The CEOs of Dell and IBM warn that the U.S. is risking its competitive technological edge in several ways.
As mounting public deficits dominate discourse in Washington
and in state capitals throughout the country, leaders from the technology
industry said they are eager to help address the problem. The federal
government can save $1 trillion over the next decade, claimed Dell CEO
Michael Dell and IBM Chairman and CEO
Samuel Palmisano, by applying homegrown expertise, technology and
organizational innovation to its information networks and management practices.
The discussion, which took place during a technology and public policy
program hosted by the Center for Strategic and International Studies (CSIS),
drew on an October 2010 Technology CEO
Council report, "One Trillion Reasons: How Commercial Best Practices to
Maximize Productivity Can Save Taxpayer Money and Enhance Government Services."
Dell and Palmisano argued that the U.S. government needs to spend less time
on partisan bickering and more time addressing issues that affect the country's
technological competitiveness, highlighting the U.S. deficit, high corporate
tax rates (the U.S. rate is more than 30 percent, compared with as little as 10
percent in other countries) and the country's unsatisfactory education system.
Palmisano added that the country's citizens are lacking a clear directive from
Uncle Sam on fostering innovation and talents required by the high-tech
industries powering the world economy. "What is missing is someone saying,
'We're going to take the country from here to there,'" he argued.
"Then go out and sell the case. If you can't sell and people say, 'That's
not what we want,' then we have what we have today."
In reference to the October report, Dell pointed out that basic steps such
as employing more Web-based citizen services and consolidation of government
data centers could go a long way toward saving the government money. If
government officials stand in the way of the "enormous improvements in
technology," they do so at their own peril, Dell said. "You just lose
relevance and you fall behind," he warned. "Holding onto stuff that
is four or five or six years old is incredibly expensive."
The October report estimated that IT infrastructure consolidation could save
the government $150 billion to $200 billion, while reducing field operations
and moving to electronic self-service could net $50 billion in savings.
Streamlining government supply chains alone could save half a trillion dollars,
while energy reduction could save Uncle Sam $20 billion.
IBM cut its overall IT expenses in half
over the past five years through consolidation and standardization, and has
dramatically reduced its data center operations and saved up to 40 percent in
operating expenses, Palmisano said.
One often-cited opportunity for cost savings through emerging technology
comes from cloud computing. Government agencies that have moved to cloud
computing have generally achieved between 25 and 50 percent in savings
associated with information technology operations, according to a Brookings
Institution report called "Saving Money Through the Cloud," cited in
the CSIS report.
"By harnessing major technological shifts and adopting best business
practices, we can not only make our government far more productive, but also
foster greater innovation in areas ranging from healthcare to education and
energy-innovation that will generate economic growth and job creation,"
the October report stated. "Our country still possesses the world's
greatest innovation engine-American society itself. Both business and
government can and must be vital partners in making that engine fire on all