The impact of sequestration on IT
I chose not to blog about sequestration until now because, like most people, I never really thought it was going to happen. Much like January’s fiscal cliff, the prevailing sentiment was that the “D.C.” in Washington would stand for “Don’t Cut” and that an 11th hour deal would be made.
But now that the deadline has passed and the only thing delaying the start of sequestration is a presidential signature, we must all seriously begin to consider what will happen to those affected by the automatic spending cuts.
As reported by Computerworld this morning, the potential budget cuts are already causing uncertainty within a sector that relies on secure funding to foster growth and innovation: IT. Even though the official OMB report from the White House says that “no amount of planning can mitigate the effects of these cuts,” IT organizations should still start anticipating what those effects will be in order to properly manage them.
If cuts are indeed made, here are some questions IT managers will need to consider.
If a multi-year agreement is nullified before it comes to term, what version of software are end users entitled to use? Most federal contracts contain language that allows the contracts to be nullified if funding becomes unavailable. On the flip side, many multi-year software volume licensing programs do not grant full ownership of licenses until the final annual payment is made. If a contract is discontinued midway through, and you deployed a new product BECAUSE of the agreement you had, which version of the product are you entitled to if the final payment is not made?
Furthermore, if budget cuts lead to staff reductions, how will licenses be stocked and eventually redeployed when needed again? (SHI offers “License Redeployment Management Services” (LRMS) to customers dealing with just such an event. LRMS warehouses, re-allocates, and reports back usage of redeployed licenses, as-needed.)
In the case of sequestration-induced layoffs, do IT managers know which employees have what devices? Who is ultimately responsible for collecting the phones, laptops, and workstations in a way that meets the Department of Defense standards for the decommissioning of hardware containing potentially sensitive materials? What about the hardware of those employees who BYOD? Who is going to make sure sensitive company data is wiped from those devices before their owners take them home for good?
Reduction in staff
While budget cuts could lead to workforce reductions, it is more likely that we will see widespread work furloughs and less hours worked per week. With less resources, who is going to ensure the proper execution of the activities mentioned above? And how are they going to do so while still managing their regular responsibilities, such as meeting current SLAs and, oh yeah, fostering an environment of innovation?
Take note: These questions aren’t just applicable to sequestration. They’re relevant to any organization experiencing major budget cuts or mass layoffs.
The answers are out there and SHI can help you find them. But right now, our eyes are focused on D.C. in hopes that sequestration can be avoided even still.