March 5, 2014
Prepared Remarks by David Zolet, Executive Vice President North American Public Sector, CSC delivered at the fourth event in Atlantic Council Captains of Industry series on March 6, 2014.

Good morning. I’d like to begin by expressing my deep appreciation to the Atlantic Council for the opportunity to share thoughts with you today about information technology and the role I believe it plays in the future of defense. First, thank you to George Lund, who deserves all of our gratitude for making the Captains of Industry series possible, and to Steve Grundman, who very ably leads it.

Recently, Army Chief of Staff General Ray Odierno observed, “I can sit here in my chair, pull out my smart phone and talk to every continent.” However, when it comes to battlefield communications, “I have to bring 50 trucks and 300 soldiers. Why is that? We cannot do that anymore.”

To the Chief’s point, if U.S. forces can no longer take that approach, what can be done? Fortunately, new technologies continue to create efficient ways to communicate on the battlefield. With the consumerization of IT, end users are choosing apps for their tablets and smart phones, and even inventing apps. That includes military personnel in the field who are designing apps that help them do their jobs better.

We can now say that networks and information are the biggest force multiplier. Wherever warfighters are, they need secure access to real-time information that enables them to dominate and neutralize adversary forces. I will call this “Information Superiority.”

Today, I’d like to talk with you about what I believe are three key components for assuring information superiority.

  • First are next-generation technologies, such as cloud computing, Big Data analytics, mobility, and cybersecurity. They deliver best in class performance. For many of them, open source development spurs innovation.
  • Next is the As-a-Service business model. It delivers best in class efficiency.
  • The third component for assuring information superiority is flexible acquisition and strong program management. This will speed access to next-gen technologies and bring down costs.

Now let’s take a deeper dive into the four next-generation technologies I just mentioned, beginning with cloud.

Next-Gen Technologies

Cloud computing. Secure access to mission data and enterprise services from anywhere in the world is essential to information superiority. Only cloud computing — distributed over a network — offers capacity, efficiency, and agility.

  • Cloud infrastructure is more affordable and meets surge needs.
  • In addition, it allows a faster transition from software development to deployment. When we refer to dev-ops, this is what we’re talking about.

But to truly benefit from the cloud, users need tools like CSC’s ServiceMesh to engineer and orchestrate software applications. ServiceMesh ties cloud resources together by moving IT workloads automatically across a variety of cloud platforms, each with varying characteristics.

Let’s talk for a moment about Defense and the cloud. DoD owns a mountain of legacy hardware and software, much of which is neither interoperable nor cost-effective. Realizing this, DoD has embarked on an aggressive journey to the cloud. It is rationalizing its IT portfolio, and consolidating data centers to cut costs and improve performance. Defense is embracing private clouds in protected enclaves, a great first step toward information security. The Defense Information Systems Agency and other defense components are exploring commercial cloud services.

It’s important to note that the transition to cloud computing is not made overnight. DoD organizations first need to identify and assess their current IT, consolidate and streamline it, and then virtualize their IT environments. To supplement long-term contracts, DoD can turn to the vibrant spot market for cloud services.

Cloud computing represents a major technological shift, not unlike the coming of the Internet. Today, a consumer can sign on to Amazon and order a virtual PC, along with virtual software such as Microsoft Office 365. Users save files in the cloud and access them anywhere. Think about this. With a credit card, anyone can quickly set up a computing environment and develop software. Virtual hardware and software, spread over many users, allows for economies of scale.

In harnessing cloud’s great potential, DoD will constantly rationalize, modernize, and transform its IT portfolio. Defense will benefit from new applications built expressly for the cloud. And cloud-based operating models are more agile and efficient than once thought possible. Cloud-based self-managing networks, working at machine speed, will help DoD adapt to the growing complexity of the Internet.

DoD will also take good advantage of cloud computing as it designs and invests in the Joint Information Environment, an emerging system of federated networks using common standards and configurations. By integrating platforms at sea, on land, and in the air and space, the JIE will enable analytics to be applied rapidly to data from all domains.

The JIE will offer DoD-wide infrastructure, enterprise services, and common applications. The military services will continue to operate their parts of the JIE, and provide their own unique mission capabilities. The JIE will be a great enabler of information superiority.

In supporting operations in both austere and benign environments, the JIE will also be more cost-competitive than existing DoD-wide IT services as it will use private-sector-style metrics, such as service level agreements.

