Data Center Consolidation:

Strengthened Oversight Needed to Achieve Cost Savings Goal

GAO-13-378: Published: Apr 23, 2013. Publicly Released: May 14, 2013.

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What GAO Found

The 24 agencies participating in the Federal Data Center Consolidation Initiative (FDCCI) made progress towards the Office of Management and Budget's (OMB) goal to close 40 percent, or 1,253 of the 3,133 total federal data centers, by the end of 2015, but OMB has not measured agencies' progress against its other goal of $3 billion in cost savings by the end of 2015. Agencies closed 420 data centers by the end of December 2012, and have plans to close an additional 548 to reach 968 by December 2015--285 closures short of OMB's goal. OMB has not determined agencies' progress against its cost savings goal because, according to OMB staff, the agency has not determined a consistent and repeatable method for tracking cost savings. This lack of information makes it uncertain whether the $3 billion in savings is achievable by the end of 2015. Until OMB begins tracking and reporting on performance measures such as cost savings, it will be limited in its ability to oversee agencies' progress against key initiative goals. Additionally, extending the horizon for realizing planned cost savings could provide OMB and data center consolidation stakeholders with input and information on the benefits of consolidation beyond OMB's initial goal.

Pursuant to OMB direction, three organizations--the Data Center Consolidation Task Force, the General Services Administration (GSA) Program Management Office, and OMB--are responsible for federal data center consolidation oversight activities; while most activities are being performed, several weaknesses exist. Specifically,

  • While the Data Center Consolidation Task Force has established several initiatives to assist agencies in their consolidation efforts, such as holding monthly meetings to facilitate communication among agencies, it has not adequately overseen its peer review process for improving the quality of agencies' consolidation plans. For example, the Task Force did not provide agencies with guidance for conducting peer reviews and did not provide oversight to ensure that all agencies exchanged plans.
  • The GSA Program Management Office has collected agencies' quarterly data center closure updates and made the information publically available on an electronic dashboard for tracking consolidation progress, but it has not fully performed other oversight activities, such as conducting analyses of agencies' inventories and plans.
  • OMB has implemented several initiatives to track agencies' consolidation progress, such as establishing requirements for agencies to update their plans and inventories yearly and to report quarterly on their consolidation progress. However, the agency has not approved the plans on the basis of their completeness or reported on progress against its goal of $3 billion in cost savings.

The weaknesses in oversight of the data center consolidation initiative are due, in part, to OMB not ensuring that assigned responsibilities are being executed. Improved oversight could better position OMB to assess progress against its cost savings goal and minimize agencies’ risk of not realizing anticipated cost savings.

Why GAO Did This Study

In 2010, as focal point for information technology management across the government, OMB’s Federal Chief Information Officer launched the Federal Data Center Consolidation Initiative—an effort to consolidate the growing number of federal data centers. In July 2011 and July 2012, GAO evaluated 24 agencies’ progress and reported that nearly all of the agencies had not completed a data center inventory or consolidation plan and recommended that they do so.

As requested, GAO reviewed federal agencies’ continuing efforts to consolidate their data centers. This report (1) evaluates agencies' reported progress against OMB’s planned consolidation and cost savings goals and (2) assesses the extent to which the oversight organizations put in place by OMB for the Federal Data Center Consolidation Initiative are adequately performing oversight of agencies' efforts to meet these goals. GAO assessed agencies’ progress against OMB’s goals, analyzed the execution of oversight roles and responsibilities, and interviewed OMB, GSA, and Data Center Consolidation Task Force officials about their efforts to oversee agencies’ consolidation efforts.

What GAO Recommends

GAO is recommending that OMB’s Federal Chief Information Officer track and report on key performance measures, extend the time frame for achieving planned cost savings, and improve the execution of important oversight responsibilities. OMB agreed with two of GAO’s recommendations and plans to evaluate the remaining recommendation related to extending the time frame.
 
For more information, contact David A. Powner at (202) 512-9286 or pownerd@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: The Office of Management and Budget (OMB) agreed with, and has begun to take steps to address, this recommendation. Specifically, since May 2013, OMB has tracked and reported on data center consolidation cost savings on a quarterly basis. In addition, in May 2014, OMB issued a memorandum that included set of 11 data center consolidation optimization metrics established by the Data Center Consolidation Task Force, including metrics related to data center energy, labor, and storage, among other things. However, as of August 2014, OMB had not yet begun to track and report on these metrics. We will continue to evaluate OMB's progress in implementing this recommendation.

    Recommendation: To better ensure that Federal Data Center Consolidation Initiative (FDCCI) achieves expected cost savings and to improve executive-level oversight of the initiative, the Director of OMB should direct the Federal Chief Information Officer (CIO) to track and annually report on key data center consolidation performance measures, such as the size of data centers being closed and cost savings to date.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Open

    Comments: The Office of Management and Budget (OMB) agreed with, and has begun to take steps to address, this recommendation. Specifically, OMB stated that it would reevaluate the time frame for the Federal Data Center Consolidation Initiative's cost savings goal as the initiative proceeds and generates cost savings. In August 2014, we found that agencies had collectively reported data center consolidation cost savings totaling approximately $1.1 billion between fiscal years 2011 and 2013, and were planning slightly more than $4 billion in additional savings and avoidances by the end of fiscal year 2017. We noted that the extent of cost savings and avoidances being reported by agencies beyond fiscal year 2015 further highlighted the importance of OMB continuing to track and report on such savings beyond the time frame of its initial goal. However, OMB had not yet reevaluated the time frames for the initiative's cost saving goal. We will continue to evaluate OMB's progress in implementing this recommendation.

    Recommendation: To better ensure that FDCCI achieves expected cost savings and to improve executive-level oversight of the initiative, the Director of OMB should direct the Federal CIO to extend the time frame for achieving cost savings related to data center consolidation beyond the current 2015 horizon, to allow time to meet the initiative's planned cost savings goal.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Open

    Comments: The Office of Management and Budget (OMB) agreed with, and has begun to take steps to address, this recommendation. Specifically, in August 2014, the Data Center Consolidation Task Force (Task Force) Charter was updated to formalize the responsibilities of OMB and the Task Force. For example, the updated charter states that the Task Force is responsible for identifying policy and implementation issues that could negatively impact agencies' abilities to meet their data center consolidation goals and coordinating communication and knowledge sharing among agencies. In addition, the charter describes OMB's responsibilities for collecting agencies' core data center metrics quarterly and, in conjunction with the Task Force, disseminating data related to key performance indicators. However, as of August 2014, OMB and the Task Force had not yet begun to disseminate data related to the core data center metrics. We will continue to evaluate OMB's progress in implementing this recommendation.

    Recommendation: To better ensure that FDCCI achieves expected cost savings and to improve executive-level oversight of the initiative, the Director of OMB should direct the Federal CIO to establish a mechanism to ensure that the established responsibilities of designated data center consolidation oversight organizations are fully executed, including responsibility for the documentation and oversight of the peer review process, the review of agencies' updated consolidation inventories and plans, and approval of updated consolidation plans.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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