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INNOVATING WITH LESS: EXAMINING 

EFFORTS TO REFORM INFORMATION 

TECHNOLOGY SPENDING 

HEARING 

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 24, 2012 

Available via the World Wide Web: http://www.fdsys.gov 

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 

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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

NICHOLAS A. ROSSI, Minority Staff Director 

TRINA DRIESSNACK TYRER, Chief Clerk 

JOYCE WARD, Publications Clerk and GPO Detailee 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

MARK L. PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

MARK BEGICH, Alaska 

SCOTT P. BROWN, Massachusetts 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

JOHN KILVINGTON, Staff Director 

WILLIAM WRIGHT, Minority Staff Director 

DEIRDRE G. ARMSTRONG, Chief Clerk 

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(III) 

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1 

Prepared statements: 

Senator Carper ................................................................................................. 37 

Senator Brown .................................................................................................. 40 

WITNESSES 

THURSDAY, MAY 24, 2012 

Steven VanRoekel, Federal Chief Information Officer, Office of Management 

and Budget ........................................................................................................... 4 

David A. Powner, Director, Information Technology Management Issues, U.S. 

Government Accountability Office ...................................................................... 6 

George DelPrete, Principal, Grant Thornton, LLP, on behalf of TechAmerica .. 16 

Molly O’Neill, Vice President, CGI Federal, Inc. .................................................. 17 

Nick Combs, Federal Chief Technology Officer, EMC Corporation ..................... 19 

Jennifer Morgan, President, SAP America Public Services, Inc., ........................ 21 

ALPHABETICAL LIST OF WITNESSES

Combs, Nick: 

Testimony .......................................................................................................... 19 

Prepared statement .......................................................................................... 80 

DelPrete, George: 

Testimony .......................................................................................................... 16 

Prepared statement .......................................................................................... 68 

Morgan, Jennifer: 

Testimony .......................................................................................................... 21 

Prepared statement .......................................................................................... 93 

O’Neill, Molly: 

Testimony .......................................................................................................... 17 

Prepared statement .......................................................................................... 73 

Powner, David A.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 52 

VanRoekel, Steven: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 44 

APPENDIX 

Questions and responses for the Record from: 

Mr. VanRoekel .................................................................................................. 104 

Mr. Powner ........................................................................................................ 107 

Statement for the Record from Project Management Institute ........................... 108 

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(1) 

INNOVATING WITH LESS: EXAMINING 

EFFORTS TO REFORM INFORMATION 

TECHNOLOGY SPENDING 

THURSDAY, MAY 24, 2012 

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, FEDERAL SERVICES,

AND INTERNATIONAL SECURITY,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:02 a.m., in 

Room 342, Dirksen Senate Office Building, Hon. Thomas R. Carper, Chairman of the Subcommittee, presiding. 

Present: Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Our Subcommittee will come to order. 

Welcome, one and all. Thanks to our guests, including the ones 

that are standing in the back. Standing room only—we do not always have that over here. You guys are a big draw, I guess. We 

are glad everyone is here. 

This hearing will examine the Obama Administration’s progress 

in implementing its plan to transform the management of our Federal information technology (IT) assets. 

In a time when we are fighting to create jobs and grow our economy while also grappling with historic budget deficits, the American people are rightfully skeptical of a government that continues 

to squander too many of our tax dollars that they entrust to us. 

They want better results from Federal programs, as do I. It’s our 

job to ensure that we get those results, and that they are delivered 

in a cost-effective manner. 

When it comes to the information technology investments that 

agencies rely on to provide services that Americans need, the Federal Government has consistently thrown good money after bad. 

We built an IT infrastructure that is bloated, inefficient, and actually makes it more difficult sometimes for the government to serve 

its citizens. 

With more than $80 billion spent each year on Federal information technology, can we say that we are getting what we are paying 

for? Can we say that we have looked at every nook and cranny of 

our IT investments and say to all Americans that we have manH605-41331-79W7 with DISTILLER

2 

aged their money effectively? I am afraid that the answer to those 

questions is no and no. However, having said that, all is not lost. 

Nearly 18 months ago, President Obama directed our Nation’s 

first Federal Chief Information Officer (CIO), Vivek Kundra, to embark on an ambitious effort to bring the Federal Government’s use 

of technology into the 21st century and to ensure that we are operating in the most cost-effective manner possible. I commend the 

President and Mr. Kundra and his team for the sense of urgency 

and the attention that they brought to these problems. We are now 

on a path, I believe, to cut what we cannot afford and nurture an 

environment in which innovation and more cost-effective technologies are being deployed throughout our government. 

As we approach the June 2012 deadline for the implementation 

of 25-point plan that Mr. Kundra developed, I am reminded of 

what Vince Lombardi once said. He said a lot of different things, 

but one of the things that he says is ‘‘If you are not keeping score, 

you are just practicing.’’ It is important that we have a good game 

plan in place, but we must also be clear in keeping score and tracking our progress. 

In keeping score, there are a number of areas that we can look 

to in order to measure the progress of the Administration’s plan. 

For example, before President Obama and his team came into office, the Federal Government did not know how many data centers 

that we had. Since then, we have found out that there are over 

2,000 data centers bleeding energy and money throughout the Federal Government. 

I am happy to hear that between now and the end of 2012, nearly 500 of these data centers will be shuttered, saving us $3 billion 

per year according to the Office of Management and Budget (OMB). 

That is $3 billion, with a B. That leaves us with several hundred 

more to go if we are to reach the President’s goal of closing nearly 

1,000 of these by 2015. But, these first few rounds may be the lowhanging fruit or maybe even the fruit already on the ground. So, 

we need to continue pressing hard to achieve our goals and the savings that will come from them. 

As we shut down these unnecessary data centers, one of the 

ways we can get more efficient IT spending is by moving the government to the cloud. The cloud is an example of the innovative 

tools available to the government that offers an efficient pay-asyou-go approach to IT. In it, a low initial investment is required 

to begin, and additional investment is needed only as use increases. 

Many Americans already use cloud computing in some form for 

email and when using social networking sites. It is also used often 

by private businesses that are looking for cost-effective IT solutions. According to OMB, Federal agencies have moved almost 70 

services to the cloud, with many more likely to migrate as well. 

Another important area where we have a plan and are now keeping score is with the Administration’s launch of TechStat Accountability Sessions, also known as TechStats, in January 2010. 

TechStat sessions have enabled OMB and agency leadership to 

turn around, halt or terminate IT investments that do not produce 

dividends for the American people. According to OMB, approximately 300 TechStat sessions have taken place since 2010, with apH605-41331-79W7 with DISTILLER

3 

proximately $4 billion in cost savings, cost avoidance or reallocation of funding for major investment project. 

Of course, no plan is perfect. In a report released today by the 

Government Accountability Office (GAO), the government’s watchdog, it provides a number of areas in the reform plan where more 

work is to be done. GAO’s concerns are ones that I want to examine so that we do not risk losing momentum and can continue the 

progress that has been made so far. Very good progress, I think. 

As we move forward, a vital component of reforming the Federal 

Government’s spending on IT involves learning from the private 

sector. IT has transformed how the private sector operates and has 

revolutionized the way in which it serves its customers, who also 

happen to be our customers. The Federal Government has missed 

out on some of these transformations in the past due in part because we often pay more for old technology that agencies no longer 

need. In addition, we have seen chronic poor management of large 

technology investments. 

I hope our private sector witnesses on the second panel are able 

to share with us some lessons from their organizations and give us 

some insights on how we can implement even more innovative tools 

at lower cost to the Federal Government and to our taxpayers. 

As I said at last year’s hearing on information technology, the 

President’s reform goals are ambitious. He and his team should be 

commended for taking on this task, and I commend them. 

While there is more work to be done to improve efficiency and 

effectiveness in the Federal Government’s IT spending, we must 

not overlook the important action taken over the past 18 months 

by OMB to address many of these problems. The reforms are being 

implemented now, coupled with initiatives that the Administration 

has underway or will undertake in the near future under the direction of our Federal CIO, Steven VanRoekel, who will help put us 

on the path to a more effective and, I hope, a more efficient Federal 

Government. 

It is important to remember that the Administration cannot do 

this alone, and those of us in Congress have work to do on our part 

to achieve success. 

Last year, I introduced legislation along with Senator Susan Collins—and others that will give OMB, agency leadership and decisionmakers in Congress the information that we need to know 

whether our investments in new technology are on the right track. 

Our bill is called the IT Investment Management Act. I am sure 

there is an acronym there somewhere. The IT Investment Management Act requires agencies to plan investments correctly, up front, 

and alert Congress regarding failing IT investments before millions 

of dollars, or maybe billions of dollars, have been wasted. 

I hope that our witnesses today will provide some thoughts and 

comments about our legislation, and we look forward to working— 

with our colleagues and with the Administration, and folks in the 

private sector too, on these efforts and other cost-saving measures 

soon. 

Again, our thanks to our first panel of witnesses and those who 

will succeed you for taking your time to be here today, for the leadership that you are showing, for sharing also your perspectives on 

these important issues. 

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1The prepared statement of Mr. VanRoekel appears in the appendix on page 44. 

And now, my script says now I am supposed to recognize our 

Ranking Member Senator Scott Brown for his opening statement, 

but I think he will be brief. [Laughter.] 

But, knowing Scott, I know he will be here, and we will look forward to him saying whatever is on his mind once he arrives. 

Now, I get to introduce Steven VanRoekel who was appointed as 

the second U.S. Chief Information Officer by President Obama on 

August 5, 2011. Prior to his position in the White House, he served 

in executive positions at the U.S. Agency for International Development and the Federal Communications Commission. 

Before joining the government in 2009, Mr. VanRoekel spent his 

career at Microsoft Corporation where he worked closely with the 

corporation’s co-founder, Bill Gates. 

And, he comes to this position, succeeding Vivek Kundra, who 

has been here many times, and this is someone who helped really 

build, lay the foundation on which our new CIO stands. 

I said it when I was Governor of Delaware, that I stood on the 

shoulders of those who came before me and people like, Mike Castle and Pete du Pont and others. 

And, you have some pretty good shoulders to stand on as well. 

David Powner. I was kidding David before the hearing started. 

I said if we paid him on a per diem basis for the times that he has 

testified, we would probably have a bigger national debt that we 

already have. 

But, we are glad to see you again, David, and thank you for your 

help and that of your team. 

But, David is the Director of Information Technology Management Issues at the U.S. Government Accountability Office. He is 

currently responsible for a large segment of GAO’s IT work that focuses on development and acquisition, on governance and reform 

initiatives. He is no stranger, again, to this Subcommittee. He has 

over 20 years of experience in information technology in both the 

public and the private sectors, and as a result, he has received 

many GAO awards during his tenure. 

I now want to recognize Mr. VanRoekel to begin his opening 

statement. 

Your entire statements will be submitted for the record. If you 

would like to summarize those, that would be fine. If you want to 

use a little bit more than 5 minutes, that is OK. If you want to 

use a lot more than 5 minutes—that is probably not OK, so we will 

have to rein you back in. 

But, we are glad you are here, and we look forward to hearing 

from you. Thank you. 

Please proceed. 

TESTIMONY OF STEVEN VANROEKEL,1 FEDERAL CHIEF INFORMATION OFFICER, OFFICE OF MANAGEMENT AND BUDGET 

Mr. VANROEKEL. Thank you, and good afternoon, Chairman Carper, and thank you for the opportunity to testify on the Administration’s efforts to continually improve the management of Federal 

information technology. 

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5 

From my nearly 20 years in the private sector, I know firsthand 

the enabling nature of technology to increase mission efficiency. 

Great American companies look for ways to use IT strategically 

and to do the seemingly impossible—improve and expand core services while also cutting costs. 

The Federal Government is no different. Through the 25-Point 

Plan to Reform Federal IT, we have jump-started a set of discrete 

actions that have augmented our larger efforts and helped turn the 

corner on advancing the culture of Federal IT. 

As we look forward, we must buildupon our work to date and 

look across agency IT portfolios in their entirety to eliminate duplication and shift spending from the costly maintenance of outdated 

systems to more efficient technologies, as you mentioned in your 

opening statement. By doing so, we can improve the delivery of 

mission-critical services as we work together with Congress to hold 

agency IT budgets in check and reduce the cost to the American 

people. 

Today, I would like to highlight three elements of our approach 

to innovate with less. 

First, we are optimizing our IT infrastructure by consolidating 

Federal data centers, shifting to more efficient technologies such as 

cloud computing and rationalizing the use of commodity IT. 

We have accelerated our data center consolidation effort significantly, increasing our goal by 20 percent from the original set in 

February 2010. To date, 267 data centers have been decommissioned, and by the end of 2012, we plan to close a total of 429. 

In addition to consolidation efforts, we are also improving the 

quality of service for the data centers that remain in our inventory. 

Ultimately, this allows us to support more efficient IT solutions 

while also creating a more secure Federal IT footprint. 

Our consolidation work reflects a larger shift in the government’s 

mindset from a capital-intensive, asset ownership model to more 

service-oriented models. Under the Administration’s ‘‘Cloud First’’ 

policy, there have been many successful migrations of services to 

the cloud, which have led to the elimination of more than 50 legacy 

systems and met our initial goals on cloud migration. To accelerate 

the safe and secure adoption of cloud computing, we launched 

FedRAMP, which leverages a ‘‘do once, use many times’’ framework 

to more efficiently conduct agency security assessments related to 

cloud procurement. 

In addition to working to optimize the Federal IT infrastructure, 

we are focused on maximizing the overall return on investment of 

Federal IT and are providing agency leadership with tools to help 

them look across their IT portfolios and take the necessary actions 

on which investments to fund and which to cut. 

Building on our TechStat reviews, which have resulted in the 

identification, as you mentioned, of $4 billion in cost savings and 

implications, we recently launched PortfolioStat to provide tools for 

agencies to identify and eliminate low-value IT investments and 

adopt shared services. 

Whereas TechStats target individual investments, PortfolioStat 

takes a broader view across the entire IT portfolio for opportunities 

for consolidation and optimization to further support agencies in 

reducing duplication and optimizing service delivery, the Federal 

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1The prepared statement of Mr. Powner appears in the appendix on page 52. 

IT Shared Services Strategy provides direction for agencies in moving services to this shared approach. Our ultimate goal in eliminating waste and duplication is to free up resources to reinvest in 

the future, to help us build a more efficient and effective digital 

government. 

The aim of the Digital Government Strategy that I released yesterday is to transform how the government connects with, and provides services to, the American people by enabling direct access, 

high-quality digital government information and services anywhere, anytime, on any device. And, as we implement the strategy, 

we will help provide the Federal workforce with 21st century tools 

to carry out agency missions more effectively and at a lower cost. 

We must use IT to improve government productivity and lower 

barriers to citizen and business interaction with the government, 

all while bolstering cybersecurity. With threats evolving daily, 

cybersecurity must be a focus of everything we do. 

The steps we are taking to optimize our IT infrastructure, maximize the return on IT investments and build a digital government 

will allow us to innovate with less and achieve our goals of improving service to the American people while driving down cost. 

I appreciate the work this Subcommittee has done in this area. 

Thank you for the opportunity to appear today, and I look forward 

to our discussion. Thanks. 

Senator CARPER. Thank you so much. 

And, Mr. Powner, you are now recognized. Please proceed. 

TESTIMONY OF DAVID POWNER,1 DIRECTOR, INFORMATION 

TECHNOLOGY MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. POWNER. Chairman Carper, I would like to thank you for 

your leadership in overseeing Federal IT spending. Your many 

hearings and oversight over the years have led to major improvements in the transparency of IT spending, with the IT Dashboard 

and to the reform efforts currently underway. 

I would also like to commend Steve VanRoekel as he continues 

to push important reform initiatives like data center consolidation, 

consolidating commodity IT, improving governance across the Federal Government through TechStat and PortfolioStat sessions and, 

just yesterday, his announcement of the Digital Strategy. 

Solid progress has been made on IT reform. I would like to highlight this progress and also discuss areas where even more attention is needed. 

The December 2010 IT reform plan is an excellent roadmap to 

position the Federal Government to spend the $80 billion it invests 

in IT annually. It is an aggressive plan that focuses on 25 specific 

areas and has very clear 6, 12 and 18-month deliverables. Basically, it sets out to achieve operational efficiencies for the dollars 

being invested in live systems and to better position the government to manage large-scale IT acquisitions. 

An area where progress has been made in operational efficiencies 

is data center consolidation. All major departments and agencies 

have a dedicated and accountable program manager and plans that 

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continue to evolve. This area is also guided by excellent performance metrics. Specifically, 1,000 centers are to be closed by 2015, 

and OMB estimates that this will result in $3 billion in savings. 

Regarding managing large-scale projects better, progress has 

been made on strengthening investment review boards through 

TechStat sessions. OMB claims that they have saved $3 billion by 

canceling and restructuring investments through their reviews, and 

agencies are reporting another $900 million in savings through 

nearly 300 TechStat reviews. Again, each area has solid progress. 

However, our review shows less progress than what OMB reports. 

Mr. Chairman, prematurely declaring victory in areas where 

more needs to be done will have the wrong consequences. I would 

like to highlight some of these areas. 

On data center consolidation and the ‘‘Cloud First’’ policy, plans 

need to be solidified so departments and agencies have clear costsaving targets to work toward. The ultimate measure with these 

initiatives is dollars savings. If the government is to reach OMB’s 

$3 billion goal, individual agency plans need to better target specific savings. Likewise, in the area of cloud computing, agency 

plans need to focus on what systems will be retired and what the 

resulting cost savings are. 

The government spends nearly $55 billion of the $80 billion spent 

on systems in operations, and freeing up funds from these initiatives to have more to spend on modernizing the government’s antiquated systems is critical. 

Turning toward better managing large-scale IT acquisitions, we 

now have better transparency and governance. But, according to 

the IT Dashboard, the CIOs have rated nearly 200 projects, or 25 

percent of the major IT projects, as red or yellow status. This 

equates to about $13 billion that are at risk. 

In addition to improving project management and governance, 

other areas where additional reform is needed include using the 

improved governance to reduce duplicative IT spending. We recently reported on duplicative IT spending at the Departments of 

Defense and Energy. OMB’s PortfolioStat initiative can help root 

out duplicative spending. 

Contracting guidance needs to support modular development. 

This area needs to be more aggressively tackled by OMB’s Office 

of Federal Procurement Policy. 

Budget models need to align with modular development. 

Multiyear funding and funding by portfolio instead of by project are 

areas that OMB, agencies and the Congress need to continue to 

pursue. 

And, CIO authorities need to be strengthened. Many CIOs in the 

government still do not have the appropriate authority to effectively manage IT portfolios at their respective agencies. 

Our report being released today highlights the areas where more 

action is needed and also highlights the importance of having solid 

performance metrics to measure progress. 

Overall, there has been solid momentum, and the reform plan is 

a great start. But, to truly reform, meaning substantial operational 

savings and even less IT projects at risk, means that reform must 

continue beyond the 18-month horizon. 

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Executing the plan through the next month is important, but 

even more important is continued diligence in achieving the billions 

that are at stake with data center consolidation and other shared 

service efforts and in turning around the performance of about 200 

major IT projects that total $13 billion. 

This concludes my statement. I would be pleased to respond to 

questions. 

Senator CARPER. Thank you both. 

I am struck by as I go home, and even around the country, when 

I run into people who said, well, we saw a hearing that you were 

holding with others of your colleagues about how to get better results for less money. And, people just say, thank you for doing that. 

As it turns out, with the kind of budget deficits we have today, 

it is hard to believe that we had three balanced budgets in a row 

in 1999, 2000 and 2001. We had a change of Administration, and 

all we had for as far as the eye could see were surpluses. And, 8 

years later, all we could see as we looked ahead were deficits. The 

deficit ballooned a couple of years ago to about 1.5 trillion, and we 

have been reining it back in. 

My hope is that by the end, at the end of this year, when the 

elections are behind us, that we will be able to enter into a comprehensive deficit reduction agreement, bipartisan, along the lines 

of that proposed by the Deficit Commission led by Erskine Bowles 

and former Senator Alan Simpson, that incorporates three dollars 

of savings on the spending side for every one dollar of new revenues. That is something I hope, that when we get to the end of the 

year, that we will actually do something very much like that. 

In the meantime, it is important for us to use every day in the 

interim to find ways to get better results for less money or better 

results for the same amount of money, with respect to the way we 

provide health care, whether it is Medicare or Medicaid or other 

programs, with respect to the way we fund our defense and pay for 

the development of new major weapon systems, whether it is the 

way we help ensure that our agricultural economy is strong and vibrant, to ensure that support our exports to other countries, the 

way that we clean our air and our water in a cost-effective way, 

the way we have real solid return on investments, the way that we 

look after the least of these—the people that do not have a place 

to live, the homeless and folks that are hungry—all those ways, to 

try to make sure that we meet our needs but do so in cost-effective 

ways. 

A great tool for realizing this goal of better results for less 

money, or the same money, is information technology. The potential is just terrific, and I am encouraged that we are beginning to 

realize that potential. 

And, as we all know, it was not always that way. And, for years 

we spent a lot of money on IT investments for any wide variety of 

purposes, and we did not always get the kind of results that any 

of us wanted, with some notable exceptions. With some notable exceptions. 

I think we are on the right track. 

And, Vivek Kundra, if you are out there somewhere, listening, 

bored to tears and wondering what is going on here in this Subcommittee, you have done good work and I think you got us on the 

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right track, with the help of, frankly, our friends at GAO and a lot 

of other people as well. 

I love to go visit schools. We are going to have a Memorial Day 

recess next week, and I will probably end up in a school or two in 

Delaware. I like to go into elementary schools, and I have been in 

a number of colleges lately with several commencements in the last 

couple of weeks. 

But, I was in a middle school and spent some time with some 

sixth graders, and among the questions they asked is, what do you 

do anyway? 

And, I explained that they have rules in their school, rules on 

their school buses, rules at home. We have rules for our country. 

And I, along with Senator Coons, Congressman Carney from my 

State and a lot of other men and women across the country—the 

President, the Vice President and the people who work for them— 

we get to help make the rules for our country, and the other thing 

we do is we try to help people in a wide variety of ways. 

But, when folks that are watching us today from around the 

country, or tonight, and they are saying what is this all about, and 

they are hearing about dashboards and TechStat, and they are 

hearing about commodities, and they are hearing about the cloud 

computing. 

Would you just take a couple of minutes, Mr. VanRoekel, and for 

those people, just make this real and make it relevant in their 

lives? 

Mr. VANROEKEL. Absolutely, and thank you. 

You are spot-on in that I think a lot of IT in the past was viewed 

as just a sort of discretionary spend. It is just part of the pie, one 

slice of the pie that we implement to do the work of government. 

And, I like to think about IT really as the pan. It is sort of the 

mission of government is sitting in that pan, and it is a tool for us 

to enable us to do better service in the work we do in government 

and, more importantly, service to the American people. 

What the Federal CIO does and the CIO community in government is really about enabling the mission of government—providing tools and resources to better service Americans, to get benefits to veterans in a better way, provide public safety resources, information to citizens on where they live, where they work, public 

and other safety things, economic benefits, job training. All the resources of government can be manifested in this way. 

And, I am delighted you are meeting with school members because I think they embody our future in a way that we do not normally see in Washington, which is using technology in such a fundamental way to live their lives. 

And, I think it is our obligation as a government to really provide 

the tools and resources for those people because they will be the 

next taxpayers of the future, the next Congress people of the future, the next warfighter, the next employer, and their government 

needs to keep pace with that. 

Our goal is really about providing accountability and driving 

down costs and focusing on doing more with less and innovating 

with less. But, at the end of the day, it is about really enabling the 

mission of government through, I think, the work we do. 

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Senator CARPER. I like that—enabling the mission of government. 

Mr. VANROEKEL. Yes. 

Senator CARPER. I am going to use that, if you do not mind. 

Mr. VANROEKEL. Please do. 

Senator CARPER. The first time I use it, I will attribute it to you. 

After that, it is mine. [Laughter.] 

Let me ask Mr. Powner, if I could; you have been complimentary, 

and rightly so, in terms of the work done within the Administration in recent years and working in these vineyards. 

And, we also know that today GAO released, I think, a report 

that provides a number of areas in which—and you have alluded 

to this in your testimony—in areas of the reform plan where there 

is more to be done, acknowledging that a good deal has been accomplished. 

I think GAO and OMB seem to disagree to some extent on the 

progress made on the IT reform plan though, and I would just ask, 

if you would, just to comment on that. 

Mr. POWNER. Yes, Mr. Chairman, I would say for the most part— 

and Steve and I have had plenty of discussions on this—I think we 

are in agreement that there has been really solid progress across 

the board. To the extent of that progress and what remains, there 

might be some differences. 

One tangible example is data center consolidation. I mentioned 

in my oral statement there is great progress there, where we have 

accountable individuals; we have plans in place, but we also know 

that the inventories and plans are not where they need to be yet. 

And, we need to get those inventories and plans where they need 

to be so that we can ultimately accomplish this goal of $3 billion 

in savings. 

So, we push real hard, and that is the role we play in making 

sure that we have the solid plans in place so that ultimately we 

can get those results. That is kind of where we disagree a bit. 

I know Steve had a great line, where he said he is on the 10- 

yard line and getting ready to drive it into the end zone. That is 

the goal we want. 

I do not know if we would—— 

Senator CARPER. He is on the other team’s 10-yard line, not his 

own. 

Mr. POWNER. That is right. He is in the red zone. 

I do not know if we would agree that he is in the red zone right 

now, but he is clearly over the 50. That is OK. 

Senator CARPER. Oh, OK. 

Mr. POWNER. But, that is OK. That is kind of the disagreement 

that we might have. 

Senator CARPER. Does he have any timeouts left? [Laughter.] 

Mr. POWNER. But, clearly, we want to commend the initiatives to 

date and all the progress that has been made. 

But, now is not the time to take the foot off the accelerator. We 

want to keep that momentum going forward. Data center consolidation is a prime example. 

Senator CARPER. I like that. I will use that one too—this is not 

the time to take the foot off the accelerator. That is good. 

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11 

Why don’t you just respond a little bit, if you would, Mr. 

VanRoekel, to what Mr. Powner has said? 

There are areas of maybe some disagreement, but there is a lot 

to agree on. But, just go back to where there might be some disagreement. 

Mr. VANROEKEL. Yes, I think there is less disagreement than 

there is agreement on progress and things we have done. Every 

time, I think Dave and I always open our meetings with talking 

about our shared goals—the opportunity we have as a community, 

I think, working with Congress, GAO and the White House, working together on the important task of driving forward IT and efficiencies into Federal IT. The disagreements are typically, I think 

just mostly in my perspective, a scoping kind of disagreement. 

The 25-point plan is a discrete set of actions. If you read through 

the 25-point plan, it lists a very discrete set of actions that need 

to be undertaken. At the end of the day, that strategy was really 

about shocking the system. It was applying a change, a tactical 

change agent to really wake people up and to realize here are a set 

of things we need to go do. 

Federal IT reform does not begin or end with the 25-point plan, 

and we are taking a very broad approach to, and going above and 

beyond, most of the elements of the 25-point plan. I think if you 

look at our work on CIO authorities and PortfolioStat and some of 

the additional things we have done to build models and plans 

around data center consolidation, none were listed in the 25-point 

plan. They are all above and beyond. 

And so, we think that we are carrying that great momentum that 

happened before. And, I think at the end of the day we will all look 

back on this time and say incredible progress has been made. 

The semantics of the line items are up for discussion, and we are 

certainly having those discussions. At the end of the day, it is 

about the score on the scoreboard, I think, and we are focused on 

that result. 

Senator CARPER. Thanks. 

Both of you have a fair amount of experience in the private sector, and you bring that experience to the public sector. How is that 

helping you? Maybe, how is it less helpful? And, is there anything 

the private sector could learn from the public sector in this regard? 

Mr. VANROEKEL. Yes, I lived every day in the private sector with 

the mentality that you had to keep costs low and keep value—or 

in the case of the private sector, profit—high and you had to grow 

the profit line up and to the right and focus on results that were 

going to drive the delta between those things and think about that. 

In the public sector, we have sort of an ingrained culture of entropy where it is just a shifting cost line, to some effect, where people sort of wrap their arms around things they have done in the 

past and are not willing to really change that. 

