The impact of sequestration on IT

 In News, SHI News, Software

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.

Volume Licensing

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.)

Asset Reclamation

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.

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  • George Hanus

    Very Good points Lauren,

    On Asset Reclamation, budget cuts, I see these tasks being managed by trusted outsourced IT consulting firms.

    As a consultant to a variety of medical clincs and small businesses I see this as a growing challenge. These are offices where a lot of the computers and BYOD are personally owned. Win and OSX, Android, IOS and Winphone are all used by personnel.

    As a solution to this security issue in each organization, I have been using Meraki Routers and Firewalls, and includes a Systems manager with agents for Windows, MAC, IOS, Android and soon Windows phones. This includes granular security on what apps are installed and can be allowed on the ntwork, GPS tracking, and systems wipe if an employee is dismissed or the device is stolen or lost. It also offers a way to have alerts if a device, such as a server, has a failure. These alerts can be managed so you don’t get alerts for everything.

    My point is not that Meraki is the only solution, there are other agent based solutions out there; just that the Meraki agent is free with the purchase of the their equipment. Actually, this should be part of the discussion between IT and Sr. Management or company owners BEFORE BYOD devices are allowed onto the corporate network, or people are allowed to work from home. It is a growing security flaw that can easily jeopardize a company, you hear about security and password breaches all the time (Evernote just announced one yesterday). It does not take a sequester to think about network security, although it will be more prevalent in the coming year, and contingencies even if SR IT would go away by quitting, firing or accident.

    As a consultant I find my roles changing to be more and more a hired IT manager, making policies for companies for a lot of organizations cannot afford; nor does it make sense to hire a full time IT engineer. As organizations may, in the next 10 months trim down significantly, I see that role increasing, and may need to expand my workforce in order to accommodate that demand. I see more internal IT needs being outsourced, for they can order alacarte services without having to pay insurance and over overhead costs.

    George Hanus
    ITAVA Design

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