MA

Full Savings Potential Not Being Realized with PortfolioStat According to GAO

Published: November 12, 2013

Acquisition ReformGovernment PerformanceOMBPolicy and LegislationShared Services

Launched in 2012 by OMB to reduced duplicative IT investments and take more advantage of shared services, the PortfolioStat process has not realized full savings potential according to a recent GAO report.

The PortfolioStat initiative requires 26 agencies to conduct an annual agency-wide IT portfolio review to reduce commodity IT spending and demonstrate how their IT investments align with the agency’s mission and business functions. PortfolioStat covers three categories of commodity IT:

  • Enterprise IT systems, which include e-mail; identity and access management; IT security; web hosting, infrastructure, and content; and collaboration tools.
  • IT infrastructure, which includes desktop systems, mainframes and servers, mobile devices, and telecommunications.
  • Business systems, which include financial management, grants-related federal financial assistance, grants-related transfer to state and local governments, and human resources management systems.

OMB established seven agency requirements for fully implementing the PortfolioStat review process: 

  • Designating a lead office with responsibility for implementing the process
  • Completing a high-level survey of their IT portfolio
  • Developing a baseline of the number, types, and costs of their commodity IT investments
  • Holding a face-to-face PortfolioStat session with key stakeholders to agree on actions to address duplication and inefficiencies in their commodity IT investments 
  • Developing final action plans to document these actions 
  • Migrating two commodity IT areas to shared services 
  • Documenting lessons learned

According to GAO’s research, only one in 26 agencies has met all seven of the PortfolioStat requirements, which include developing a commodity IT baseline, completing an action plan, and migrating two services to a shared services model.  The chart below shows the number of requirements met by each of the top IT spending agencies.

Generally, all agencies have designated their CIOs as the lead official, completed portfolio surveys and held PortfolioStat sessions.  Few agencies have completed an action plan, developed a commodity baseline, or migrated two services.

GAO estimates that agencies could save at least $5.8 billion through FY15 by addressing 200 consolidation opportunities the identified.  The chart below shows the estimated cost savings by agency for FY13-FY15 if consolidation initiatives were implemented for the 200 investments:

 

DOD by far presents the most potential for costs savings with the potential for 26 initiatives at $3.2b-$5.3b in potential savings, followed by DHS with 15 initiatives with $1.4 billion in potential savings.

GAO made six recommendations to OMB to further the success of the PortfolioStat initiative:

  • Agencies fully disclose limitations their CIOs might have in exercising the authorities and responsibilities 
  • Agencies state what actions have been taken to ensure the completeness of their commodity IT baseline information and identify any limitation with this information 
  • Agencies report on the progress of their two consolidation efforts 
  • OMB disclose the limitations of any data reported on the agencies’ consolidation efforts and associated savings and cost avoidance 
  • Agencies report on efforts to address action plan items as part of future PortfolioStat reporting
  • Improve transparency of and accountability for PortfolioStat by publicly disclosing planned and actual data consolidation efforts and related cost savings by agency

GAO also made 58 recommendations to 24 of the 26 departments and agencies in their review. 

PortfolioStat stands to save agencies billions in IT spending if fully and thoroughly implemented.  Additionally, agencies will likely need contractor assistance in consolidating and eliminating duplicative IT investments over the next two years.