The Defense Department is on track to spend more than $30 billion on IT in fiscal 2016, representing a slight bump over 2015 but a 14 percent slump from the $35 billion spent on technology goods and services in 2012.
The bulk of the Pentagon’s spending on IT goes toward running and maintaining legacy systems – roughly two-thirds of the IT budget, in fact. That budget predictably has taken hits as operations in Southwest Asia continue to wind down, but cuts also are attributable to enterprise IT consolidation and the migration of some IT dollars to intelligence agency solutions, according to a new analysis from IDC Government Insights.
“One of the things that makes it difficult for vendors to tap into the budget for ‘new systems and enhancements’ is that they only represent a small subset of total [DoD] IT spending,” IDC’s Shawn McCarthy wrote in a blog post analysis. However, “DoD-wide programs are growing. These types of multi-department programs include the common solutions found in all services, such as shared financial management systems, shared human resource management systems…today this category has grown.”
Military IT spending dipped to $30 billion last year, but IDC predicts a slight increase to $30.4 billion in fiscal 2016, a 1.6 percent increase. Since 2012, IT spending in the DoD-wide category largely has remained static while service-specific funding declined, most significantly in the Army.
That trend likely will continue as Pentagon leaders focus on enterprise IT services and goods, including the shift to the Joint Information Environment and unified capabilities. The incorporation of cloud services and focus on multi-department functionality have meant tough-to-swallow budget cuts but promise long-sought efficiencies, according to the analysis.
“The Defense-wide budget has remained steady while all of the other services, especially the Army, have been on a slow decline. The decline in overall Army spending is related to the winding down of many of its operations in the Middle East,” McCarthy wrote. “Defense-wide IT programs – for example those managed by the Defense Information Systems Agency or the Defense Logistics Agency – are the IT projects which will have long-term staying power in the years ahead.”
