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Feds announce 12% hike in IT spending, demand ROI

The Bush administration used Oracle AppsWorld as a platform to announce its planned 12% increase in federal IT spending for fiscal 2004.

SAN DIEGO -- The Bush administration released its 2004 information technology spending plan for the federal government at Oracle's AppsWorld conference on Monday. The proposed budget, which calls for a 12% increase in IT spending during fiscal 2003, puts the managers of more than 700 projects on notice that those programs will be cut if they cannot prove return on investment.

"The biggest effort we will make is in trying to emulate the spending and cycle times of the private sector," said Mark Forman, associate director of IT and e-government for the Office of Management and Budget. "The message going forward is, if you can't prove real value, you won't get any money."

Forman conceded that federal IT projects have too often been allowed to run on without clear goals or spending plans. As a result, the government has created a list of more than 700 IT projects it has identified as "at risk."

Accounting for more than $21 billion of the overall $59 billion 2004 IT budget, managers of these programs are being asked to re-assess their business plans and re-affirm that they may soon bear fruit. When project managers prove that their individual efforts have shown "sufficient potential for success," they will be removed from the list, Forman said. Projects that fail to prove measurable value will be phased out or combined with others.

"We're the single biggest spender on IT products and services in the world," Forman said. "We better know where every dollar of that money is going."

Officials said the budget grew by $6.4 billion -- from $52.6 billion in 2003 -- because of better reporting of funds already being spent on IT, increased investments around homeland security and the war on terror, and continued efforts around systems modernization.

Under the spending plan, $37 billion would be used on IT to support agency programs and missions, $21 billion would go toward networks and infrastructure, and $1 billion would pay for enterprise architecture upgrades. The budget also includes $4.7 billion in provisions for cybersecurity, an increase of more than 10% from the 2003 plan.

Another major area of spending would be on e-government applications to offer more online services to U.S. citizens. Forman noted the president's goal for citizens to reach any government service online in no more than three mouse clicks, although he did not break out how much money would go toward the effort.

The budget plan's overriding message revolves around Bush's aspiration for IT to bring about "real reform" in the management of government. The president outlined five major initiatives under that goal, including driving results and productivity growth, in particular for homeland security and information sharing; controlling IT costs through consolidation and integration of redundant applications, as well as buying enterprise-wide software licenses; developing a government-wide architecture; improving cybersecurity, including privacy protection; and making IT workforce improvements, especially in project management.

The Bush administration used the Oracle AppsWorld conference as the springboard for its IT spending announcement. Redwood Shores, Calif.-based Oracle Corp., host of the event, is the largest provider of financial software to the U.S. government.


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