New framework could save $5.8B in federal IT spending

Federal CIOs are trying to better make and explain business decisions on IT spending, and the Technology Business Management Council Thursday announced a set of tools to help them do just that.

The recommendations on implementing a TBM framework for federal IT could help save the government $5.8 billion in IT spending, the TBM Council said during the unveiling of a new report at the General Services Administration headquarters

The council calculated the estimate using a recent study on implementing TBM methodology conducted by research and advisory firm Forrester, according to a press release.

Through the report, the TBM Council seeks to create transparency in a budget environment where agencies are feeling pressure to spend less while continuing to modernize legacy systems. In fiscal year 2015, for example, only 25 percent of the federal IT budget was spent on development, modernization and enhancement, according to a Government Accountability Office report. The same report found that DME spending has actually declined by $7.3 billion in the past seven fiscal years.

In an interview with FedScoop before the event, Transportation Department CIO Richard McKinney said this framework will help him make smarter business decisions and save money.

“No one is giving me a whole lot of new money,” McKinney said. “And because I have all of this need to modernize, I believe that if I can save money on the operational side, then Congress will allow me to invest that money on the modernization side.”

The TBM Council’s report was developed after a year of monthly meetings with a group of federal and private sector IT officials — the Commission on IT Cost, Opportunity, Strategy and Transparency. McKinney, with a few other federal CIOs, participated in the commission.

The report includes 21 recommendations for applying TBM methodology in the federal IT space — in particular, it outlines a “Federal TBM Taxonomy,” which would create a common language for reporting and evaluating IT spending, including cost to build or buy, operate and maintain.

The report also calls for standard reporting metrics for benchmarking and budget planning.

“I found myself not being able to make cogent business arguments because I didn’t have good data,” McKinney said at the event. “I didn’t have good cost information.”

McKinney told FedScoop that before this framework, he “didn’t have any tools or any methodologies for honest cost analysis.”

“It’s hard to make arguments for change if you can’t project the downstream price of that change,” he said. “You end up cheerleading for change, knowing that change is good and that change is generally going to save money, but you can’t be specific.”

These recommendations may sound like other reporting requirements for the federal IT community, like the Office of Management and Budget’s PortfolioStat, but GSA CIO David Shive said he sees implementing TBM as a way to “bring some sanity into that reporting environment.”

“The fact that we report things a bit differently to a variety of stakeholders is confounding to those who make decisions up on the Hill or the White House,” Shive said. “And having a single taxonomy across the federal space is going to help alleviate that problem.”

The GSA has already completed a pilot project for TBM and is now implementing the methodology agencywide.

“By instituting this methodology, we are changing the culture of how we do business with our customers,” Shive wrote in a Thursday blog post. “We are increasingly able to show value for the products and services we use to support the business of the federal government and better account for every taxpayer dollar spent on technology.”

Shive said GSA plans to be a leader in moving toward consistency in reporting by adopting the TBM framework, including the taxonomy, and then encourage other agencies to adopt it.

The TBM framework, McKinney said at the event, marries well with the Federal IT Acquisition Reform Act. For him, the two together were “the right solution at the right time.”

Like other CIOs who are facing a changing administration, McKinney said he knows his time as CIO is running out. He told FedScoop he is already gathering all the data he can find to feed into the taxonomy.

“Now it just falls on people like me to take this and make it real,” McKinney said of the report. “Not put it up on a shelf somewhere, but actually drive it into the organization.”