Budget proposal to detail benefits of IT consolidation

The Bush administration's fiscal 2008 budget proposal will detail the financial benefits of an effort to consolidate back-office information technology systems across government, an Office of Management and Budget official said Tuesday.

The effort, known as the lines of business initiative, encourages agencies to move away from maintaining their own IT systems in areas such as financial management and human resources, and toward using service centers shared with other agencies. The service centers could be run by a federal agency or a private sector contractor.

From fiscal 2006 to fiscal 2007, planned spending on IT to support agency missions increased by $1 billion across government, said Tim Young, OMB's associate administrator for e-government and information technology, at the Government Performance Summit in Washington. But during that same period, there was a substantially smaller increase in planned infrastructure spending, Young said.

"In my view, that is an indication that agencies are consolidating and optimizing their infrastructure, and they're fully utilizing the president's e-government and lines of business initiative," Young said.

For example, the Housing and Urban Development Department saved more than $10 million in 2005 by transferring to the Treasury Department's HR Connect service center, and is in the process of shutting down 17 separate human resources systems, Young said.

The budget request will announce shared service centers in two areas under another category in which OMB is urging agencies to consolidate systems: information systems security. These centers, Young said, will be for security training and for meeting the reporting requirements in a federal law -- the Federal Information Security Management Act. Multiple agencies will host service centers, he said.

In addition, a task force is examining opportunities for agencies to share common geospatial processes and capabilities, Young said. As many as 25 agencies independently produce or collect geospatial data or invest in potentially duplicative capabilities, he said.

An analysis of overall purchasing of IT infrastructure found that the government could save between $18 billion and $29 billion over 10 years through consolidation in that area, but other strategies can improve efficiency as well, Young said.

"Enormous efficiencies and economies of scale and skill can be realized by standardizing business processes [and] acquisition practices," Young said. "Consolidation is not necessarily the entire answer, but I think it is part of the answer."

Young said more details on the IT infrastructure line of business will be available once the budget proposal is released in early February.

He would not say whether the 2008 budget proposal would include new lines of business, as previous budgets have, but several sources have told Government Executive that OMB is not planning any new consolidation efforts.

In addition to details on IT consolidation, the budget request will describe IT projects that have suffered from deficiencies in planning, Young said. Technology investments on OMB's management watch list, which is used to oversee the planning of IT investments through the budget process, will be updated in the 2008 budget submission as well, he said. This list is separate from the high-risk list, which was published for the first time last year and relates to the execution of specific projects.

"Transparency breeds accountability and accountability breeds results," Young said. "Look at the agencies that have no investments on the management watch list. One could conclude from this that they are pretty good, at least on paper, at planning the implementation of their capital investments."