Cost mandates usually trigger cuts. Our new case study describes how Patrick Newbold, CIO at the Centers for Medicare & Medicaid Services (CMS), spun a 2025 cost reduction mandate into a modernization opportunity. In doing so, he created a playbook that both public and private CIOs can leverage.

Focus On Value, Not Cost

CMS reframed the discussion from cost reduction to value optimization. Rather than asking what could be eliminated, Newbold focused on which investments best supported mission outcomes. This prevented reactive cuts and created a foundation for broader transformation.

One example was platform consolidation. CMS reduced Atlassian instances from 16 to five and consolidated multiple Salesforce deployments into a single enterprise platform. The effort generated approximately $18 million in annualized savings while reducing operational complexity and security overhead. More importantly, those savings could be redirected toward modernization priorities.

Turn Vendors Into Partners

CMS also redefined its vendor relationships. Instead of focusing solely on contracts and deliverables, it asked vendors to work together as part of a larger ecosystem. For example, at CMS’s AI-focused Excite Day, leading product companies, systems integrators, and CMS’s internal teams partnered to educate, train, and guide staff in their practical application of AI tools.

CMS was also transparent about financial realities. As a result, it was able to shift vendor compensation toward shared-value models aligned with outcomes that mattered to CMS’s mission. When the outcomes were exceeded, there were structured opportunities for scaled rewards. This encouraged vendors to consider how their solutions fit into CMS’s broader ecosystem and helped advance shared priorities and expected results.

Build Trust Through Transparency

Modernization requires trade-offs, and CMS chose to make those trade-offs explicit. Leaders consistently communicated priorities, constraints, and decision criteria, linking investment decisions to mission impact, affordability, security, and operational simplicity.

That transparency reduced resistance to change and shifted accountability away from maintaining legacy systems and toward delivering measurable outcomes. And by applying this criteria consistently over time, CMS created a framework that reduced subjective or ad hoc decision-making.

The Real Lesson

The CMS story is about accepting constraints and leveraging them to drive better decisions. By establishing a culture rooted in the three principles of high-performance IT (alignment, adaptivity, and trust), CMS turned budget pressure into a catalyst for modernization, stronger partnerships, and more effective governance.

Want to learn more? Check out the full case study here. If you want to discuss how to shift IT spend conversations from cost to value, email me or request a guidance session.

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