The JIE is to mesh with the Intelligence Community’s emerging IT enterprise architecture, called IC ITE, which takes advantage of cloud-based services from the private sector. IC ITE encompasses a common IT framework for seventeen members of the Community. The private cloud component of IC ITE, provided by NSA, offers storage and an app store for all users. The JIE and IC ITE embody opportunities for greater integration and secure sharing of information using a common, cloud-based IT architecture. These programs should leverage each other’s strengths, although stove-piped funding may pose a hindrance. Each military service views command and control systems as its own core competency.

The JIE’s success will depend in part on the coordination of IT budgets and strong program management. To help with this, DoD may turn to the private sector for common cloud services. AT&T and Amazon Web Services, for example, are cost-competitive in providing cloud platforms as a service.

Both DoD and America’s adversaries have access to the Internet. The advantage will go to the fastest to innovate and to make decisions. The JIE will help turn fast-moving commercial technology into military systems, enabling U.S. forces to deliver surprise on the battlefield, both real and virtual.

Big Data Analytics. Big Data analytics is another next-gen technology vital for information superiority. Research shows that companies that do data-driven decision-making enjoy a 5- to 6-percent increase in productivity over firms that do not. DoD, too, will gain by using more data analytics. This methodology is in an early phase, but evolving at breakneck speed. It’s important to get on the train.

The current focus of Big Data analytics is on large-scale computation involving massive numbers of distributed file systems, and structured and unstructured data. The next phase will leverage widespread embedding of sensors. For example, sensors placed throughout aircraft engines will provide real-time feedback on performance and anomalies. Virtualized IT infrastructure will help automate access to data for advanced analytics.

As the velocity of data increases, DoD’s data-to-decisions initiative will help assure information superiority. Many defense missions depend on decreasing the time from collection of information to achieving military effect in complex operating environments. U.S. forces must have faster decision cycles — or OODA loops — than adversaries.

Timely analysis of the explosion of social media and sensor data holds great promise for improving detection and situational awareness. As an example, Big Data analytics help make sense of waves of data from unmanned vehicles, thereby speeding the processing, exploitation, and dissemination of actionable intelligence.

Warfighters at the edge need mission-specific micro-analytics as close to the sensor as possible, whether on a switch or mobile device. A key need is to parse data streams in near real-time. In-memory analytics and complex event processing extract intelligence on the fly. In developing new tools for this, a tolerance for risk, and the capacity to move on quickly after failure, are key.

Mobility. Mobile technologies offer new and accessible tools for information superiority. Real-time mapping will aid military maneuvers in unfamiliar environments. Mobile devices will help identify friend and foe, improve medical diagnoses in the field, and speed logistics in austere locations.

Apple's mobile handset revenues alone place the business among the largest in the world, exceeding companies like Microsoft, Intel, and Coca-Cola. Mobility providers such as CSC own or manage hardware and software that enable devices to access enterprise data. They offer self-encrypted and self-contained wireless access, and use pre-configured, proven technologies and processes that save money. Modular systems enable tailoring for varied users. Real-time monitoring assesses the health of devices and boosts security.

Cybersecurity. No discussion of information superiority is complete without considering cybersecurity. Itis fundamental. Defense systems must be resilient enough to fight through successive attacks. To ensure this, DoD is moving to continuous monitoring and fast Big Data analytics.

DoD has a growing need for cyber automated situational awareness and battle damage assessment. This means detecting, analyzing, and mitigating threats at network speed. The JIE will help by employing a single security architecture. As the cyber threat increases, securing complex information in motion and at rest is essential. Advanced persistent threats are a particular challenge, and many threats have no known signatures.

By leveraging cyber experience in both the private and public sectors — a two-way street — large IT companies can speed adoption of best practices. The defense industrial base cyber information-sharing program does this. DoD shares classified threat information with industrial participants, and, in turn, they furnish incident data to DoD. As a charter member, CSC leverages insights from our global security operations centers. In fact, our centers sometimes detect new threats before they harm others. This kind of public-private partnership should grow to encompass the nation’s critical infrastructure, but progress has been slow.

Leveraging next-generation technologies like cloud, big data, mobility, and cyber is the first step to information superiority.

Open-source software. It’s also important to note that many of these next-gen technologies rely on open-source software. Developed and shared collaboratively by programmers, open source software plays an increasing role in assuring information superiority. Crowd-sourcing drives innovation. Competition between proprietary and open-source software spurs higher quality and increases choice. Hardened security tools are baked into the software.

