Tech CEOs tell US gov't how to cut $1 trillion from deficit

The federal government can achieve huge savings through IT consolidation and expanded Web services, a report says

The U.S. government can save more than $US1 trillion over the next 10 years by consolidating its IT infrastructure, reducing its energy use and moving to more Web-based citizen services, a group of tech CEOs said in a report released Wednesday.

The Technology CEO Council's report, delivered to President Barack Obama's National Commission on Fiscal Responsibility and Reform, also recommends that the U.S. government streamline its supply chains and move agencies to shared services for mission-support activities.

"America's growing national debt is undermining our global competitiveness," said the council, chaired by IBM CEO Samuel Palmisano. "How we choose to confront and address this challenge will determine our future environment for growth and innovation."

If the cash-strapped U.S. government enacted all the recommendations in the advocacy group's report, it could save between $920 billion and $1.2 trillion by 2020, the group said. "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."

While the Obama administration is looking at ways to restructure government, the ideas in the report are generally new suggestions for the U.S. government, said Tom Galvin, a spokesman for the council.

The council's report is "intended to spark a series of discussions about what makes sense" when trying to cut the deficit, Galvin added. "It's meant to initiate a conversation."

In June, the U.S. Department of Treasury predicted the U.S. government's budget deficit would reach $19.6 trillion by 2015. The current government debt is more than $13 trillion.

While the ideas may be new to government, the council's companies have implemented many of the recommendations themselves in an effort to cut costs, and they have helped customer companies implement similar measures, Galvin said.

"The people who are presenting this report have a lot of experience working with large organizations, not only their own, but with other companies in helping them implement technology to make them more efficient," he added.

The federal government can achieve large savings by consolidating its IT resources, the report said. The government now spends about $76 billion a year to support "widely dispersed" IT assets, the report said.

"The government's costs of operating information technology systems are higher than they need to be -- in some cases by more than a factor of two," the report said.

Council member IBM cut its IT expenses in half over the past five years through consolidation and standardization, the report said. EMC, another member, has saved more than $100 million over the past five years through virtualization, the report added.

The federal government could also reduce IT energy consumption by 25 percent, and it could save $200 billion over 10 years by using advanced analytics to stop improper payments, the report said.

"We know that it is possible to achieve the level of savings we have outlined here," the report said. "We also know that these savings can be realized while at the same time improving service. We've seen it in industry after industry, and we've seen it in our own companies' transformations."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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Tags governmentDellIBMemce-governmentGovernment use of ITMIchael DellSamuel PalmisanoTechnology CEO CouncilTom Galvin

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Grant Gross

IDG News Service
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