Federal spending on information technology (IT) is estimated to be over $83.4 billion in 2019
, yet is neither consistently tracked across agencies, nor linked to business outcomes. Moreover, according to the President’s Management Agenda (PMA), 84% of the 2018 Federal IT budget requests were classified as “other” – making it difficult to understand the priority and value of these efforts.
Federal CIOs will need to optimize IT spending in order to find funding for IT modernization and successfully deliver initiatives that support their agency’s mission. Technology Business Management (TBM), one of 14 cross-agency mandates in the PMA, provides a standardized view of IT spend and a taxonomy to categorize IT spending in a consistent way. Applying the TBM framework will help agencies understand and prioritize their IT spending and show the value of IT, while complying with Federal guidance and mandates to implement TBM by the 2022 deadline.
Value of the TBM framework for Federal agencies
TBM framework ensures processes are reproducible, predictable, and accurate. When applied for analyzing Federal agency data, these processes support increased transparency, efficiency and value, among other benefits such as:
Incentives for adopting TBM
— Compliance with PMA target of government-wide adoption by fiscal 2022
— Acceleration of important initiatives like:
• Negotiating outsourcing contracts
• Eliminating technical debt
• Clarifying third-party costs
• Reducing costs means funding innovation
Requirements of a successful TBM implementation
- Data-driven decision-making
- Transparency in demonstrating the value of IT investments
- Ability to streamline reporting
- Cross-agency collaboration and sharing of best practices
Many Federal CIOs begin the TBM journey by trying to select a single TBM tool that they hope will be adopted by their organization, and by the many other agencies with whom they must share financial data. However, in our estimation, there are five components of a well-constructed and sustainable TBM implementation, and only one of them is about software solutions. By focusing on people, processes and standards, Federal CIOs can begin making real and immediate progress toward capturing and efficiently aggregating and analyzing data from across the Federal enterprise to build to TBM maturity.
1. CFO and CIO collaboration that creates TBM buy-in.
With TBM, collaboration between finance and technology is the key to success. To achieve a sustainable and successful implementation that will add value to the organization, all key stakeholders must be in strategic alignment. Finance must be willing to support the foundation of the TBM framework and, therefore, must prepare to inspect, adjust and adapt its financial structure. The technology side of the organization must ensure that the strategic and tactical goals of IT investments are aligned to and supported by both IT and financial architectures.
2. Structured IT financial data, mapped to the TBM taxonomy.
The successful implementation of any TBM solution requires sound data collection and analysis processes that maintain integrity while accurately informing the TBM framework end-to-end. These processes can be automated to reduce data entry errors and time while improving auditability.
TBM can help with:
1. Data extraction and cleansing
2. Advanced data sciences techniques
3. Designing and building APIs
4. Coherently presenting results to end users
Federal agencies should begin their data management process with quality agency data, such as that found in general ledgers, object class information, cost pools, budget object classifications, IT products and activities, as well as the services rendered to end-users and consumers. TBM can align and reconcile the data — maximizing insights.
3. Software agnostic approach that meets organizational needs.
Federal agencies use a variety of software solutions to manage finance and IT. This does not preclude them from establishing a new TBM taxonomy since the framework can be designed to be flexible and use mapping techniques to align TBM with tools of various levels of sophistication. TBM can be software agnostic, while allowing for the design and implementation of a new data taxonomy.
4. Processes and governance to ensure consistency and data integrity.
Once the mapping and taxonomy has been established, it must be maintained, controlled and improved. The TBM processes and governance structure provide a backbone for both business and technical management. They also influence the adjustment of the TBM architecture by covering taxonomy improvement, reporting processes, and IT and financial architecture alignments.
5. Reports that provide insights and metrics to drive sound decision making.
TBM reports can provide CIOs with the insights they need to understand their IT spend and prioritize initiatives that align with their agency’s mission. KPIs can be customized to measure parameters like cost and spending, cost structure, performance and risk, portfolio investments, return on investment, and data quality.
When implemented well, TBM will help Federal agencies improve operational efficiencies and effectively manage the “business of IT.” TBM allows CIOs to optimize IT spend, maximize business value, and allocate funds toward initiatives that most positively impact the agency’s mission. Last but not least, TBM provides CIOs with a clear justification for their IT spend, that proves value to taxpayers. TBM is powerful tool in the CIO’s arsenal to help individual agencies better account for the value of IT. When implemented government-wide, TBM can create optimization across agencies that benefits the American people.
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