We have been able to add new value to Federal IT over, I think, 

the prior 15 or so years, really by growing the budget. We were 

growing prior to 2009. Federal IT spending was growing about 7 

percent on a compound annual growth rate. 

In 2009, that stopped. Vivek Kundra and this Administration 

came in and flat-lined Federal IT spending. 

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Under my watch in the budget that was recently passed for 2012, 

we are actually in the negative territory. We are going down in the 

negative territory. 

But, stepping back out of those, the budget line items, you have 

to ask yourself, have we innovated? Have we done innovative 

things in the last 3 years? And, I think we have, and it sort of 

proves out the ability for us to bring this private sector mentality 

of keep that cost line flat or declining while you innovate. 

Had we kept growing Federal IT spending, we would be at about $103 billion right now if that average, that line, had been growing. 

And so, we have produced amazing value in that delta, I think, in 

the past 3 years by innovating with less. 

I think what the private sector can learn from the public sector 

is we tackle very unique things in the public sector. We are leading 

the way, I think, on cloud, with FedRAMP, and looking at security 

and the different aspects of cybersecurity as they apply. We are the 

stewards and champions of privacy and security for American citizens. I think there could be a lot of that brought into the private 

sector to learn from. 

And, I think a lot of the international aspects—computing and 

the consumerization of technology and cloud computing—are driving this sort of international dynamic that we have never seen before where the world, when your servers may be in some far-flung 

place and you do not know it, creates unique dynamics. 

And so, the private sector working hand in hand with the public 

sector to really foster the next wave, I think, could be an important 

thing that we do together. 

Senator CARPER. All right. Thank you. David. 

Mr. POWNER. A couple key areas, I would say with my experience 

in the private sector. I think accountability in the private sector is 

much stronger. And, I think some of the initiatives in the Federal 

Government now with, for instance, the IT Dashboard, where we 

have clear accountability for all 800 major IT projects, is a step in 

the right direction. 

I think one other area in the private sector, based on the experience I had, was modular incremental development. In fact, Steve 

and I were talking a lot about the move toward Agile. And, years 

ago we were doing extreme programming and that type of thing 

where you had deliverables within 90 days. I mean, we were not 

talking about months on delivery, but it was days in terms of our 

software deliveries. 

And, I think the more the government can get in that cycle, and 

clearly, that is in the IT reform plan. There is a lot that is in there, 

and I think some of the initiatives that Steve has in place are 

pushing government to be more agile when it comes to software development. 

Senator CARPER. All right. One of the questions I often ask at a 

hearing like this; basically, we are interested in knowing what in 

this case the Administration is doing and asking them to tell us 

what they think they are doing well and what the to-do list still 

is. 

And, we always like to ask GAO if they agree and where they 

agree and maybe where they do not, and then we like to have a 

conversation like we are having just now. 

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13 

But, what I always like to ask is, how about us? The people that 

sit on this side of the dais, how are we doing and what can we be 

doing? 

What are we doing that is constructive and helpful, and what 

could we be doing that would even be more enabling—to use your 

term, Mr. VanRoekel, to be even more enabling? 

So, you can turn the tables on us here. 

Mr. VANROEKEL. Yes, thank you for that opportunity. 

I think your opening statement captures a theme that I would 

love to see in the broader context of Congress, which is really the 

ability to view IT as the strategic asset. 

I mean, one comparison to the private sector that we use is that 

innovative private sector companies pretty much as a norm view IT 

as one of the most strategic aspects of their operations. They invest 

in it. Senior management reviews it. And, we see that. 

I think there is a bit too much of looking at IT as just a discretionary piece of the equation and viewing IT as just the simple 

ability to print a document or check your email on your BlackBerry, or things like that, when IT is so much more of what we 

need to embrace to drive the future forward for this country. 

One of the stats I love to quote is that over 50 percent of the Fortune 500 companies founded in this country’s history were founded 

in the worst economic times in this country’s history. And, if you 

trace many of them back, including my alma mater of Microsoft, 

founded it in 1975 during a very big recession, many of those companies were founded on the premise that they could seize on some 

new, emerging technology that would catapult them forward. 

I think many of them, if you trace back, have that and follow 

that similar line. It was that ability to seize on that inflection point 

in technology to really push ourselves forward. 

We are in one of those inflection points now. With mobile technology, cloud computing and other things, we can do so much more 

for less than we were able to even 3 years ago. And, I think it is 

our time; it is our opportunity now, to really seize on that as a 

country and to foster the private sector to do the same that we saw 

back in those times as well. Government is a very powerful enabler 

of that. 

Senator CARPER. Thank you. Mr. Powner. 

Mr. POWNER. Mr. Chairman, a couple areas. I know when you 

hold these hearings we see a spike in activity within the Federal 

agencies, so clearly, your oversight on issues. And, one tangible example is the IT Dashboard. 

And, I know Vivek Kundra gets a lot of credit for the IT Dashboard, but I am not certain we would have the IT Dashboard if it 

was not for this Subcommittee. That work started where we were 

looking at OMB’s watch lists and high risk lists and trying to raise 

the level of transparency with IT spending, and I think your continued persistence was a major factor in why we have the IT Dashboard. 

Now, in terms of using the data on that dashboard—and I know 

we have a report coming out in a couple months where we are 

going to talk about what that dashboard data shows, by agencies— 

I think we need to continue to raise the accountability through 

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14 

your hearings with this Subcommittee. You have already achieved 

a lot. There is still a lot of money that is on the table. 

And again, I think data centers—I will focus on that one also 

since there is a potential $3 billion in savings, at least, that is out 

there, and we have a report coming out for you on that in the near 

future too. It is going to identify some of the holes so that we ultimately get to the goals that are on the table. 

And, I do think Steve and I share—we have common goals trying 

to move the ball forward. 

It is important that the money that we are spending on these 

large IT acquisitions, that we really deliver on that, because one 

of your prior questions about what do we get in return. I mean, we 

get better air traffic control, more efficient air traffic control. We 

have better routes through a lot of our technology acquisitions. 

You look at IRS right now. IRS is processing tax returns this filing system much quicker than they ever have in the past because 

of a key delivery that they just delivered in December this year. 

So, there is a lot of good things happening. We just need more 

of that. 

Senator CARPER. Good. I love to quote Abraham Lincoln, and he 

used to say, among other things, the role of government is to do 

for the people what they cannot do for themselves. 

The role of the government is to do for the people what they cannot do for themselves. And, that is a paraphrase of what he said, 

but I really think that is a big part of our role, not our only role, 

but it is a big part of it. 

As we come to the end of this panel’s appearance here, I am trying to put it together and just say how do we relate what we are 

talking about here today to Lincoln’s view of the role of government. And, what I wrote down was information technology should 

be seen as a strategic—I think that was your term—strategic asset, 

enabling the mission of government. Enabling the mission of government. 

What is the mission of government? To do for the people what 

they cannot do for themselves, and given the kind of fiscal crisis 

and challenges that we face today, to do for the people what they 

cannot do for themselves in more cost-effective ways going forward. 

So, that is a pretty good mission statement for all of us. 

Do you all have anything you want to add before we excuse you 

and turn to the second panel? 

Nothing at all? 

Thank you so much. Keep up the good work. Much obliged. 

Thank you. [Pause.] 

I am going to ask the Subcommittee to come to order, please. 

We welcome our second panel. You heard the warm-up act. They 

were pretty good, were they not? 

I think they provided some good groundwork for us to go forward 

and accomplish some more here. 

I want to briefly introduce our witnesses, and we are glad you 

took time to be with us. For some of you, this is not your first visit, 

and we appreciate your return engagement here. 

First, we will lead off with George DelPrete. 

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Mr. DelPrete is a Principal with Grant Thornton and the Chair 

of TechAmerica’s Chief Information Officer Survey Task Force 

Group. 

So, you are a chairman as well, Mr. Chairman. 

He brings more than 20 years of experience in strategy and technology consulting. He has a record of assembling, of supervising 

and leading effective teams and advising executives on how to solve 

complex business challenges and use information technology to improve operational performance. Mr. DelPrete is a frequent speaker 

on topics ranging from shared services to portfolio management. 

So, welcome, sir. Nice to see you. 

Molly O’Neill, how are you today. 

Ms. O’NEILL. I am good. Thank you. 

Senator CARPER. Nice of you to come. Vice President of CGI’s 

Federal Civilian Business Unit and also serves as a fellow on CGI’s 

Initiative for Collaborative Government. Before her work with CGI, 

she was Assistant Administrator and Chief Information Officer at 

the U.S. Environmental Protection Agency (EPA) from 2007 to 

2009. In the role of CIO, she was responsible for the EPA’s information technology infrastructure and policies. Ms. O’Neill is a 

champion of innovation around data transparency, around sharing 

and collaboration. Welcome. 

Ms. O’NEILL. Thank you. 

Senator CARPER. Mr. Nick Combs, how are you today? 

Mr. COMBS. I am fine, Senator. 

Senator CARPER. Good to see you. Currently, Chief Technology 

Officer for EMC Federal and serves as a senior corporate evangelist—I like that, evangelist—on cloud computing, big data and information security issues. He has more than 26 years of experience 

managing, leading and developing information technology solutions 

for the Federal Government. He also serves on the Executive Advisory Committee of the Government Information Technology Executive Council. Nice to see you. 

And, batting cleanup in this lineup is Jennifer Morgan, the 

President of Public Service for SAP America. She is responsible for 

the company’s Federal, civilian, defense and State and local higher 

education customers. Ms. Morgan has more than 18 years of experience in helping to develop, sell and implement enterprisewide solutions and has worked with most Federal agencies, including the 

U.S. Department of Agriculture, the Department of Homeland Security and the U.S. Postal Service, over which we share jurisdiction 

and we have spent a lot of time in this room trying to figure out 

how to put them on a path that is fiscally sustainable and providing the kind of services that we need in our country. 

And, recognizing Mr. DelPrete to begin his remarks, I would just 

say try to stay within 5 minutes in your remarks. Your entire 

statements will be made part of the record. If you go way beyond 

that, I will have to rein you in. 

But, we are happy that you are here, and we look forward to 

hearing from you. Thanks so much. Mr. DelPrete. 

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1The prepared statement of Mr. DelPrete appears in the appendix on page 68. 

TESTIMONY OF GEORGE DELPRETE,1 PRINCIPAL, GRANT 

THORNTON, LLP AND ON BEHALF OF TECHAMERICA 

Mr. DELPRETE. Thank you very much. I want to thank the Subcommittee for giving us the opportunity to testify this morning. 

As you mentioned, I am a Principal with Grant Thornton, and 

I have the honor to talk to you today about the 22nd Annual 

TechAmerica CIO Survey. Grant Thornton and TechAmerica 

worked together to produce this survey, providing insight on the 

issues and challenges facing the chief information officer community for a number of years. TechAmerica is the leading voice for the 

U.S. technology industry, representing approximately 1,200 member companies. 

I will briefly summarize the five issues that were cited in the 

survey this year. There are copies of the survey for folks that are 

interested, in the back of the room this morning. 

I know it is not a focus of the survey—not a focus of the session 

today, but cybersecurity is the top concern among Federal CIOs. 

This is no surprise, as so many security issues are handled through 

cyberspace today, from controlling an elevator to moving money to 

storing confidential data on citizens. Outside threats are on the 

rise. I think we can look into our spam filters every morning and 

see the kinds of things that are trying to get us to provide private 

information to them. 

CIOs are very focused on preventing those external threats, but 

one of their primary challenges today is focusing on the internal 

threats. One CIO recently referred to the internal issues around 

cybersecurity as stupid human tricks—folks sharing passwords—— 

Senator CARPER. I am sorry? 

Mr. DELPRETE. Stupid human tricks—folks sharing passwords 

inadvertently with one another, putting personally identifiable information onto networks where it should not be and also, potentially, losing laptops. This is an area of focus for them. 

CIOs also cited cybersecurity as one of the primary issues that 

needs to be resolved to make mobility a reality. Those barriers will 

come down with a consistent, high quality, governmentwide security framework, with sound performance metrics and processes for 

sharing threat information. 

CIOs also talked about human capital. Seventy percent of survey 

respondents say the pay and hiring freezes are really hampering 

their abilities to recruit and retain the folks they need to fulfill the 

mission of the CIOs. It is also having an impact on their ability to 

create successful succession plans, to ensure that the right kinds 

of people are in those roles. 

One of the biggest challenges in the IT workforce was IT acquisition skills. Folks feel that the skill set is extremely lacking and 

look forward to having an opportunity to try and build that skill 

set. 

Central agency policy was also a key issue that was focused on. 

Survey respondents gave the 25-point plan a C+ on feasibility and 

a C on value to their organizations. Despite the mediocre score, 

CIOs felt like it served as a good cookbook of ideas; it spurred a 

lot of wonderful action and pushed some very good thinking and 

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1The prepared statement of Ms. O’Neill appears in the appendix on page 73. 

helped centralize some decisionmaking around the important IT reform initiative. 

In terms of the improvements, they would like to see it more 

flexible. One size does not fit all. And, there were a number of 

things for them to try to initiate in short timeframes, and it placed 

a large burden on them in being able to accomplish that. 

So, they would like to see a clearer statement of central agency 

priorities and overall strategy. They would also like seed money for 

some of the innovations called for in the plan. 

Mobility was also one of the things that is really an enabler and 

game changer for CIOs right now. There are some exciting pilots 

and things happening out in the Federal marketplace. 

One of the challenges they see is there needs to be better control 

over the stovepiped proliferation of mobile applications. One CIO 

referred to it like mushrooms sprouting after a rainstorm. There 

are pilots that are happening and lots of stovepiped duplication 

around this area. Great ideas, but there needs to be better control 

and governance around that. 

They also want a framework for development of mobile technology because demand is surging and changing quickly. The mobility strategy released by OMB yesterday is a positive step in 

bringing mobility further into the forefront of IT reform. 

And, the last issue was on controlling costs. As we heard about 

in the initial panel, IT budgets have remained flat and declined for 

some agencies. The positive thing about this is it is forcing some 

exciting innovations that we have seen in the community. There is 

more centralization of IT duplicative infrastructure. Folks are, I 

think, looking at better ways to reduce that cost. The data center 

consolidation is a wonderful example. 

Asked what they would do in the face of 10 percent budget cuts, 

it is the least effective method of cost control. They would eliminate 

services or lower performance, stop or slow down modernization, 

cut staff or contractors. 

IT can be a multiplier of cost savings and effectiveness—investing more now in order to gain greater benefits in the future. Congress should hold managers accountable for return on that investment, and the Federal Government should collaborate on, and 

share, IT development and assets, simplify IT’s management 

framework and replace duplication with central solutions to ensure 

we stretch our IT dollars and maximize the benefits they bring to 

a more efficient and effective government. Thank you. 

Senator CARPER. No, we thank you. Ms. O’Neill. 

TESTIMONY OF MOLLY O’NEILL,1 VICE PRESIDENT, CGI 

FEDERAL, INC. 

Ms. O’Neill. Yes, thank you, Chairman Carper, for this opportunity to appear before you today. 

My name is Molly O’Neill. I am the Vice President of CGI Federal, a global information technology and business process services 

firm. Prior to rejoining CGI in 2009, I served as the Chief Information Officer at the U.S. EPA. On behalf of my 31,000 colleagues at 

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18 

CGI, I am honored to provide some thoughts today around ongoing 

efforts to reform IT spending across the Federal Government. 

CGI applauds the Administration and congressional initiatives in 

not only eliminating wasteful IT spending but also to encourage 

Federal agency investment in the new technologies. 

In particular, CGI thanks you, Chairman Carper, as well as Senator Brown, Chairman Lieberman, and Senator Collins, for your introduction of the Information Technology Investment Management 

Act of 2011. 

The ‘‘Cloud First’’ initiative, the 25-point plan and the ‘‘Shared 

First’’ initiative—all represent positive steps forward in this area. 

However, Federal agencies do face challenges as they look to implement new technologies. 

In October 2010, CGI was selected to provide cloud services on 

the governmentwide Infrastructure-as-a-Service (IaaS) contract vehicle. Over the next 10 months, CGI’s cloud computing environment underwent a very rigorous evaluation, resulting in a permit 

authority to operate, allowing CGI to begin providing certified 

cloud services to the government. In September 2011, CGI was 

awarded the first competitively bid task order by DHS to move all 

of its public Web sites to the cloud. Since then, CGI has won a 

number of other additional task orders, including projects for GSA 

and the National Archives and Records Administration (NARA). 

Based on these projects and discussions with other Federal agencies, we offer up some of the following observations: First of all, the 

cloud helps deliver real cost savings. There are two major drivers 

that lead to the cost savings. 

The first is the speed at which new systems can transition and 

go live in the cloud. For instance, CGI worked with the General 

Services Administration (GSA) to bring 30 systems live in less than 

90 days. As a result, the agency has reduced its server footprint by 

50 to 70 percent. In the case of NARA, Archives.gov was live 10 

days after contract signing, and the site was able to handle the 

crush of 65 million visitors when the 1940 census data was released. 

The second is that agencies only pay for the capacity that they 

need. Instead of running data centers continuously at peak capacity, cloud clients have lower day-to-day costs and only pay for additional capacity when they need it. 

When migrating to the cloud, agencies can also have confidence 

in strong security. The No. 1 cloud question Federal agencies ask 

us is: Is the cloud secure? CGI can answer yes because we built our 

cloud designed to meet the Federal security requirements. Specifically, our cloud provides the Federal Information Security Management Act (FISMA) compliance for low and moderate impact systems, which represent 88 percent of Federal agency systems. To 

date, agencies across government have migrated only a tiny fraction of these systems to the cloud. 

But, significant acquisition challenges also exist. CGI agrees with 

GAO’s assessment that statutory changes are necessary to adjust 

IT budget models. However, the existing tools should also be used 

more widely. 

Agencies have struggled to modify their procurement methods for 

cloud services. The notion for paying for IT services in a more elasH605-41331-79W7 with DISTILLER

19 

1The prepared statement of Mr. Combs appears in the appendix on page 80. 

tic fashion is very different from the traditional way that government contracts and the models that they use. Many agencies are 

still also pursuing lengthy procurement processes rather than 

using some existing contract vehicles. 

There are a number of new technologies that also can provide 

significant cost savings and springboard the Federal Government 

into this new era of efficiency and transparency. Although investment in the cloud, mobility and analytics surely will result in cost 

savings, it is the convergence of these technologies that will have 

the greatest impact on transforming government. 

Just imagine a day when a Member of Congress, like yourself, 

can search real-time data to analyze the effectiveness of a program 

anytime, anywhere, because the liberated agency data is stored in 

a secure cloud and made available to any device. It certainly beats 

how things are done today. 

Technology alone can produce savings, but how the Federal Government procures and delivers IT can offer savings too. Cloud computing demonstrates that IT systems can be developed and hosted 

anywhere in the United States. 

The model is not new for CGI. Through three onshore centers of 

excellence—in Belton, Texas; Lebanon, Virginia; and Troy, Alabama—CGI provides clients with high quality IT services at costs 

significantly below the average for metropolitan U.S. cities, delivering cost savings at approximately 20 to 30 percent while providing meaningful job growth and economic development in those 

communities. 

In closing, the fundamental shifts in technology can enable more 

effective, efficient and transparent Federal Government. Movement 

to the cloud will result in lower IT costs and the ability to share 

software and services more widely across the Federal enterprise. 

However, the cloud only represents a part of what is possible. Congress and Federal agencies must capitalize on other ways to save 

money and maximize the benefit by ensuring discipline in spending, leveraging existing investments and embracing new technologies. 

Thank you once again for the opportunity, and I look forward to 

any questions that you might have. 

Senator CARPER. You are welcome and thank you. You are right 

on the money there. 

Mr. Combs, please proceed. Thank you. 

TESTIMONY OF NICK COMBS,1 FEDERAL CHIEF TECHNOLOGY 

OFFICER, EMC CORPORATION 

Mr. COMBS. Chairman Carper, my name is Nick Combs, and I 

am the Chief Technology Officer of EMC Federal. On behalf of 

EMC and our 54,000 employees, I would like to thank you for inviting me to testify today. 

Included in my written comments are many ways that the Federal Government can take advantage of capabilities and technologies to run much more efficiently, and I encourage the Subcommittee to look at those written comments. 

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Prior to joining EMC 4 years ago, I served for more than 25 

years in the Federal Government, including time as CIO of the National Media Exploitation Center and senior positions within the 

Defense Intelligence Agency. Over the course of my career in government IT and commercial industry, I have had direct experience 

resolving many of the IT challenges facing the IT industry today, 

particularly as enterprises transition to cloud services, dealing with 

this massive amount of data, and to improve trust and 

cybersecurity within our architecture. 

Within the Federal Government, all Cabinet-level departments 

and agencies utilize EMC’s innovative capabilities to deliver transforming IT initiatives within their agencies. 

We are also a leader in the private technology, in the private industry, with technology and services to support the private and financial industries, with many of our largest customers’ headquarters in Delaware and Massachusetts. 

Enterprise IT leaders in both government and commercial industry are consistently telling us their systems are too complex; they 

are too inefficient; they are too inflexible, and they are costly. 

As the leading cloud infrastructure provider, EMC is consistently 

looking for ways to improve its own IT. And, through data center 

consolidation and cloud computing, EMC has saved more than $80 

million in data center equipment costs and another $12 million in 

power and space cooling, making it 34 percent more efficient overall in energy efficiency. Imagine if we could apply that across the 

entire government. 

We believe the lessons from EMC’s journey to the cloud, as well 

as many of our other customers and partners, are equally relevant 

to the course being chartered by our Federal IT leaders. IT transformation within the enterprise can be accelerated by aggressively 

consolidating data centers, transitioning legacy systems to cloudbased infrastructure and services, and building security into the 

cloud architecture. 

While Federal agencies are beginning to make critical investments in these areas, budget cuts could stifle the Federal transformation underway if they are misdirected. A plan for up-front 

costs associated with IT transformation is an important issue for 

Congress. There have to be some investments if you want real savings, and we need to make sure we are making those investments 

in the proper way. 

Unless agencies can rely upon realistic, detailed plans to acquire 

technologies to help them do more with less, data center consolidation and cloud computing goals may not fully gain the traction and 

Federal savings could remain lower than we anticipated. 

Congress has placed Federal IT spending on a diet. In my view, 

diets are only successful if you make smart choices with what you 

consume. While we should buckle down and reduce redundant and 

unnecessary expenditures, we should invest strategically in the 

technologies, services and processes that will enable the Federal 

Government to do more with less over the long term. 

Congress, including this Senate Subcommittee and the OMB, 

should be commended for the ongoing efforts to meet these challenges head-on. In a recent GAO report, OMB efforts listed data 

center consolidation incomplete due to a lack of agency detailed reH605-41331-79W7 with DISTILLER

21 

1The prepared statement of Ms. Morgan appears in the appendix on page 93. 

porting. The good news is we have a lot more work to do in this 

environment. So, let’s keep the pressure on in that environment. 

Agency CIOs should have budget flexibility in order to aggressively shift resources toward cloud computing and away from the 

legacy systems that exist today. As noted in the GAO report released this week, Congress and the Executive Branch must identify 

budget models that will allow increased budget flexibility through 

working capital funds or other centralized IT operations and maintenance. Last year, the TechAmerica CLOUD2 Commission also 

made this recommendation. 

Cybersecurity is clearly one of the biggest concerns of Federal 

CIOs as they move toward IT transformation services. Security 

must be risk-based and driven by a flexible policy that is aligned 

to the business or mission need. This is one of the principal reasons 

that EMC supports updating the Federal Information Security 

Management Act. Enacting updated FISMA legislation that will 

enable continuous monitoring is essential to address today’s threat 

environment as well as to provide an effective operational risk 

management framework for tomorrow’s cloud computing needs. 

In conclusion, the Federal Government has many unique environments, but these diverse organizations can benefit greatly from 

the successes the commercial companies and organizations have already achieved through the adoption of cloud computing and data 

center consolidation. 

I believe that now is the time to double down on IT investments 

and efforts to incentivize these cloud transition initiatives that improve the security and delivery of our government’s systems. 

Mr. Chairman, thank you for the opportunity, and I look forward 

to your questions. 

Senator CARPER. Thanks so much for your testimony. Thanks for 

your presence and the work that you all are doing in Delaware too. 

Ms. Morgan, nice to see you. Please proceed. 

TESTIMONY OF JENNIFER MORGAN,1 PRESIDENT, SAP 

AMERICA PUBLIC SERVICES, INC. 

Ms. MORGAN. Thank you, Chairman. Chairman Carper, Members 

of the Subcommittee, thank you for the opportunity to share SAP’s 

perspective on the Federal Government’s use of information technology. 

My organization, SAP Public Services, serves more than 3,800 

public sector agencies in almost 50 States. Like you, we believe 

passionately that IT is part of the solution because we know from 

experience that IT enables faster, more intelligent decisionmaking, 

higher performance, meaningful efficiencies and cost savings, and 

greater transparency and accountability. 

We see several megatrends that are reshaping the role technology is serving in government agencies and citizens. One is called 

in-memory processing. From the beginning of time until 2003, humanity created an estimated 5 exabytes of data. Today, we create 

that same amount of data every 12 hours. In response, industry 

has created powerful new tools for managing and analyzing big 

data. 

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22 

For example, SAP’s in-memory technology allows organizations 

to analyze massive amounts of unstructured data thousands of 

times faster than traditional disk-based systems. Using this technology, one of the world’s leading medical research hospitals has 

reduced the time needed to analyze the DNA in cancer tumors from 

3 days to 2 minutes. Not only does this mean patients and their 

families receive diagnoses much faster; it means that therapies can 

be tailored to each patient’s particular condition. 

Another megatrend is mobility—our growing ability to make data 

and applications accessible to anyone, anytime, on any device. Obviously, the mobility trend raises challenges for Federal CIOs, such 

as enabling Federal workers to use their favorite mobile device securely. Most companies do this for their workers. We can do it for 

the government as well. 

A third megatrend is cloud computing—fast, flexible, cost-effective IT services on demand. We believe there is enormous potential 

for cloud computing to save the U.S. Government money while improving mission performance and creating good jobs in our economy. 

Across all of these trends, there is a consistent success factor. It 

is co-innovation with industry partners and government. Vendor 

lock-in is out; co-innovation and teamwork is in. Let me give you 

one example that illustrates the power of these trends. 

When Congress and the Obama Administration created the Recovery Accountability and Transparency Board (RATB) in 2009, to 

help ensure accountability in Federal stimulus spending, the Board 

had to determine how to manage huge quantities of evolving data 

from a variety of sources and how to best represent that information to the public in an easy, understandable way on a device of 

their choosing. 

The Recovery Board turned to SAP and other companies to 

launch a Web site known as Recovery.gov to overcome these challenges. We worked with industry partners such as CGI to base a 

solution in the cloud, which was the first Federal Web site to 

launch in the cloud, in the public cloud, and we made the data accessible on a variety of devices. Perhaps most remarkably, Recovery.gov was launched in 11 weeks when many said it could not be 

done. 

So, how can Congress and the Executive Branch make the most 

of these new technologies and reap the benefits for U.S. taxpayers? 

Well, first, we want to recognize and applaud the work that is 

being done by Steven VanRoekel and his colleagues across government, who are improving the way the public sector obtains and 

uses technology. The new Digital Strategy announced yesterday is 

another helpful contribution. 

Progress is definitely being made. Still, as the GAO has reported, 

there is more work that can be done. 

For example, the government’s IT procurement process often 

takes longer than the technology modernizations themselves. This 

is a real problem when technology innovation cycles are getting 

shorter and the costs of technology are going down. The government’s acquisition process must be accelerated to address this new 

reality. Faster, more agile IT development is possible using commercial, off-the-shelf, repeatable technology. 

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23 

Second, Congress and the Administration should encourage open 

dialog and co-innovation between the government and its private 

sector partners. This is not always possible under current procurement rules. 

And, third, we would encourage Congress to begin systematically 

building performance and accountability metrics into the legislation 

governing all agencies. IT can be an enabler of these accountability 

measures. You can only improve what you are measuring. You 

have to inspect what you expect. 

