Sidebar 1: The Feds: Cutting Costs by Modernizing at Oak Ridge

Federal agency IT budgets aren't as volatile as those of state and local governments, but there's widespread recognition among federal CIOs of the importance of efficiency gains.

When R. Scott Studham was hired as CIO of Tennessee's Oak Ridge National Laboratory (ORNL) in October 2005, he thought he saw an opportunity to cut IT spending while improving service offerings.

The federal research laboratory focuses on energy, technology and national security issues, and has a $1.2 billion budget and more than 4,200 staff members.

In 2006, Studham began consolidating the lab's 200 IT employees who worked in 20 small IT departments into one unit called the IT Services Division. In 2007, he focused on creating technology standards and building enterprise architecture.

One of the biggest areas of saving was consolidating software licenses. "One department might license product A, while another licenses product B, and they both do the same thing," Studham said. "So we looked at all of our licenses and saw which ones it made sense to cancel. That was the biggest initial cost avoidance we found - around duplicative services and licensing."

In the first year, those savings were reinvested in an IT security revitalization project that had been on the back burner, but needed to be done.

The following year, IT costs dropped from 4.6 percent of the lab's total budget to 4.4 percent. "I think you can lower costs and have more success if you modernize your IT environment," Studham said.

The IT group is now focused on adding features to help staffers with their work, including offering a common portal to the mix of back-end applications users must access, such as payroll and human resources. The IT team also has focused on offering more collaboration tools, such as Webcams and blogs.

Studham described a recent internal Webcam meeting with six people: "We did instant messaging to set it up and then all turned on our Webcams. We did in five minutes what would have taken a day and a half to set up a few years ago."

Other new tools include expertise location within the ORNL and document stores. "We can mine data to help people find experts at the lab," Studham said. "These are knowledge workers, so connecting them in this way adds value."

Studham said his 2009 budget is looking a little tighter than 2008's, but that isn't stopping him from looking ahead to his next challenge: a business process modeling project that will let employees visually track requests as they journey through the government bureaucracy. "It will also allow lab management to track which business functions are taking the longest to complete and make decisions about whether to add resources to speed them up," Studham said.