SAP Co-CEO Bill McDermott Outlines Opportunity for Government to Eliminate IT Gap Between Public and Private Sectors

Identifies Key Trends Driving IT Innovation for All Sectors; Delivers Recommendations for Government Action

Jun 22, 2010, 13:31 ET from SAP AG

WASHINGTON, June 22 /PRNewswire-FirstCall/ -- In a speech today before the National Chamber Foundation, Bill McDermott, co-CEO of SAP AG (NYSE: SAP), outlined the opportunities facing government in using information technology (IT) to improve operations, speed up the pace of government and deliver better services to citizens. McDermott outlined three forces driving IT globally today – real-time computing to manage an explosion of data, the growing demand for mobile computing and the drive for a sustainable future – and offered three recommendations to help governments use IT to run better.

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In his speech, McDermott echoed the perspective of the Office of Management and Budget (OMB), which recently offered the view that closing the IT gap between the public and private sector "is perhaps the single most important step that can be taken toward a more efficient and responsive government." McDermott delivered the speech as part of a series of "CEO Leadership Luncheons" hosted by the foundation and kicked off two days of meetings in Washington with SAP public sector customers and members of Congress.

IT Gap Between the Public and Private Sectors

McDermott opened the speech by acknowledging: "We have enormous national challenges in front of us, such as rebuilding the economy, improving our schools, protecting our people and cleaning up the environment. Yet most Americans see a disorganized, inefficient response to almost every national challenge, and they're concerned about wasteful spending and the size of government. It often takes government years to design, buy and implement technology solutions, and we can do better than this. There is much room for improvement."

Earlier in June, the Obama Administration directed that federal agencies trim approximately $75 billion in discretionary budget cuts for 2012. As part of that move, the OMB said agencies should explore a variety of options, including boosting productivity through the use of information technology and streamlining operations by consolidating data centers and other technical facilities.

"The focus on IT is timely," said McDermott. "And SAP has a special commitment to this endeavor, because public sector organizations give us an opportunity not only to build a good business but also to help radically improve government operations—and in the process deliver real, tangible benefits to all of our fellow citizens."

Three Trends Driving New Opportunities in IT

McDermott cited three major trends that are currently driving IT innovation for all sectors and that hold great potential for bringing greater efficiency to government:

  • The huge explosion of data in organizations and the need to understand and analyze it in real time. Businesses use real-time information to gain transparency and optimize their decisions at all levels of the organization, and public sector organizations must do this too.
  • The vast expansion in the use of mobile computing. With mobile solutions, civil servants can have the power of business analytics in the palm of their hands – whether they're a government executive at lunch in downtown DC, an emergency responder on the scene of a disaster or a logistics officer in Afghanistan.
  • The promise of sustainability to strengthen the economy. The combined expenditures of all U.S. federal, state and local governments are almost 40 percent of all economic activity. The public sector in the United States has an enormous influence on the sustainability of the economy – not just through its laws and regulations, but through its own operations too.

Leveraged collectively and correctly, McDermott said, these trends could drive technology decisions government agencies need to reform processes and improve efficiency.

Recommendations for Achieving Better Government Through IT

At the luncheon, and in meetings with members of the administration, Congress, agency heads and business leaders, McDermott detailed a three-point slate of recommendations to help close the IT gap between the public and private sectors.

  • Government must continue to eliminate poor-performing programs while continuing steady investments in better performing ones, even with the current pressure for deep budget cuts.
  • Congress and President Obama should maintain a stance of technology neutrality and encourage a broadly competitive market. To do this, they must avoid top-down technology mandates or "U.S. only" rules and instead set clear objectives that let the marketplace compete to meet national goals in all economic sectors.
  • Washington should step up incentives for innovation and investment in all IT economic sectors such as healthcare, energy, transportation, banks and homeland security.

"As we continue to work toward transforming government for our nation's future, let's be sure to include mechanisms that reward those organizations that invest in technology to save money and boost success and performance, especially in focus areas such as healthcare and financial services," McDermott said. "In addition, let's let the marketplace find the best IT solutions to close the gap between private and public sectors to help government run better."

About SAP

SAP is the world's leading provider of business software(*), offering applications and services that enable companies of all sizes and in more than 25 industries to become best-run businesses. With more than 97,000 customers in over 120 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE, under the symbol "SAP." For more information, visit www.sap.com.

(*) SAP defines business software as comprising enterprise resource planning, business intelligence, and related applications.

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