In closing, the rapid progress of technology makes it possible for 

government to improve its performance while saving money and increasing accountability. SAP appreciates the opportunity to be a 

leader and a partner in this effort. 

Thank you, and I am happy to answer any questions. 

Senator CARPER. Thanks so much. 

Was everybody here for the first panel? 

Ms. MORGAN. Yes. 

Senator CARPER. Yes. Just react to it. Just react to what you 

heard from Mr. VanRoekel and what you heard from Mr. Powner— 

what you agreed with, maybe what you did not agree with. Just 

your reaction to it and things that you think that people in my 

job—Senator Brown and others, Senator Lieberman, Senator Collins—that we should be mindful of, but just react to it for us in 

ways that would be constructive, please. 

Do you want to go first, Ms. Morgan? 

Ms. MORGAN. Sure. I think that the statement that was made 

that IT is more than just allowing neater technology or just the 

fact of having a mobile device or being able to do more electronically. IT is an enabler, but IT has the ability to truly change lives. 

IT has evolved rapidly over the last 5 years alone, and it is not 

about organizations and government agencies and companies who 

really drive the requirements of what is needed. It is people like 

us. We, the individuals, the citizens, are really driving the technology needs and demands. 

And so, I think IT can become a huge enabler when you are talking about farmers, our veterans, students, way beyond, I think, 

what people’s perception may have been about IT maybe 3, 5 years 

ago. 

Senator CARPER. Thank you. Mr. Combs. 

Mr. COMBS. Yes, I would agree with Jennifer’s comments, and I 

really liked Mr. VanRoekel’s comment, or view; IT is a strategic 

asset. 

One of the challenges in the government—and I spent 25 years 

there—is how do you keep up with the evolving innovation that is 

taking place. Every 18 months, there is some new creation that 

really changes the dynamics of IT. 

In the government, we were building stovepiped silos of excellence for the last 40 years. How do we build this innovation? This 

is where I think the public-private partnerships really come into 

play and to create those relationships, break down the barriers to 

communication that exist within acquisition. 

The other thing is GAO made the comment of do not take the 

foot off the accelerator, and I liked Mr. VanRoekel’s comments that 

we have the bigger end game in sight. And, I do not think that we 

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24 

need to stay focused just on these initiatives, right, because it is 

about more efficient, effective, cost-saving environments, and I applaud them for the additional work they are doing outside the 25- 

point plan to drive those efficiencies. 

Senator CARPER. All right. Thank you. Ms. O’Neill. 

Ms. O’NEILL. Yes, and I agree with colleagues over here that 

have just spoken. 

I think one of the key things is getting over the notion that IT 

is a support function. It really is something that is totally integrated with the mission of government now. 

And, there is a lot of talk about cost savings, rightfully so, but 

sometimes to the public that means that it is extra added support. 

And, I think efficient, more strategic, better investments kind of 

thing may be some of the better words to use because I think, putting my hat in from when I was working in the Federal Government. I think there is still a lot of push-down from the missions 

and the programs, thinking that technology is still just a support 

thing; it is just your email. Well, it is not. It is just so much more. 

And so, I think those statements earlier today about everyone 

understanding it is a strategic asset. We need to be smart about 

how we purchase it, right, which will help reduce costs, but we also 

need to continue to invest in it so that we can put those services 

out there to the citizens much better. 

The other thing is between the two witnesses, between GAO and 

OMB, there was some disagreement in terms of where they are in 

progress, but the reality is I think OMB put some stretch goals out 

there on purpose. And so, they were pretty out there in terms of 

what they were trying to get done in 12 months. 

And, if you think about the Federal Government not being a battleship, to turn a battleship, it is more like an aircraft carrier. That 

is what my friends from the Navy say. 

Senator CARPER. I am a Navy guy. 

Ms. O’NEILL. OK. 

Senator CARPER. When we talk about really hard things to 

do—— 

Ms. O’NEILL. Right. 

Senator CARPER [continuing]. We talk about having to turn an 

aircraft carrier. 

Ms. O’NEILL. OK. Right. 

Senator CARPER. In naval aviation, when we had a really hard 

thing to do, we would describe it; a really hard thing to do was like 

changing an aircraft engine when you are in flight. 

Ms. O’NEILL. Right. So, battleship is easier, right? 

Senator CARPER. It is. 

Ms. O’NEILL. But aircraft is harder. So, this is like turning an 

aircraft. 

So, I think if you do not put stretch goals out there, right, you 

are never going to get the momentum and the drive toward doing 

that. 

So, from the outside looking in, from the private sector, I think 

those were great stretch goals, and I think there is momentum out 

there. We need to keep the foot on the accelerator but at the same 

time know there is momentum, not just between the Federal agenH605-41331-79W7 with DISTILLER

25 

cies but also in the public sector and sort of the commercial world 

that is pushing these things down. 

So, the flavor of cloud and mobility and things like that are not 

going to go away, and they should not go away. We need to keep 

the accelerator on, understanding we had stretch goals for a reason 

because we are trying to move that big aircraft carrier. And, I 

think that is why there is a little bit of difference between the two. 

Senator CARPER. All right. Thank you. 

When I hear someone talk about keeping the foot on the accelerator, I think, well, the first thing we have to do is find the car. 

[Laughter.] 

We have to get in the car, turn on the ignition and engage the 

transmission and then find the accelerator. 

Ms. O’NEILL. We found the car. 

Senator CARPER. We have found the car. We are in the car. We 

have the ignition on. We turn on the radio, have some good music, 

and now we are heading down the road. 

Ms. O’NEILL. But, there is a caution—if you put the accelerator 

too far, if you have a lead foot, right, and you are going to get 

picked up for speeding. 

I mean, one of the few things in terms of the cloud itself, where 

maybe we have missed a couple goals, but the reality is—and I 

think some of the testimony here—to say we actually spent some 

time between public sector and the government really elevating security too. 

So, there are benefits associated with some of the slowness, but 

now sort of the waterfall is opening. The accelerator is on. Now, we 

can sort of push a lot harder. 

Senator CARPER. Good. Thank you. 

That is what we call stretching an analogy, I think, or a metaphor. OK, Mr. DelPrete. 

Mr. DELPRETE. Yes, I think one of my key takeaways from the 

discussion was the shared goals that both organizations have. And, 

I think they identified that the dialog around IT reform was really 

started by the 25-point plan, and there is not much in there the 

chief information officers do not agree with. 

So, whether we have finished 70 percent or 30 percent is not 

really the key point. The key point is that it is forcing CIOs to 

think about important ways to innovate and save money. 

We see a number of outstanding examples through our work, 

through the CIO survey, but also through my work at Grant 

Thornton with our customers, in trying to help them figure out 

ways to reduce the data center footprint. We do not provide the 

data center solutions on the back end. We are a trusted advisor. 

We are looking for ways to help them reduce the number of firewalls. In one organization, we are taking those firewalls from 132 

down to 124 to strengthen security but also reduce that administrative footprint. 

So, I think there are a number of examples in the 25-point plan 

about how we can use data center consolidation and cost control as 

ways to really improve what CIOs are trying to accomplish. 

I think one of the things that is a big challenge—it struck me 

from my work as the chairman of the survey task force, and I see 

it through my work at Grant Thornton today, I guess, the lack of 

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26 

authority that many central CIOs have over the purse strings. Government as a whole, I think, knows the budget of everything but 

the cost of nothing, and that is extremely true for Federal CIOs 

that we speak with. 

In our discussions of large federated agencies, CIOs control as little as one percent, 7 percent, 20 percent of the overall budget, yet 

they are supposed to be accountable for making sure that the 

money is being spent effectively. I think that is a conundrum that 

we all need to work together—industry, Congress, OMB and the 

Executive Branch—to figure out how to resolve that. 

Senator CARPER. The next question, I would ask you to think 

back on what our first two witnesses said and reflect on what they 

have said. 

Some of you know each other. I suspect some of you know each 

other pretty well and have spent a fair amount of time together, 

maybe testified together, but worked together. Just in terms of 

your statements here today and what you have said in response to 

my questions so far, just react to one another and where you find 

particular agreement or maybe where you see things a little bit differently. Would you do that? 

And, we will just start with you, Mr. DelPrete. 

Mr. DELPRETE. Sure. Absolutely. Again, my role is a little bit different than each of the folks here in that they provide technical 

tools to run a data center, provide software, provide a storage solution or virtualization solution. I am generally working on the front 

end, to help CIOs figure out how to apply these kinds of technologies on the back end to save money. And, I agree wholeheartedly with what they have said before. 

We run program manager’s offices. We are overseeing some of 

the work that CGI does. We have partnered with a number of these 

folks. I agree with everything they are saying. 

We need to make an investment in order to save money right 

now. We are really at a critical crossroads. Although cost control 

is creating innovation, I think most CIOs feel like there are too 

many balls up in the air and they are going to start to hit the 

ground and crash and burn. So, we need to step back and figure 

out how we can use these kinds of tools to make those investments 

to actually save money. 

Think about something like health IT. You need to invest millions to save billions. It is not going to happen unless you step back 

and think about how you can improve and automate a lot of what 

is happening in those spaces. 

I agree that data center consolidation, cloud computing, 

virtualization are critical technologies that are going to help further drive change, improve efficiency, create more sustainable environments for all of us. 

So, I concur with the comments, and I will open it up to my peers 

here. 

Senator CARPER. Please, Ms. O’Neill, just react to what you all 

have been saying to one another. 

Ms. O’NEILL. Yes, I think there is a lot of agreement on this 

panel in terms of there are opportunities to save. We all have solutions to bring to the table. I think we all want to work with the 

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government in more of a partnership, to look toward a lot of this 

innovation out there. 

And, I think the other thing, sort of a theme—and maybe my colleagues can react to me—is that I think that we all believe the government is on the right path and all of these initiatives have started us there. We all hope they move fast. 

And, we have all learned even within our own private companies 

how to use some of these technologies and have a lot of lessons to 

bring to the table, to sit down with the public sector. But, we also 

probably also see how all these things are converging. 

And so, one of the things and fears that sort of it goes back to 

is that sometimes in government we have initiatives, right, and we 

tend to want to react to them and put plans in place to move them 

along quickly, but if we took one step back and said, how do these 

fit together, they might have even more of an impact. 

That is probably what we are finding in our commercial lives 

back in the private industry—looking at things a little bit differently, to say, yes, we want to do data center consolidation. And, 

most of us probably do because, again, as Steve said earlier, you 

are looking at your bottom line and cutting the costs there. 

But, how are we using that, and what are we going to do, and 

how are we going to support the next generation workforce? 

Not singularly looking at telework or singularly looking at data 

center consolidation, not singularly looking at cloud. We are not 

singularly looking at cyber. It is all of those things together that 

are going to make us more efficient companies, and I think that is 

what we are looking to help government with. 

Senator CARPER. All right. Thank you. Mr. Combs. 

Mr. COMBS. And, I would agree, but really, we need to focus in 

on measuring. We have to have measurable results in what we are 

doing. And, I think sometimes we get too focused on this policy or 

that policy or this particular initiative. 

And, we need to move to cloud, but what are the results that you 

are actually getting from coming to cloud? 

And, that is my concern. I like to call that term cloud-washing, 

and it happens not only—— 

Senator CARPER. What do you call it? 

Mr. COMBS. Cloud-washing, right. 

So, you have all this buzzword, cloud, out there. And, everyone 

in the industry—you will see the same old legacy technologies coming in as cloud-ready. Nothing changed in the architecture. 

I have seen it on the government side where a 10-year-old service-oriented architecture (SOA) projects are defined cloud so that 

they can move the budget from one place to another. 

So, it happens on both sides of the street—the industry and the 

government. 

So, let’s stay focused on the measurable results that are taking 

place. We all bring technologies, and we work together. We compete in places, and we work together, to deliver the best capabilities. And, if we stay focused in on the measurable results and not 

just these terms that come up and down, like big data or cloud, 

let’s stay focused and make some success. 

Senator CARPER. All right. Good. Thanks for that commonsense 

advice. Ms. Morgan. 

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Ms. MORGAN. So, it is interesting because I think if you had 

talked to this panel probably even a couple years ago we would say 

we never work together; we competed against each other. And, the 

terms I used was co-innovation and teamwork, and over the last 

couple of years I have seen industry, certain partners, really coming together on behalf of government. 

And, that gets people’s attention because we are thinking differently. We are coming with new ideas, and we are doing things 

we have not—it usually means we are doing something new. And 

so, that is a trend that I think has brought a lot of new ideas and 

innovation that sometimes we do not even expect. Sometimes the 

government helps us see what the use cases are for the convergence of our technologies. 

Likewise, we work together in the private sector. EMC and SAP 

are huge partners. We are each customers of each other on the private sector side. 

So, now we say, how can we take the great results that we have 

seen in industry and within our own companies; how do we take 

those and apply those and reuse them in public sector, because all 

these topics we have talked about today, whether the example 

Molly used of imagine if you could see on an iPad at any time, real 

time, information about what is happening in your congressional 

district. You can look into it. You can dive down into the very detailed piece of information at that exact moment. 

Well, that is the convergence of mobility. That is the convergence 

of big data. And, likely, it is the convergence of pulling that information from the cloud. So, it is all of those together that really 

bring out the true power of what is in front of us. 

Senator CARPER. Good. Thanks. 

Thank you all. That was good. 

I have about two or three more questions, and I think I will just 

ask these of the entire panel if I could. 

Each of you represents a company, if you will, that has had success in working with the Federal Government in implementing information technology projects. Could you take just a couple minutes 

to provide maybe one—at least one, maybe two—examples, not too 

complex, if you will, but of the type of work that your organization 

has done or is currently doing with the Federal Government? 

Do you want to go first, Ms. Morgan, please? 

Ms. MORGAN. Sure, happy to. 

So, the example I used in my testimony was what we had done 

with Recovery Board, and what was exciting about that was everybody said: Oh, you cannot stand up a Web site. It is going to just 

cost so much money. It is going to take months and months and 

months. 

And again, working with kind of a motley crew of folks who we 

had never worked with before, coming together and getting that 

done and showing you can make things happen for a lot cheaper 

than you think it takes to get it done. 

So, I think that the measurement and the accountability of getting that done and also what the result of that is doing and what 

it is showing in terms of it is a platform that is repeatable across 

government. What they are doing is they are providing measurement and accountability for the stimulus funds. That is no different 

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from other programs across all agencies within the Federal Government. 

That same capability, that same approach is something that 

could be reused to look at higher programs as an example. If you 

shine a light on something, fraud and transparency really tend to 

have better results when it comes to accountability. 

That is one example. 

I think another example is a lot of times when we talk about 

technology we assume it is solely the role of an IT individual or 

CIO. And, while that is very true—those folks really own that—we 

have found that the best successes and modernizations come when 

the business owner takes responsibility for understanding what it 

is that they want to deliver, what their customer—their constituent, needs to get out of that capability. 

We have worked very closely with USDA on that, and we found 

that the ownership at the business levels within the Office of the 

CFO and the partnership that they have with the CIO creates 

much better communication, much better governance and allows 

things to happen more effectively. 

Senator CARPER. Those are good. Thanks. 

Mr. Combs, maybe an example, if you would. 

Mr. COMBS. Yes. I am very fortunate in my job. I get to travel 

around the country and talk to most of the CIOs in the government, and I would like to use a couple of examples. EMC is helping 

these companies build their cloud strategy, their transformation 

strategy in moving forward. 

If you look at the Postal Service—and I would not want to be the CIO of the Postal Service—$7 billion deficit, 38,000 post offices 

around the Nation, 80 percent of those post offices are losing business. We want to move toward technology services, but you have 

rural America that wants to get their mail every day. You want to 

cut down Saturday mail, but to save two billion dollars one day. 

Yet, the bulk mail carriers want that—those ads—to be delivered 

Saturday morning, and it drives the economy because people are 

going out and spending. So, it is a very complex situation. 

So, EMC is working with them to develop their strategy forward. 

And, they have two major data centers—in San Mateo and Eagan, 

Minnesota—and I spent a lot of time out there helping to modernize those facilities to make them more efficient. 

I just got back last month from Stennis, Mississippi, with the 

Navy’s Meteorology and Oceanography Command. And, we talk 

about consolidation and shared data services, and most of that is 

taking place within the department. But, if you look at what the 

Navy is doing there, they have to work with NOAA; they have to 

work with Department of Air Force, to bring in all of this meteorology data in a shared services architecture and to keep our ships 

safe at sea. 

So, we are working on some very great projects across the board. 

We are actually working with SAP on NASA and data center consolidation. They have 115 data centers that they need to consolidate down. 

We rolled out a system architecture that is being replicated 

across—it was started at Marshall in Alabama, and now it is being 

rolled out in Kennedy and Johnson. 

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30 

So, we are building the reference architectures to make things a 

lot more efficient in our government. 

Senator CARPER. Again, those are great examples as well. 

And, you pretty well nailed the postal—some of the challenges 

we face in postal. I like to say, though, that the situation is dire 

with the Postal Service, but it is not without hope. We can fix this, 

and we appreciate your help in doing that. Ms. O’Neill. 

Ms. O’NEILL. Well, I already mentioned the fact that we are providing the cloud service. So, we are proud of our investments there, 

in the future there and the opportunity. 

The other thing that I know that you are aware of that we work 

with the Recovery Audit Contractor (RAC), and we are looking at 

fraud, waste and recovering fraud, waste and abuse, the monies associated with that for the Medicare program. And, we are doing 

that, not just for the Federal Government but also for some States 

as well. 

Senator CARPER. Oh, good. 

Ms. O’NEILL. So, we are very proud of that work. 

So, I will pick a third, if that is OK, since you are aware of 

those—— 

Senator CARPER. Sure. 

Ms. O’NEILL [continuing]. Which is we also run the Central Data 

Exchange. 

Senator CARPER. RAC, for people who do not know, deals with 

the Recovery Audit Contractor. Where we have overpayments, 

mispayments, improper payments, sometimes fraud, we go out and 

try to recover that money. 

Ms. O’NEILL. Right, and that is interesting because that is a benefits-based contract. 

Senator CARPER. Tell folks what benefits-based means. 

Ms. O’NEILL. So, for benefits-based contracts, instead of us doing 

things on time and materials and having the government spend the 

money on the infrastructure to put the automation and the tools, 

to look for and identify areas where there has been fraud, waste 

and abuse, CGI actually invested in that, and the only thing that 

we get paid out is a portion, a very small portion, of whatever is 

not just identified but actually recovered. And so, it is a benefitsbased model and a very unique kind of project—— 

Senator CARPER. One of the benefits that flows from this, we 

have found, is not just recovering some of the money that has been 

misspent or overspent, but we actually get good ideas for how not 

to make those same mistakes, especially on health care, like pay 

and chase. We pay money for claims—in some cases, dead doctors 

providing services for dead patients. You get the drill. But, one of 

the things we have learned is how do we do that less frequently 

so that we will not spend all of our time chasing the money. 

Ms. O’NEILL. Right. So, we do not look at the back end. Now we 

have been able to take what we are learning from that and put it 

to the front end. We do not pay it out to start with. 

Senator CARPER. There you go. 

Ms. O’NEILL. So, a fantastic project, and we are very proud to 

support the Federal Government in that. 

Senator CARPER. Thank you. 

Ms. O’Neill. So, I will give you one more—— 

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Senator CARPER. Go ahead. 

Ms. O’NEILL [continuing]. Just because I think it demonstrates 

the shared services aspect of some of the things that Steve 

VanRoekel was talking about. 

So, we actually run something called the Central Data Exchange 

for the U.S. EPA. Of course, it’s—— 

Senator CARPER. It is your old shop. 

Ms. O’NEILL. Right. So, I am very proud of it as well, having 

been part of that for many years even before I was at EPA. 

Senator CARPER. How many years? Twelve? Thirteen? 

Ms. O’NEILL. The Central Data Exchange has been up since 

2003. 

Senator CARPER. OK. 

Ms. O’NEILL. But, it has formed—what is interesting, originally 

built for the Federal Government to exchange information, to get 

environmental data, with industry. Now, all 50 States are moving 

electronically into CDX. And, we were able to take CDX and now 

it exchanges data within the Federal Government. So, it is a 

shared service on environmental information exchange between 

State government, Federal Government, industry. 

And then, we were able to repurpose it for FederalReporting.gov, 

which we are working with our partner over there on the other 

side, which we mentioned earlier—to repurpose it so that we are 

not building something fresh again to support 

FederalReporting.gov. 

So, if you take a look at what the first panel was talking about, 

about shared services, we were able to get the FederalReporting up 

in a matter of weeks, as was mentioned here, and start receiving 

that data right away. So, it is something that we are very proud 

of. 

So, we are looking for innovation and reuse. So, it is not to all 

of our best interest to redevelop things for the government either. 

It is to be able to identify those things that are already out there 

and that can be repurposed to support the mission and move things 

in government a lot faster. 

Senator CARPER. Good. 

Mr. DelPrete, if you have maybe one example you would like to 

share. 

Mr. DELPRETE. Sure. It is hard to just provide one example, but, 

yes. 

We focus on performance and accountability, and one of the 

things that we are doing right now is rationalize their IT infrastructure—I talked earlier about CIOs and federations not having 

control of IT dollars being in an environment where there are 10 

help desks in one building or 15 IT contracts for commodity IT. It 

just does not make sense. There is duplication in spending. 

One of the things we have done at the Department of Interior 

(DOI) is worked with them to restructure the way that the CIOs 

are organized within the department. Secretary Salazar put out a 

memo and created an IT transformation strategy that would make 

CIOs within various departments report up to the central CIO. 

And, in doing that, we are looking at the redundancy in some of 

that infrastructure and architecture and laying out a transformation plan that will enable them to bring that back into the 

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department. And, we have a target savings goal of $100 million by 

2016. So, we are the trusted advisor helping them through that 

challenge. 

We also do a lot of work with the Recovery Board, using a combination of software and human analysis to look at grants money 

and where it is going out and try to identify instances of improper 

payments, as was mentioned by others before. 

We are also working with Patents and Trademarks right now to 

lay out a series of templates to enable them to do Agile development and keep track of that Agile at 90-day intervals. 

I think that was more than one example. 

Senator CARPER. We will let you slide. 

I think maybe my last, or next to last, question is this. I asked 

this to the first panel too, and I oftentimes ask this question. If you 

were in our shoes, if you were sitting up here and you were serving 

your State in the U.S. Senate and you were on this Committee, or 

Subcommittee, what would you do differently, more of or less of, to 

make sure that the Legislative Branch of our government is doing 

its share as we try to, among other things, use IT as a strategic 

asset in enabling our government to do its work, its job? 

Do you want to go first, Ms. Morgan? 

Ms. MORGAN. Sure. 

Senator CARPER. I would just say—let me just add, everything I 

do I know I can do better. And, I like to say, if it is not perfect, 

make it better. 

And, it is not just for me; it is not just for us in my office and 

our Subcommittee, but everything we do in government we can do 

better. So, give us a thought or two, how to do our job better in 

this regard. 

Ms. MORGAN. I think just the more that we can bring successes 

to the forefront for you to see. 

And, many times there will be a success out there. But then, it 

is, OK, how do you take that and how can it be reused in other 

agencies? And, that is where the complexity begins. 

Just from a procurement perspective, a policy perspective, it is 

hard to take the vision that we all know is out there and actually 

put it into action. 

So, I think it is helping us take these ideas that we have and 

take many of these—many of us do some of these small proof of 

concepts or pilot projects to prove out a concept. But, once it is 

proven out, how do we then unleash the power within that? 

And, I think that is where, unfortunately, bureaucracy tends to 

get in the way, and that is where you can help us understand how 

we can maybe move some of those barriers and get the technology 

and get the innovation out further in government. 

Senator CARPER. OK. Thanks. Mr. Combs. 

Mr. COMBS. Thank you for the question, sir. 

The first thing is the financial reform needed to allow the flexibility in the budget process. As a government civilian and retired 

Army personnel, working on an annual budget—in research and 

development you can have 2-year budgets. Working on a singleyear budget makes it difficult. 

The establishment of these funds that transcend Fiscal Year (FY) 

boundaries would allow organizations, as long as they are targeted 

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toward efficiencies with measurable results, all right, and you can 

put the caveats in there. I think the ability to establish those funds 

really needs to be driven by Congress. 

The other one is we have to protect our infrastructure. General 

Alexander identified a billion, or a trillion, dollars as leaving the 

U.S. economy every year because of cyber criminals. All right. 

I think our biggest risk to our Nation is the exodus of intellectual 

property that is taking place, and I will give you an example. 

General Motors does their auto design on our system, and it is 

a completely closed network. The minute that design hits the internet, it is rolling off assembly lines overseas, and they did not have 

to do any of the research and development that took place to drive 

that innovation. 

We have to move to continuous monitoring so that we can infect 

it. If we cannot get agreement on all the cyber bills that are out 

there, let’s look at what we can agree upon and move those bills 

forward to better protect our Nation. 

And, the last I would say is make it easier for the commercial 

industry to work with the government. We have the capabilities 

out there. 

In your home State, we have worked with the financial industry 

for years on financial crimes. Those capabilities can easily be 

pulled in to deal with cyber criminals or health care payment 

issues, right—to develop those, to take those commercial capabilities and adopt them to military. We have to be able to work closer 

together, public-private relationships, to move forward. 

Those are three areas that I think that you guys could provide 

a lot of benefit. 

Senator CARPER. Those are great points. Thank you. Ms. O’Neill. 

Ms. O’NEILL. Yes, three, very quickly. Continued oversight is 

great because it brings—it not only makes the government and private sector accountable but also brings attention to the importance 

of IT. And, I think all of us would agree that is something that this 

Subcommittee is very helpful with. 

The other thing—and it was just mentioned, but to push and foster and help us bring private and public sector together more, especially as we go down this road—is this very important inflection 

point, as Steve VanRoekel said, right now that we are in, with this 

convergence of technology to make sure that we do not go down the 

roads of siloism and that we learn from each other, whether it is 

on the security because the government is doing a lot with security 

around the cloud that the public sector has not gotten to yet and 

the commercial sector has not gotten to. But, to provide those opportunities for us to share ideas in a much more collaborative way 

would be very, very helpful. 

And, the other thing is to help push accepting different models 

for delivery, and I mentioned that in both my written testimony 

and my oral testimony, to say we have to break down some barriers and reeducate on the acquisition side in terms of looking at 

models for delivery that are different, that are much more cost-effective, so that we can save some money in core business that we 

have been doing for a while and invest more in the technology— 

in the new, emerging things that are going to transform government. 

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Senator CARPER. Good. Thank you. 

And, the last comment from Mr. DelPrete. 

Mr. DELPRETE. I absolutely concur with what my colleagues have 

said today. 

I think we need to continue the dialog on this very important 

issue. Eighty billion dollars is not a drop in the bucket, and we 

need to make sure it is spent in the right ways. 

Reform the IT acquisition rules. We do not have the right people 

there, and we do not have the right rules. They are much too restrictive for us to take advantage of the great technologies that are 

out there. 

We need to change the IT budget process. Working capital funds, 

multiyear money—there are lots of creative ways to give CIOs 

more flexibility and accountability for how those IT resources are 

spent. 

We also need to continue to take steps to reduce the redundant 

infrastructure and centralize where it makes sense, but we should 

only do that if we have a real good business case and we know 

what we are getting into, with clear performance metrics of where 

we are going to end up, and we continue to measure that each step 

of the way. Thank you. 

Senator CARPER. I thank you. 

My wife would like to, at some point in her life—she has a bucket list. I think most of us do. One of the things on her bucket list 

is to go to the Olympics, and the Olympics are in London this summer. 

In some of the Olympic competitions, they are competing against 

like the stopwatch, in swimming or track or whatever. And, in 

some cases it is how high they can go over a hurdle. Sometimes, 

the judges actually give scores, and you know how they raise their 

score cards and give scores. 

Sometimes I have thought about asking our staff, both Democrat 

and Republican staff, just to hold up their scores for the panels and 

tell you how you did. This has been a really good one. I am not 

going to embarrass them to do that today. 

This has been a very helpful panel, and certainly the folks, the 

two folks, who preceded you, just did an exceptional job. 

