7 Initiatives

The unprecedented fiscal challenges of the Government today present a tremendous opportunity for public officials to redefine the business and operating models of departments and agencies in ways that will reduce costs and enhance the quality of services in the long run. Understanding where cost savings opportunities exist is a first step in proactively identifying initiatives to undertake.

IBM has identified seven places to look for savings:

1. Consolidate Information Technology (IT) Infrastructure
2. Streamline Government Supply Chains
3. Reduce Energy Use
4. Move to Shared Services for Mission Support Activities
5. Apply Advanced Business Analytics to Reduce Improper Payments
6. Reduce Field Operations Footprint and Move to Electronic Self-Service
7. Monetize the Government’s Assets

Deficit reduction efforts could generate more than $1.5 trillion over 10 years and if aggressively pursued, $1 trillion in savings over five years, as shown below.

IBM Story

IBM understands the “what you need to do” and the “how you do it,” as it relates to reducing the cost of doing business and improving performance.

With nearly 100 years of experience, IBM is able to draw on learnings and best practices based on both internal and external efforts. Externally, we have Federal experience working with over 40 countries worldwide to help solve their most critical challenges, and internally, IBM has used ourselves as a guinea pig to establish a set of cost-saving strategies and initiatives.

• Over the past five years, IBM has cut our IT expenses in half and dramatically reduced our data center operations, resulting in savings up to 40% in operating expenses. If the Federal Government could achieve similar improvements, you could save $150 to $200 billion over the next 10 years.
• Over the past 10 years, IBM consolidated 30 different supply chains and restructured our supplier network, while at the same time eliminating $25 billion in costs and improving supplier performance. If similar steps were taken by the Federal Government, you could realize more than $500 billion in savings over the coming decade.
• In information technology (IT), IBM has saved $1.4B since 2005 by consolidating 128 CIOs to one; 31 networks to one; 155 data centers to six; and 16,000 applications to 4,200.
• In human resources (HR), IBM consolidated 38 operation centers into one, 21 data centers into one; and achieved a global HR to staff ratio of 1:109 – an improvement from 1:59.

If we set priorities, if we apply the principles of Edwards Deming and of Peter Drucker ... we can focus on transforming, not just cutting. The choice becomes not just do you want more or do you want less, but are there ways to do it better? Can we learn from the private sector, can we learn from Ford, IBM, from Microsoft, from what General Motors has had to go through?
–Newt Gingrich, Former Speaker of the House

Strategic Insight Accelerator

Federal managers can use this as an opportunity to reduce costs but also improve performance. With the right plan in place, it can be an opportunity to streamline business processes, shed unnecessary functions, and optimize information technology to create sustainable reforms.

Our Strategic Insight Accelerator Assessment utilizes best practices, and a low cost six-week strategy engagement based on your scope and identified priority areas. Benchmarking and peer group comparisons are performed in order to help your agency maximize cost savings opportunity. At the end of this engagement, the IBM team will present a report that includes cost savings and performance data sources and targeted focus areas, and achievable steps by identifying immediate initiatives and quick wins to get started.

So, what are you waiting for? Let’s get started today.