In a move suggesting how quickly cloud computing is becoming part of the government IT mainstream, the Office of Management and Budget is requiring agencies to itemize their cloud computing initiatives in fiscal 2014 budget plans.
The emphasis on cloud computing comes within the larger context of planned cuts to information technology spending. The guidance formalizes prior notices for agencies to “propose reductions in IT that represent 10% of their overall spending, and propose a reinvestment of at least 5%, and up to 10%, of these savings, in priority IT investments for OMB consideration.”
The budgeting requirements are part of the annual Exhibits 53 and 300 series detailing information technology and e-government investments. Agencies must submit a draft Fiscal Year (FY) 2014 Exhibit 53A by August 27, 2012 and submit their budget request Exhibit 53s on September 10, 2012.
The new requirement to detail cloud computing investments reflects OMB’s continuing belief that moving computing work from agency-owned and managed computers, to shared, pay-as-you-go systems, will “save taxpayers money and change the way government uses IT,” OMB spokeswoman Moira Mack told Breaking Gov.
That belief dates back to the Federal Cloud Computing Initiative, launched in 2009, when the Obama Administration took its first concrete steps to facilitate the adoption of cloud computing.
“Agencies are no longer asking if they will use cloud computing; rather they are asking how they can use cloud computing to transform their IT portfolio to increase return on investment,” said Mack.
“The FY 2014 budget guidance issued to agencies represents the next step to expand cloud computing and spur innovation within the federal government while reducing wasteful spending and duplication,” she said.
IT: Reduce and Reinvest
The OMB guidance also formalizes OMB’s intent that agencies’ 2014 budget submission “should achieve an agency-wide 10% reduction in IT spending, compared to the average spending on IT from FY 2010 through 2012.”
To do this, agencies are required to report the specific investments in which they propose cuts and the specific investments in which they propose to reinvest funds according to the guidance.
As part of their FY 2014 budget submission, agencies are asked to complete a new exhibit component called Exhibit 53D.
“This new exhibit will allow agencies to show how they achieved the 10% reduction called for in the memorandum, and where they propose to reinvest some of these savings. It also requires that agencies include an explanation of how, at the investment and account level, you would achieve this reduction,” the guidance states.
It is expected the 10% cuts should reduce agency spending in the following IT areas:
• Duplicative commodity IT investments or contracts
• IT infrastructure (e.g. data centers, networks, desktops, and/or mobile devices)
• Enterprise IT systems (e.g. email, help desk, collaboration, identify and access management, security and web infrastructure)
• Business systems (e.g. HR, FM, and other administrative functions);
• Underperforming projects/investments of any type
• Lower-value or lower-priority investments of any type.
Agencies are then asked to propose “where you would reinvest the savings from identified cuts in innovative IT solutions that would produce a favorable return on investment within 18 months or demonstrably improve citizen services or administrative efficiencies.”
OMB is proposing reinvestment in the following areas:
• Improvements to citizen services or administrative efficiencies;
• Adoption of shared services;
• Consolidation of commodity IT, including optimizing data centers;
• Improvements to the security posture of the agency’s IT and information assets;
• Improvements to the energy efficiency of IT facilities and equipment;
• Innovative investments consistent with policy initiatives such as cloud computing, modular development, reduction of improper payments, and digital government; or
• Data analytics or data management consistent with Administration priorities in Big Data.
Documenting Cloud Investments.
Mack said the “Cloud First policy, launched in December 2010, is accelerating the pace at which the government realizes the value of cloud computing by requiring agencies to evaluate safe, secure cloud computing options before making any new investments.”
As part of the Obama Administration’s IT reforms, agencies were required to move three computing services, such as email, with the expectation that to the cloud by 2012, saving the government money, driving innovation, creating new services and reducing waste. Cloud computing has become an integral part of the government’s IT DNA, she said.
Under the guidance, cloud investments are to be reported for prior year, current year and budget year both by deployment model (Public, Private, Community, Hybrid) and service model (platform as a service, software as a service, and infrastructure as a service.)
The updated policy says “the Agency Cloud Computing Portfolio is to be completed at the agency level, not at the individual investment level. Exhibit 53C is comprised of two tables to report the following data elements for each year (PY, CY, BY).
It also requires agencies to conduct Cloud Computing Alternatives Evaluation and “specifies whether, as of the date of the submission, a cloud alternative was evaluated for the investment or components/systems within the investment, per the Cloud First policy.”
The cloud computing requirement was applauded by the Software & Information Industry Association (SIIA) Public Sector Innovation Group applauded the move.
“The new guidance is a big step toward making cloud computing a reality for the federal government. It ensures that agencies are able to plan investments in cloud technologies that can reduce costs and more effectively serve citizens.”said Michael Hettinger, director of the SIIA Public Sector Innovation Group.
A June SIIA whitepaper had asked for a review of the current OMB Exhibit 300 process to ensure its relevancy in today’s world of on-demand computing. The advice was one of five key recommendations aimed at helping federal CIOs and IT companies work together to effectively transition to a new cloud-based environment according to Hettinger.