And, what you have done is to make relevant, not just to folks 

in my job, but I hope for the people who may have been watching 

us from other places around the country, to make relevant what we 

are trying to get done here, to maybe explain in ways people can 

better understand and to better explain what our responsibilities 

are on the legislative side to be a partner here, a good partner, but 

at the same time to hold folks accountable for getting the work 

done. 

I like to say, in adversity lies opportunity. That is Einstein. That 

is not me, but in adversity lies opportunity. 

And, we face plenty of adversity in our country and certainly in 

our Federal Government, but there is real opportunity as well, and 

there is real opportunity in the way that we harness information 

technology to really serve the people of this country better. 

I think we are getting—we are in the car. We found the car. We 

are in the car. Got the key in the ignition. The ignition is on. The 

motor is running. The radio is on. And, we have the car in gear. 

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And, we have got the foot on the accelerator. And, we are going to 

go some place. In fact, I think we already are. 

Thank you very much. 

With that, we are adjourned. 

[Whereupon, at 11:42 a.m., the hearing was adjourned.] 

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A P P E N D I X 

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FOR RELEASE: May 24, 2012 

CONTACT: Emily Spain (202) 224-2441 or emilLspain@carpcr.senate.gov 

U.S. SENATE COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, 

GOVERNMENT INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY 

HEARING: "Innovating with Less: Examining Efforts to Reform Information 

Technology Spending" 

Opening Statement of Senator Tom Carper, Chairman 

As prepared/or delivery 

This hearing will examine the Obama administration's progress in implementing its plan 

to transform the management of our Federal Information Technology assets. 

At a time when we're fighting to create jobs and grow our economy while also grappling 

with historic budget deficits, the American people are rightfully skeptical of a 

government that continues to squander too many of the tax dollars they entrust to us. 

They want better results from federal programs. It's our job to ensure that they get those 

results, and that they're delivered in a cost-effective manner. 

When it comes to the information technology investments that agencies rely on to 

provide the services Americans need, the federal government has consistently thrown 

good money after bad. We've built an IT infrastructure that is bloated, inefficient, and 

actually makes it more difficult for the government to serve its citizens. 

With more than $80 billion spent eaeh year on federal information technology, can we 

say that we're getting what we paid for? Can we say that we have looked at every nook 

and cranny of our IT investments and can tell Americans that we have managed their 

money effectively? I'm afraid that the answer to both questions is "no." However, all is 

not lost. 

Nearly 18 months ago, President Obama direeted our nation's first federal Chief 

Information Officer, (CIO) Vivek Kundra, to embark on an ambitious effort to bring the 

federal government's use of technology into the 21st century and ensure that we're 

operating in the most cost-effective manner possible. I commend the President and Mr. 

Kundra and his team for the sense of urgency and attention they have brought to these 

problems. We are now on a path to cut what we can't afford and nurture an environment 
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in which iIUlovative and more cost-effective technologies are being deployed throughout 

government. 

As we approach the June 2012 deadline for th~ implementation of the 25-point plan Mr. 

Kundradeveloped, I'm reminded of what Vinc~ Lombardi once said: "If you're not 

keeping score, you're just practicing." It is important that we have a good game plan in 

place, but we must also be clear in keeping score and tracking our progress. 

In keeping score, there are a num~ of areas that we can look to in order to measure the 

progress of the Administration's plan. For example, before President Obama and his team 

came into office, the federal government didn't know how many data centers it had. 

Since then, we've found out that there are over 2,000 data centers bleeding energy and 

money throughout the federal government. 

I'm happy to hear that, between now and the endof2012, nearly 500 of these data centers 

will be shuttered, saving us $3 billion per year according to the Office of Management 

and Budget (OMB). That leaves us with several hundred more to go if we are to reach 

the President'~ goal of closing nearly 1,000 by 2015. But these first few rounds may be 

the 'low-hanging fruit' or perhaps'1he fruit already on the ground. So we need to continue 

pressing hard to achieve our goals and the savings that will come with them. 

As we shutdown these unnecessary data.centers, one of the ways wc can get more 

efficient IT spending is by moving the federal government to the 'cloud'. The cloud is an 

example of the innovative tools available to government that offers an efficient pay-asyou-go approach to IT. In it, a low initial investment is required to begin, and additional 

investment is needed only as use increases. 

Many Americans already use cloud computing in some form for email or when using 

social networking sites. It's also used often by private businesses looking for costeffective IT solutions. According to OMB, federal agencies have moved almost 70 

services to the cloud with many more likely to migrate, as well. 

Another important area where we have a plan and are now keeping score is with the 

Administration's launch of TechStat Accountability Sessions, also known as "TechStats," 

in January 2010. TecbStat sessions have enabled.OMB and agency leadership to turn 

around, halt, or tenninate IT investments that do not produce dividends for the American 

people. According to 'OMB, approximately 300 "TechStat" sessions have taken place 

since 20 I 0 with approximately $4 billion jn cost savings, cost avoidance, or reallocation 

of funding for major investment projectS. 

Of course no plan is perfect. In a report released today by the Government Accountability 

Office (GAO), the government's watchdog, it provides a number of areas in the reform 

plan where more work is to be done. GAO's concerns are ones that I want to examine so 

that we don't risk losing momentum and can continue the progress that has been made so 

far. 
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As we move forward, a vital component of reforming the federal government's spending 

on IT involves learning from the private sector. IT has transformed how the private 

sector operates and has revolutionized the way in which it serves its customers. The 

Federal Government has missed out on these transformations in the past, due in part 

because we often pay more for old technology that agencies no longer need. In addition, 

we've seen chronic poor management oflarge technology investments. 

I hope our private sector witnesses on the second panel are able to share some lessons 

from their organizations and give us some insights on how we can implement even more 

innovative tools at lower costs in the federal government. 

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STATEMENT OF SENATOR SCOTT BROWN, RANKING MEMBER 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

COMMITTEE ON HOMLAND SECURITY AND GOVERNMENTAL AFFAIRS 

Hearing on 

"Innovating with Less: Examining Efforts to Reform Information Technology Spending" 

May 24, 2012 

Senator Carper, thank you for holding this important hearing today. I welcome Mr. 

Vanroekel to his first visit to our subcommittee and look forward to working with him on these 

important issues. During times of economic hardship, the private sector innovates and finds new 

ways to operate smarter, faster, and cheaper. Yet responsible fiscal policy demands the 

government do the same in good times QI bad. Accordingly, federal agencies and departments 

have increasingly looked towards information technology (IT) to modernize and enhance their 

administrative and operational functions. As the government has become more dependent on 

technology to conduct its daily business, the proportion of the federal budget going towards IT 

has risen in kind. In just the last ten years, government spending on IT has risen from just over 

$46 billion in 2001 to nearly $80 billion in fiscal year 2012. Yet, agencies government-wide 

have continually struggled with effectively planning, developing, and deploying IT investments 

successfully. Administrations present and past have struggled to keep up with the need to 

provide effective oversight and issue timely policy and f,'Uidance to meet the constant evolution 

of technology and innovation. New initiatives to address these problems are given priority for a 

time, but accountability is lost with the turnover of new leadership or a focus on "the next big 

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Take for instance Data Center Consolidation efforts - an important initiative for reducing 

costs and optimizing federal IT infrastructure. The Office of Management and Budget (OMB) 

took notice of the gross inefficiencies and duplication in federal IT assets within agencies and 

across the federal government. As a result, it issued guidance with the goal to - quote - "reduce 

the total number of agency data centers [over 1 24 months, by closing many currently operating 

data centers and concentrating their operations into a smaller number of physical locations." As 

part of this initiative, agencies were required to -again quoting --"develop an inventory of 

agency data centers and cost of operations of each data center, develop a data center 

consolidation strategy, and develop a detailed implementation plan for that consolidation." 

One could be excused for thinking I'm referring to OMB guidance as part of the current 

Administration's Data Center Consolidation Initiative (or DCCI). Unfortunately these quotes 

come from an OMB memorandum dated October 1995 -- more than 15 years ago. This 

illustrates that data center consolidation is clearly not a new concept. In 1998, presumably after 

the 1995 data center consolidation effort was complete, there were 432 data centers. By 2010, 

there were again over 2,000. Clearly the lessons learned from the previous efforts were lost over 

time, did not develop into long term best practices, and attention was diverted elsewhere as time 

passed and economic conditions changed. 

As happens often in the federal government, leadership, budget priorities, and policy 

considerations change over time both within and across Administrations. OMB has obviously 

faced these same challenges, so the purpose of providing this example was not to cast blame on 

OMB, but to point out a significant concern in light of the GAO report issued today. We must 

ensure that important initiatives started by OMB over the last couple of years develop into truly a 

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new way of doing business for agencies in how they prioritize the management of their IT 

investment portfolio. 

The 25-point plan was a positive step in addressing some long-standing problems the 

federal government has had in developing and acquiring IT. The original goal for achieving all 

25 action items in that plan is next month. As GAO has pointed out in its report, however, only a 

third of the items GAO reviewed were fully complete. I am fully on board for pushing federal 

agencies to take advantage of innovations long since adopted by the private sector including 

cloud computing and mobility solutions. These innovations have a real chance to provide 

significant return on investment, reduce redundancy, increase efficiencies at agencies, provide 

accountability and transparency and improve access to government service to taxpayers. I get 

concerned, however, that as time goes on, constant promotion of new initiatives, while all have 

their individual merits, simply give agencies the opportunity to take their eye off the balL I'm 

afraid of a time where a future Senator may sit in my chair and point out an OMB memo from 

2010 as yet another example of the federal government's inability to learn from the past and 

solve some of the fundamental problems GAO has long since identified in federal IT As the 

Administration promotes Cloud First, Shared First, Mobility First, Future First, etc.-- if 

everything is first then eventually nothing is actually first and priorities are difficult for IT 

managers to identify and prioritize. It's clear that more work remains to be done, but I appreciate 

Me Vanroekel's efforts thus far and appreciate his commitment to getting the basics right while 

making a valiant attempt to drag the federal government finally into the 21 sl century. 

To our industry guests, there is no doubt that government can leverage the expertise of 

the private sector in better ways. More attention can be focused on lessons-learned and using 

best practices both inside and outside government. For our part, I, along with Chairman Carper 

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and Senators Liebennan and Collins have been working on legislation, the Information 

Technology Investment Management Act to help with these efforts and to ensure that some 

effective oversight measures last beyond the current Administration. Considering the amount of 

money being spent on IT, senior leadership accountability and ownership over these projects 

must be a continuing top priority. This legislation will go a long way to make certain it is, now, 

and into the future. 

1 am amazed by the potential for new technologies not only to streamline government 

operations, but also expand citizen participation like never before. No doubt, there are both 

many opportunities and challenges associated with bringing the federal government into the 21 st 

Century. Both our government and industry witnesses today playa big role in pushing us ahead. 

Their efforts do not go unnoticed. I thank them for their service and look forward to an engaging 

discussion. 

Thank you Mr. Chainnan. 

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EXECUTIVE OFFICE OF THE PRESIDENT 

OFFICE OF MANAGEMENT AND BUDGET 

W ASmNGTON, D.C 20503 

May 24, 2012 

STATEMENT OF STEVEN VANROEKEL 

FEDERAL CHIEF INFORMATION OFFICER, 

ADMIN ISTRA TOR FOR E-GOVERNMENT AND INFORMATION TECHNOLOGY 

OFFICE OF MANAGEMENT AND BUDGET 

BEFORE THE SENATE COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND INTERNATIONAL SECURITY 

"Innovating,flith Less: Examining Efforts to Reform li?formation Technology Spending" 

Good afternoon, Chairman Carper, Ranking Member Brown and members of the Subcommittee. 

Thank you for the opportunity to testify on the Administration's efforts to improve the 

management of Federal Infonnation Technology (IT). Agencies today face unprecedented 

pressures a rapidly evolving technology landscape, rising public expectations, and the need to 

operate securely in an increasingly interconnected world all while we are driving toward flat or 

declining budgets. To meet these challenges, we need to shift investment away from the costly 

maintenance and operations of legacy IT systems, to 21 SI_century solutions that enable us to 

innovate with less. 

When the President appointed me to the position of Federal ChiefInformation Officer last 

August, I was charged with canying forward the Administration's efforts to harness advances in 

IT to make Government work better and more efficiently for the American people. From my 

time in the private sector, I know firsthand the enabling nature of technology to increase mission 

efficiency. Successful organizations focus on continually looking for ways to shift investment 

from support activities to those mission functions that generate the most value for their 

customers. In a lean fiscal environment, leading companies look for ways to use IT as a strategic 

asset and to do the seemingly impossible: improve and expand core services while cutting costs. 

It should be no different with the Federal Government. Nearly everything that we do as a 

Government depends on IT -- from health care, to education, to homeland security. Yet the way 

we fund IT, program-by-program and agency-by-agency, has led to a proliferation of duplicative 

systems, hinders our ability to share services Government-wide, and impedes our ability to adjust 

to the fast pace of technological change and corresponding adjustments in funding levels. For too 

long, this inflexibility has caused even the most highly visible IT projects to fail after significant 

investments in time and money. 

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Efforts to eliminate waste and duplication must be made on both ends of Pennsylvania Avenue, 

collaboratively, as our individual work will only get us so far. By eliminating duplication and 

reining in IT spending, the Federal Government can increase its focus on delivering mission 

critical services to the American people. 

To deliver on the President's commitment to create a more effective and efficient Government, 

we are leveraging the latest advances in technology to save taxpayer dollars. We are working 

aggressively to meet the challenge of innovating with less, and we are seeing real results. 

We have capitalized on the Administration's 25 Point Plan to Rejbrm Federal Information 

Technology Management (25 Point Plan).l Already we have realized billions of dollars in cost 

savings and avoidance as a result of this Administration's aggressive IT reforms, while 

improving service and accelerating delivery. When the plan is complete, we will carry on the 

work of continually improving Federal IT as our efforts do not begin or end with the 25 Point 

Plan. 

Our approach to reducing duplication and increasing efficiency in our IT spending is as follows: 

• Maximizing the return on our investment in Federal ITby providing the tools to help 

agency leadership look across their IT portfolios and take the necessary actions so that 

common business functions and services are not duplicated time and again, and make the 

right decisions on which investments to fund and which to cut 

• Optimizing our IT infrastructure by shutting down and consoli dating Federal data 

centers2

, shifting to lightweight technologies such as cloud computing3 and streamlining 

the use of commodity IT. Ultimately this allows us to support more efficient solutions 

and creates a more secure Federal footprint 

Building a more efficient and effective digital government by enabling the American 

people and an increasingly mobile workforce to access high-quality digital government 

information and services anywhere, anytime, on any device. We must ensure that as the 

Government adjusts to this new digital world, we procure and manage devices, 

applications, and data in smart, secure and affordable ways. 

1 http://www.cio.gov/documents/25-Point-lmplementation-Plan-to-Reform-Federal%20IT.pdf 

2 OMS defines a data center as /(a closet) room, floor or building for the storage, management, and dissemination 

of data and information" under the following March 19,2012 FDCCI memo: 

National Institute of Standards and Technology defines cloud computing as "a model for enabling convenient, 

on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, 

applications, and services) that can be rapidly provisioned and released with minimal management effort or 

service provider interaction." 

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Maximizing the Return on Iuvestment in FederallT 

The first policy that OMB introduced during my tenure as Federal CIO, Memorandum 11-29, 

Chief InjiJrmatiol1 Officer Authorities, shifted the role of agency Chief Information Officers 

(CIOs) away from just policymaking and infrastructure maintenance to encompass true IT 

portfolio management for the entire agency 4 This Memorandum directs ClOs to focus on 

reducing duplication and to right size and eliminate waste in their agencies' IT investments so 

that spending can be shifted to mission areas and innovative solutions that better serve the 

American people and maximize the return on our investment in IT. 

TechStat and PortjiJlioStat 

TechStat has been an important tool for enhancing and promoting CIO oversight of the large 

investments agencies make in IT. TechStat Accountability Sessions are reviews of agency IT 

programs with OMB andlor agency leadership. Using data from the Federal IT Dashboard, 

investments are carefully analyzed with a focus on problem-solving that leads to concrete actions 

to improve performance. On top of recent successes in propagating the TechStat model 

throughout the agencies and bureaus, we are also currently expanding our efforts to conduct 

more OMB-led TechStat reviews to tackle the most complex and significant IT issues facing the 

Government today. Using tools like the IT Dashboard, we are targeting underperforming IT 

investments, and then working with agencies to find solutions to address inefficiencies and to 

deliver better technology solutions sooner, and at a lower cost. 

Through the work outlined in the IT Reform Plan, agencies identified nearly $1 billion in 

efficiencies over the last year, adding to the $3 billion found in OMB-led TechStat reviews. This 

brings the grand total of TechStat cost implications to approximately $4 billion in less than two 

years. More information about these results is available in the TechStat Report released on 

December 8, 2011, and published on cm.gov5 

While TechStat targets individual investments, the newly launched PortfolioStat initiative takes a 

broader approach by looking across entire agency portfolios for consolidation and optimization 

opportunities. Launched on March 30,2012, PortfolioStat will be the primary tool through 

which agencies will assess the maturity of their IT portfolio management process, identify and 

eliminate duplication, cut lower priority investments, and move to shared solutions in order to 

maximize the return on IT investments across the portfoli06 Agency Deputy Secretaries are 

responsible for the implementation and subsequent outcomes from the PortfolioStat initiative. 

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Shared-I'irst 

The Federal IT Shared Services Strategy, released on May 2, 2012, calls for agencies to migrate 

two commodity IT services to a shared approach by the end of20127 Agencies will increasingly 

consolidate IT-related enterprise, business, and infrastructure services and systems. In so doing, 

we will not only improve the scope and quality of these shared services, but through strategic 

sourcing initiatives, agencies will also be able to take advantage of lower prices and acquisition 

strategies that better support modernization as new approaches become available. 

To help agencies innovate with less, we are promoting Enterprise Architecture (EA) principles 

that support the development of solutions along the lines of "Iittle-to-big" (e.g., consolidating 

duplicated capabilities) and "big-to-little" (e.g., using modular delivery to speed results and 

reduce risk). 

EA is a powerful tool for agency leadership and management to use in eliminating waste and 

duplication, moving toward shared service delivery models, and embracing new technologies 

such as cloud computing, mobile, and social media. EA can also support new, enhanced 

governance methods and subsequent changes to operating procedures, such as TechStat, 

PortfolioStat, and continuous monitoring. 

Operationalizing IT Management 

For the first time, the Federal Government has dedicated funding to operationalize and build 

upon these efforts to deliver most cost savings to the American taxpayers. The new Integrated, 

Efficient and Effective Uses ofInformation Technology (IEEUIT) account will augment and 

accelerate the early results from TechStat and PortfolioStat by providing expert resources and 

additional analytical capabilities like the continually improving IT Dashboard, to root out and fix 

or terminate poorly perfonning or duplicative IT investments. IEEUIT will also fund activities 

designed to drive down commodity IT costs, such as data center consolidation, shared incubation 

pilots, and a centralized catalog of commodity IT products and services accessible by agencies. 

Optimizing our IT Infrastructure 

When this Administration came into office, we found outdated technology, infrastructure and 

rampant duplication. From poorly performing projects to redundant infrastructure, it was clear 

aggressive reform was needed. We are attacking the problem by consolidating data centers and 

moving to lightweight, shareable technologies, such as cloud computing, while also directing 

agencies to consolidate commodity IT services and move to a shared services modeL 

Data Center Consolidation 

Under the Federal Data Center Consolidation Initiative (FDCCI), we have accelerated our efforts 

to consolidate Federal data centers and now plan to close 968 data centers by 2015, pushing our 

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goal up 20% from the original as set in February 20] O. By the end of calendar year 2012 alone, 

we plan to close 429 data centers. 

To date, 267 data centers have been consolidated and we are beginning to see budgetary results. 

For example, as stated in the President's Budget, the Department of Defense plans to save up to 

$300 million in FY 2013 by closing 100 data centers. In other cases, agencies are investing in 

their current infrastructure to accomplish the goals of data center consolidation. The Department 

of Homeland Security (DHS) is currently building its enterprise data centers and expects to reap 

billions in savings starting at the end of the decade. But as we decommission data centers, we 

must make sure we are optimizing the infrastructure we will continue to operate as the future 

inventory must be more efficient, secure, and better able to serve agency missions. 

That is why in addition to focusing on data center consolidation opportunities to maximize 

savings, we must also improve the operations of the data centers that remain in our 

inventory. Agencies will focus on efficiency and quality of service, ensuring that they are taking 

advantage of current technologies, which deliver a greater return on IT investments. 

Finally, as agencies optimize their infrastructure, the Government will become more secure by 

improving its cyber security posture, more sustainable by reducing the energy use of our total 

data center inventory, and more cost efficient with its use of Federal property. Data center 

consolidation and optimization enables the Federal Government to be more agile as we expand 

our use of cloud services and other innovative technologies. 

Cloud Computing 

As we consolidate our infrastructure, we must also shift the Government's mindset from capital 

intensive asset ownership to more service-oriented models, such as cloud computing, which 

allow agencies to pay for only the resources they need at the time of use. 

For too long, the government's administrative and procurement processes did not keep pace with 

new technologies. To accelerate the adoption of cloud based services, the Administration 

launched the Federal Risk Authorization Management Program (FedRAMP). FedRAMP 

establishes a standardized approach to security assessment, authorization, and continuous 

monitoring for cloud solutions. 

FedRAMP leverages a "do once, use many times" framework that produces savings in the 

overall cost, time, and staff currently associated with conducting duplicative agency security 

assessments. It also provides a uniform risk management approach that utilizes a standard set of 

baseline security controls so that each agency doesn't have to reinvent the wheeL An initial 

operating capability of FedRAMP will go-live in June 2012. 

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Additionally, agencies have made significant progress on cloud migrations under the 

Administration's "Cloud First" policy8 This led to the successful migration of 40 services to 

cloud with an additional 39 migrations to come by June 2012. These migrations alone have led 

to the elimination of more than 50 legacy systems, and greater efficiency through providing 

shared services such as collaboration tools. 

Cyber Security 

As we optimize our infrastructure by consolidating data centers and leveraging innovative 

technologies, we must never lose sight of the fact that we need to be ever-vigilant in protecting 

our national assets and information. With threats evolving daily, cyber security must be a focus 

of everything we do. 

The Administration continues to make significant investments in cyber security efforts, 

providing DRS with resources that will fund enhancements to our cyber programs to protect 

large and small agencies from cyber intrusions. We have also provided resources for a 

centralized continuous monitoring capability to identify and mitigate vulnerabilities on agency 

networks, improving the cyber security of the entire Federal enterprise. 

Building a More Efficient aud Effective Digital Government 

Technology is fundamentally transforming how we conduct our business and live our daily lives. 

Advances in computing power, the rise of high-speed networks, and the growing mobile 

revolution have unleashed new innovations, spawned new industries and reshaped existing ones. 

The President has charged us with harnessing the power of technology to help create a futureready digital government one that is efficient, effective and focused on improving the delivery 

of services to the American people. 

Digital Government S'trategy 

The Digital Government Strategy will provide a 12-month roadmap to jumpstart the use of smart 

mobile technology and improve delivery of digital services to the American people and our 

Federal workforce. We must ensure that Government information, data and services are available 

anywhere, anytime, on any device. The strategy will help agencies use modern tools and 

technologies to seize the digital opportunity and fundamentally change how the Government 

serves both its internal and external customers, at lower costs. It will also layout actions to 

ensure that as the Government adjusts to this new digital world, we build the infrastructure 

needed to support digital government efforts to leverage the Federal Government's buying power 

to reduce costs where appropriate. 

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Through the implementation of this strategy, we aim to fundamentally transfonn how the 

Government connects with, and provides services to, the American people. Through our ongoing 

efforts, we will help provide the Federal workforce with the 21 S'-century tools to cany out their 

mission of delivering services to all citizens. Lastly, the strategy will enable more efficient, 

coordinated digital service delivery at a lower cost. 

Innovative Tools 

In addition to providing the Federal Government with a roadmap to improve digital services, we 

are regularly leveraging innovative tools and technologies to create efficiencies across agencies. 

In January of this year, President Obama laid out a proposal to consolidate the Federal 

Government. His first focus is on Government's interaction with businesses and the fact that 

there are six separate organizations within the Federal Government that focus primarily on 

business and trade. Through the work and cooperation of the Department of Commerce, the 

Small Business Administration, and other agencies, we have been able to stand up BusinessUSA, 

a virtual one stop shop that makes it easier for America's businesses to access the services and 

infonnation they need to help them grow, hire and export9 

Another tool that the Administration launched this year was the Federal Infrastructure Projects 

Dashboard,IO bringing new transparency and accountability to the multi-agency permitting 

process. The focus of the cun'ent phase is to create new opportunities for collaboration among 

the Federal agencies involved in a nationally or regionally significant project. For the first time, 

each of these projects will have a space in which the Government can answer the questions of 

who, what, and when for the pennits and actions required to make these projects shovel ready. 

Innovating With Less 

The steps the Federal Government is taking to eliminate waste and duplication and invest in 

innovative technologies will allow us to better serve the American people. Now there are some 

who say we should not invest in IT in this fiscal environment, or use cyber security concerns to 

promote the misconception that you cannot innovate and effectively maintain security. But, the 

American people expect us to use technology to provide the same level of service they 

experience in their everyday lives. They pay bills online and buy plane tickets on smartphones. 

And it's not just the millennial generation - with grandparents now using social media to keep in 

touch with grandchildren - expectations have reached a critical point faster than anticipated. 

Building on the progress of the last two-and-a-halfyears, my focus going forward will be to 

drive innovation in Government and make investments in technology that better serve the 

American people. We will use technology to improve productivity and lower barriers to citizen 

and business interaction with the Government, all while bolstering cyber security. 

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As part of a broader continuous improvement in IT, the Federal Government is shifting its 

mindset from building proprietary and highly customized systems to adopting light technologies 

and shared or provisioned solutions. Eliminating duplicative IT infrastructure, reforming Federal 

IT management, and streamlining service delivery are at the core of the Administration's 

approach to root out waste and duplication throughout Government. I appreciate the work this 

Committee has done in this area-as you well know the magnitude of these efforts require all of 

us to continue to work together. 

Thank you for the opportunity to appear today and I look forward to our discussion. 

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GAO 

For Release on Dplivery 

E:xppctNI at 10:00 a.m. EDT 

rnu1fsday, May z1, 2012 

GAO-12-745T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Federal Financial 

Management, Government Information, Federal 

Services and International Security, Committee on Homeland Security and Governmental Affairs, United 

States Senate 

INFORMATION 

TECHNOLOGY REFORM 

Progress Made; More 

Needs to Be Done to 

Complete Actions and 

Measure Results 

Statement of David A. Powner, Director 

Information Technology Management Issues 

GAO 

Accountability * Integrity * Reliability 
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Chairman Carper, Ranking Member Brown, and Members of the 

Subcommittee: 

I am pleased to be here today to discuss the progress the Office of 

Management and Budget (OMB) and key federal agencies have made on 

selected action items associated with information technology (IT) reform. 

While investments in IT have the potential to improve lives and 

organizations, some federally funded IT projects can-and havebecome risky, costly, unproductive mistakes. With at least $79 billion 

spent in fiscal year 2011 by the U.S. government on IT investments, it is 

important to ensure the most efficient and effective use of resources. 

In December 2010, the Federal Chief Information Officer (CIO) released a 

25-point plan for reforming federal IT management. This document 

established an ambitious plan for achieving operational efficiencies and 

effectively managing large-scale IT programs. It also clearly identified 

actions to be completed in three different time frames: (1) within 6 months 

(by June 2011), (2) between 6 and 12 months (by December 2011), and 

(3) between 12 and 18 months (by June 2012). 

