Return of the Guru

Tech CEOs Weigh In on Federal Budget Deficit

Ara Trembly
Insurance Experts' Forum, October 7, 2010

One of they many (and they have been legion) science fiction movies I have seen over the years portrayed a scenario in which the Earth (that is, the U.S.) was threatened by an impending asteroid collision. The somewhat fanciful solution (this was the 1950s after all) involved all of our leading industries generously pitching in gratis and coming up with a solution to, literally, save the planet.

In what may be life imitating art (stretching the definition of art, I admit), a group known as the Technology CEO Council (TCC)—composed of civic-minded tech executives—is now proposing tech measures through which, it claims, “the U.S. federal government can save over $1 trillion by 2020, while improving the services it provides to citizens and laying a foundation for future job growth and innovation.”

The research findings and recommendations in the TCC report, “One Trillion Reasons,” were shared this week with the Obama administration’s economic team by the Council’s members, chaired by IBM CEO Samuel Palmisano, and submitted to National Commission on Fiscal Responsibility and Reform that is considering proposals to reduce the federal deficit.

Based on real-world expertise, the group claims, “technology and organizational changes that are already working successfully in the private sector can be implemented across government immediately to reduce a nearly $700 billion annual structural budget deficit, and to improve government operations and the U.S. economy.”

Let’s consider some of our tech leaders’ proposals. The first they dub “Green Data Centers.” The group notes that the federal government spends approximately $76 billion annually to support and manage vast and widely dispersed IT assets. “Up to 30 percent of that spending could be saved by further reducing IT overhead, combining data centers, eliminating redundant networks and standardizing applications,” they say. The politically correct “green” nonsense aside, some of that actually makes sense. Reducing overhead is a great idea, but it’s Business 101, not the “green revolution.” In fact, there’s nothing really revolutionary about any of this, but that doesn’t mean it wouldn’t work.

Next, the group recommends that the U.S. “decrease duplication.” They claim a $500 billion savings can be realized by consolidating the government’s myriad supply chains. “This would also render the government’s procurement process far more transparent, helping to strengthen public trust,” their report notes. So I am wondering which supply chains (read vendors) would be eliminated in the consolidation. It certainly wouldn’t be players like IBM and Dell, two prominent players on the TCC. More likely it would be smaller suppliers—say, the kind that serve the insurance industry. After all, the big guys can easily duplicate what our industry-specific vendors have wrought, right?

TCC also thinks we should “stop fraud with analytics,” an idea that will come as no surprise to the insurance industry, which is already fighting fraud with data analytics. The group wants to apply analytics to things like federal grants, food stamps, Medicare reimbursements, tax refunds and other programs. Great idea! Glad the insurance industry thought of it.

Going “digital”—eliminating paper processes—is another brain wave proposed by TCC. They say that transitioning antiquated, paper-based processes to digital records management for federal forms would generate $50 billion in cost savings over 10 years. Sounds good, but it also ignores the fact that digital data storage is vulnerable to all kinds of things that can corrupt it, not to mention the fact that not everyone has Internet access. Still, it points us in the right direction.

There’s more, but I’m sure you get the drift by now. TCC is telling the feds to start doing business in a responsible manner.

Good luck on that one.

Ara C. Trembly ( is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

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