The time-honored discounted cash flow method for determining appropriate utility returns falls short when interest rates are low. Inadequate ROEs ultimately increase cost of capital and wipe away...
CIOs Under Pressure
IT officers are getting more efficient, but guess what keeps them up at night?
traditional keep-the-lights-on metrics. It’s all about additional and incremental value creation. I think that’s unique, certainly in this industry.
Fortnightly: What’s been the simplest but most profound technological advance at your company in the past year, and what one basic change would you make that hasn’t yet been approved?
Carlson: Let me use business analytics again. That’s a relatively simple process. It’s bright people listening to a problem or looking for a problem, and then using data to determine how to fix it. There’s not really much complexity in that, but for some reason, it’s a hard thing to succeed at. Yet what we were able to do last year with a small budget and a small group of people had some very profound impact.
As for a change that hasn’t happened yet, I’d like information security to become a lot easier. There are ways to change that, but it involves more than just a single-company approach. It’s probably the thing that keeps us up awake right now—the security of our environment. There’s got to be a way to make it easier. Some of it is out there. We just need to go grab it. It’s going to require some investment, but unfortunately, it’s not the type of investment that shows a natural return. Preventing something from happening—you might get a pat on the back, but when it costs you a lot of money, it’s not the most obvious success factor.
Scott Charbo, CIO, Department of Homeland Security
Fortnightly: What can you tell me about IT staffing and funding at DHS in the past year, and for the year to come?
Charbo: We’re in a fiscal-year 2007 budget right now, in terms of federal funding. We’re budgeting for ’08.
(Editor’s Note: As of press time, President Bush had proposed a budget of $34.4 billion for DHS, up $2.3 billion from last year.)
We were roughly about $5 billion worth of IT department-wide in ’06, spread across infrastructure, O&M, development, IT security, networks, data-center support, e-mail, LAN operations, and sensors. It’s a pretty big portfolio that falls under that number.
That $5 billion does not all fit in a budget under me. That’s dispersed within the Coast Guard, Customs and Border Protection, within our preparedness for FEMA, Immigration and Customs Enforcement, and Citizenship and Immigration Service. So it’s disbursed throughout the department.
We were actually on the upside for fiscal year ’07. I think the trend was flat, or a little decrease across most of the civilian agencies, but DHS got a little boost. A lot of that is the Secure Border Initiative, the infrastructure we’re placing at the Southern border.
Fortnightly: What’s the size of your staff?
Charbo: My immediate staff is 78. We have approximately 500 contractors. Most of that relates to managing LAN operations, desktop support, mobile-device support, phones, etc., and the secretaries and the headquarters groups that we have. I do not have immediately the staff that’s at Coast Guard or at Customs. We have CIOs in those departments that manage both the contract and federal staffing in