Dell, IBM CEOs Present Plan to Save Government $1 Trillion

Feb. 3, 2011
Palmisano and Dell lay out productivity agenda, warn that political wrangling undermining U.S. competitiveness.

Perhaps theres no amount of innovation that can wrestle control of a bureaucratic monolith the size of the U.S. government, but the CEOs of IBM and Dell certainly have some ideas worth trying.

After meeting with President Barack Obama on Tuesday, IBM chairman and CEO Samuel Palmisano and Dell CEO Michael Dell laid out an agenda that would streamline the governments information systems and has the potential to create $1 trillion in savings.

The ideas, according to Palmisano, are far from innovative. In fact, he points out the private sector has adopted almost all of the suggestions over the past decade. The problem is the government is still relying on an archaic network system.

What we are talking about is putting things together and sharing, said Palmisano. It is extremely straightforward. IBM had 84 data centers, now we have 14 and we saved $3 billion.

Palmisano and Dell were on hand as part of the Technology CEO Council, a tech industry advocacy group made up of CEOs from top U.S. tech firms, including Ursula Burns of Xerox, Michael Splinter of Applied Materials, Steve Appleton of Micron Technology, and Joseph Tucci of EMC.

The group met with Obama and other White House officials on Feb. 2, where they discussed future investment in the economy, improving science and math education to improve the pool of potential employees, the free trade agreement with South Korea, and the benefits of investments in research and development and ways to work together on corporate tax reform.

The council made seven recommendations in its report, One Trillion Reasons, that it believes can save the government $1 trillion dollars over the next nine years.

Among the recommendations was consolidation of its IT infrastructure, which it estimates can save between $150 to $200 billion, along with a streamlining of government supply chains, reducing energy use, moving to share-services, applying advanced analytics to reduce improper payments, reducing field operations and moving to electronic self-service, and the monetizing of government assets.

Holding on to stuff that is four or five or six years old, is incredibly expensive, he said. And were not even talking about the power savings, which can be 95%.

The discussion also veered into policy and economics. According to Dell and Palmisano, the toxic political tone within the country was preventing progress in areas badly in need of help, such as the mounting federal deficit, high corporate tax rates and an education system that is not preparing its students for highly-skilled work.

While we are global companies, we are still Americans and we want to see America succeed, said Dell. The world is changing very quickly and partisanship doesnt help our cause as Americans.

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