The federal government can save $1 trillion through 2020 by consolidating infrastructure, combining supply chains and reducing energy consumption among other moves.
Fresh off a meeting with President Barack Obama, the CEOs of Dell Inc. and IBM Corp. laid out a productivity agenda for the federal government that they say could save the government $1 trillion.
And it is nothing new or groundbreaking, said Samuel Palmisano, IBM’s chairman and CEO. It’s the same efficiency moves the private sector has been making for more than a decade.
“What we are talking about is putting things together and sharing,” Palmisano said during a panel discussion the day after he, CEO Michael Dell and other members of the Technology CEO Council met with Obama and other White House officials.
“It is extremely straightforward,” he said. “IBM had 84 data centers, now we have 14 and we saved $3 billion.”
The Technology CEO Council makes seven recommendations in its report, One Trillion Reasons, that it says will save the federal government $1 trillion through 2020.
The recommendations and estimated savings are:
- Consolidate IT infrastructure -- $150 billion to $200 billion
- Streamline government supply chains -- $500 billion
- Reduce energy use -- $20 billion
- Move to shared-services -- $50 billion
- Apply advanced analytics to reduce improper payments -- $200 billion
- Reduce field operations and move to electronic self-service -- $50 billion
- Monetize government assets -- $150 billion
The return on investment of taking these steps will be felt almost immediately, particularly in the infrastructure area, Dell said.
“Holding on to stuff that is four or five or six years old, is incredibly expensive,” he said. “And we’re not even talking about the power savings, which can be 95 percent.”
The panel of Dell and Palmisano was moderated by John Hamre, president and CEO, of the Center for Strategic and International Studies.
Much of the discussion focused on the need to increase productivity in the U.S. economy. Both Dell and Palmisano criticized the partisanship that dominates U.S. politics and the debate around how to address the deficit and national debt.
“While we are global companies, we are still Americans and we want to see America succeed,” Dell said. “The world is changing very quickly and partisanship doesn’t help our cause as Americans.”
The meeting with the White House yielded some results, Palmisano said. The administration is willing to work on the corporate tax structure, which Obama said he would support changing as long as it is deficit neutral. The tech CEOs also met with members of Congress on the issue, and they agreed to work on it as well.
“For the first time I feel there is real work underway,” he said.
Another critical area is free trade, and the White House needs the private sector to help make the case for more free trade agreements.
“Wherever we have a free trade agreement, the data shows that we are doing better,” Palmisano said. But the public perception is the opposite. “Now we have to sell it.”
Dell and Palmisano both said the U.S. is at a critical junction and has to put aside partisanship so the country can move forward, otherwise the risk is that the country will be eclipse by emerging global economies in China, India and Brazil.