For Federal CIOs, the pending sequestration, if implemented, will cause significant turmoil in funding agency IT operations and programs. But even if the sequestration is avoided, cutting Federal costs will be a key action area in moving towards a more balanced budget and reducing the deficit. How will Federal executives fare as they tackle this issue? Can CIOs effectively position IT as a significant tool for delivering efficiency?

1. The Business of IT By Paul Wohlleben
Surviving Budget Chaos
Consider these strategies to deal with the looming cuts in federal IT spending.
T
he basis of the current federal more collaborative process. It is more
budget crisis is easily under- difficult to craft such a compromise,
The Effect of
stood: Government expenses but the decisions made are much more
Uncertainty
are much higher than revenues, likely to be implemented. Let’s look at some of the key players in the
and borrowing to address the increasing • ocus on efficiency.
F economy and how they are affected by
gap is becoming much more problematic. Look closely at the organization and budget uncertainty:
Practically everyone in a leadership its activities. Identify and remove bar- • usinesses: Business leaders are
B
capacity regarding the federal budget riers to efficiency. Ensure that over- sitting on large amounts of cash. They
agrees that the deficit must be reduced to sight activities are lean. Oversight can will take actions to use the cash to
a manageable level. identify and address failing projects, grow their businesses in ways that will
drive economic demand and increase
The budget sequestration agreement but such operations tend to become
employment when they believe economic
established in 2011 was a macro-level bloated and bureaucratic. Include sup-
conditions will allow them to produce a
compromise to address the size of the port contractors in these reviews and fair return on their shareholders’ capital.
deficit over the next 10 years. Many adjust contract tasks expeditiously. • nvestors: Investors have also hoarded
I
details were left unspecified, and the • emember Moore’s Law.
R significant amounts of cash in safe but
sequestration provides a great example CIOs are in an enviable position. Most low-yield investments. They too are
of the adage, “The devil is in the details.” federal programs are people-driven, but waiting for economic conditions to
While many believe the full sequestra- IT is technology-driven. Each year the allow them to redirect their capital into
tion will never be implemented, it seems price/performance ratio of most tech- investments that hold the prospect
fairly clear that the federal deficit must be nology improves. IT leaders must use of solid returns.
reduced. However, it is not at all clear how that to their advantage. CIOs have a • onsumers: Consumer spending drives
C
a great amount of economic demand
these cuts will be accomplished. wide range of options to choose from
and has a significant impact on our
For government leaders and employees, that can lead to cost savings and greater
economy. With unemployment high
and for the private organizations that sup- efficiency. and real estate markets weakened,
port government, the effect seems clear: • ell IT as a solution.
S consumers are spending less. Bringing
There must be action to cut the deficit, How to Manage the Chaos For cuts of less than 5 percent, agency • Leverage the team. CIOs have an important role in lead- clarity to the economy, which increases
and part of the solution will require cuts Under most scenarios, the federal executives should be able to manage by is human nature to come together to
It ing any re-scoping or restructuring to employment and stabilizes real estate, will
to selected government programs. The budget is likely to sustain cuts in excess continuing current programs and improv- fight a common enemy. In this case, the absorb cuts. The most important role increase consumer confidence and
agencies that have the most success in of 5 percent. Certainly, as agencies create ing efficiency. Some pain likely would be enemy is budget cuts. Agency leaders might well be to serve as lead innovator, spending.
dealing with these cuts will be those that operating plans based on such budgets, involved in improving efficiency, as cost will find increased cooperation as they demonstrating to other mission execu- • overnment leaders: For the past
G
have in place an effective strategy for programs will sustain the overall cuts in cutting to drive efficiency could reduce seek ways to protect and accomplish tives how IT can be used to improve few years, the leaders of federal agencies
using the resources that remain at their varying proportions. Some will be cut levels of both federal and contractor staff. the agency’s mission while absorbing efficiency. IT leaders should set aside have dealt with significant uncertainty
brought on by continuing budget
disposal. less than the average, some more. I be- Absorbing cuts of 5 percent or more the cuts. They should take advantage time to meet with other executives and
elizabeth hinshaw (Wohlleben); Mike Kemp/getty images
resolutions and a stalemate on budget
Lack of clarity regarding our economic lieve there are two strategies to employ, while maintaining the scope of federal of this team spirit to push consolida- help them find ways to get more done
matters in Congress. As a result, their
playing field, and the role and impact of depending on the level of cuts being taken programs would be much more difficult. tion initiatives that remove stovepipes with less. decision-making and procurement
government on the economy, is the truly by a program or activity that supports Larger cuts require that programs be pri- and inefficiencies from the agency’s activities have been drastically slowed.
disruptive factor we face today. agency operations. oritized in terms of contribution to the operation. Absorbing budget cuts is always pain- On top of this, we now have the looming
mission, and that some of the programs • Connect with external stakeholders. ful. In the end, decisive leadership pro- sequestration, which increases uncertainty.
that yield lower contributions be elimi- CIOs do not exist on an island; any uni- vides the best path for moving forward As we get more budget certainty, whatever
nated or significantly re-scoped. This is lateral decisions they make regarding after adjusting plans and operations. the results and impacts on the size and
“Getting the strategies to yield the very difficult work and involves a great budgets that impact services provided scope of the federal budget, leadership
deal of emotional baggage. to agency customers could be undone should be positioned to act decisively.
rewards they promise will take hard work Here are a few strategies that federal in the decision-making process. Avoid
Paul Wohlleben is a former federal CIO who cur-
rently consults in the federal sector. E-mail him
and strong leadership.” — P W aul ohlleben
IT leaders can use as they implement this trap by reaching out to custom- at paul.wohlleben@gmail.com or visit his blog at
budget cuts: ers and their leaders and seeking a businessofinfotech.blogspot.com.
42 FedTechmagazine.com | fall 2012 Fall 2012 | fedTechmagazine.com 43