The military services also like open source software because they do not pay licensing fees or lose control of intellectual property. The Defense Intelligence Agency is leveraging open-source innovation through a wiki-style environment, and many new defense business systems are built on the open-source Linux computer operating system.

To enable efficient testing at scale, DoD should allow companies to test software in its computing environments by offering shared development and testing platforms. Large, bleeding-edge tech companies, such as Facebook, LinkedIn, and Netflix, release open-source frameworks every month. DoD has many of the same data, geographic, and security issues. By leveraging evolving open-source code to speed analytics, DoD will give the warfighter a greater edge.

As-a-Service Business Model

Now let me turn to the As-a-Service business model, which is accelerating the spread of next-gen technologies.

To assure information superiority, enterprises no longer need to own all of the Big Iron. Rather, they need secure, reliable, and affordable access to computing. Today, Defense should buy more of these computing resources as a service from the private sector. DoD would pay only for IT actually consumed, thereby saving money. This is akin to purchasing electricity from a utility. As an example, in buying mobile support as a service DoD would pay only a monthly subscriber fee.

Cloud computing as a service not only brings elasticity — allowing rapid scaling of purchases as needs change; it also improves cost transparency. This advantage helps DoD optimize resource allocation. To satisfy varied needs, cloud computing as a service uses private, public, and hybrid environments.

To give one example, a large intelligence agency buys substantial IT as a service from the private sector. The program has slashed network outages by 95%, improving reliability. The number of user devices has risen by two-thirds, while the number of staff has fallen by one-quarter. Users now have virtual desktops, further lowering costs and improving security.

In another example, IT-based simulation can be bought efficiently as a service. This is attractive if DoD capital budgets are tight, software advances are frequent, or multiple defense units need access. One military facility uses realistic simulators for two-fifths of its pilot training, at a cost of only eight percent of its total training budget.

Bottom line, DoD should embrace the as-a-service paradigm, and migrate away from a capital-intensive to a capital-light environment. This will be easier to maintain and upgrade, and yield more agile and cost-effective IT. By reducing back-office costs, buying IT as a service will improve the tooth-to-tail ratio. In addition, DoD should not only consume IT infrastructure as a service, but also use this business model for all layers of the IT stack, to include infrastructure, platforms, software, and business processes.

Acquisition and Management

The final key ingredient for information superiority is easier acquisition of IT and strong program management. The travails of HealthCare.gov last fall highlighted the challenge. President Obama was frank: “The way the federal government does procurement and does IT is just generally not very efficient. In fact, there’s probably no bigger gap between the private sector and the public sector than IT.” The President’s statement is compelling.

In a similar vein a former Army CIO lamented, “DoD spends too much on multiple networks that don’t talk to one another, data that is hard to access, and technology that takes too long to acquire and field.”

How can better acquisition and management aid information superiority?

Acquisition. Current acquisition rules are cumbersome for fast-moving technology, and designed more for buying products than services. Defense tends to focus on many requirements rather than a few key outcomes. In other words, requests for proposals should spell out what DoD wants, but not dwell on how contractors should do the work. DoD wastes money by buying too many IT assets and too few services. Defense has difficulty enforcing enterprise-wide security architectures. DoD is moving some IT work in house, even though contractors are efficient and adapt faster. Impending DoD rules may scare off software companies that do not want to expose their commercial cost data to defense auditors.

So how do we change the acquisition playing field in ways that boost information superiority? By the time DoD selects, acquires, and installs new IT, it may be obsolete. Defense can avoid this problem by focusing on outcomes and by purchasing IT as a service. DoD should invest in platforms and architectures that ease the swapping out of old for new technologies. Design principles should keep software applications and business processes agnostic of the tools that enable them.

Many of DoD’s IT challenges relate not to the most exotic technologies, but to implementing proven solutions — basic blocking and tackling. Buying cloud services from the private sector eases this burden while saving money.

It’s clear that private sector experience in computing for the business enterprise can be critical in helping DoD build information superiority. For example, CSC owns and operates the Army’s Logistics Modernization Program, one of the world’s largest integrated business systems. LMP processes more than four million transactions daily, and has a response time better than industry standard. LMP enables certified financial statements. The Army estimates the rate of return on future LMP investments to be 61:1.

