Spend more--not less--on IT.

• Author: Mechling, Jerry
• Position: Commentary

Technology-enabled productivity improvements can be used to hold down government spending without taking all the budget cuts as service reductions. While the possibilities are clearly important--especially through economies of scale, self-service offerings, and expanded collaboration and transparency--they will call for new IT investments.

Unfortunately, given that governments at all levels are now debating how to reduce deficits and close budget gaps, it's politically difficult (some say impossible) to argue for more spending on anything. Politics typically says that the way to handle cutbacks is the way Vince Lombardi handled the Green Bay Packers ("He treats us all equally--like dirt.").

But information technology is different and shouldn't be treated "equally." It's an area where additional spending in one part of the budget--properly targeted--can reduce spending overall. So you heard me right: We should spend more on IT today than yesterday, certainly as a fraction of government spending and probably in total. And we should do this despite or, indeed, because of government's fiscal problems.

In the battle to reduce deficits, conservatives and liberals strongly disagree on the balance between cutting costs and raising revenues. But both sides should agree on the value of productivity. When we gain productivity--and we can--we can reduce spending without cutting services or raising taxes. What's disappointing today is that so little attention is going to the productivity possibilities.

It's here that the IT budget becomes extremely important. IT is rarely more than 5 percent of government expenditures, but, as the factor behind roughly one-fourth of society-wide productivity improvements since the early 1990s, it's a powerful catalyst for overall productivity. The "big numbers" for IT in the budget are thus not the potential savings in the 5 percent of the budget that's IT alone, but in the productivity improvements that the 5 percent enables in the other 95 percent. A "cut-across-the-board" mentality--one that assumes that everything should be cut equally--throws away that productivity power when we need it most.

So it's time for leaders to do the analysis and stand up for needed investments. Some of those...