You asked us to testify on our report being released today that describes 

the progress OMB and key federal agencies have made on selected 

action items in the IT Reform Plan and the extent to which sound 

measures are in place to evaluate the success of the initiative. ' In this 

regard, my testimony specifically covers the progress made on 10 

selected IT Reform Plan action items by OMB; the General Services 

Administration (GSA); and the Departments of Homeland Security, 

Justice, and Veterans Affairs. In preparing this testimony, we relied on our 

report being released at today's hearing. In that report, we evaluated 

progress by selecting 10 action items from the IT Reform Plan, focusing 

on action items that (1) were expected to be completed by December 

2011, (2) covered multiple different topic areas, and (3) were considered 

by internal and OMB subject matter experts to be the more important 

items. We also selected three federal agencies (the Departments of 

Homeland Security, Justice, and Veterans Affairs) based on several 

factors, including high levels of IT spending and large numbers of 

investments in fiscal year 2011. We then evaluated the steps OMB and 

1 GAO, Information Technology Reform: Progress Made,' More Needs to Be Done to 

Complete Actions and Measure Results, GA0-12-461 (Washington, D.C .. Apr. 26, 2012) 

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Background 

the selected federal agencies had taken to implement the selected action 

items from the IT Reform Plan. In cases where the action was behind 

schedule, we compared plans for addressing the schedule shortfalls to 

sound project planning practices. We also determined whether and how 

agencies were tracking performance measures associated with these 

action items, and compared these measures to best practices in IT 

performance management. In addition, we interviewed OMB and selected 

agency officials regarding progress, plans, and measures. 

All work on which this testimony is based was performed from August 

2011 to April 2012 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives, We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objective, 

IT can enrich people's lives and improve organizational performance. 

However, as we have described in numerous reports and testimonies, 

federal IT projects too frequently incur cost overruns and schedule 

slippages while contributing little to mission-related outcomes. Further, 

while IT should enable government to better serve the American people, 

the federal government has not achieved expected productivity 

improvements-despite spending more than $600 billion on IT over the 

past decade, 

Over the last two decades, Congress has enacted several laws to assist 

agencies and the federal government in managing IT investments. Key 

laws include the Paperwork Reduction Act of 1995,' the Clinger-Cohen 

Act of 1996,3 and the E-Government Act of 2002,4 Also, the GPRA 

(Government Performance and Results Act) Modernization Act of 2010 

includes IT management as a priority goal for improving the federal 

'44 U.S c. § 3501 et seq. 

340 U.S.C. § 11101 etseq 

4The E-Government Act of 2002, Pub. L. No. 107-347 (Dec. 17,2002) 

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Federal IT Refoml Plan 

Strives to Address 

Persistent Challenges 

government. 5 Each of these laws delineates roles and responsibilities for 

OMB and agencies regarding information technology and its 

management. 

As set out in these laws, OMB is to playa key role in helping federal 

agencies manage their investments by working with them to better plan, 

justify, and determine how much they need to spend on projects and how 

to manage approved projects. Within OMB, the Office of E-government 

and Information Technology, headed by the Federal CIO, directs the 

policy and strategic planning of federal IT investments and is responsible 

for oversight of federal technology spending. 

Agency CIOs are also expected to have a key role in IT management. 

Federal law, specifically the Clinger-Cohen Act, has defined the role of 

the CIO as the focal pOint for IT management, requiring agency heads to 

designate CIOs to lead reforms that would help control system 

development risks; better manage technology spending; and achieve real, 

measurable improvements in agency performance. 

In addition, the CIO Council-comprised of CIOs and Deputy CIOs of 28 

agencies and chaired by OMB's Deputy Director for Management-is the 

principal interagency forum for improving agency practices related to the 

design, acquisition, development, modernization, use, sharing, and 

performance of federal information resources. The CIO Council is 

responsible for developing recommendations for overall federal IT 

management policy; sharing best practices; including the development of 

performance measures; and identifying opportunities and sponsoring 

cooperation in using information resources. 

After assessing the most persistent challenges in acquiring, managing, 

and operating IT systems, in December 2010 the Federal CIO established 

a 25-point IT Reform Plan designed to address challenges in IT 

acquisition, improve operational efficiencies, and deliver more IT value to 

the American taxpayer. 6 The actions were planned to be completed in 

5pub. L. No. 111-352, 124 Stat. 3866 (2011). The GPRA(Government Performance and 

Resu!ts Act) ModernizatIon Act of 201 0 amends the Government Performance and 

Results Act of 1993, Pub. L. No. 103-62, 107 Stat 285 (1993) 

60MB, 25 Point Implementation Plan to Reform Federal Information Technology 

Management (Washington, D.C .. Dec. 9, 2010). 

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three different time frames: (1) within 6 months (by June 2011), (2) 

between 6 and 12 months (by December 2011), and (3) between 12 and 

18 months (by June 2012). Several different organizations were assigned 

ownership of the key action items, including the Federal CIO, the CIO 

Council, GSA, the Office of Personnel Management, the Office of Federal 

Procurement Policy, the Small Business Administration, and other federal 

agencies. Table 1 contains detailed information on selected action items 

in the IT Reform Plan. 

Table 1: OMB's IT Reform Plan: Selected Action Items, Required Activities, and Responsible Parties 

Plan 

number Action item title 

10 

13 

15 

Complete detal!ed 

implementation plans 

to consolidate 800 

data centers by 2015 

Shift to a "cloud first" 

policy 

Launch a best 

practices 

collaboration platform 

Design a cadre of 

specialized IT 

acquisition 

professionalsc 

Issue contracting 

guidance and 

templates to support 

modular 

Required activities 

Complete consolidat!on plans that Include a technical road map, 

clear consolidation targets, and measurable milestones 

Identify dedicated agency-specific program managers 

Establish a cross-government task force comprised of the agency 

program managers 

Ensure the task force meets monthly 

Launch a public dashboard for tracking progress towards closures 

Estabhsh a federal strategy for movmg to cloud computing" 

Identify three services (per agency) that are to move to cloud 

computing 

Establish migration plans for the three services that are to move 

Establish a portal for program managers to exchange mformation 

on best practices 

Require agencies to submit their experiences to the portal 

Codify and synthesize agency submissions to provide a searchable 

database that facilitates real-time problem solving 

Define an IT acquisition specialist position 

Establish the requirements, guidance, cUrriculum, and process for 

becommg one 

Create guidance to strengthen the IT acquisition skills and 

capabilities of IT acquisition specialists 

Work with IT and acquisition community to develop guidance on 

contracting for modular developmentd 

Obtain feedback from industry leaders 

Develop templates and samples supporting modular development 

Page 4 

Responsible 

parties 

OMB and 

federal 

agencies 

OMS and 

federal 

agencies 

CIO Council 

OMB and 

federal 

agencies 

Office of 

Federal 

Procurement 

Policy 

Due date 

June 2011 

June 2011 

June 2011 

June 2011 

December 

2011 

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Plan 

number Action item title 

17 Work with Congress 

to create IT budget 

models that align 

with modular 

development 

Responsible 

Required activities parties Due date 

Analyze workmg cap!tal funds and transfer authorities to Identify current OMB and June 2011 

IT budget flexibilities federal 

Identify programs at agencies where additional budget flexibilities could agencies 

improve outcomes 

Work with Congress to propose budgetary models to complement the 

modular development approach 

Evaluate mechanisms for increased transparency for these programs 

20 Work with Congress Work with Congress to consolidate commodIty IT spendmg under the OMB and June 2011 

21 

22 

to consolidate agency CIO federal 

commodity IT 

spending under 

agency CIOe 

Reform and 

strengthen 

Investment Review 

Boards 

Redefine role of 

agency CIOs and 

CIOCouncil 

Develop a workable funding model for "commodity" IT services 

Have the CIO Council and agency CIOs identify "commodity" services to 

be included in this funding model as they are migrated towards shared 

services 

Revamp IT budget submIssions 

Have agencies conduct "TechStat" revIews! 

Have OMB analysts provide training to agency CIOs m the "TechStat" 

methodology 

Make agency CIOs respons!ble for managmg the portfolio of large IT 

projects within their agencies 

Have the CIO Council periodically review the highest priority "TechStat" 

findings assembled by the agency CIOs 

Source GAO analys,s 010M8's IT Reform Plan 

agencIes 

OMB and June 2011 

federal 

agencies 

Federal CIO June 2011 

and agency 

CIOs 

"Cloud computing is an emerging form of computing where users have access to scalable, on¥ 

demand capabilities that are provided through Internet-based technologies, It has the potential to 

provide IT services more quickly and at a lower cost 

blnfrastructure-as-a-Service is one type of cloud computing in which a vendor offers varioLis 

infrastructure components such as hardware, storage, and other fundamental computing resources 

"While the IT Reform Plan discusses having agencies develop cadres of specialists, there is no 

requirement for agencies to do so 

dAccording to the IT Reform Plan, modular development is a system development technique that 

delivers functionality in shorter time frames by creating requirements at a high level and then refining 

them through an iterative process, with extensive engagement and feedback from stakeholders 

eCommodity services are systems or services used to carry out routine tasks (e.g., e-mail, data 

centers, and web infrastructure) 

10MB defines a TechStat as a face-to-face, evidence-based accountability review of an IT investment 

that results in concrete actions to address weaknesses and reduces wasteful spending by turning 

around troubled programs and terminating failed programs 

GAO Has Previously 

Reported on Needed 

Improvements in Federal 

IT Management 

Given the challenges that federal agencies have experienced in acquiring 

and managing IT investments, we have issued a series of reports aimed 

at improving federal IT management over the last decade. Our reports 

cover a variety of topics, including data center consolidation, cloud 

computing, cia responsibilities, system acquisition challenges, and 

modular development. Key reports that address topics covered in the IT 

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Reform Plan include reports on data center consolidation, 7 cloud 

computing,8 best practices in IT acquisition,9 IT spending authority, 10 

investment review and oversight,11 and agency CIO responsibilities. 12 For 

example, in July 2011, we reported that only one of the agencies 

submitted a complete data center inventory and no agency submitted a 

complete data center consolidation plan. 13 We concluded that until these 

inventories and plans are complete, agencies might not be able to 

implement their consolidation activities and realize expected cost savings. 

We recommended that agencies complete the missing elements in their 

plans and inventories. In response to our recommendations, in October 

and November 2011, the agencies updated their inventories and plans. 

We have ongoing work assessing the agencies' revised plans, and in 

February 2012, we reported that our preliminary assessment of the 

Data Center Consolidation: Agencies Need to Complete Inventories and Pfans to 

Achieve Expected Savings, GAO-11-565 (Washington, D.C .. July 19, 2011), and Followup on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and 

Fragmentation, Save Tax Dollars, and Enhance Revenue, GAO-12-453SP (Washington, 

D.C. Feb 28,2012) 

BGAO, Information Security: Federal Guidance Needed to Address Contro/lssues with 

Implementing Cloud Computing, GAO-10-513 (Washington, D.C .. May 27,2010), and 

Information Security: Additional Guidance Needed to Address Cloud Computing 

Concerns, GAO-12-130T(Washington, D.C. Oct 5, 2011) 

9GAO, Information Technology: Critical Factors Underlying Successful Major Acquisitions, 

GAO-12-7 (Washington, D C.: Oct. 21, 2011) 

1oGAO, Information Technology: VA Has Taken Important Steps to Centralize Control of 

Its Resources, but Effectiveness Depends on Additional Planned Actions, GAO-08-449T 

(Washington, D. C .. Feb. 13, 2008) 

11GAO, IT Dashboard: Accuracy Has Improved, and Additional Efforts Are Under Way To 

Better Inform Decision Making, GAO-12-210 (Washington, D,C.: Nov. 7, 2011); 

Information Technology: OMB Has Made Improvements to Its Dashboard, but Further 

Work Is Needed by Agencies and OMB to Ensure Data Accuracy, GAO-11-262 

(Washington, D.C .. Mar. 15,2011); Information Technology: OMB's Dashboard Has 

Increased Transparency and Oversight, but Improvements Needed, GAO-iO-70i 

(Washington, D.C .. July 16, 2010); Information Technology: Management and Oversight 

of Projects Totaling Billions of Doflars Need Attention, GAO-09-624T (Washington, D.C .. 

Apr, 28,2009), Information Technology: Agencies and OMB Should Strengthen 

Processes for Identifying and Overseeing High Risk Projects, GAO-06-647 (Washington, 

D.C .. June 15, 2006); and Information Technology: OMB Can Make More Effective Use of 

Its Investment Reviews, GAO-05-276 (Washington, D.C .. Apr. 15, 2005) 

12GAO, Federal Chief Information Officers: Opportunities Exist to Improve Role in 

Information Technology Management, GAO-11-634 (Washington, D.C Sept. 15, 2011) 

13GAO-"-565. 

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OMB and Key Federal 

Agencies Have Made 

Progress on IT 

Reform Action Items, 

but Much Remains to 

Be Done 

updated plans showed that not all agency plans were updated to include 

all required information. 14 We discuss each of the topics in more detail in 

the report being publicly released today. 15 

As discussed in our report, OMB and key federal agencies have made 

progress on selected action items identified in the IT Reform Plan, but 

there are several areas where more remains to be done. Of the 10 key 

action items we reviewed, 3 were completed and the other 7 were 

partially completed by December 2011. The action items that are behind 

schedule share a common reason for the delays: the complexity of the 

initiatives. In all seven of the cases, OMB and the federal agencies are 

still working on the initiatives. However, OMB and federal agencies have 

established time frames for completing only two of these initiatives. 

In a December 2011 progress report on its IT Reform Plan, OMB reported 

that it made greater progress than we determined. The agency reported 

that of the 10 action items, 7 were completed and 3 were partially 

completed. OMB officials from the Office of E-government and 

Information Technology explained that the reason for the difference in 

assessments is that they believe that the IT Reform Plan has served its 

purpose in acting as a catalyst for a set of broader initiatives. They noted 

that work will continue on all of the initiatives even after OMB declares the 

related action items to be completed under the IT Reform Plan. We 

disagree with this approach. In prematurely declaring the action items to 

be completed, OMB risks losing momentum on the progress it has made 

to date. 

Table 2 provides both OMB's and our assessments of the status of the 

key action items, with action items rated as "completed" if all of the 

required activities identified in the reform plan were completed, and 

"partially completed" if some, but not all, of the required activities were 

completed. 

14GAO-12-453SP. 

15GAO-12-461 

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Table 2: GAO's Assessment of the Status of Key Action Items 

reported 

status 

Plan number (as of 

and action December 

-,it""e-,mc-t_it_'e~-----, 2011) 

(1) Complete 

detailed 

implementation 

plans to 

consolidate at 

least 800 data 

centers by 

2015 

(3) Shift to 

cloud-first 

policy 

(4) Stand·up 

contract 

vehicles for 

GAO', 

assessment Description 

In 2011, agencies published their updated consolidation plans and identified dedicated 

program managers for their data center consolidation efforts Also, OMS established a 

cross-government task force comprised of the agency program managers that meets 

monthly and launched a public dashboard for tracking progress in dosing data centers 

However, not all of the agencies' updated data center consolidation plans include the 

required elements. Of the three agencies we reviewed, one (the Department of Justice) 

lacked required milestones and targets for servers and utllization_ In addition, in 

February 2012, we reported finding similar gaps in multiple agencies' consolidation 

plans."When asked why the plans were not yet complete, agencies reported that it 

takes time to adequately plan for data center consohdation and many found that they 

need more time. We have previously recommended that agencies complete the 

missing elements from their data center consolidation plans. b OMS has noted that 

agencies are expected to provide an update on their plans in September2012 

The Federal CIO published a strategy for moving the governmentto cloud computing 

and had each agency identify three services to be moved to the cloud. In addition, each 

of the three agencies we reviewed established migration plans for these services and 

had migrated at least one service to the cloud by December 2011. However, each of 

the three agencies' migration plans we reviewed were missing key reqUired elements. 

including a discussion of needed resources, migration schedules, or plans for retiring 

legacy systems. We have ongoing work performing a more detailed review of seven 

agencies' progress In implementing the federal cloud computing policy underway, and 

plan to issue that report in the summer of 2012. c However, at this point there are no 

time frames for agencies to complete their migration plans. 

GSA has established a common set of contract vehicles for secure cloud-based 

infrastructure solutions, and made them available governmentwide. As of January 

2012, federal agencies could purchase cloud solutions from three GSA~approved 

vendors. 

developed a i allow program 

managers to exchange best practices and case studies, and aU three agencies we 

reviewed have submitted case studies to OMS for the portal. However, the data 

accessible by the portal has not yet been effectively codified and synthesized, making it 

difficult for program managers to search the databases and for them to use it for 

problem solving. For example, a general search for cloud computing best practices 

identified more than 13,000 artifacts, while a date-bounded search for the last year 

identified 14 artifacts-of which only 8 clearly provided information on best practices in 

cloud computing. The vice chairman of the CIO Council explained that the portal's 

shortcomings are due to how new it is, and noted that the council is still working to 

improve the portal's functionality. However, the CIO Council has not established a time 

frame for providing this additional functionality 

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Plan number 

and action 

item title 

(13) Design a 

cadre of 

specialized IT 

acquisition 

professionals 

(15) Issue 

contracting 

guidance and 

templates to 

support 

modular 

development 

(17) Work with 

Congress to 

create IT 

budget models 

that align with 

modular 

development 

(20) Work with 

Congress to 

consolidate 

commodity IT 

spending 

under agency 

CIOs 

reported 

status 

(as of 

December 

2011) 

Partially 

compteted 

Partially 

completed 

GAO's 

assessment 

Partially 

completed 

Partially 

completed 

Description 

1, the I Issued gUidance defining an ! 

acquisition specialist; established the requirements, guidance, curriculum, and process 

for becoming one; and established guidance to strengthen the IT acquisition skills and 

capabilities of IT acquisition specialists. Because the development of the cadre is 

voluntary, the status of the agencies we reviewed varies: the Department of Veterans 

Affairs has a cadre of specialized IT acquisition professionals, the Department of 

Homeland Security is developing one, and the Department of Justice is still considering 

whether they need such a cadre 

An offlc!al within the Office of Federal Procurement Policy stated that the agency 

worked with the IT and acquisition community to develop draft guidance for modular 

development, and has obtained feedback from industry leaders. However, the office 

has not yet issued this guidance, or the required templates and samples supporting 

modular development. An Office of Federal Procurement Policy official explained that 

delays were due to challenges in ensuring consistent definitions of modular 

development across the government and industry. The office currently plans to issue its 

guidance and templates in spring 2012 

OMS reported that it analyzed eXisting legal frameworks to determine what budget 

fleXlbilities are currently available and where additional budget flexibilities are needed, 

and worked to promote these ideas (such as multiyear budgets or revolving funds) with 

selected congressional committees. Also, the three agencies we reviewed identified 

programs where additional budget flexibilities could improve outcomes. For example, 

the Department of Homeland Security proposed a working capital fund for centralized 

IT operations and maintenance functions. However, in response to OMS's ideas, there 

has not yet been any new legislation to create budget authorities as a result of the IT 

Reform Plan and OMB has not identified options to increase transparency for programs 

that would fall under these budgetary f1exibilities. OMB officials noted that they are 

behind schedule in working with Congress, in part because when the IT Reform Plan 

was issued in December 2010, the fiscal year 2012 budget process was already under 

way. They explained that this meant they needed to wait to incorporate changes into 

the fiscal year 2013 budget process. However, OMB has not yet established time 

frames for completing this activity. 

OMB issued a memo in August 2011 that, among other things, required agencies to 

consolidate commodity IT services under the agency CiO. d In addition, the federal CIO 

has discussed the importance of consolidating commodity IT under the agency CIOs 

with selected congressional committees. However, OMS noted that this action Item is 

behind schedule and that it is continUing to discuss the implementation of the memo 

and the development of models for funding commodity IT With agencies and Congress 

Further, the three agencies we reviewed had not yet reported to OMS on their 

proposals for migrating commodity IT services to shared services, in part because they 

were waiting for guidance from OMB. OMB officials noted that part of the reason for the 

delay is that when the IT Reform plan was issued in December 2010, the fiscal year 

2012 budget process was already under way. Therefore, they needed to wait a year to 

incorporate changes into the fiscal year 2013 budget process. However, OMS has not 

established a time frame for completing this activity 

Page 9 GAO-12-745T 
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reported 

status (as 

Plan number of 

and action December 

..,i",te:-;m-,to-it-;-Ie __ 2011) 

(22) Redefine 

role of agency 

CIOs and the 

CIOCouncil 

GAO'. 

assess .. 

ment 

In August , issued a memo i i 

CIO away from solely being responsible for policymaking and iin [,"''',,,,!,,,-o maintenance to a role that encompasses true portfolio management for an IT. 

However, OMB acknowledged that there is disparity among agency CIOs' authorities 

and that it will take time for agencies to implement the required changes. Of the three 

agencies we reviewed, two GlOs reported having true portfolio management for all IT 

projects, and one did not. The Department of Homeland Security's CIO does not yet 

have responsibility for the portfolio of aU IT projects. We have ongoing work assessing 

the department's governance of IT investments. 

Regarding changes in the role of the CIO Council, the council formed a committee to 

focus on management best practices. This committee analyzed the outcomes of agency 

TechStat reviews over the past year and published a report discussing governmentwide 

trends in December 2011. 

Source GAO analysIs of OMS "nd 8gtlncy (lalil 

"GAO·12·453SP. 

'The seven agenCies are the Departments of Agriculture. Health and Human SeI1/lces. Homeland Securrty. State. and Treasury. as_II 

as GSA and tim Small 6usme~s Admmlstmuon 

Until OMB and the agencies complete the action items called for in the IT 

Reform Plan, the benefits of the reform initiatives-including increased 

operational efficiencies and more effective management of large-scale IT 

programs-may be delayed_ With the last of the action items in the IT 

Reform Plan due to be completed by June 2012, it will be important for 

OMS and the agencies to ensure that the action items due at earlier 

milestones are completed as soon as possible. 

OMB Has Not Established Measures for Evaluating Results on Most 

IT Refonn Initiatives 

The importance of performance measures for gauging the progress of 

programs and projects is well recognized. In the past, OMB has directed 

agencies to define and select meaningful outcome-based performance 

measures that track the intended results of carrying out a program or 

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activity." Additionally, as we have previously reported, aligning 

performance measures with goals can help to measure progress toward 

those goals, emphasizing the quality of the services an agency provides 

or the resulting benefits to users." Furthermore, industry experts describe 

performance measures as necessary for managing, planning, and 

monitoring the performance of a project against plans and stakeholders' 

needs." According to government and industry best practices, 

performance measures should be measurable, outcome-oriented, and 

actively tracked and managed. 

Recognizing the importance of performance measurement, OMB and 

GSA have established measures for 4 of the 10 action items we 

reviewed: data center consolidation, shifting to cloud computing, using 

contract vehicles to obtain Infrastructure-as-a-Service, and reforming 

investment review boards. Moreover, OMB reported on three of these 

measures in the analytical perspectives associated with the President's 

fiscal year 2013 budget. Specifically, regarding data center consolidation, 

OMB reported that agencies were on track to close 525 centers by the 

end of 2012 and expected to save $3 billion by 2015. On the topic of 

cloud computing, OMB reported that agencies had migrated 40 services 

to cloud computing environments in 2011 and expect to migrate an 

additional 39 services in 2012. Regarding investment review boards, 

OMB reported that agency CIOs held 294 TechStat reviews and had 

achieved more than $900 million in cost savings, life cycle cost 

avoidance, or reallocation of funding. 

However, OMB has not established performance measures for 6 of the 10 

action items we reviewed. For example, OMB has not established 

measures related to the best practices collaboration platform, such as 

number of users, number of hits per query, and customer satisfaction. 

Further, while OMB has designed the guidance and curriculum for 

developing a cadre of IT acquisition professionals, it has not established 

measures for tracking agencies' development of such a cadre. Table 3 

160MB, Guide to the Program Assessment Rating Toof. 

17 GAO, NextGen Air Transportation System: FAA's MetriCs Can Be Used to Report on 

Status of IndMdual Programs, but Not of Overall NextGen Implementation or Outcomes, 

GAO-10-629 (Washington. D.C.: July 27.2010). 

18Thomas Wettstein and Peter Kueng, "A Maturity Model for Performance Measurement 

Systems," and Karen J. Richter, Ph.D., Institute for Defense Ana!yses, CMMf® for 

Acquisition (CMMf-ACQ) Primer, Version 1.2. 

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details what performance measures and goals, if any, are associated with 

the action item, 

Table 3: Assessment of Performance Measures Associated with Selected IT Reform Action Items 

Action item 

(1) Complete detailed 

implementation plans to 

consolidate 800 data centers 

by 2015 

(3) Shift to a cloud-first policy 

(4) Stand-up contract vehicles 

for secure Infrastructure¥as¥aService solutions 

(10) Launch a best practices 

collaboration platform 

a cadre of 

IT acquisition 

(15) Issue contracting 

guidance and templates to 

development 

(17) Work. with Congress to 

create IT budget models that 

with modular 

(20) Work. with Congress to 

consolidate commodity IT 

spending under agency CIOs 

(21) Reform and strengthen 

investment review boards 

Performance measures 

Number of data center 

closures 

Expected cost savings 

Number of services 

transitioned to a cloud 

computing environment 

Number of legacy systems 

eliminated 

Anticipated cost savings 

Number of task orders issued 

under the contract vehicle 

Dollar amounts awarded 

through the contract vehicle 

Period of performance for the 

contract 

Number of T echStat reviews 

Number of terminated 

programs 

Page 12 

The IT Reform Plan identifies a goal to consolidate 

data centers by 2015. 

In December 2011, in conjunction with a decision to 

include smaller data centers in the consolidation effort, 

the Federal etO increased this goal to more than 1,QOO 

data centers by 2015, 

In 2012, OMS announced a goal of saving $3 

The IT Reform Plan states that each agency will identify 

three services to move to the cloud and that one of 

those services must move within 12 months. 

OMS has not yet announced goals for eliminated 

legacy systems or anticipated cost savings. 

GSA established a goal of having at least one task 

order issued under the Infrastructure-as·a-Service 

blanket purchase agreement in the first year. 

GSA has not yet announced goals for its second year. 

OMB established a goal of having agency CIOs 

terminate or turn around one third of all 

underperforming IT investments by June 2012. 
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Action item 

(22) Redefine role of agency 

CIOs and the CIO Council 

Performance measures 

Cost savings associated with 

T echStat reviews 

Performance goals 

Source: GAO analYSj$ of OMS and agency data 

"Performance measures or goals have not been established for this action item. 

Until OMB establishes and tracks measureable, outcome-oriented 

performance measures for each of the action items in the IT Reform Plan, 

the agency will be limited in its ability to evaluate progress that has been 

made and whether or not the initiative is achieving its goals. 

Implementation of Recommendations Could Help Ensure Key 

Efforts are Completed and Results are Identified 

In our report being released today, we are making several 

recommendations to help ensure the completion of key IT reform 

initiatives and that the results of these initiatives are measured. 

Specifically, we are recommending that the Departments of Homeland 

Security, Justice, and Veterans Affairs complete elements missing from 

the agencies' plans for migrating services to a cloud computing 

environment, and identify and report on the commodity services proposed 

for migration to shared services. All three agencies agreed with our 

recommendations and identified steps that they are undertaking to 

address them. 

In addition, we are recommending that the Federal CIO ensure that the 

action items called for in the IT Reform Plan are completed by the 

responsible parties prior to the completion of the IT Reform Plan's 18 

month deadline of June 2012 and that the agency provide clear time 

frames for addressing the shortfalls associated with the IT Reform Plan 

action items. The Federal CIO agreed with both of these 

recommendations and stated that OMB intends to complete the action 

items by the deadline. We are also recommending that the Federal CIO 

accurately characterize the status of the IT Reform Plan action items in 

an upcoming progress report in order to keep momentum going on action 

items that are not yet completed. The Federal CIO disagreed with this 

recommendation and stated that OMB has accurately characterized the 

completeness of the action items, and therefore, the recommendation 

does not apply. We do not agree with OMB's characterization of four 

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action items. Specifically, OMB considers the action items associated with 

data center consolidation, cloud-first policy, best practices collaboration 

portal, and redefining roles of agency CIOs and the CIO Council to be 

completed. While we agree that OMB has made progress in each of 

these areas, we found activities specified in the IT Reform Plan that have 

not yet been completed. For example, in the area of data center 

consolidation, we found that selected agency plans are still incomplete. In 

addition, in the move to cloud computing, selected agency migration 

plans lack key elements. Thus, we believe that the recommendation is 

warranted. 

