3 Big Opportunities in the FY15 Budget

by Stephanie Meloni, Senior Analyst

With the unveiling of FY15 Budget requests this week, the news has been inundated with ominous (though not surprising) stories surrounding further reductions of forces within the DOD, terminations of modernization programs/acquisitions, retirement of aircraft, etc. The overall message is that DOD has been forced to stretch their resources in an increasingly complex threat environment.

In terms of IT budget requests from the Services, we are still awaiting the specific numbers (anticipating that information to be released in early April), but we know that DOD’s IT FY15 budget request will be $35.4B – which represents a six percent decline from FY14. In fact, DOD is taking the brunt of the three percent reduction in the overall Federal IT budget.  

The military is making plans to be smaller and leaner – but they are also aiming to be more flexible and technologically advanced. So, where can the IT product community find opportunity within that mission?

1.     Existing Systems
DOD is very risk-averse for understandable reasons. But in attempting to avoid faulty and costly modernization projects, they have created an environment that makes it very difficult to acquire new technologies. Their sluggish pace of modernization has created a huge problem for them. High sustainment costs of legacy systems now take up the majority of their IT budgets – leaving very little room to spend on new initiatives. For industry this presents an opportunity as government will be receptive to ideas on how they can save sustainment costs of their existing systems. For other modernization efforts, implementation needs to be very well-planned and thought out to anticipate problems that may lead to cost increases down the line.

2.     Cyber
Cyber has also been mentioned numerous times as a “protected” area within the budget, and one that we expect to see growth over the next few years especially. DOD requested $5.1B for cybersecurity in FY15, which represents a slight increase from last year’s request. Some of this funding will go toward the standing-up of more special cyber mission teams – DOD expects to have about 6,000 cyber mission specialists operational by 2016.

3.     Information Sharing & Analytics
Other areas of opportunities for industry revolve around helping the government identify cost savings, improve processes, collaborate and share information, and analyze their data. DOD wants their analysts to have better access to their data – so they may be receptive to information sharing technologies. They want their analysts to reduce time and effort spent manipulating data, and more time doing the actual analysis. There should also be opportunities for tools and applications that help the DOD analyze their data to identify ways to reduce any areas of wasteful spending and other patterns that can help them identify operational efficiencies.

The bottom line is that the DOD is looking for ways to stretch their limited budget further and they see technology as the avenue to making that happen. Working closely as a partner with the government to understand their mission, and how we can make their dollars go further, will be greatly appreciated – as well as finding ways to enable and extend their current capabilities.