U.S. Gov’t IT Spending to Drop, Analysis Firm Says

A new analysis firm, using the “collective intelligence” of the government contracting community, has predicted a 10 percent to 25 percent drop in U.S. government IT spending in the next three years.

Government Futures, using lessons from the open-source software and online wiki communities, launched Friday with its first report, saying that U.S. government IT spending will drop in the coming years because of federal budget constraints, voter skepticism about government effectiveness and new technologies that enable cross-agency collaboration.

Other reasons for the predicted drop in spending: There will be a shift in government buying power from agency chief information officers to people in charge of programs and missions, and the government will attempt to shift the risks in IT projects to the private sector, Government Futures said. The U.S. government spends about US$60 billion a year on IT.

Successful government contractors will focus on providing specialized services to U.S. agencies, including better ways to interact with constituents or collecting debts, said Bruce McConnell, president of Government Futures and former IT policy chief at the U.S. White House’s Office of Management and Budget.

Government Futures’ first report, “Government 2.0: Are You Ready?” is available at the Government Futures website.

Instead of playing up traditional strengths such as relationships with government agencies, successful contractors focus on speed, agility and going beyond contract requirements to meet client expectations, added Jim Kane, an adviser for the new firm and president and chief executive of the Systems and Software Consortium.

Government Futures will rely on the so-called Web 2.0 phenomenon of online participation and community to issue its reports, McConnell said. The firm will use online polls, focus groups and surveys of government contractors, government workers and others to gather “collective intelligence,” a term for the often accurate predictions or innovative problem-solving that happen when large groups of diverse people participate in a decision. Author James Surowiecki wrote about collective intelligence in his 2004 book, The Wisdom of Crowds.

Government Futures will use this collective data to shape reports on the government market by bringing in experts to look at the data. Much of the survey information will be freely available, but the firm will sell analysis pieces and consulting services. McConnell compared the new company to the open-source movement, which relies on many contributors while maintaining project leaders who drive progress.

Government Futures will create “open-source insight,” he said.

After seven “pretty fat” years in the government contracting world, driven by domestic security and Iraq War spending, changes are likely coming, especially if control of the U.S. Congress changes hands after the Nov. 7 elections, said Harris Miller, an adviser to the new firm and former president of the trade group the Information Technology Association of America.

Government Futures’ next report, due out in mid-November, will focus on changes to government contracting if one or both houses of Congress turns over to Democratic control.

It’s important for contractors to stay ahead of those changes, and Government Futures’ approach of gathering information from diverse sources can help them do so, Kane added. “The secret of intelligence is keeping your eyes open, your ears open and your mouth shut,” he said.

-Grant Gross, IDG News Service (Washington Bureau)

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