As companies seek opportunities to deliver these kinds of results, federal acquisition rules rightly promote a level playing field for contractors. It has to be this way. Treating all contractors fairly does not require, however, the kind of adversarial climate that exists today. Nor does it mandate closing the door for discussion well before requests for proposal are issued. This contributes to government's IT lag. In the private sector, IT providers and clients treat each other as partners, and clients are laser-focused on outcomes. Both invest in the relationship. Creating new partnerships with open communities will help DoD develop more productive ties with private sector innovators.

CSC is also a strong partner and supporter of small businesses, many of which bring path-breaking innovation. Recently we acquired three such companies in the Big Data analytics and cloud spaces — 42Six, Infochimps, and ServiceMesh.

Small business set-aside rules, however, are sometimes too strict or complicate DoD’s pursuit of large-scale, enterprise-wide IT programs. On a positive note, the FY14 defense authorization act will allow prime contractors to count small business subcontract dollars at all tiers toward the primes’ small business goals. This will provide greater visibility into small business participation in contracting. Balanced initiatives that foster small businesses’ ability to thrive in the federal market deserve to be encouraged.

DoD needs additional certified acquisition professionals to manage sophisticated IT contracting, and it needs greater numbers of experienced IT professionals to run large or complex programs. Without these resources, DoD risks degraded performance and higher costs when it transitions such programs away from contractors that have shown their ability to run them efficiently.

Sometimes, DoD agencies move work inside because they want to take over intellectual property owned by a contractor. This, likewise, can incur costs and increase risks to well-performing systems. Defense should seek rights to private sector intellectual property commensurate with the investment DoD makes to improve on it.

Let’s move to management for a minute.

Management. Most IT failures arise from poor management, not bad technology. Program managers and system architects who have deep and successful experience across a range of undertakings are the gold standard. They succeed for a reason. Like sports stars, they are not born but made.

DoD should follow leading-edge companies and centralize IT resourcesunder the CIO. This offers more potential for enterprise-wide approaches and scale efficiencies. The CIO ought to be more than a policy leader.

Transformation of obsolete IT-based systems requires active engagement by top management. It must take ownership of changes. This is especially important early on, or if future directions are unclear. Requirements for transformation may be hard to define at the outset, but changing them later raises risks and costs. If change is large and complex, or if legacy issues are not well understood, fixed-price contracts are unwise. Personnel stability and adequate acquisition capacity improve prospects for program success.

Let me cite two examples of how management can affect outcomes. I mentioned one earlier — HealthCare.gov. It went live without sufficient end-to-end testing. Just two weeks before launch, a requirement was levied to keep users from browsing insurance plans before they enrolled to buy one. This became a single point of failure.

The second example involves modernization of business systems. Thousands in DoD are outdated. Integrated systems work best when processes are aligned with commercial-off-the-shelf software, such as that made by SAP and Oracle. Overly customizing business systems may cause them to fail, and will increase the future burden of updating software. The big efficiency gains come from using business systems right out of the box.

DoD is transforming its electronic health records.  They ought to facilitate proper access while protecting privacy. Transformation should enhance clinical interoperability and modernize care coordination. In this way, the linkage between DoD and Veterans Administration records can be strengthened, and collaboration with commercial and non-traditional care providers can be improved.

Lack of timely IT funding, made worse by federal budget uncertainty, creates extra work if funding is provided in smaller amounts.

Another management challenge is that the defense sector is becoming less competitive in attracting IT talent, especially in a down federal market and an up commercial market. Defense investments in cloud computing and software innovation have helped contractors obtain and train top talent in emerging areas such as distributed technologies and data science.

The competition for talent is Silicon Valley. IT workforces are mobile and responsive to opportunity. Federal furloughs and pay freezes have turned talent away. The low-price-technically-acceptable contracting environment reduces capacity to pay for talent. Thus, job insecurity is now a major worry for the contractor IT workforce.

Conclusion

As I conclude, I’ll refer back to General Odierno’s statement — we shouldn’t have to bring 50 trucks and 300 soldiers to communicate on the battlefield.

Today, warfighters have access to mobile phones, tablet computers, and instant information in their personal lives. They want — and need — this information superiority on the battlefield.

Together with the private sector, DoD can achieve it quickly, affordably, and reliably. The key is to rely more on the three ingredients we’ve discussed today: next-generation technologies, the as-a-service business model, and sound acquisition and management.

Thank you.

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