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Federal Agency Predicts 40% Savings From Move to Cloud

Carolyn Duffy Marsan | March 11, 2011
The Equal Employment Opportunity Commission (EEOC) expects to save 40% over the next five years by switching its financial management application to a cloud computing vendor -- a sign of the massive savings to come from the U.S. federal government's shift to the software-as-a-service model.

Lucas says GCE also provides the EEOC with a substantial return on investment because the agency doesn't have to hire a contractor to build a new application from scratch. "The cloud model gives us a lot of flexibility, a lot of risk mitigation and a lot of cost advantages," Lucas says.

Lucas says he hopes other agencies will follow suit and adopt the cloud computing model for their financial management systems.

"We're trying to turn financial management into a commodity service instead of having a financial management application built for each agency," Lucas says. "The EEOC award is going to, I believe, further validate this idea to CIOs and CFOs across the government, that they can modernize their workforce on a new set of tools in a cost-effective way."

EEOC officials are encouraging other CIOs to be open minded to cloud-based computing. "I think the federal government has got a lot to learn about the economies of scale that come from running the same service for multiple customers,'' Smith says.

Lucas adds that highly standardized government applications like financial management are ripe for software-as-a-service implementations, not only for federal agencies but also for state and local governments.

"Wherever you can find a rigorous set of standard business processes, those are the areas where industry can offer software-as-a-service to government," Lucas says. "Logistics, supply chain management, case management are all ripe for this type of investment. ... I expect growth in back-office applications like HR, financials, budgeting, procurement and acquisition."


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