Should the government be run like a business? Or is the public sector so different that business strategies are out of place?
These questions loom large in every election cycle and there are supporters and opponents for each view. In either case, government agencies need to understand their total IT costs in order to make data-driven decisions and analyze tradeoffs between cost, quality and value of IT investments.
Today’s federal government spends more than $90 billion annually on IT, and agency leaders know they could better manage that spending with increased visibility and more accurate data. Congress and taxpayers continue to press for better information about how federal IT dollars are spent and want to see a quantifiable return on that investment.
How can the government deliver such information when there is little visibility into how the budget is spent? The FY 2018 President’s Budget reported 84% of the total Federal IT budget categorized as “other,” as opposed to being clearly tied to a specific IT category of spend. Without more granularity, there is no way to accurately measure baseline federal investments or demonstrate to the public that the government is spending tax dollars wisely.
The answer to this problem is Technology Business Management (TBM). In the spring of 2017, the Office of Management and Budget called on agencies to begin adopting elements of the TBM framework. As an open source standard for IT costs, the methodology provides more granularity in IT spending, based upon a taxonomy broadly accepted across both private and public sector organizations.
The urgency to move to TBM financial management practices increased further in the 2018 President’s Management Agenda, which specifies that agencies are to adopt TBM government-wide by Fiscal Year 2022.
TBM has the potential to transform federal IT decision making. Its data-driven approach helps CIOs and IT leaders manage, improve and communicate business value. It enables a full understanding of current state to improve future-state outcomes and benefits. Its value-management methodology provides IT cost, consumption and performance transparency, showing IT leaders—and, when necessary, auditors and lawmakers—just where and how agencies are spending their IT funds.
By automating the use of authoritative data, TBM reduces the manual agency burden for collecting and reporting IT budget, spending and performance data. It also enables IT benchmarking across federal government agencies and with other public and private sector organizations.
It is important, however, to implement TBM strategically and collaboratively. The agency’s chief information, finance and acquisition officers should jointly contribute to the TBM process; all three of their organizations need to provide key information. Putting collaboration first is critical, as having three C-level officials work individually—rather than collectively—will hinder the effort.
TBM is a complex undertaking, and it is one of the key areas offered in CGI’s new federal Management Consulting Practice. It’s also one of the topics that I and other government experts will discuss at the Association of Government Accountants Professional Development Training conference, July 22-25 in Orlando, Florida. Get more information about AGA PDT and register here.