cost curve, which government CIOs in particular are just not all that used to, he says. “CIOs can’t just hunker down for a couple of cold winters; it’s a climate change.”

This is where disruptive thinking comes in. Here are several ways that Rimmer and Suparno Banerjee, vice president of EDS global government industry, suggest agencies can radically rethink IT management and apply technology in new ways to reap unexpected results:

  • alternative workplace solutions: For example, agencies might use flexible schedules and telework more extensively or figure out how to pull retired works in electronically to maintain skill sets;
  • open-source and other collaborative approaches;
  • cloud computing and data center consolidation;
  • pay-as-you-go sourcing and other new outsourcing models such as turning to the voluntary sector: “CIOs in general don’t want to reduce their cost base; they want to achieve a variable cost base,” Banerjee says;
  • more participative or community models of data services: Barriers between the consumers and providers of services are starting to erode.

When it comes to alternative workplace programs, cloud or utility computing, and data center consolidation, agencies are already moving on these efforts. “They’re all happening now at one level or another, in one department or another,” Rimmer says.

But disruptive IT management needs to be done in tandem with restructuring operating costs — figuring out how to maintain IT investments while pushing more funds into innovation — and improving governance, Banerjee and Rimmer say. They have written a paper on the topic, “Navigating Difficult Times.”

A key first step here is for an organization to understand what its cost base is and whether it’s flat or decreasing over time. “It’s not as if people don’t know these things; it’s more about applying structure and a process and prioritizing investments across the enterprise,” Rimmer says.