To address our concerns regarding performance measures, we are 

recommending that the Federal CIO establish outcome-oriented 

measures for each applicable action item in the IT Reform Plan. The 

Federal CIO disagreed with our recommendation and noted that OMB 

measured the completeness of the IT Reform Plan action items and not 

the performance measures associated with broader initiatives. We 

continue to believe that our recommendation is appropriate because there 

are multiple action items in the IT Reform Plan that are not aligned with 

broader initiatives and for which there are no measures. Examples 

include the best practices portal, developing a cadre of specialized IT 

acquisition professionals, and establishing budget models that align with 

modular development. Given that the purpose of the IT Reform Plan is to 

achieve operational efficiencies and improve the management of largescale IT programs, we maintain that it is appropriate to establish 

performance measures to monitor the IT Reform Plan's results. 

In summary, OMB and selected agencies have made strides in 

implementing the IT Reform Plan, including pushing agencies to 

consolidate data centers, migrating federal services to cloud computing, 

improving the skills of IT acquisition professionals, and strengthening the 

roles and accountability of CIOs. However, several key reform items 

remain behind schedule despite OMB stating that these items have been 

completed. 

In addition, OMB has not established performance measures for gauging 

the success of most of its reform initiatives. For example, while OMB is 

tracking the number of services that agencies move to a cloud computing 

environment and the number of data center closures, it is not tracking the 

usefulness of its efforts to develop a best practices collaboration portal or 

a cadre of IT acquisition professionals. 

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Overstating progress and not implementing appropriate performance 

measures do not position the federal IT community to leverage and build 

on the progress made to date. Moving forward, it will be important for 

OMB to continue to provide guidance, goals, and oversight to ensure that 

critical IT reform efforts extend well beyond the original 18-month time 

frame. It will also be important for agencies to aggressively pursue the 

completion of IT reform initiatives. 

Chairman Carper, Ranking Member Brown, and Members of the 

Subcommittee, this concludes my statement. I would be happy to answer 

any questions at this time. 

GAO Contact and Staff Acknowledgments 

311270 

If you or your staffs have any questions about this testimony, please 

contact me at (202) 512-9286 or at pownerd@gao.gov. Individuals who 

made key contributions to this testimony are Colleen Phillips (Assistant 

Director), Cortland Bradford, Rebecca Eyler, Kathleen S. Lovett, and 

Jessica Waselkow. 

Page 15 
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Tech 

1HE 

WHERE THE FUTURE BEGINS 

INNOVATION WORLDWID~ 

Statement of 

George DelPrete 

Principal 

Grant Thornton LLP 

Grant Thornton 

on behalf of 

TechAmerica 

before the 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, 

Government Information, Federal Services, and International Security 

May24,2012 

For more information, contact: 

Trey Hodgkins 

Senior Vice President 

TechAmerica 

(703) 284-5310 

thodgkins@techamerica.org 

601 Pennsylvania Avenue, NW, Ste. 600 North, Washington, DC 20004 

703-522-5055 

www.techamerica.org 
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Testimony of George DelPrete on behalf of TechAmerica 

Innovating with Less: Examining Efforts to Reform Information Technology Spending 

May 23,2012 

12 

Thank you for inviting me to testify this morning. 

I am a principal in Grant Thornton's Global Public Sector (GPS), based in Alexandria, Virginia. 

Our mission is to provide responsive and innovative financial, performance management, and 

systems solutions to governments and international organizations. I lead the firm's federal 

government information technology (IT) practice. I have worked in the government IT field for 

21 years with a primary focus on IT investment decision making and management. 

Today I report on the results of the 22nd Annual TechAmerica Survey of Federal Chief 

Information Officers. TechAmerica is the leading voice for the U.S. technology industry, 

representing approximately 1,000 member companies of all sizes from the public and 

commercial sectors of the economy. Grant Thornton has supported TechAmerica in this annual 

survey since its inception, and I had the honor to direct the spring 2012 edition. 

For 22 years, TechAmerica has conducted an annual survey of federal information executives, 

including chief information officers (ClOs) and their deputies, chief technology officers, the 

heads of major information technology (IT) divisions and representatives of oversight and 

congressional organizations. In 2012, IT professionals from TechAmerica member firms 

interviewed 40 of these federal executives. The executives identified five major concerns: 

cybersecurity, controlling costs, human capital, central agency policy and mobile technology. 

Cybersecurity 

Although I know it is not the focus of this hearing, it is important to note that cybersecurity 

remains at the top of the list of ClO concerns. This is no surprise, as so many security issues are 

handled through cyberspace, from controlling an elevator to moving money to storing 

confidential data on citizens. Some CIOs say that most major data breaches come from inside a 

government organization, yet most cybersecurity resources are directed at outside threats. 

Outsider threats are on the rise, however, and are becoming more sophisticated. On the 

upside, security threat upsurges have led to policy changes and innovation driven by a renewed 

sense of partnership between operations and their cybersecurity offices and among 

government agencies. On the downside, cybersecurity threats are an inhibitor for IT 

centralization and mobility. Those barriers will come down only with greater trust among 

agencies resulting from a consistent, high-quality, government-wide security framework. The 

framework must have sound performance metrics and official processes for sharing threat 

information. Several survey respondents say that the Federal Information Security 

Management Act (FISMA) needs to be more dynamic. Most say they need more funding for 

cybersecurity. 

Human Capital 

601 Pennsylvania Avenue, NW, Ste. 600 North, Washington, DC 20004 

703-522-5055 

www.techamerica.org 
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Testimony of George DelPrete on behalf of TechAmerica 

Innovating with Less: Examining Efforts to Reform InformatIon Technology Spending 

May 22,2012 

Page 13 

Human Capital 

seventy percent of survey respondents say that pay and hiring freezes affect their IT workforce 

and hiring plans. Freezes cause some key staff to leave and make attracting new, younger staff 

harder. About half of CIOs say there are formal succession plans to fill gaps left by their 

departing IT executives and senior managers (a problem as Baby Boomers retire). CIOs want a 

workforce with management and "people" skills. Such skills include abifity to work in 

collaborative teams, negotiate with contractors, do business analysis and budgeting, manage 

change and be leaders. Needed technical skills include application development, mobility, 

network engineering. cybersecurity and open-source content management. IT acquisition skills 

are in short supply, which may be one reason that many CIOs think the IT acquisition process is 

"broken." 

Of special note regarding the acqUisition process is the increasing use of the acquisition practice 

"lowest priced, technically acceptable" (lPTA). lPTA is increasingly the only criteria applied to 

the acquisition of goods and services in the government market and it Is especially troubling in 

the IT sector, where the practice frequently yields less than "best value" for the taxpayer, For 

example, instead of conSidering the Hfecycle costs of items - acquisition, Installation, operation, 

maintenance, upgrade and finally disposal· many acquisitions are driven onty by which bid 

included the lowest price. Often, other important considerations are left out of the equation. 

TechAmerica would call the increasing prevalence of this practice to the attention of the 

Committee and ask that it examine the acquisition practices of the government, assess their 

value in the Information Age and identify more effective and efficient practices to address the 

new funding demands IT products and services often impose. 

Central Agency Policy 

The federal government's policy cornerstone for IT reform is the 25-Point Implementation Plan 

to Reform Federal Information Technology issued by the White House Office of Management 

and Budget (OMB). Asked to rate the Plan as a whole, survey respondents gave it a C+ on 

feasibility and a C on value to their organizations, progress to date in implementation and their 

leaders' commitment to further progress. Despite the mediocre s'Core they give the Plan, most 

CIOs support it - they just want to see the Plan improved. Positive comments include that the 

Plan is a cookbook of good ideas, has spurred action, pushed, good thinking and helped 

centralize decision making. Policies promoted by the Plan might be better if they were more 

fleXible, say CIOs, because "one size does not fit all." CIOs would like a clearer statement of 

central agency priorities and overall strategy. They would also like seed money for some of the 

innovations called for in the pran. 

This note on funding points to the overall status of the IT appropriations process as the major 

outstanding element of the 25-Paint Plan left to address. TechAmeric3 Identified in our report 

601 Pennsylvania Avenue, NW, Ste. 600 North, Washington, DC 20004 

703-522-5055 

www,techa.merL<;a.org 
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Testlmony of George DelPrete on behalf of TechAmerica 

Innovating with Less; Examining Efforts to Reform Information Technology SpendIng 

May 22, 2012 

Pagef4 

to the Office of Management & Budget (OMB) titled Government Technology Opportunities jor 

the 21st Century that funding for IT programs did not match the pace of innovation and was an 

outdated process for the Information Age. The multi-year cycles and agency-by-agency 

appropriations makes true savings from government-wide IT investment strategies difficult to 

achieve. OMB echoed those findings in the 25-Point Plan and we call on the Committee to 

focus on ways to improve the process of appropriating for IT programs as a means of 

maximizing the investment in innovation. 

Mobility 

Mobility means smartphones, tablets and other devices, but It is not a gadget-buying exercise, 

say CIOs. Mobility is a technical and cultural revolution in how people access and use 

information and, for civil servants, in how, where and when they work. Right now, 

cybersecurity concerns are barriers to mobility in some organizations. On the other hand, CIOs 

in law enforcement, intelligence and defense organizations, where one would expect 

reSistance, are great supporters of mobile technology. CIOs stress the need for a strong 

strategy for mobility governance, involving common hardware versus "bring your own device" 

policies, synchronization, access to data, security and other issues. They also want a framework 

for fast development of mobile technology because demand is surging and changing quickly. 

Controlling Costs 

The survey shed valuable insight into CIO views on cutting wasteful and inefficient IT spending, 

the subject of today's hearing. CIOs in our survey say that the most effective and feasible ways 

to save IT money are to consolidate redundant systems and operations and cancel 

underperforming projects and services. This includes consolidating data centers, which survey 

respondents saw as a good initiative both because it saves money and offers tighter central 

management of IT operations. Respondents condemned across-the-board budget cuts as the 

least effective method of cost control. Asked what they would do in the face of a 10% cut to 

their budgets, respondents said they would: 

• Eliminate services or lower performance in service-level agreements (SLAS)i 

• Stop or slow down modernization, development and infrastructure work; or 

• Cut staff or contractors. 

Of interest is that most survey participants agree that cost cutting drives efficiency and 

innovation, plus it gives CIOs more influence. Tight budgets lead to improved planning, better 

IT development practices, new funding methods and a harder search for savings. Respondents 

also say they would save money if central agencies and Congress required them to fulfill fewer 

data calls or unfunded mandates. 

601 Pennsylvania Avenue, NW, Ste. 600 North, Washington, DC 20004 

703-522-5055 

I(IiW.1fL.tectlamertc.aQ.rg 
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Testimony of George DelPrete on behalf of TechAmerica 

Innovating with Less: Examining Efforts to Reform Information Technology Spending 

May 22,2012 

Page IS 

Respondents think there are limits to what cost cutting can do to promote innovation and 

modernization. To start, the always-rising tide of IT innovation has become a digital tsunami. 

Although Cloud-based alternatives to owning IT assets have been around for some time, a 

Cloud First imperative is now sweeping through the federal government. The number of 

mobile devices - smartphones, pads and other handheld devices - has surged past other means 

of communicating or using digital information, creating quandaries for cybersecurity and 

government IT policy. Congress has curtailed IT funding along with other investments, with 

little or no new money for realizing IT's potential. Financial relief is not likely for several years 

to come, yet during that time citizen demand for digital public service will continue to swell. 

To conclude, we are about to go through a truly revolutionary time in IT innovation, one that 

will make many existing IT assets obsolete in just a few years. We can start up that hill now 

with the sole intent of saving millions of dollars, only to forego billions of dollars in benefits and 

savings a few years down the road. Alternatively, we leverage IT as a multiplier of cost savings 

and effectiveness, investing more now in order to gain greater benefits in the future. But 

Congress should hold managers more accountable for a return on that Investment. The federal 

government should collaborate on and share IT development and assets, simplify IT's 

management framework, and replace duplication with central solutions. Solutions require 

robust business case analysis to confirm savings and returns on investment. This will ensure we 

stretch ou r IT dollars and maXimize the benefits they bring to a more efficient and effective 

government 

A full copy of the TechAmerlca 22"d annual federal CIO survey can be read and downloaded at 

www.federalciosurvev.com. 

Thank you. 

601 Pennsylvania Avenue, NW, Ste. 600 North, Washington, DC 20004 

703-522-5055 

www.techamerlca.org 
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Written Testimony of Molly O'Neill 

Vice President 

CGI Federal Inc. (CGI) 

Prepared for 

The Senate Committee on Homeland Security and 

Governmental Affairs 

Subcommittee on Federal Financial Management, 

Government Information, Federal Services and 

International Security 

Hearing Entitled 

"Innovating with Less: Examining Efforts to Reform 

Information Technology Spending" 

May 24,2012 
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Chairman Carper, Senator Brown, Members of the Subcommittee, thank you very much for the 

opportunity to appear before you today. My name is Molly O'Neill and I am a Vice President at CGI 

Federal Inc. (CGI), a global information technology and business process services firm. Prior to re-joining 

CGI in 2009, I served as the Chief Information Officer at the Environmental Protection Agency (EPA). On 

behalf of my 31,000 colleagues at CGI, I am honored to provide some thoughts today around ongoing 

efforts to reform IT spending across the federal government. 

CGI has partnered with its commercial and federal, state, and local government clients for more than 36 

years on a wide array of technology projects. As a company, CGI has worked with more than 100 federal 

organizations, so like the members of this Subcommittee, CGI has recognized patterns across 

government that aren't always visible within a specific agency given its focus on a single core mission. 

CGI takes very seriously its responsibility, not only to its individual clients, but also to the entire federal 

government and, as a result, CGI welcomes this opportunity to share its observations. 

Among its recent noteworthy projects, CGI was proud to partner with the EPA to support the Recovery 

Accountability & Transparency Board with the rapid development and deployment of 

FederaIReporting.gov, which served as the "in box" for recipients of Recovery Act funds to report their 

spending. CGI also has had the honor of testifying in front of this Subcommittee about its work as a 

Recovery Audit Contractor (RAe), helping identify nearly $400 million of improper payments in the 

Medicare program. These projects are the latest in a long line of successful federal partnerships where 

CGI has worked side by side with federal employees to achieve the agency mission. 

Additionally, as one of three cloud services providers granted a certified-secure, permanent "Authority 

to Operate" by the General Services Administration (GSA) last year, CGI has now implemented cloud 

solutions for a number of clients under the Infrastructure-as-a-Service (laaS) contract vehicle. 

CGI applauds the Administration and Congress not only for its continued efforts to eliminate wasteful IT 

spending, but also for its recognition that continued investment in IT will save money, improve 

efficiency, increase transparency, encourage innovation, and provide better service to U.s. citizens and 

businesses. In particular, CGI thanks you, Chairman Carper, as well as Senator Brown, Chairman 

Lieberman, and Senator Collins for your introduction and support of the Information Technology 

Investment Management Act of 2011. This legislation encourages more active oversight of IT programs 

across government and also provides creative new incentives to reward individuals who help their 

agencies succeed with the acquisition and implementation of these initiatives. 

Additionally, the "Cloud First" initiative, the 25-point plan, and the "Shared First" initiative all represent 

positive steps forward in this area. However, it should come as no surprise that with such significant 

changes also come significant challenges as federal agencies look to implement and realize the 

maximum benefit associated with new technologies. In my testimony today, I will discuss some of CGI's 

specific experiences as a service provider of cloud computing, describe some of the barriers that stand in 

the way of faster adoption of new technologies, and offer some recommendations for how government 
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and industry can move beyond the cloud to collaborate on solutions that allow us to "do both more and 

better, but with less." 

Cloud Computing Experience: Successes and Barriers 

In October 2010, CGI was honored to be one of the 12 companies selected by the GSA to provide cloud 

services on the government-wide Infrastructure-as-a-Service (laaS) contract vehicle. Over the 10 months 

that followed, CGI's cloud computing environment underwent a rigorous evaluation process that 

resulted in receipt of a permanent "Authority to Operate" (ATO), allowing CGI to begin providing 

certified-secure cloud services to government agencies. In addition to meeting the technical and 

management requirements outlined in the contract, the ATO's Assessment and Accreditation process 

ensured that CGI met all of the necessary federal security requirements, including the Federal 

Information Security Management Act (FISMA). In September 2011, CGI was awarded the first 

competitively-bid task order under the laaS vehicle by the Department of Homeland Security (DHS) to 

move all of the Department's public websites to the cloud. Since then, CGI has won a number of 

additional task orders under the same vehicle, including projects for the GSA's Office of Citizen Services 

and the National Archives and Records Administration (NARA). In each of these situations, CGI's clients 

were able to quickly compete their task orders under the laaS vehicle and move forward with a contract 

award. CGI is now delivering more than $100 million in secure cloud solutions to agencies ranging from 

DHS to the Department of Labor and the Nuclear Regulatory Commission. 

Based on these projects and discussions with numerous other federal agencies over the past year, CGI 

offers the following observations for consideration: 

Cloud helps deliver real cost savings in the short-term. There are two major drivers that lead to 

cost savings. The first is the speed at which new systems can transition and go live in the cloud. 

Traditionally, it would take at least six (6) months to launch a website or system, but with cloud, 

that timeframe is dramatically reduced. For instance, CGI worked with the GSA to bring 30 

systems live in less than 90 days. As a result, the agency has reduced its server footprint by 50-

70 percent. In the case of NARA, Archives.gov was live 10 days after contract signing and was 

able to handle the crush of 65 million visitors coming to the site in conjunction with the 1940s 

census data release. At DHS, the RestoretheGulf.gov and StudyintheStates.dhs.gov websites 

were deployed in CGI's secure public cloud just six (6) weeks after project kickoff. The second 

cost savings driver is that agencies only pay for the capacity that they need. So, instead of 

running data centers that continuously provide peak capacity, CGI's cloud clients have 

significantly lower day-to-day costs and clients pay only for added capacity when needed. For 

example, capacity would surge for fema.gov when a hurricane approaches the coastline. With 

cloud, clients also have more control over costs. Under CGI's contract with DHS, CGI notifies the 

Department when 80 percent of a monthly not-to-exceed dollar limit is reached and does not 

bill any costs beyond an approved threshold unless the contract is modified. 
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When migrating to the cloud, agencies can have confidence in strong security. The number 

one cloud question federal agencies ask CGI is: "Is the cloud secure?" Having taken many 

agencies live in the cloud, CGI can answer, "yes," because its cloud is designed to meet federal 

security requirements. Specifically, CGI's federal cloud was built to ensure that agencies have 

automated security management, greater redundancy, improved disaster recovery, and 

simplified security auditing. In addition, CGI has found that shifting public data to an external 

cloud has reduced agencies' risk of exposing internal data. As a result, considerable opportunity 

remains to increase government savings from the cloud while maintaining strong system 

security. CGI's federal cloud provides FISMA compliance for low and moderate impact systems, 

which represent 88 percent of federal agency systems. To date, agencies have migrated only a 

tiny fraction of these systems to the cloud. This Subcommittee can encourage agencies to seize 

on this savings opportunity by moving beyond the security question to migrate low and 

moderate impact systems to certified-secure federal clouds. 

Strong leadership and inter-departmental cooperation increase the results from cloud. CGI 

commends the GSA for both: (1) its leadership role with the laaS contract, which provides 

agencies with a vehicle to quickly access secure cloud solutions, and (2) the recent development 

of the Fed RAMP model, which represents a significant and necessary step forward as the federal 

government looks to implement the cloud. It is critical that the federal government adopt a 

common risk framework for all its agencies. Without this consistency, agencies are likely to look 

for highly-customized solutions that often hold no real extra benefit and severely limit potential 

cost savings. Moving forward, CGI is hopeful that Fed RAMP will have the necessary resources to 

operate efficiently and avoid becoming a bottleneck given the tremendous existing (and likely 

continuing) demand for cloud services. 

Significant acquisition challenges exist. In discussions with dozens of agencies on this topic, CGI 

has seen a wide variety of approaches to transitioning to the cloud. CGI agrees with the GAO's 

assessment that statutory changes are necessary to adjust IT budget models to better enable 

flexible development. However, the existing tools also can be used more widely. Although many 

agencies have moved aggressively into the cloud and used existing contract vehicles, many 

others have struggled to modify their procurement methods when purchasing cloud services. 

Cloud computing not only represents a fundamental change to how IT services are delivered, 

but also in how they are procured. The notion of paying for IT services in a more "elastic" 

fashion is very different from the traditional "firm fixed price" and "time-and-materials" 

contracts familiar to most government acquisition professionals, Additionally, many agencies 

are pursuing lengthy procurement processes rather than using readily-available contract 

vehicles that could significantly accelerate cloud migration. Continued education around these 

tools and the "new way" of acquiring these IT services will be critical going forward. In addition, 

strong leadership across federal agencies, continued oversight, and encouragement from the 

members of this Subcommittee are also critical to reduce acquisition costs and accelerate IT cost 

reduction from cloud migrations. 
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Moving Beyond the Cloud: Technology 

Although cloud computing receives most of the public's attention, there are a number of other IT 

opportunities that would allow for increased collaboration between the public and private sectors and 

push government to achieve greater cost savings and provide better service to citizens. In general, CGI 

and other private sector companies stand ready to respond quickly and provide the latest skills and 

technology around the emerging needs of federal agencies. In CGI's experience, this serves as the best 

complement to government staff, who remain experts in their agencies' missions. 

Cybersecurity issues remain important to all current and future government technology. That said, there 

are significant opportunities ahead in government IT. New technology can springboard government into 

a new era of efficiency and transparency. The caution, based on lessons learned, is not to address these 

new technologies in silos. Although investment in the cloud, mobility, and data analytics will result in 

cost savings, it's the convergence of these technologies that will have the greatest impact on 

transforming government. Just imagine the day when a member of Congress can search real-time data 

to analyze the effectiveness of a program anytime and anywhere, because the data is stored in a secure 

cloud and made available to any device. The quest for such meaningful data is now within reach. 

Join the mobility revolution - The power and explosion of mobile devices is one ofthe biggest 

disruptions in government IT. The obvious benefit is the anywhere, anytime access. However, to 

unleash this power, agencies must develop data and applications to meet the new mobile world. 

Today, industry will say that mobile application development is not difficult. The challenge is 

unleashing the data from legacy systems into these mobile applications. Earlier this year, OMB 

engaged the public in a conversation on federal mobile strategy. This strategy should include 

policies for provisioning and managing mobile devices to ensure cost savings. But real success 

requires a focus on data quality, access, and architecture principles that will enable liberation of 

the data so that the information can be leveraged and used more broadly both in and out of a 

mobile environment. If these principles continue to be pushed, then the government can 

fundamentally change the way it does business. For example, CGI's application called "IQ Suite" 

enables clients to view the status, risks, and performance metrics of its IT projects. CGl's clients 

view this real- time data anytime and anywhere, replacing the need for a "monthly" progress 

report full of static and outdated data. 

Liberate "big data" to harness actionable information. The topic of "big data" and analytics is 

increasingly on the list of top challenges facing federal agencies. CGI sees it as a huge 

opportunity for federal agencies to harness their data to allow for more detailed analysis of 

agency operations and provide unparalleled transparency into how government spends money 

and what outcomes it achieves. Agencies can move from simply collecting and manipulating 

data to actually using the data to create actionable information. To drive results, Congress must 

identify and eliminate stovepipes that may prevent a broader implementation of these tools 
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across the federal government. These tools also can playa valuable role in detecting and 

eliminating fraud and identifying overlapping programs. In fact, every day, CGI sees firsthand the 

value in data analytics in the work it does in the recovery of fraud, waste, and abuse. 

Moving Beyond the Cloud: New Ways of Procuring and Delivering IT Services 

Technology alone can produce savings, but how the federal government procures and delivers IT can 

offer savings too. Below are just a few examples of the ideas that CGI currently deploys across its 

portfolio of government and commercial clients. 

Expand the map - Diversify the geography of IT delivery. Cloud computing shows that IT 

applications and systems can be developed and hosted anywhere in the United States. This 

model is not new for CGI. Today, through three (3) onshore centers of excellence in Belton, 

Texas; Lebanon, Virginia; and Troy, Alabama; CGI provides its government and commercial 

clients with high-quality IT services at costs significantly below the average for metropolitan U.S. 

cities, delivering cost savings of approximately 20 to 30 percent while providing meaningful job 

growth and economic development in these communities. By 2016, CGI will have added more 

than 1,000 jobs in these centers and plans to continue making investments in other 

communities around the country. Congress and the Administration should encourage agencies 

to seek out new delivery models when procuring IT services. 

Encourage innovative contracting models that can help deliver more with less. In addition to 

the recommendations in GAO's report regarding statutory changes to enable more flexible IT 

development and consolidate authority with agency CIOs, Congress and the Administration 

should provide agencies with more freedom to enter into innovative agreements with industry 

to allow government to significantly reduce its up-front costs. As you know, the CMS RAC 

program is funded through contingency fees. CGI and its fellow RACs pay all of the set-up costs 

and get paid a percentage of amounts successfully recovered. There are many other areas 

across government where the private sector could assume initial costs and get paid only when 

agencies begin seeing the benefits of reduced costs and/or enhanced revenues. However, since 

the 2009 sunset of the "Share in Savings" provision of the E-Government Act of 2002, agencies 

rarely have the ability to enter into this type of innovative agreement. If the federal government 

wants to do more with less, then it should embrace new methods of contracting that shift risk 

and up-front costs to industry partners. Otherwise, given the tight federal budget environment, 

there will continue to be a challenge around significant, short-term investments justified by 

long-term returns. 

In closing, this fundamental shift in technology can enable a more effective, efficient, and transparent 

federal government. Movement to the cloud will result in lower IT costs and the ability to share 

software and services more widely across the federal enterprise. However, the cloud only represents a 

small part of what is possible. Whether it is how IT services are procured or where they are performed, 
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Congress and federal agencies also must capitalize on other ways to save money and allow for more 

investment in technologies to maximize the benefit to the general public. Expanded investment in data 

quality and broader use of new technologies aimed at liberating data from old systems represents an 

opportunity for the federal government to provide better and more accurate information to citizens and 

enable Congress to make more informed decisions around budget priorities. All of these objectives can 

be achieved by ensuring discipline in spending, leveraging existing investments, and investing in 

emerging technologies to improve government services. 

Thank you once again for the opportunity to participate in this important hearing. I would be happy to 

answer any questions that the Committee may have. 
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Written Testimony of 

Nick Combs 

"Innovating with Less: Examining Efforts to 

Reform Information Technology Spending." 

Before 

U.S. Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, Government Information, 

Federal Services, and International Security 

May 24, 2012 

Chairman Carper, Ranking Member Brown and other distinguished members of 

the Subcommittee, my name is Nick Combs and I am the Chief Technology Officer for 

EMC Corporation's Federal Division. On behalf of EMC and our 54,000 employees, 

thank you for inviting me to testify today. I will discuss the many ways information 

technology can further enable the federal government to do more with less and how IT is 

being transformed through the adoption of cloud computing infrastructure and services. 

Prior to joining EMC, I served for more than 25 years in the federal government. 

was appointed as the Deputy Chief for Enterprise IT Solutions at the Defense Intelligence 

Agency, where I was responsible for the engineering and program management of all 

activities in the Department of Defense Intelligence Information Systems (DoD lIS) 

environment. I also served as the IT Director and Chief Infonnation Officer of the 

National Media Exploitation Center (NMEC) under the Office of the Director of National 

Intelligence. Over the course of my career in government and the IT industry, I have 

direct experience resolving many of the IT challenges facing organizations today, 

particularly as enterprises transition to cloud services, manage unprecedented amounts of 

"big data" and strive to improve trust and cyber security. 

Headquartered in Hopkinton, Massachusetts, EMC is a global leader in enabling 

organizations to transform their operations and deliver IT as a service. Fundamental to 

this transformation is cloud computing. Through innovative products and services, EMC 
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accelerates the journey to cloud computing, helping IT departments store, manage, 

protect and analyze their most valuable asset information - in a more agile, trusted and 

cost-efficient way. 

We cooperate, partner and work with various public and private sector 

organizations that range in all sizes and come from diverse missions and business models. 

Within the federal government, all cabinet level departments and agencies utilize EMC's 

innovative and cost-effective solutions to address issues and opportunities associated with 

transforming IT, transforming the business they conduct, and addressing cyber security 

challenges. However, we are also a leading provider of technology and services to the 

private and financial sector, with some of our largest commercial customers 

headquartered in both Delaware and Massachusetts. 

