Technology Can Save Feds $1T in 10 Years

Technology Can Save Feds $1T in 10 Years

Throughout this highly charged election season, government spending and the federal deficit have been a linchpin of political arguments. At the same time, a gridlocked Congress means that very little has been accomplished despite all the debate.

But a report published earlier this month highlights seven ways that, using existing technologies, the federal government could save $100 billion dollars a year for the next 10 years, not-insignificant portion of the current federal deficit.

The report, "One Trillion Reasons," was published by the Technology CEO Council, a group chaired by IBM CEO Samuel Palmisano. It lays out how technologies from data center management to fraud-fighting tools can improve efficiency and productivity in the government.

"Our report contains straightforward, proven ways to pare back $1 trillion from the deficit while increasing productivity and enabling sustainable competitiveness," Michael Dell, Chairman and CEO of Dell, said in a statement. "We're serious about helping to provide solutions for the mounting debt crisis, and we're optimistic that changes today will help lay the foundation for future job growth and innovation for our country."

Among the strategies the Technology CEO Council recommends are data center consolidation (potential savings of $16 billion per year), energy efficiency through server virtualization, building controls and fleet management technologies ($2 billion in savings per year) and consolidation of shared services like payroll and travel systems ($5 billion in savings per year).

The recommendations come from case studies at the member companies of the Tech CEO Council as well as from initiatives undertaken by other governments. For data center consolidation, IBM and EMC -- both members of the council -- offer case studies:

IBM has dramatically reduced its data center operations and saved up to 40% in operating expenses. IBM cut its overall IT expenses in half over the past five years through consolidation and standardization. Likewise EMC Corporation's data center consolidation and adoption of cloud computing internally cut costs and energy use. To date, EMC has achieved a virtualization rate of over 70%, with consolidation ratios as high as 40:1, saving $104.5 million over five years including an estimated $80 million in capital equipment cost avoidance and $19 million of operating cost reduction due to increased data center power, cooling, and space efficiency.

The United Kingdom's government initiatives also provide several examples. "In announcing its own initiative," the report states, "the United Kingdom government predicts that it could cut £3.2 billion (approximately $4.8 billion) from a £16 billion (approximately $23.9 billion) annual IT budget, a 20 percent savings, through cloud computing. If the Obama administration achieves similar savings, it will save $16 billion a year."

The Obama administration has already begun some work on incorporating these ideas, beginning in October 2008 with an executive order committing federal agencies to sustainability. That order also included green IT initiatives, and the president followed on that order with details of telework and cloud computing as key planks in its efforts. If the government were to achieve Obama's data center consolidation initiative, it expects to save $3 billion per year in energy costs alone.

Below are all seven recommendations from the Tech CEO Council; the full report, "One Trillion Reasons," is available for download from

Initiative 1: Consolidate Information Technology Infrastructure
Initiative 2: Streamline Government Supply Chains
Initiative 3: Reduce Energy Use
Initiative 4: Move to Shared Services for Mission-Support Activities.
Initiative 5: Apply Advanced Business Analytics to Reduce Improper Payments.
Initiative 6: Reduce Field Operations Footprint and Move to Electronic Self-Service.
Initiative 7: Monetize the government's assets

Photo CC-licensed by UpstateNYer.