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By Paolo von Schirach
July 17, 2011
WASHINGTON – US Government IT procurement and the running of IT systems is more or less a disaster in terms of value for money and improved operations. An $ 80 billion a year federal IT budget buys US taxpayers very little in terms of enhanced efficiencies. There are 24,000 US Gov websites and more than 10,000 separate IT systems. But some servers are unused 93% of the time. One specific IT project within the Department of Defense had been 12 years in the making, with a $ 1 billion tab and zero output before it was finally closed down.
Vivek Kundra, US Gov Chief Information Officer
This is the disconcerting picture emerging from a FORTUNE magazine interview (Uncle Sam’s First CIO, July 25, 2011) with Vivek Kundra, the outgoing Chief Information Officer of The United States. Indian born Kundra is the very first individual to fill this job. Credit should be given to the Obama administration in creating this position as part of its attempt to streamline and optimise a haphazard Government IT system that was sorely in need of real supervision.
That said, this interview highlights stunningly low levels of efficiency and almost primitive approaches to technology procurement and use prevailing in the US Governemnt. It looks as if when you get into the Government none of the principles that would illuminate IT related business decisions in the private sector apply any more. Efficiency and cost effectiveness are unknown parameters.
Government has to be inefficient?
Broadly speaking, it is more or less taken for granted that Government is less efficient than the private sector. But why is it so? And do we have to accept this as an immutable fact of life? Why do we have to accept that “statutorily” the Government will do thing slowly and inefficiently, with less or no care for quality of execution and cost control? In principle at least, good managers should be able to design equally good programs in the private and public sectors. But, mysteriously, it is not so.
The examples provided in the Kundra interview are stunning regarding bad planning, poor execution and almost no accountability in the purchasing of IT systems whose purpose should be to improve the running of systems and the efficient delivery of services.
Government IT procurement practices outdated
Government IT contracts are designed according to antediluvian parameters of complete “A to Z solutions” that do not take into account the standard private sector practice of availing oneself of ready made, off the shelf, solutions for standard components. In so doing Government projects are exceedingly cumbersome and much more complex that they need to be. This adds to cost and slows down execution. Besides, Government contracts are designed around billable hours and not outcomes. So, the contractors objective is to keep consultants busy “doing stuff”, irrespective of goals and outcomes that are rarely, if at all, measured.
This led to the proliferation of systems, regardless of added value. “There were 432 data centers in 1998 and there are over 2,000 today Average utilization of processing power is under 27%. Average utilization of storage is under 40%“. –Kundra says in the interview. This excessive proliferation of mostly useless systems conveys a picture of almost complete mismanagement.
To his credit, Mr. Kundra introduced reform, sometimes pushed by simple actions, like publishing the names of the various Government Agencies CIOs on the Internet, next to their projects and time lines. Publicity and transparency invite scrutiny and greater accountability.
Why is Government so far behind?
Still, the larger question remains. Why is it that the Government cannot do things properly? Mr. Kundra says that the Washington approach is mostly focused on setting policy goals, disregarding execution. It may be so. But how is it possible that this is the rule? This is the United States of America, and not poor, resource starved Niger. Someone, somewhere must have realised that poorly executed policy is useless, may be even counter productive.
Government reviews its own operations
Theoretically at least, the Government is policing itself. We have, scores of Inspector General Officers in all Agencies. And then we have the Government Accountability Office, (GAO), whose statutory function is to review US Gov programs and projects and to publish reports that are supposed to show how public money is spent. We know that some of the GAO work is remarkably good. Are we to conclude that the Congress and the Administration simply do not care of any alarm bells sounded by the GAO simply because low quality of output is the norm?
Government is studied endlessly
But if the work of Government bodies is not enough, let’s keep in mind that few things in America are scritinized and studied more than Government. In Washington DC alone there are literally hundreds of prestigious think tanks (The Brookings Institution, The American Enterprise Institute For Public Policy, The Heritage Foundation, The Center for Strategic and International Studies, The New America Foundation, The Carnegie Endowment, to name just a few), with experts who “do only policy analysis” on anything from the broadest macro-issues to the most minute sub-components of the Defense Budget. Are you telling me that no one in the vast think tank community ever noticed the disconnect between policy design and poor execution when it comes to IT systems? No expert ever figured out that Government is not equipped to take care of execution and that bad execution defeats even the most beautifully designed policy?
Or do we have to conclude that the armies of experts also do not care about quality of execution, because they themselves do not understand its value? OK. Let’s concede that. The experts somehow do not get it.
Business Schools review public policy
But then we supposedly have in America some of the best business schools in the world, schools in which every now and then at least someone might have given a look at the quality of public administration and the cost effectiveness of public policy programs. Are we to conclude that all these great academics who have invented “competitiveness” and who created the science of management consulting had nothing to say about this hopelessly outmoded public policy system? Or are we to conclude that they simply do not care, because their focus is only on the private sector?
Let’s concede that public is slower than private
Look, we can accept that the public sector may not be as nimble as the public sector when it comes to rapid adaptation to state of the art innovation. Fine. We concede that. There is no market pressure in Government. There is no stock value to preserve.
But what is not acceptable is that we take it for granted that there is an insurmountable, natural barrier between the private sector and public administration performance standards whereby the public sector is by definition a few generations behind –and that’s the way it has been and will be.
This is unacceptable. All knowledge is transferable. We may find the speed of transfer less than ideal. We may want faster pick up. But the notion that some 30 years into the IT revolution the Government has to be clueless as to best practices and project design, procurement and execution standards is unacceptable. If the bureaucracy resists change, then it is up to elected policy makers whose is job is to make Government work to kick them into action.
Progress is possible, taxpayers should demand it
US CIO Vivek Kundra made some progress in modernising the systems he was called upon to supervise. This proves that, given policy guidance and proper authority, progress is possible. Citizens should take notice and demand value for money from elected leaders. As the ghastly US Gov IT story illustrates, good design, and careful, cost effective execution is more important than bigger budgets.