Blog post

It Takes Money To Save Money

By Andrea Di Maio | March 21, 2011 | 0 Comments

smart governmentIT management

Earlier today I read that the US Federal CIO Vivek Kundra said that financial support would be needed to make sure that TechStat project review sessions were conducted more frequently. TechStat reviews have been conducted by the OMB on selected projects and arte one of the 25 points for improved IT management that OMB identified last December (see blog post). This would be part of $60 million proposed for fiscal 2012, which include also support for cloud activities and data center consolidation. Kundra explained that “it’s actually the follow-through and the follow-up, which take countless hours and resources” to make sure that agencies meet requirements from those sessions.

This resonated with what I discussed with the CIOs of Dutch government organizations at an executive dinner where we were debating the ambitious objectives that the Dutch government of saving about 6 billion euros (800 million of which in IT) in the next three or four years. The discussion was about how to find low hanging fruits that would ensure quick and visible cost reductions and at the same time combine them with more structural changes that may cost money now but give sustainable savings in the future.

For how much political leaders and some government executives believe that there is a lot of fat that can be squeezed almost instantly, and that cost savings can be achieved by just pulling a few levers and turning a couple of knobs, reality is that sustainable cost savings do cost money.

This is an important point in the research we are doing about “smart government”, where the blend between strategic and tactical, between domain-specific and cross-domain, between short-term and long-term is key.

The traditional approach based on the premise that strong political leadership and commitment is the primary ingredient for success is no longer valid: volatility, unpredictable changes, delicate political balance, put the longer term endeavors that are needed to establish sustainable efficiencies at risk. It is important to constantly find a compromise between those low hanging fruits and the longer term goals, since the former gives us the fuel for the latter.

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