As I have said in other public forums over the past 12 months, enterprise IT users 

in both government and industry often tell us that their current IT infrastructures are too 

complex, inefficient, inflexible and costly. Almost three-quarters of IT budgets are spent 

to "keep the lights on" and maintain existing stove-piped IT systems and applications, 

with only about 25 percent being spent on innovation to deliver new and improved 

services efficiently and securely to end users. This scenario is as commonplace in the 

private sector as it is in the public sector and everyone is committed to doing more with 

less. 

EMC is no different and has worked hard to find greater efficiencies to make our 

own IT operations leaner. EMC's internal shift to a cloud-based infrastructure has helped 

the company save millions of dollars and significantly improved IT service delivery, 

while also improving energy efficiency and sustainability. For example, data center 

consolidation and cloud computing has enabled EMC to save nearly $80 Million in data 

center equipment costs and another $12 Million in power and space savings to date for an 

overall 34 percent increase in energy efficiency. This is equivalent to 100 million pounds 

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of CO2 reduced, The other benefit of our shift to the cloud has been a 170 percent gain in 

storage administrator productivity, 1 

We believe that lessons I earned from EM C' s journey to the cI oud - as well as that 

of many of our customers and partners in the private sector and at the state/locallevel --

are equally relevant to the course being chartered by federal IT stakeholders, Some 

examples of the benefits of cloud computing and data center consolidation reflecting 

various segments of the US, economy include: 

• Oregon-based Columbia Sportswear, a leading innovator in active outdoor 

apparel, footwear, accessories and equipment has increased the 

performance of its IT infrastructure using 25 percent less space after 

implementing a cloud computing model. At 95 percent virtualized, 

Columbia has reduced its storage total cost of ownership by 40 percent 

while enabling 50 percent more virtual machines to be supported in the 

infrastructure. 

• Texas-based Lone Star College System, the fastest-growing community 

college system in Texas has deployed a private cloud to deliver IT -as-aService to over 90,000 facuIty, staff and students at more than a dozen 

locations, In moving to a cloud model, Lone Star has saved more than 

$600,000 in capital expenditures by utilizing virtualization and 

consolidating its IT environment At 90 percent virtualized, Lone Star has 

reduced its energy consumption by 66 percent while increasing its ability 

to deliver new IT services in less than a week compared to three to four 

months before moving to the cloud. 

• Independent Bank, a Michigan-based bank, has also achieved many 

benefits from moving to a cloud environment. At 70 percent virtualized, 

the bank has eliminated 65 servers and avoided additional server 

expenditures even as its environment expands. All the while, Independent 

Bank has reduced the time to deploy servers from at least a day to just 1-2 

hours. In addition, the bank has seen server-related power consumption 

dramatically reduced, When it comes to backup, Independent Bank has 

also reduced its backup storage capacity requirements while decreasing 

the time to recover data of critical systems from days to just a few hours 

and even minutes, 

1 Validated in ESG IT Audit EMC IT - a Blneprint for DataCenter Efficiencv, by The Enterprise Strategy 

Group. April 2009. 

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• At 90 percent virtualized, the City of Denton, Texas is leveraging 

virtualization and cloud infrastructure technologies to optimize efficiency, 

streamline management and transform its IT infrastructure. Since 

implementing its EMC-based infrastructure, the City of Denton has 

dramatically increased performance, streamlined administration, and 

developed a solid business continuity strategy. 

• As a result of data center consolidation efforts, the Commonwealth of 

Massachusetts now uses a single content repository for all eligibility 

systems. This eliminates maintenance costs of multiple systems, as well as 

paper and manual processes. This also enabled customer service 

improvement by enabling content to be searched across all systems; 

resulting in response time improvement of four days to constituents. 

IT transformation within the enterprise can be accelerated by aggressively 

consolidating data centers, transitioning legacy IT systems to cloud-based infrastructure 

and services, and building security into the cloud architecture from the beginning. But to 

do that, organizations have to make targeted investments in enabling technologies such as 

virtualization, converged IT infrastructure and scalable data storage, data analytics and 

information security in order to get the maximum amount of cost effectiveness, efficiency 

and agility over the long haul. While federal agencies are beginning to make these 

critical investments, budget cuts could stifle the federal IT transformation underway if 

they are misdirected. 

As you know, Congress has placed federal IT spending on a diet due to federal 

belt tightening measures designed to reduce budget deficits. In my view, diets are only 

successful if you make smart choices about what you consume, not just focusing on a 

reduction of food and calories. If you don't invest in the diet, by eating healthy, 

exercising and having the right balance, then it is likely that you will not succeed in your 

overall objective. The same approach should be applied to federal IT transformation. 

While we should buckle down to reduce redundant and unnecessary expenditures, we 

should invest strategically in the technologies, services and processes that will enable the 

federal government to do more with less over the long term. To enable our internal shift 

to the cloud - in order to gain the improvements in productivity, energy efficiency, 

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transparency and trust - EMC had to make investments in technologies and converged IT 

infrastructure in order to achieve our savings and productivity objectives. 

Agency ClOs should have budget flexibility in order to aggressively shift 

resources towards cloud computing and away from far more limiting and costly legacy 

systems and services. In a recently released report by MeriTalk, titled "Cloudy with a 

Chance of Savings," federal agency savings are already estimated to be at $5.5 billion in 

IT costs with current cloud computing efforts, and could go as high as $12 billion 

annually2 Based on our own savings from cloud computing and other industry 

assessments, we believe the federal government is well positioned to save billions if 

efforts to utilize cloud computing are fully adopted and implemented through effective 

governance and federal budgets. 

Congress, including this Senate Subcommittee, and the Office of Management 

and Budget (OMB) should be commended for ongoing efforts to meet these challenges 

head-on. OMB's improvements to federal IT governance when fully implemented could 

help federal agencies do more with less while providing better services to federal 

taxpayers. OMB's plans including the Cloud-First policy, the Federal Data Center 

Consolidation Initiative, and the Federal IT Shared Services Strategy are changing the 

federal IT landscape for the better. However, increased flexibility within the federal 

budget process is also needed to accelerate IT innovation. 

As noted in the Government Accountability Office (GAO) report released this 

week, Congress and the Executive Branch must identify budget models that will allow 

increased budget flexibility through working capital funds or other centralized IT 

operations and maintenance functions 3 Last year, the TechAmerica Foundation Cloud2 

Commission also specifically recommended that OMB "establish policies and processes 

2MeriTaik report titled "Cloudy with a Chance of Savings", Arpil25, 2012 Cloud Computing Brainstonn 

on Capitol Hill (http://www.meritalk.com/ccx/chanceofsayings). 

3 GAO Report on Information Teclmology Reform: "Progress Made: More Needs (0 Be Done to Complete 

Actions and Measnre Resnlts", April 2012. 

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for providing fiscal incentives, rewards and support for agencies as they take steps 

towards implementing cloud deployments,,4 

Cloud Computing 

Simply put, cloud computing is about delivering applications online to users at 

their desktops, on laptops, tablets or smart phones. This can be done in-house, through an 

enterprise's "private" cloud, or through third-party, web-based service providers in the 

"public" cloud. We expect most large enterprises will prefer a hybrids approach that 

allows them to access some applications, like payroll processing, through service 

providers while retaining control over their most mission-critical applications in their 

private cloud data centers. 

As the TechAmerica Foundation Cloud2 Commission pointed out in its 2011 

report,6 cloud computing is really based on a simple idea: "By allowing [IT] users to tap 

into servers and storage systems scattered around the country and around the world and 

tied together by the Internet cloud service providers can give users better, more reliable, 

more affordable, and more flexible access to the IT infrastructure they need to run their 

businesses, organize their personal lives, or obtain services ranging from entertainment to 

education, e-government, and healthcare." 

We agree and this shift brings new efficiencies, cost savings, and helps 

organizations gain more productivity from their IT systems. 

EMC supports the Administration's Cloud First and Shared Services initiatives 

along with the ongoing federal data center consolidation efforts. We understand that the 

transition to cloud computing will not occur overnight; rather it requires a journey to 

-1 Recommendation 12 (Incentives), "Cloud Firsl Cloud Fast: Recolmnendations for Innovation, Leadership 

and Job Creation", A Report from the Commission on the Leadership Opportmlity in U.S. Deployment of 

the Cloud (CLOUD2), 201 L pp 24-25. 

, Hybrid Cloud: The cloud infrastructure is a composition of two or more clouds (private, community, or 

public) that remain unique entities but that are bOlmd together by standardized or proprietary technology 

that enables data and application portability. Source: NIST Cloud Definition. 

6 "Cloud First, Cloud Fast: Recommendations for Innovation, Leadership and Job Creation", A Report from 

the Commission on the Leadership Opportunity in U.S. Deployment of the Cloud (CLOUD2), 20 II, pp 5. 

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realize all the benefits the cloud has to offer. The federal government has many unique 

environments, but these diverse organizations can benefit greatly from the successes that 

commercial organizations have already achieved through the adoption of cloud 

computing. The economies of scale, flexibility, and efficiencies of these cloud 

infrastructures will not only save significant amounts of capital and maintenance costs, 

but enable the application and use of information across our enterprises as never before. 

One can only imagine all the ways in which information technology could be 

applied in the government if federal IT professionals were freed from the burdensome 

task of managing today's complex and sometimes antiquated infrastructures. Former 

OMB Director Orszag made a similar point two years ago when he highlighted the reality 

that government organizations are unable to match the productivity and innovation of the 

private sector because of archaic and complicated computing infrastructure7 Cloud 

computing provides a mechanism to address this technology gap, enabling the federal 

government to unleash new innovations and improve productivity. 

The adoption of cloud computing will also help improve cyber security over the 

long-term. While ensuring "trust in the cloud" is critical to spurring cloud adoption, there 

should be tangible improvements in security that come with the shift to the cloud that is 

underway. 

Trust in the Cloud 

Cyber security is clearly one of biggest concerns of federal ClOs who are 

considering implementing cloud infrastructure and services. When I speak to customers 

about their journey to the cloud, they consistently bring up cyber security and data 

privacy issues as possible barriers to adoption. In the same MeriTalk report cited a 

moment ago, 85 percent of the respondents indicated that security was the top obstacle to 

the c1oud8 However, as the current Federal CIO, Steven VanRoekel emphasized recently 

Remarks by Peter Orszag, Center for American Progress. June 8, 20l0. Washington. DC. 

8 Culture issues (38 percent of respondents) was the second most identified obstacle in the report. 

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at a public forum that I attended in Fairfax, Virginia security doesn't have to be a barrier 

to cloud adoption, but can actually be an enabler. 

For example, technologies and effective best practices exist today to deliver 

private and hybrid clouds inside federal organizations to gain dramatic improvements in 

IT efficiency, while also providing the security required to protect sensitive information 

within the government enterprise. Today, organizations struggle to have control and 

visibility in their physical IT environments. This challenge need not be exacerbated in 

the cloud. The good news is that virtualization technology creates the right conditions for 

organizations to improve control and visibility beyond what's available in today's 

physical environments. 

With virtualization and cloud computing, applications have become completely 

disassociated from the IT infrastructure on which they run. It provides the flexibility to 

have the same application run in the datacenter next door on one day, in a centralized 

datacenter hundreds of miles away the following day, and in a service provider datacenter 

another day. For that reason, improving cyber security cannot solely rely on the controls 

of the IT infrastructure such as the network perimeter. Security must evolve to become 

much more centered on the users and on the information they are accessing. For example, 

emerging technology practices such as adaptive authentication and data loss prevention 

are both widely used in the commercial world and are increasingly used in federal 

government agencies. 

We believe in the transformation power of virtualization - so much so that we are 

focusing our cloud-security strategy and development initiatives on making security and 

compliance in the cloud: 1) logical and information-centric, 2) built-in and automated, 

and 3) risk-based and adaptive. For years, EMC, RSA (the Security Division of EMC) 

and our sister company, VMware, have worked to embed security, management and 

compliance controls into the virtualization platform. 

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In addition, RSA and EMC are working with cloud providers to give them the 

means to demonstrate security and compliance to their customers, removing this barrier 

to greater cloud adoption. For example, the RSA Cloud Trust Authority gives cloud 

customers an easy and scalable way to ensure trusted access to multiple cloud providers, 

while giving the cloud providers themselves a more automated, consistent way to 

demonstrate compliance with cloud standards for security and confidentiality as they 

evolve. Over time we expect the Cloud Trust Authority to evolve to offer additional 

means of security and compliance for digital information and identities. 

During the next several years, cloud computing adoption could enable 

organizations to improve information security by replacing the disparate and legacy IT 

systems that are so common today. Instead of having our IT and information security 

organizations protecting stove-piped systems, organizations are able to implement 

centralized monitoring, management and security solutions. 

When implemented correctly, cloud environments can be much more secure than 

today's IT environments. The level of transparency cloud vendors provide is a critical 

aspect when choosing a cloud partner. The federal government must take a trust-butverify approach. Cloud vendors should be required to provide the tools and capabilities 

to allow customers visibility into their cloud environments to ensure compliance with 

those service level agreements, or SLAs. SLAs should be clearly defined and monitored 

by government customers to ensure maximum service value is received for budget dollars 

spent. For instance, SLAs in areas of performance, availability, backup and recovery, 

archive, continuance of operation, and disaster recovery must be clearly stated, measured, 

and monitored by the government agencies. Additionally, government risk and 

compliance capabilities need to be deployed and dashboards provided to the customer to 

ensure that our information is protected and our policies are being followed. 

Security must be risk-based and driven by flexible policy that is aligned to the 

business or mission need. The need for a common framework to ensure that security 

policies are consistently applied across the infrastructure is critical to success. That is 

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one of the principle reasons that EMC supports updating the Federal Information Security 

and Management Act (FISMA). Enacting updated FISMA legislation that will enable 

continuous monitoring is essential to address today's threat environment as well as 

provide for an effective operational risk management framework for tomorrow's cloud 

computing infrastructure. By adopting continuous monitoring practices, federal agencies 

will be able to more effectively address advanced cyber threats as well as save money 

over the long haul by moving away from costly, paper-work intensive compliance. 

Data Center Consolidation 

Tn the recent report, GAO indicated that OMB's efforts to consolidate 800 data 

centers by 2015 is listed as incomplete because of a lack of agency detailed reports. The 

good news in our view is that the federal government can save several billion more in 

taxpayers' dollars once these plans are fully executed. 9 These savings could also help 

the government to eliminate duplication and high energy costs. Last year, the Senate 

Appropriations Committee report accompanying the funding bill for the General Services 

Administration highlighted the data center migration efforts taking place at the 

Department of Homeland Security. According to the Committee report, "the Department 

of Homeland Security has testified to the Committee that it expects to save approximately 

five billion dollars in taxpayer funds over the next twenty years due to recent data center 

consolidation efforts. Building on current successes across the Government will allow 

GSA to better demonstrate and measure the cost-savings potential of such activities and 

thus encourage other agencies to adopt such best practices."lO 

EMC and the Informatics Information Group have helped the Walter Reed Army 

Medical Center comply with its mandated closure as a result of the Base Realignment and 

Closure Commission (BRAC) recommendations. This effort resulted in virtualization of 

99 percent of servers before migration of data and systems to two other facilities. 

9 GAO Report on lnforllk'ltion Teclmology Reform: "'Progress Made: More Needs to Be Done to Complete 

Actions and Measure Results", April 2012. 

IOU.S. Senate, Committee on Appropriations. Financial Services and General Govermnent Appropriations 

Act, 2012 (S. Rp1., 112-79). Washington: Govermnent Printing Office, 2011. 

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According to Daniel J. Lohrmann, Michigan's Chief Technology Officer and 

Deputy Director of the Infrastructure Services Administration, "Our constant challenge is 

doing more with less ... We thought that as budgets were slashed, user demand would 

drop, but the exact opposite happened."ll Efforts to consolidate the number of data 

centers helped Michigan curtail spending on data center maintenance and energy costs for 

a savings of$1.4 million annually. 

According to the Data Center Consolidation and Cloud-Computing (DC4) 

Coalition, for every $1 customers invest in data center consolidation, they can expect a $3 

reduction in their operating costs within three years. That is exactly what happened in 

Michigan and is a good barometer for federal IT officials to examine further. 

In order to fully implement IT transformation, data center consolidation should be 

aggressively adopted across the federal government. I am encouraged by Mr. 

VanRoekel's efforts to include data centers of less than 800 square feet in his plans as 

many of these data centers are poorly designed and use more energy than necessary. The 

Federal CIO's efforts to shutdown these data centers will push the total number to be 

consolidated up to 1000 by 2015 and should result in greater efficiency and overall cost 

savings for the federal government. 

Updating Federal Budget and Procurement Processes 

As mentioned earlier in my statement, budget flexibility is a critical ingredient 

that could help federal agencies to procure and implement IT transformation solutions to 

consolidate data centers and transition to the cloud. The TechAmerica Foundation 

Cloud2 Commission emphasized budget flexibility in one of its principal 

recommendations aimed at federal IT transformation. Specifically, the Commission 

recommended that" .. Agencies should demonstrate flexibility in adapting procurement 

models to acquire cloud services and solutions. Congress and OMB should demonstrate 

11 State of Michigan Case Study, EMC Corporation (http://www.emc.com/coHatcral/customerpro files/h7277 -state-of-michigall-Gp.pQD 

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flexibility in changing budget models to help agencies acquire cloud services and 

solutions." 12 

A plan for upfront costs associated with IT solutions is an important issue for 

Congress to consider in reforming how agencies leverage and invest in cost cutting 

technologies. As an example, The President's FY 2013 budget request reduces overall 

federal IT spending by $586 million when comparing FY 2013 enacted levels to the 

request level of $78.8 billion. 2.7 percent of this decrease is from the Department of 

Defense's closure of 100 data centers. l3 The President's budget acknowledges that the 

proposed plans to consolidate these 100 data centers fails to take into account all upfront 

investment costs. 

As the GAO noted in its recent report, progress has been made but more remains 

to be done. Tackling upfront costs associated with data center consolidation and cloud 

computing probably sticks out as the most significant hurdle that agencies must clear. 

Federal agencies must speed development of a funding plan to implement data center 

consolidation and its shift of Federal services to the cloud. The Administration's launch 

of PortfolioStat coupled with the IT investment reviews contained within the proposed 

Information Technology Investment Management Act, should help the Office of 

Management and Budget to surpass previous efforts to track IT spending and hopefully 

can help agencies to speed delivery of spend plans for data center consolidation and cloud 

deployments. PortfolioStat and other transparency systems will support Congress and 

the Executive Branch aims to eliminate duplication and spot anomalies to prevent waste, 

fraud, and abuse. 

Unless agencies can rely on realistic detailed plans to acquire technologies to help 

them do more with less, data center consolidation and cloud computing goals may not 

fully gain traction and federal savings could remain lower than anticipated. 

l' Recommendation 11 (Federal Acquisition aud Budgetiug), "Cloud First, Cloud Fast: Recouuueudations 

for Innovation, Leadership and Job Creation". A Report from the Commission on the Leadership 

Opportunity in U.S. Deployment of the Cloud (CLOUD2). 201 L pp 23-24. 

13Data source: Agency FY 201311' budgets. reported February 2012. 

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Conclusion 

In conclusion, there is a wealth of knowledge within the private sector that can 

help government agencies identify, update, and support "best practices" based on lessons 

learned from both public and private sector implementation of data center consolidation 

and cloud initiatives. 

I believe that now is the time to redouble IT investments efforts to incentivize 

cloud transition initiatives that improve the security and delivery of government services 

at significantly reduced operational costs benefitting the American people. 

As EMC Chairman and CEO Joe Tucci stated in his 2012 Letter to Shareholders, 

cloud computing is transforming the way information technology is architected, deployed 

and consumed. We believe market adoption of cloud computing represents a fundamental 

shift in industry dynamics that will be as far-reaching and impactful over time as the 

adoption of personal computers was a generation ago. 

EMC and I look forward to continued work with this Subcommittee to accomplish 

the objectives discussed within my written statement. We are committed to helping the 

federal government to do more with less. 

Mr. Chairman and Members of the Subcommittee thank you for your attention to 

these important issues and I would be happy to answer any questions you may have at 

this time. 

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Testimony of Jennifer Morgan, 

President, SAP Public Services 

Before the Subcommittee on Federal Financial Management, 

Government Information, Federal Services, and International Security 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

Thursday, May 24,2012,10:00 am 
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Testimony of Jennifer Morgan, President, SAP Public Services 

Before the Subcommittee on Federal Financial Management, Government 

Information, Federal Services, and International Security 

U.S. Senate Committee on Homeland Security and Governmental Affairs 

Thursday, May 24, 2012, 10:30 am 

Chairman Carper, Senator Brown, and Members of the Subcommittee: Thank you for 

this opportunity to share SAP's perspective on the federal government's use of 

information technology (IT). 

My name is Jennifer Morgan, and I serve as President of SAP Public Services, a USbased subsidiary of SAP, the world's leading provider of business software. Our 

mission is to help companies and governments to run better. Our vision is to help the 

world run better. Over the last 40 years, we have been innovation leaders in core 

business processes such as financial management and human resource management; 

and today we continue to lead a new wave of innovation enabled by business analytics, 

in-memory computing, cloud computing, and mobility. 

In the United States., SAP helps thousands of organizations be more agile and 

competitive in the global economy. My business unit, SAP Public Services, serves 

more than 3,800 public sector agencies in almost all 50 states, from local school 

districts to statewide programs to the largest federal defense and civilian agencies. 

Some of our best known customers are: 

• The US Army, US Navy and Defense Logistics Agency; 

• Civilian agencies including the Departments of Agriculture, Interior, State and 

Treasury, plus US Customs and Border Protection, NASA, NIH and CDC; 

• Many state and local government agencies from Orange County Public Schools 

to the City of Houston to the Commonwealth of Pennsylvania; and 

• Many higher-education institutions including MIT, University of Kentucky, Johns 

Hopkins and Boston University. 

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Based on SAP's public and private sector experience-and our global technology 

leadership-we are honored to share our perspective on how technology innovations 

can help address the challenges that confront the US Government. 

Like you, we believe passionately that IT is part of the solution, because we know from 

experience that IT enables: 

o Faster, more intelligent decision-making; 

o Turning insight into foresight; 

o Higher performance; 

o Meaningful efficiencies and cost savings; and 

o Greater transparency and accountability, which are essential to efforts to reform, 

consolidate and course-correct large government programs. 

Technology Mega-Trends 

Technology is evolving at a pace we have never seen before. No longer is technology 

being driven by large companies and governments; it is being driven by consumers, or 

in the case of the public sector, by citizens with higher expectations of what technology 

can do. Businesses and governments must adapt to these changing expectations. 

We see several mega-trends that are reshaping how technology can enable the 

missions of government agencies. 

In-memory processing. You have probably heard of the term "Big Data," which refers 

to the growing volume of information produced in the course of daily life. In the United 

States alone, companies store enough data every year to fill 10,000 Libraries of 

Congress. From the beginning of time until 2003, humanity created an estimated 5 

exabytes of data. In the last 12 hours, we created that same amount of data. 

In response, industry has created powerful new tools for managing and analyzing all 

that data, in terms of both volume and speed. For example, the SAP HANA in-memory 

technology removes entire layers of hardware from the solution stack and allows 

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organizations to analyze massive amounts of unstructured data thousands of times 

faster than old disk-based systems. 

Here is one illustration of how Big Data technologies are changing the world for the 

better. SAP worked with one of the world's leading medical-research hospitals to 

reduce the amount of time needed to analyze the DNA in cancer tumors from 3 days to 

2 minutes. Patients and their families receive diagnoses much faster; and therapies can 

be better tailored to each patient's particular condition. It is hard to think of a better 

example of the benefits of "Big Data" management than improved medical care for 

loved ones with cancer. 

Think of how these technologies can allow government agencies to analyze huge data 

sets to combat waste and fraud, or to spot ways to cut spending while improving 

services - proactively. 

Mobility. Our growing ability to make data and applications accessible to anyone, 

anytime, on any device is critical at a time when there are 5 billion mobile phone 

subscribers in the world, and more than 9 billion mobile apps downloaded to date. 

When we marry the benefits of anytime, anywhere, any-device connectivity with access 

to business data and applications, including real-time analytics-we achieve enormous 

gains in efficiency and productivity. 

In a GovLoop survey sponsored by SAP, close to 60% of the federal managers who 

responded said their organizations would roll out between one and four new mobile 

applications in the next 12 months. Another 10% said they were likely to introduce five 

or more mobile apps in the coming year. The most commonly mentioned reasons for 

adopting mobility in government were: 

o Reducing costs; 

o Improving communications with constituents; 

o Improving internal communications; and 

o Linking data and business processes. 

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Obviously, the mobility trend raises several challenges for Federal CIOs and IT 

managers. For example, in the GovLoop survey, we found the majority of government 

organizations will only support one kind of mobile device for employees. Obviously, this 

creates a lot of grumbling for people who want to use a different kind of device. So 

now, many CIOs are looking at ways to enable "BYOD," or "bring your own device." 

BYOD is another example of how empowered consumers and constituents are driving 

these trends. 

Cloud computing. Public and private sector organizations want flexible ways to deploy 

technology without having to maintain expensive, on-site infrastructure. They want fast, 

flexible, cost-effective IT services on demand. Cloud computing offers many 

opportunities for government to consolidate and streamline operations, just as it does 

for business. In fact, an independent study sponsored by SAP recently found that cloud 

computing could save US businesses as much as $625 billion over five years, much of 

which could be reinvested in new business opportunities and jobs. 

Likewise, there is enormous potential for cloud computing to save the US Government 

money while improving mission performance and creating good jobs in our economy. 

We compliment the administration on its "Cloud First" and "Virtualization First" policies 

and working with agencies and business partners to make them a success. 

Across all of these trends, there is a consistent success factor, namely 

collaboration and co-innovation with partners and customers. A very large and 

growing portion of SAP's business occurs in collaboration with other companies and, 

most importantly, with our customers. New solutions must extend the investment made 

in legacy solutions. Vendor lock-in is "out;" co-innovation and teamwork is "in." 

We have found that the fastest and most successful results occur when industry and 

government co-innovate to bring new possibilities to life through technology. 

Taken together, the rise and convergence of these mega-trends - cloud, mobility, Big 

Data, and cross-industry collaboration - are helping IT users achieve quantum leaps in 

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efficiency, speed, and accountability. The kind of real-time, big-picture situational 

awareness and decision-making ability that used to appear only in science fiction is 

becoming reality in business and government today. 

The pace at which technology is advancing will not slow for anyone. That is why the 

most successful businesses in the private sector are constantly adapting to stay 

relevant and competitive, and the public sector must do the same. 

A Case Study in These Trends 

Let me tell you about one federal agency that has led the way in innovation and 

illustrated the power of these trends. 

When Congress and the Obama administration created the Recovery Accountability 

and Transparency Board in 2009 to help ensure transparency and accountability in 

federal "stimulus" spending, the Board faced several challenges, such as: 

• Determining how to manage huge quantities of evolving data from a variety of 

sources about stimulus grants, loans, vendors employed, and jobs; 

• Presenting this information to the public in an understandable way on any 

Internet-access device; and 

• Not spending millions of dollars that the board did not have to create an entirely 

new infrastructure and business process to manage all this data. 

To address these challenges, the Recovery Board turned to SAP and several other 

companies to launch a website called Recovery.gov, which takes a huge amount of 

program data from a variety of sources, analyzes it, and presents it to the public in a 

user-friendly online dashboard. The industry consortium launched Recovery.gov in just 

11 weeks. As part of that effort, we worked with Amazon to base the solution in the 

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cloud, a move that took just 22 days and made history as the first federal agency 

website to launch in the public cloud. 

SAP also worked with Apple, Google, and other companies to make the data accessible 

on a variety of mobile devices. As a result, you can download the Recovery.gov app on 

your smartphone and immediately track spending in your states and local communities. 

More recently, the Recovery Board leveraged these technologies to create 

FederaIAccountability.gov, which allows agencies to evaluate the risk of each applicant 

seeking government funds. This solution, called FAST ALERT, was deployed in about 

three months. It enables federal agency personnel to analyze many large data sets in 

real-time and identify instances of waste, fraud and abuse before they happen. 

