Dive Brief:

• Enterprise software giant Workday sees a “rich opportunity” for its federal business when it comes to the Trump administration’s government efficiency effort based on its potential to drive technology upgrades, CEO Carl Eschenbach said Tuesday.
• Currently, federal agencies are working with “very antiquated” enterprise resource planning, human capital management and financial software systems, Eschenbach said during an earnings call.
• “If you want to drive efficiency in the government, you have to upgrade your systems, and we find that as a really rich opportunity,” he said.

Dive Insight:

President Donald Trump on Jan. 20, the same day he was inaugurated for his second term in the White House, signed an executive order establishing a new Department of Government Efficiency. Billionaire and Trump ally Elon Musk has been a central figure behind the effort.

While DOGE is expected to push for massive budget cuts across the federal government, technology spending is unlikely to be one of the affected areas, according to a report by Canalys, part of CFO Dive publisher Informa TechTarget.

In fact, DOGE will likely drive an increase in government spending on technology, with artificial intelligence being a key focus, according to the report, which was authored by Canalys research analyst Noah Dantes.

“Expect the federal IT budget to continue to grow over the rest of President Trump’s term, outside of any short-term spend from DOGE or an AI bill,” he said.

In a December post on the social media platform X, Musk said the federal government’s computers and software “are in such bad shape that they often cannot verify that payments are not fraud, waste or abuse.” 

“My preferred title in the new administration is Volunteer IT Consultant,” he wrote. “Need to fix the IT infrastructure in order to make government work. This is a grind & hardly glorious, but we can’t make government efficient & fix the deficit if the computers don’t work.”

Trump’s order establishing DOGE directed it to “commence a Software Modernization Initiative to improve the quality and efficiency of government-wide software, network infrastructure and information technology (IT) systems.”

To date, DOGE has saved the U.S. government $65 billion through various means, including fraud detection, contract cancelations and workforce reductions, according to its website.

However, critics say the effort has caused government jobs and programs to get slashed at an alarming rate, creating chaos and confusion along the way.

“Donald Trump and Elon Musk are recklessly and illegally dismantling the federal government, shuttering federal agencies, firing federal workers, withholding funds vital to the safety and well-being of our communities,” Rep. Melanie Stansbury (D-N.M.), the top Democrat on the House's DOGE oversight subcommittee, said in a statement earlier this month.

Torsten Sløk, chief economist at Apollo Global Management, has predicted that expected layoffs of about 300,000 federal workers by DOGE may trigger wider unemployment and slow economic growth, as previously reported by CFO Dive.

“There's some uncertainty, but there's still tremendous opportunity,” Eschenbach said during Tuesday’s earnings call. “And if you want to drive efficiencies across the government, there is a starting point called on-premises solution, getting them to the cloud.”