A $5.8B argument for better IT management

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For more than a year, agency CIOs, Office of Management and Budget staffers and other federal IT experts have been working with top corporate tech executives to hash out a taxonomy and metrics for managing IT spend.  On July 21 the group unveiled its report and recommendations -- and asserted that a full embrace of "technology business management" could save agencies $5.8 billion over five years.

The Commission on IT Cost, Opportunity, Strategy and Transparency (IT COST) is an effort to bring to government the standards and practices developed by the TBM Council for the private sector.  The report, TBM Council President Chris Pick told FCW, involved "hundreds of interviews across many agencies" and monthly working meetings with both IT and finance executives, all devoted to tailoring commercial best practices to the needs of federal government.

The $5.8 billion estimate, meanwhile, came from Forrester's analysis of agency IT spending, and of the sorts of efficiencies current users of the TBM model have realized.

"This is really about ... optimizing federal cost and value in the age of [the Federal IT Acquisition Reform Act]," Pick said. He called the report "a purpose-built set of recommendation for the federal landscape."

Central to the report is the Federal TBM Taxonomy -- what Pick called a "four-layer cake" of standardized categories for cost pools; "IT Towers" like compute and storage; applications and services; and the programs or business units that spend the money and benefit the IT resources.

The goal, as the report puts it, is to create "a common language so that the terms server and compute for example are understood by everyone (IT and non-IT stakeholders alike) to mean the same thing and to include the same types of underlying costs calculated using the same methods."

Transportation Department CIO Richard McKinney said those standards are vital to gaining the visibility into DOT spending that he needs to truly implement FITARA -- and also to making the case for change with real data rather than instinct and anecdotes.

"I've been frustrated since I came here three years ago with … my not having the ability to understand my unit cost," McKinney told FCW. "When you get into trying to make a cost-savings argument about shared services and consolidation, we lack the granularity … to make a good business case. "

Also included in the report are 21 recommendations for implementing the taxonomy and broader TBM practices.  Some "minor adjustments" to federal accounting and reporting standards are needed, the commission concluded, and agencies are urged to create dedicated TBM offices to wrangle the data and look for those efficiencies and savings. The report also calls on OMB to "establish a government-wide TBM governance board and designate a center of excellence for cross-agency implementations."

General Services Administration CIO David Shive said at the July 21 event to release the report that GSA already has many of those recommendations in place, and has been using some TBM practices for 3-4 years.

"We did a proof of concept and saw some real wins," he said, but without the taxonomy and supporting systems in place, "it's a ton of work. So we're really excited to overlay the taxonomy … and to try to tell that story."

The structure of a government-wide group has yet to be determined, Shive said, but "the expectation is do just that, to build a community of practice."

Finally, the report includes more than 200 suggested metrics that agencies could use to parse IT spend once TBM tools are in place. Benchmarking across agencies and against the private sector is a big part of TBM's appeal for OMB, McKinney said, but both he and Shive stressed that those metrics' real value is to help agencies make better business decisions.

"If done right, it's a decision engine," Shive said. "It allows you to flip levers on potential investments, and say, make this investment, and here’s going to be the business outcome. Don't make this investment, which is a decision in and of itself, and here’s what the outcome is going to be. Do that for every single investment ... and you start to sense trends and can make good forward-looking decisions."

DOT, GSA and the Interior Department will pilot to newly developed model, but other agencies are already expressing interest. Federal Emergency Management Agency CIO Adrian Gartner, who was in the audience on July 21, questioned whether such significant change could be successfully implemented when there's so much churn in the CIO ranks. But he told FCW after the event that he's already told his team to read the report, and scheduled a meeting to discuss what it might mean for FEMA.

"I hope this becomes a movement in the federal government," McKinney said at the event, adding that he feels a real sense of urgency to help make that movement happen.

"I think this is our last chance to get this right," he said. "If [we] can't make FITARA and this COST Commission successful ... things will get radically more difficult with the Hill."

"Having testified in front of House Oversight," McKinney noted, it's clear that lawmakers are getting impatient for hard data on results when it comes to IT savings.

"My patience is a little thin," he added.

About the Author

Troy K. Schneider is the Editor-in-Chief of both FCW and GCN, two of the oldest and most influential publications in public-sector IT. Both publications (originally known as Federal Computer Week and Government Computer News, respectively) are owned by GovExec. Mr. Schneider also serves GovExec's General Manager for Government Technology Brands.

Mr. Schneider previously served as New America Foundation’s Director of Media & Technology, and before that was Managing Director for Electronic Publishing at the Atlantic Media Company, where he oversaw the online operations of The Atlantic Monthly, National Journal, The Hotline and The Almanac of American Politics, among other publications. The founding editor of, Mr. Schneider also helped launch the political site in the mid-1990s, and worked on the earliest online efforts of the Los Angeles Times and Newsday. He began his career in print journalism, and has written for a wide range of publications, including The New York Times,, Slate, Politico, Governing, and many of the other titles listed above.

Mr. Schneider is a graduate of Indiana University, where his emphases were journalism, business and religious studies.


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