The Recovery Board experience is a success story in enabling better stewardship of 

taxpayer dollars while enhancing the public trust. We drew on the best of many 

organizations, both private and public; we helped the government be more agile; and 

we leveraged the megatrends of cloud, mobility, and Big Data to innovate for the 

common good. 

Here are a few more examples of how public sector agencies are harnessing these 

trends: 

• At the USDA, as a result of standardizing all financial management and 

accounting functions - and adding the SAP HANA in-memory database 

and advanced business analytics - we anticipate reducing the amount of 

time it takes the Farm Services Agency to run critical financial reports from 

minutes to seconds each. In an organization that runs thousands of 

financial reports a year, you can imagine the savings in time and money 

that can be put to other uses. 

• Or consider the State Department and the US Patent Office, which have 

used our solutions to gain a clearer picture of their costs to deliver 

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services and come up with better fee structures and business processes 

to support their operations, 

• At the local level, the City of Boston is implementing a performancemanagement solution that allows managers to assign and track 

performance measures; generate fast reports and online dashboards; and 

share results with colleagues, lawmakers and the public, As part of the 

deployment, which is occurring in a matter of weeks, not years, SAP 

hosted an "Innovation Jam" bringing together a wide array of solution 

providers and users to develop test-able prototypes within a 24-hour 

period, 

• Or look at the University of Kentucky, which is using our solutions to 

identify students at-risk of dropping out and intervene sooner to improve 

student retention, 

These are just a few examples of what SAP technology is making possible for our 

customers; and I know there are many more like them, 

Recommendations for Federal IT Management 

How can Congress and the Executive Branch make the most of these new technologies 

and reap the benefits for US taxpayers? 

Well, first, we want to applaud the work being done by the Federal CIO and his 

colleagues across all levels of government who are working with industry to improve the 

way the public sector acquires and uses technology, Progress is being made, and we 

especially applaud efforts to move forward on data-center consolidation, cloud 

initiatives, and the use of mobile technology, 

Still, as the GAO has reported, there is much more work that could be done, 

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For example, the government's IT procurement processes often take longer than 

the technology upgrades. This is a real problem at a time when technology 

innovation cycles are getting shorter, and costs are going down. The nature of the new 

technologies means that large, complex deployments are no longer the norm. The 

government's acquisition processes have to evolve to address this new reality. 

It does not have to be this way; we need only look back on the last quarter century of 

acquisition reform panels to find good ideas that still need to be implemented. One of 

those panels was the TechAmerica Foundation's "GTO-21" Commission in 2010, in 

which SAP was proud to participate. Based on interviews with more than 1 00 federal 

acquisition experts, the commission reported that program managers face very complex 

compliance requirements when it comes to technology purchases. Programs are often 

understaffed from a management standpoint, and many lack continuity of personnel. 

Many government systems are so complex that they are not well suited to be completed 

at a fixed point in time; but rather, they need to be developed incrementally with input 

from many sources, including the end users. 

These problems are compounded by the increasing use of Continuing Resolutions to 

fund the operations of government, and the resulting disruptions in planning and 

contracting processes. 

The GTO-21 Commission recommended several steps to keep federal IT acquisition 

moving in the right direction, including: 

• First, focus on faster, more agile, incremental development using 

commercial, off-the-shelf technology. More flexible contracting 

vehicles could include self-service app stores like the Apple iTunes store. 

Incremental change is less costly and less likely to get out of control. It 

delivers value in months, not years. And it helps prevent the problem of 

vendor lock-in and escalating costs as the government's needs evolve and 

grow. 

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• Second, foster an open dialogue between the government and its 

private sector partners and "co-innovation" of the type that is so often 

seen in the private sector. 

Congress and OMB should make it clear that public-private dialogue and 

collaboration are to be encouraged, not feared. On the industry side, big 

government contractors can improve dialogue by including key 

subcontractors and vendors from the start. 

• And third, the government needs to develop more professional 

program management capabilities in every agency. OMB should 

formalize the career track, establish a Leadership Academy, and assign 

capable program managers to oversee every program from start to finish. 

Mr. Chairman, I am not a policy expert, but SAP does employ some of the leading 

experts in these issues, and along with our industry colleagues, we have been proud to 

participate in several panels including the GTO-21 Commission, the "Cloud2" 

Commission, and the new Big Data Commission, announced just this week. Each of 

these prior efforts has outlined a series of common-sense IT policy changes that all 

sides can agree on, and the new Big Data Commission is aiming to do the same. I urge 

the subcommittee to examine these reports and adopt their recommendations. 

Closing 

It bears repeating that many of these steps can be taken with no new laws or 

regulations needed. Using existing authority, the IT industry can help government cut 

wasteful spending without passing a single budget cut. We can help increase revenues 

without touching the tax code. We can help prevent waste and fraud before they occur. 

We can dramatically improve the delivery of government services in a consumer-driven 

world. 

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SAP has achieved breakthroughs like this for governments at every level in the US and 

worldwide, and other companies are bringing their own innovations to bear. 

The rapid progress of technology makes it possible for government to improve its 

performance while saving money and increasing accountability. SAP appreciates the 

opportunity to be a leader and partner in that effort. Thank you. 

END 

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Answers to Questions for the Record 

Submitted to Mr. Steven VanRoekel 

for a hearing before the 

Homeland Security and Governmental Affairs Committee 

United States Senate 

"Innovating with less: Examining Efforts to Reform Information Technology Spending" 

May 24,2012 

From Mr. Coburn 

1. According to your testimony, you have expanded the original plan to consolidate 800 data centers to 

now propose 968 consolidations by 2015. How well have agencies complied with the administration's 

2010 plan to consolidate data centers? Can you point to any agendes that have been particularly 

effective or other agencies that have been slow? 

In December 2011, OMB announced that the Administration was expanding the efforts of the Federal Data 

Center Consolidation Initiative (FDCCI) to data centers of all sizes.' As the FDCCI continues, the government's 

goal will be to close at least 40% of identified data centers, consistent with the percentage used in our original 

consolidation goal. Our original goal of closing at least 800 data centers was based on a baseline number of 

2,094 data centers." By expanding the FDCCI to include data centers of all sizes, the baseline number of data 

centers has increased to some 3,000 data centers. That means we'll be looking to consolidate over 1,000 data 

centers by the end of FY2015 - a goal that requires us to continue aggressively rooting out duplication and 

waste among data centers across the Federal government. 

Any large consolidation effort -- and the Federal government's effort is likely the most complex ever undertaken 

-- requires time to deploy technical solutions, rightsize assets, build lessons learned and craft best 

practices. That is why agencies are required' to report on planned and actual closures each quarter.s It is 

important to stress that the quarterly and annual numbers are expected to change, as agencies continually 

update their asset inventories, refine their consolidation plans and reflect lessons learned. For this reason, we 

have focused on a percentage goal-- as the denominator changes, we can adjust our target to meet the 40% 

goal. Already, we have commitments from agencies to close 968 - we expect that to go up to our goal as we 

work with agencies through the budget development process to increase closure targets. 

To date, more than 250 data centers have been closed, with projections to close a total of 429 by the end of this 

fiscal year. Overall, each agency has had its successes and continues to experience challenges. From the 

Administration's perspective, we will continue to collaborate with agencies to provide them the tools so the 

consolidation succeeds in delivering better value to the American taxpayers. One area of particular success is 

the use of virtualization and the adoption of cloud computing. For example, robust uses of virtualization and 

cloud technologies have enabled the Census Bureau to reduce the data center power consumption of all its data 

centers by 10 percent. In another instance, the Bureau of Indian Affairs is using virtualization to reduce its data 

1 http://www.whitehouse.gov/b!og/2011/12/20/expanding~our~efforts-data.centers 

2 http://www.gpo.govlfdsys!pkg/BUDGET.2012-PER/pdflBUDGET-2012-PER.pdf. Please see section 20. 

3 http://www.cio.gov/documents/2S-point-implementation.plan-to"reform-federal%20ft.pdf 

4 http://www.cio.gov/documents/CIO Memo FOCO Deliverables Van Roekel 3-19-12.pdf 

5 These updates are published on Data.gov. Please see https:Uexplore.data.gov!Federal-Government-Finances-and· 

Emp!oymentIFederal.Oata-Center-Consolidation-lnitiative-FDCCl/dSwm-4c37 
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center footprint from 14 to 1 by the end of this fiscal year, Virtualization is a key enabling step agencies take as 

they strategically assess how to deploy cloud computing solutions within their IT enterprises, 

Another area where the FDCCI has made progress is interagency sharing. In a 2011 report on the FDCCI, the 

Government Accountability Office recommended that OMB, "require agencies to consider consolidation 

challenges and lessons learned when updating their plans,,,6 OMB has worked with the co-chairs of the FDCCI 

Task Force (Task Force), an interagency body driving consolidation within agencies, and agencies to make the 

sharing of best practices a regular occurrence within our Task Force meetings. 7 Agencies are also working more 

closely together to find new consolidation opportunities, As required under the 25 Point Plan to Reform Federal 

IT Management, on June 9, 2012, we launched a Federal data center marketplace where agencies can find or 

offer excess data center space or capacity to other offices and bureaus, The marketplace is hosted on a 

platform on the MAX Federal Community and is part of the Administration's effort to develop greater 

collaboration between agencies. Offerings on the marketplace provide agencies with additional options for their 

consolidation plans, enabling more informed consolidation decision-making. 

However, through 2.5 years of consolidation work, we have also encountered challenges, One of the most 

serious challenges relates to funding, both the upfront costs associated with consolidation and also accounting 

for the savings as consolidation occurs. Since the Task Force began operating in February 2011, agencies have 

stressed a need for a comprehensive tool to inform consolidation decision making, model consolidation paths 

and assist with the development of cost savings figures and funding needs. In response, earlier this year, the 

Task Force released the first version of the data center Total Cost of Ownership model. It is based on agency 

provided inventory data, built on best practices in the public and private sectors, and tailored to reflect the 

realities of the Federal Government's operational structure. Moving forward, the model will help all 

stakeholders optimize spending on data center facilities, network management, and IT services to help agencies 

realize overall IT savings from consolidation. 

As we stressed in the recently released Federal Shared Service Strategy', agencies should be taking a "shared 

first approach" toward all aspects of technology, FDCCI, in conjunction with shared services and cloud 

computing, seeks to change the notion that every program, component or mission, needs a unique system with 

a unique data center. Instead, agencies should be developing enterprise wide solutions, which server multiple 

stakeholders, In that way, we can deliver services to the taxpayer faster, for less money and with fewer 

resources, In order to break down these cultural barriers, we are putting in place mechanisms so agencies can 

share resources. That is why the data center marketplace is so important. The online marketplace matches 

agencies with extra capacity to agencies with increasing demand, thereby improving the utilization of existing 

facilities, The marketplace will help agencies with available capacity promote their available data center space. 

Sharing mechanisms like this help break down the cultural barriers so the FDCCI and enterprise-wide solutions 

can succeed. 

Z. Would it be helpful for Congress to pass legislation requiring agencies to comply with your plan for 

data center consolidations? 

While OMB would need to analyze any proposed legislation to fully evaluate how it could impact the FDCCI, at 

this point, the Administration believes legislation could limit, rather than enhance, agency efforts to consolidate 

data centers. Legislation would codify actions which are already required by government-wide policy and are 

currently subject to numerous oversight bodies, including Congress, OMB, and inspectors general. Legislation 

could also impose a one size fits all approach, limiting the flexibility currently afforded agencies, which choose 

" http://gao.gov/products/GAO-11-565 

7 Examples of these can be found at http://do.gov/fdccj 

s http://www.gao.gov/assets/600/S92249.pdf 
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the most appropriate consolidation path suited to unique mission, policy and legislative requirements. Any 

proposed legislation would need to carefully weigh the different data center needs of each agency. The 

ultimate outcome of any proposed legislation should be results oriented, rather than process-oriented, and 

provide agencies with the tools to solve the challenges within the FOCCI. 

Instead of codifying data center consolidation efforts, OMB believes a stronger mechanism to enhance the 

FOCCI is to empower agency ClOs to eliminate duplication and rationalize their agency's IT investments, 

including commodity IT services like data centers. This effort was jumpstarted by OMB Memorandum 11-29 

(CIO Authorities)' and continued more recently with OMB Memorandum 12-10 (Implementing 

PortfolioStat)lO Under the latter, agency Chief Operating Officers are leading an agency-wide IT portfolio review 

within their respective organizations called a PortfolioStat, specifically targeting duplicative commodity IT 

investments like data centers, as well as investments that are not aligned to agency missions or business 

functions. OMB believes these tools are providing ClOs with data to build business cases for consolidation that 

can overcome organizational inertia and convince managers to relinquish "ownership" of redundant IT assets. 

Data center consolidation should be a natural outcome that ClOs and their C[x]O partners are focusing on 

reducing costs and improve operational efficiencies of government. The end game is not data center closures 

per se, but a more efficient and cost effective government that delivers high quality services in agency mission 

areas. In that vein, Congressional attention via its normal oversight responsibilities has been and will continue 

to be helpful. 

3. As your Administration moves forward with data center consolidation, and toward cloud computing, 

can you please describe what steps the administration is taking to ensure that this transition 

strengthens cyber security? 

With regards to cloud computing and data center consolidation, the FDCCI's strategiC approach has been to 

work with agencies so they can figure out the best path to consolidate. This might be (a) intra-agency, where 

agencies virtualize existing resources, decommission assets and/or physically move equipment to another 

facility, (b) inter-agency, where agencies can utilize another agency's spare capacity within operational data 

centers and/or (c) migrating systems to cloud computing platforms. In reality, agencies often take advantage of 

several or all of these approaches. As agencies consolidate, they must account for the security and reliability of 

their data and the continuity of operations for all services, mission critical or otherwise. From the outset, FDCCI 

stakeholders, OMB, the Federal CIO Council and agencies have made it a central element of the FDCCI that 

consolidation should in no way jeopardize the government's data. 

In accordance with the Administration's "Cloud First" policy, agencies are required to evaluate safe and secure 

cloud computing options before making any new investments. It was also noted in our Federal Cloud Computing 

Strategy" that the government would address the challenges posed by cloud computing. The most notable of 

these and the one often cited as the largest barrier to cloud adoption is security. That is why the Administration 

launched the Federal Risk and Authorization Management Program (FedRAMp).12 FedRAMP will change the way 

the Federal government secures cloud solutions by providing a standardized approach to security assessment, 

authorization, and continuous monitoring for cloud solutions. It leverages a 'do once, use many times' 

framework that saves cost, time, and staff currently associated with conducting duplicative agency security 

assessments. By utilizing FedRAMP, agencies can have confidence that if they use a cloud solution to 

consolidate, their data will remain safe and secure. This helps improve our overall cybersecurity posture, which 

we noted was a key strategiC goal of the FDCCI when we launched the Initiative in February 2010. 
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Post-Hearing Questions for the Record 

Submitted to Mr. David Powner, GAO 

From Dr. Tom Coburn 

"Innovating with Less: Examining Efforts to Reform Information Technology Spending" 

May 24,2012 

In your testimony, you stated that the plan to implement data center consolidation is 

"partially complete" based on your review of three agencies. Please discuss what 

factors are causing the delay in these consolidations based on your review. 

There are multiple factors affecting agencies' progress in establishing data center consolidation 

plans. These factors include the complexity and amount of information needed in agency 

inventories and plans, and how long agencies have been working on their consolidation 

initiatives. Specifically, agencies need to determine and validate detailed information on each 

data center for their inventories of existing facilities, and to assess and establish thorough cost 

and schedule estimates. In our July 2012 report, we note that officials from several agencies 

commented that some of the information needed for their inventories (including power usage 

information) is not available and that some of the information needed for their plans is still being 

developed. 1 Moreover, the agencies with fewer data centers and ones who have been working 

on consolidation for several years seem to have made more progress on their consolidation 

plans. 

Based on what you've seen so far, do you anticipate that agencies will be able to 

implement the administration's new plan to consolidate all 968 data centers by 2015? 

Based on the progress that agencies have made to date, we believe that it will be challenging to 

consolidate 968 centers by 2015" The 24 participating agencies had planned to close 430 

centers by the end of fiscal year 2012 and another 197 by the end of fiscal year 2013. However, 

as of April 2012, agencies reported having closed only 268 of the data centers. Closing an 

additional 162 centers in 5 months may prove difficult and any delays in consolidating these 

centers could affect the number of closings in later years. As noted in our July 2012 report, 

OMB's continued management focus on this initiative and agencies' completion of their 

inventories and consolidation plans could improve the likelihood that the new goals will be met. 

Do you think it would be helpful for Congress to pass legislation requiring agencies to 

comply with the administration's data center consolidation plan? 

Given the importance of OMB's IT Reform efforts and the potential for up to $3 billion in savings 

from government consolidation efforts, it could be beneficial to make compliance with this 

initiative required by law. We recently reported that, after two years of effort, most participating 

federal agencies have not yet completed their inventories or consolidation plans. Legislation 

could help direct agencies' attention to the importance of the consolidation initiative. Moreover, 

we noted that agencies still have quite a bit of work to close 430 centers by the end of the fiscal 

year. Legislation could help ensure that agencies stay on track in completing their inventories 

and plans, closing data centers, and achieving the resulting benefits, in addition to providing 

agencies With a longer-term perspective on the Importance of maintaining data center 

inventories and consolidation plans beyond the 2015 timeframe and continuing to look for 

additional efficiencies and savings. 

'GAO, Data Center Consolidation: Agencies Making Progress on Efforts, but inventories and 

f,ans Need to Be ~ompleted, GAO-12-742 (Washington, D.C.: July 19, 2012). 

The administration s new goal of clOSing 968 data centers by 2015 is a reduction from its earlier 

goal of clOSing 1,200 centers during this time. 
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Statement for the Record by the Project Management Institute 

Thank you, Senator Carper and Ranking Member Brown for the opportunity to participate in this 

hearing, "Innovating with Less: Examining Efforts to Reform Information Technology 

Spending." There are several important elements of the IT Refonn plan which promoted the 

migration to cloud computing and data center consolidation that will have a lasting impact on 

government IT. The Project Management Institute appreciates the opportunity to submit thcse 

comments on the IT Refonn efforts to-date and the impact of effective program management in 

yiclding the results envisioned in the 25-Point Plan. 

The Project Management Institute (PMI) is the world's largest project management membership 

association, representing over 600,000 practitioners in 185 countries. A not-for-profit 

organization, PMI advances the project management profession through globally recognized 

standards and certifications, collaborative communities, an extensive research program, and 

professional development opportunities. 

PM!'s certification program has existed since 1984, when the PMp® was launched. Since then, 

PMI has continued to serve the project management profession with a comprehensive 

certification program for practitioners with different levels of education and experience. PMI's 

certifications are developed and maintained through a vigorous process. This process is 

exemplified through the Project Management Professional (PMP)® credential accreditation by 

the American National Standards Institute (ANSI) against the International Organization for 

Standardization (ISO) 17024. In addition, the PMP is also registered against the ISO 900 1:2000 

standard for quality management systems. 

PMI certifications are distinguished by their global development and application, which make 

them transferable across industries and geographic borders. The role and tasks of project 

managers around the globe are researched and documented to deline each PM! certification. The 

strength ofPMI's certifications is that they are portable and not tied to any single method, 

standard or organization. 

We see growing evidence and recognition that the strategic implementation of program 

management, through standardized practices and celiified professionals, can deliver competitive 

advantage for businesses, governments and NGOs. Utilizing strong project and program 

management in the execution and operation of IT projects and programs along with experienced 

and credentialed project and program managers; wasteful spending will be reduced. We 

continue to be encouraged by the Administration's focus on improving program management as 

a fundamental aspect of IT refonn as outlined in the 25-Point Refonn Plan. 

The proposals laid out in the 25-Point Plan to implement key refonns to program management 

are strongly supported by PM! and evidence that these efforts should improve government IT 
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program management. PMI particularly supports the creation of a senior level program manager 

job classification who will be responsible for overseeing IT program budgets and the creation of 

a career path to ensure those program managers have the skill sets necessary to take on the 

responsibilities of the position will greatly enhance the performance of federal IT projects and 

programs. This refonn aligns the federal government with best practices of high perfonning 

organizations and should yield corresponding improvement in the governments' talent 

management challenges. 

Every year PMI publishes a look at trends in the project and program management profession. 

This report, The Pulse of the Profession. is a global survey of practitioners and project and 

program management leaders. This year's report showed that high performing organizations 

deliver more than 80% of thcir projects on time, on budget and having met original goals and 

business intent, while low perfonning organizations consistently miss project deadlines, run over 

budget and have misaligned project and business goals. Finishing on time and on budget is the 

goal of every project manager when they take on an assignment. Yet we see gross deviations 

between high perfonning organizations and the median project. 

Overall, an average of only 64% of projects meet their original goals and business intent while 

the other 36% do not!. \\Thy? According our research, some of the most critical project success 

factors include: 

Talent: Stat1ing the team with appropriately skilled people 

Project Management Basics: Taking the time to create a realistic implementation plan 

Executive Sponsorship: Ensuring top-level management support for the project 

Focus on Benefits: Clearly defining the expected benefits from the project 

Change Management: Effectively managing change associated with the project 

Our study indicates that when a project fails, an average of one-third of that project's budget is 

lost for good. Taken with the analysis that shows that on average 36% of projects do not meet 

their original goals and business intent, organizations are putting at risk twelve cents for every 

dollar spent on projects. Therefore, just over US$120,OOO is at risk for every US$l million spent 

on projects. 

Unfortunately, the one area that showed a significant decrease from our previous survey is one of 

the most important formal "talent management" processes to develop project managers. 

Potentially a result of the challenging economy and popular austerity measures, some finns 

appear to be cutting back on developing their project management staff. This reduction in talent 

management reduces the level of maturity in an organizations project management 

This should concern every organization. PM!'s analysis shows that the reported maturity level 

does in fact correlate with on-time and on-budget project delivery. Those reporting high maturity 

levels outperform low maturity organizations by 28 percentage points for on-time project 

delivery, 24 percentage points for on-budget delivery and 20 percentage points for meeting the 

original goals and business intent of projects. 

1 Project Management Institute, Pulse of the Profession, March 2012 
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PMI has conducted significant research on the impact of two specific trends in IT, migration to 

the cloud and the need for organizations to embrace and utilize '''Agile'' methodologies. To reap 

the benefits of cloud projects, organizations must define strategic goals, address risks, and 

carefully monitor progress through implementation and beyond. Only when they follow these 

vital project management steps can they achieve the greatest ROI in cloud computing and 

communicate that success across the organization. 

Keys to Managing Cloud Projects 

Cloud computing is changing the way technology supports the business. Yet embracing that 

technology requires strong project management leadership and tcchnical cxpertise to ease 

stakeholders and end users through the transition. Project management skills and competencies 

are important parts of the transition to the cloud. Organizations that attempt to move into the 

cloud without committing to those best practices risk failing perilously behind as the IT 

landscape inexorably changel. 

Eight Key Takeaways for Implementing Cloud Computing 

Every cloud project should include: 

• A strategic vision of the organizational benefits, whether it is cost savings, improved 

flexibility or more advanced capabilities; 

• Selection and prioritization of the right projects to move into the cloud, with an initial 

focus on those that deliver measurable bottom-line benefits with low security risks; 

• An implementation plan that includes testing prior to roll-out, a transition schedule with 

strategies for managing the data during the crossover, and a backup plan in case the 

system goes down or data is lost in the transfer process; 

• A change management, or communications campaign, to educate everyone from 

executives to end users about why the organization is moving into the cloud, the impact it 

will have on their jobs, and the benefit it will bring to them and to the business; 

• A sufficiently detailed risk-management plan identifying privacy and regulatory 

concerns, as well as issues relating to data storage, protection and replication; 

• Careful vendor selection and vetting plan that covers cost, security of data centers and 

[T processes, interface usability, backup strategies, regulatory compliance, reliability and 

customer satisfaction; 

2 Project Management Institute, White Paper; Cloud Computfng: The New Strategic Weapon 

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An adequate governance process to assess security, and evaluate the quality and access 

to cloud tools and technologies; 

• Formalized metries of ROI to the organization either through bottom-line savings on 

servers or increased sustainability. 

Advancing the Agile Philosophy 

The use of agile as an approach to managing projects has been increasing dramatically over the 

last several years. ft has become an increasingly important discipline lor our members and 

credential holders. Agile is defined as a philosophy using organizational models based on 

people, collaboration and shared values. Characteristics of projects that utilize Agile practices 

are: rolling wave planning; iterative and incremental delivery; rapid and tlexible response to 

change; open communication between teams, stakeholders and customers. More fundamentally, 

utilizing Agile practices on a project means breaking tasks into smaller increments, flexibility to 

adjust requirements with developments in technology, collaboration between business and 

technical staff and rapid reflection of performance. Recognizing the growing use of Agile 

practices, PMI launched the Agile Certification in 20 II. 

PM!'s research has shown that the use of Agile practices has tripled from December 2008 to 

May 2011. The UK has already mandated the use of Agile practices for its government IT 

projects. The Department of Defense is increasingly mandating use of Agile practices on its IT 

acquisitions projects3

. 

Why are these trends developing? PM!'s research demonstrates the value that agile can have in 

decreasing product defects, improving team productivity, and increasing delivery of business 

value. Overall, projects utilizing Agile practices when incorporated with more traditional 

approaches of project management are 16% more productive according to research. Projects 

utilizing Agile practices are also more likely to have a higher quality ofthe product with fewer 

defects; particularly important when delivering IT systems. 

Recommendations for Further Action 

1) Scale IT program management career path government-wide. 

The role of a program manager should not come about by accident. The importance of 

recognizing the role of a program manager and building the skill sets to have strong program 

managers is critical. It is something successful organizations have recognized. PMI's research 

shows that 80% of higher-performing projects use a certified project manager. In addition, 50% 

of project failure is traceable to poor/no project management, including things we know are 

frequently cited in IT: bad estimates/deadlines, scope changes and poor resource planning4. 

3 Project Management Institute; Presentation of Sethuraman & McCorkle; PMl and Agile: Evolution oj Agile 

within PM Community; AprillB, 2012 

4 Project Management Institute, PgMP Credential Handbook. Revised March 18, 2011. 

http://www.pmi.org/Certification/ ~ /media/PD F jCertifications/pdc_pgmphandbookashx 
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Larger organizations must extend project thinking to program and portfolio management. 

Organizational support of project management doesn't begin and end with hiring the personnel 

and implementing the practices. It is essential to retain and support project management talent 

by providing defined career ladders and options. Recruiting and retaining highly perfonning 

personnel is a particular challenge in the federal government. We hope to make OPM and each 

agency's job easier. 

Scaling the IT reform plans across agencies is a logical and makes good sense. PMI encourages 

the expansion of the job classification and career path beyond IT to all projects and programs 

throughout the federal government. We believe adopting this model will improve efficiency, 

improve the expenditure of taxpayer money and improve morale at agencies. 

2) Enable IT program manager mobility 

PM!'s studies of workforce trends show that the job of a program manager is enhanced by 

providing opportunities for increasingly complex and rewarding assignments, Providing 

opportunities for skilled program managers to work on increasingly complex programs, aligned 

to a strong career path will improve retention and create incentives for staying within federal 

service. Career mobility is a tangible benefit for program managers. 

3) Strengthen IT acquisition skills and capabilities. 

There are a variety of ways to assess the project management skills and capabilities of an 

organization. PM! has developed tools to help assess a project and program managers' skills 

utilizing PMI standards to find potential for improvement. These tools can be modified for each 

unique environment, and adapted to each agency's requirements. These tools help organizations 

deliver a career path for PM professionals that evaluate their eurrent and relevant knowledge of 

PM standards and establish a baseline. These baselines provide a path for identifying individual 

and organization-wide training needs. The assessments can be used as part of the hiring process 

and as part of an integrated perfonnance evaluation system, 

Conclusion 

PM! is grateful for the opportunity to submit this statement. We look forward to working with 

Congress and the Administration to fully implement the 25-Point Plan and to create a culture of 

strong program management across the federal government.