DOD’s headache? Save $3.5 billion a year on IT!

The lead story in the November 28th issue of InformationWeek (you should be able to read the story online at www.informationweek.com in another week or so) is about the challenges faced by the U.S. Department of Defense. The Pentagon has an IT budget of US$38.4 billion (that’s BILLION with a b!) and needs to slash it by tens of billions over the next five years — without loss of functionality, performance or security.

For those of you who want to compare this to your own budget, the DOD spends a bit under 6% of their US$671 billion budget on IT. Since most enterprise IT departments find that the bulk of their budget, typically 70-80%, is allocated to simply operating and maintaining existing systems and facilities, this will obviously be a huge challenge.

Not surprisingly, CIO Teri Takai’s IT strategic plan took a year to prepare. But surprisingly, it’s only 48 pages long — an inspiring feat in itself. Ms. Takai is obviously no amateur at this stuff. She’s the former CIO of the State of California, the State of Michigan, and worked at Ford and EDS before that.

Among the plan’s 26 initiatives is a goal to close 344 of the DOD’s 772 data centres. Market Metrics is currently working on a study of the Canadian hosting market, and I can tell you this — the number of data centres the DOD wants to close is about four times the combined total number of data centres operated by the top dozen Canadian hosters!

I reckon there’s two ways for CIOs to view this story. The first is to bless your luck stars it isn’t you. The second is to be inspired when preparing your organization’s 2012 IT plan. If Ms. Takai can pull off what she has to do, perhaps you can face your own organization’s challenges by following her lead… defining goals, setting priorities and creating an action plan.

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    Market Metrics Inc. helps knowledge-based businesses with strategy, planning and innovation and was founded in 2003 by Greg Graham, a seasoned marketing professional. Greg is a Certified Management Consultant (CMC), an Accredited Small Business Consultant (ASMEC), a member of the American Marketing Association, and holds MBA/BEE degrees as well as a Certificate in Strategic Management. He frequently performs consulting engagements on behalf of the Government of Canada's Industrial Research Assistance Program (IRAP). Prior to Market Metrics, Greg's 21 years of corporate experience encompassed tech start-ups through Fortune 500 companies.

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