Data Center Consolidation: Strengthened Oversight Needed to Achieve Cost Savings Goal
Highlights
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.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | 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. |
The Office of Management and Budget (OMB) agreed with, and has taken steps to implement, this recommendation. Specifically, since July 2012, OMB has tracked and reported to Congress on data center consolidation cost savings on a quarterly basis. In addition, in May 2014, OMB issued a memorandum that included a set of 11 data center consolidation optimization metrics and targets established by the Data Center Consolidation Task Force. For example, the metrics and related targets addressed data center power usage effectiveness, percentage of operating systems virtualized, and data center facility and storage utilization. Subsequently, in April 2015, OMB began reporting on agencies' progress against these metrics on the IT Dashboard--a public website which provides detailed information on agencies' major investments. As a result, stakeholders in the federal consolidation effort will be better positioned to oversee agencies' progress against key initiative goals.
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| Office of Management and Budget | 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. |
The Office of Management and Budget (OMB) did not state whether it agreed or disagreed with our recommendation, but has taken steps to address it. Specifically, in April 2013, OMB stated that it would consider reevaluating the time frame for the Federal Data Center Consolidation Initiative's cost savings goal as the initiative proceeded and generated cost savings. Subsequent to the enactment of the December 2014 IT acquisition reform legislation (commonly referred to as FITARA), which included a series of provisions related to the federal data center consolidation effort, OMB issued a memorandum in August 2016 that established a framework for achieving the data center consolidation and optimization requirements of FITARA. This memo included criteria for agency data center strategic plans and performance metrics for evaluating success of those strategies. Further, OMB's memorandum extended the time frame for achieving data center cost savings and avoidances through fiscal year 2018. As a result, OMB and federal agencies are better positioned to realize the benefits of consolidation and optimization beyond the Federal Data Center Consolidation Initiative's original 2015 time frame.
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| Office of Management and Budget | 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. |
The Office of Management and Budget (OMB) agreed with, and has taken steps to implement, this recommendation. Specifically, in August 2016, the Federal Chief Information Officer issued a memorandum that announced the Data Center Optimization Initiative (DCOI) as a successor effort to the Federal Data Center Consolidation Initiative. To execute DCOI, OMB's August 2016 memorandum formalized the roles and responsibilities for its Office of the Federal Chief Information Officer, which includes setting the data center closure targets and cost savings and avoidance goals for each agency. Further, the memorandum also described the role and responsibilities for the General Services Administration's (GSA) Office of Government-wide Policy, which includes providing guidance on technology advancements, innovation, cybersecurity, and best practices to data center providers, as well as assisting with creating and maintaining an inventory of acquisition tools and products related to data center optimization. As part of this new initiative, OMB also established a new transparency mechanism on its IT Dashboard to better ensure that OMB and agency responsibilities under DCOI are fully executed. Specifically, the Dashboard now includes agencies' data center closure targets and progress reported against those targets. Further, GSA's Office of Government-wide policy has issued best practices guidance for data center management, as well guidance for designating data centers as shared service providers. As a result of these actions, OMB is better positioned to effectively oversee agencies' progress against key DCOI goals and agencies have additional tools to improve the execution of their optimization efforts.
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