Shawn P. McCarthy | IT managers torn by two masters

Internaut | Commentary: The dual goals of cutting costs and completing projects can put IT managers in an impossible position

Shawn P. McCarthy

Federal data center managers are serving two masters now, and unless they are experts at juggling conflicting demands, they could find themselves in an impossible situation.

Master No. 1 takes the shape of agency chief information officers and financial managers who are pressuring data center managers to consolidate applications, servers and even entire data centers. The idea is to cut costs by eliminating redundancies and extra software licenses. In the process, managers must also migrate toward a standardized enterprise architecture. So far, so good.

But the second master, the Office of Management and Budget, has a much different agenda. OMB holds approval power over large proposed information technology projects and requires details on why the project is needed ' either to save money through a return on investment or to greatly improve citizen services.

So, managers must bow to the pressure of master No. 1, but they can't always get the funding from master No. 2 to deliver on those promises. Right now, according to OMB IT budget documents, two-thirds of the federal IT budget is consumed by existing systems and projects. Only one-third is available for 'development, modernization and enhancement' to existing programs. Some agencies have less than 15 percent of their budgets assigned to new projects.

One of the best ways to cut costs is to merge systems and projects across multiple agencies. Yet agencies have budgeted even less for that. Few have more than 2 percent targeted toward multiagency IT projects. Most are spending less than 1 percent. Obviously, it's difficult to meet the goals of data center consolidation with this level of funding, yet agency directors continue to talk this talk as a way to cut long-term costs.

The only way for federal IT managers to address these conflicting demands is to start developing a set of best practices (or maybe best answers) when they are asked to do the impossible. Some ideas include:

  • Investigate whether the agency has already aligned IP programs and new projects with its business goals. Without that, any proposals are just
    wheel-spinning.

  • Acknowledge that it's difficult for mid-level managers to make a business case for certain projects, such as development of IP-based services that are available to other government agencies. These projects must be championed at the organization's CIO level, and return on investment may have to be calculated across multiple agencies. Without CIO buy-in, funding and manpower will be difficult to find.

  • Determine all the labor costs, machine costs, software licensing fees and IT services costs associated with each application or system you manage. Only then can they compare the cost of system consolidation with the cost of future savings. If it will take five years or more to achieve the savings, it could be difficult to rely on those long-term savings calculations.

  • If you're moving toward a service-oriented architecture, find out if it is possible to charge for the IP service. How much? Can a current cost center be turned into an internal revenue center?

These ideas just scratch the surface of what must be considered when balancing competing demands. But they may help midlevel managers leverage their needs into better long-term planning at the upper levels of each agency.

Shawn P. McCarthy is a senior analyst and program manager at IDC Government Insights. E-mail him at smccarthy@idc.com.

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