Adriving objective of the Office of E-Government and Information Technology has been to save money and improve operations by moving agencies to shared solutions for cross-agency needs.
The Office of Management and Budget first addressed this objective with its Quicksilver projects, which attempted to use the best existing government capabilities to provide shared services. OMB then introduced its Line of Business initiatives, further maturing and focusing the process of moving agencies to shared services. The LOBs remain the current focus for this campaign.
In the president’s fiscal 2008 budget proposal, OMB formally introduced its latest LOB, the IT Infrastructure Optimization Initiative. IOI aims to help agencies tackle some of the foundational systems complexities in expanding shared services.
Mother of All LOBs
The scope of the government’s IT infrastructure is extensive. In fiscal 2006, total infrastructure costs were $20 billion — almost a third of the federal IT budget. OMB estimates that through common implementations, as much as $29 billion in savings can be achieved over 10 years. That’s a staggering potential savings, with a tremendous return on investment. And yet, these estimates assume just more than a 15 percent annual savings. That savings, given consolidation opportunities, common solution adoption potential and the continued innovation and improvements in the capabilities of technology, seems conservative.
The vision for the IOI LOB is an optimized and cost-effective governmentwide IT infrastructure that supports agencies’ core missions and customer-centric services. Achieving this vision demands that the government do four major things:
- Make functions across agencies and programs interoperable.
- Enable collaboration within and across agencies.
- Reduce the total cost of commodity IT infrastructure components.
- Govern IT investment to achieve mission and governmentwide goals.
How IOI Will Work
Centers of excellence and shared-services providers in the specific functional areas implement most of the other LOB initiatives. For example, under the Financial Management LOB, agencies are selecting an OMB-certified center of excellence to implement, host and/or run their financial operations.
For the IOI LOB, however, agencies will be driven to improve IT infrastructure cost and performance by taking actions that will move the respective agencies toward industry-average service levels and cost-effectiveness measures. An interagency working group led by the IOI Program Management Office will establish these measures. Rather than select providers from an approved list of centers, agencies will develop plans of action laying out how they will achieve infrastructure improvements within five years.
The task will begin with development of a detailed performance baseline. The IOI PMO will gather baseline data for the next two years and establish what it calls a top-performers target zone and scale and industry range. Agencies will use this baseline to measure progress.
Once the baseline is complete, government leaders will have a tool to guide them in seeking additional investments or pursuing cost and quality improvements through change initiatives such as service aggregation within the current agency, service aggregation with top performers or outsourcing to managed service providers.
The Challenges Ahead
The IOI LOB holds the promise of significant cost savings and improved services. It’s a great concept, but big questions remain, such as:
- Will Congress support IOI?
- Can OMB overcome resistance from agencies?
- Will the A-76 process be a debilitating factor?
- Can agencies effectively implement changes required by IOI?
IOI will become a significant issue for CIOs over the next few years. If the outstanding questions can be answered, the infrastructure LOB has the potential to herald one of the broadest IT transformations in government to date.