White House pushes TBM for IT savings and smarter spending
Chris Liddell, the president's director of strategic initiatives, thinks the federal government may be spending as much as $200 billion on IT each year -- far more than is generally acknowledged. Better data and metrics, he argued at a July 20 White House event, is critical to bringing down that spend.
"We think there's a huge amount of money to be saved," Liddell said at the White House Summit on Technology Business Management. "The fact that we don't have the right information ... is one of the biggest issues that we face."
The half-day summit brought together CIOs and chief financial officers from both the public and private sectors, along with federal acquisition experts and other stakeholders, to explore ways to encourage agencies to adopt the Technology Business Management (TBM) framework for categorizing and managing IT investments.
"We have to keep in mind the end game," Acting Federal CIO Margie Graves told the attendees. That end game, she said, is "trying to answer the mission questions that our business owners have. Describe the impact and outcome for the mission space."
Michael S. Brown, Exxon Mobil's vice president for IT and a TBM Council board member, offered an example of the payoffs that TBM can bring. When he took his current job, Brown said, only 11 percent of the IT projects in his portfolio generated a return for Exxon Mobil's shareholders -- the rest he described as "keeping-the-lights-on stuff." Last year, Brown said, 70 percent of projects improved the bottom line.
"Is that all TBM?" he said. "Of course not. Is TBM foundational to what we did? Absolutely. ... That is a big chunk of us understanding cost."
In an interview after the event, Graves said that federal IT, acquisition and finance leaders must work together to gather and analyze the data to help mission owners determine "how to most effectively spend their dollars."
"If we do that, then we’re having the business conversation," she said. "We’re not having an IT conversation. … It's 'What am I doing to buy down cyber risk?' And 'How do I make sure that my next dollar is going to the most important thing?' That’s what the CFOs want to know, that’s what your business leads want to know."
Graves and U.S. Deputy Controller Mark Reger, both acknowledged in their event remarks that simply gathering the required data is difficult, let along standardizing it. Reger said that implementation of the Data Act and other efforts have created a "backbone" for coding and comparing data, but "what we really have to do is figure out what data we want to collect … and get that information out to everybody."
They also suggested that federal contractors could play an important part in moving the effort forward. The Defense Department, Reger said, is working with vendors to determine "what the code structure is that they need to incorporate on their invoices when they submit it. It may not be a complete code, but it’ll help tremendously."
"If you don’t have a lot of the data in the federal space, start with your contractors," Graves said in her post-event conversation with reporters. "If you can give them a way to do their invoicing or a way to gather their costs … then you can start there. It’s all about establishing a standard … and then meeting the agencies where they are in the maturity model."
Government has a long history of pushing reporting requirements onto its vendors, and industry has often complained that this deters many firms from seeking federal business. Former federal CIO Tony Scott, however, said coding purchases to facilitate TBM should be an easy lift.
"Actually, I think this is a fairly simple matter," Scott, who attended the summit, told FCW afterwards. "If the government issues a P.O. with the right codes on it and specifies that it in turn expects to see those codes on the invoice that is turned in to get paid, it will all work. Once these flow through the various systems, you can really start to get a better picture of what is going on."
"This is what the standardized taxonomy was all about," he added. "The standardization of the way that IT spend is categorized."
The Office of Management and Budget's embrace of TBM began in 2015, when Scott and former Deputy CIO Lisa Schlosser brought together a team of agency CIOs with private-sector executives from the TBM Council to work on mapping the framework to federal needs and other reporting requirements.
Those efforts led to a July 2016 IT COST Commission report that suggested TBM could save government as much as $5.8 billion over five years. While several agencies had already embraced some of the general practices, the report argued that a governmentwide framework was needed to fully realize the benefits -- and to help CIOs implement the Federal IT Acquisition Reform Act.
While OMB has urged agencies to focus on seven common categories of IT spending in their Exhibit 300s and published some TBM-inspired capital planning and investment control guidance, Graves stressed that the goal is not to force any sort of rapid governmentwide deployment of the framework.
"The documents that we put in the budget are to get people thinking," she said after the event. "It’s not that you need to implement this overnight. We’ll meet the agencies where they are. But we’re going to start setting those standards and putting a directional mindset in play so that people understand what the value proposition is."
Troy K. Schneider is editor-in-chief of FCW and GCN, as well as General Manager of Public Sector 360.
Prior to joining 1105 Media in 2012, Schneider was the New America Foundation’s Director of Media & Technology, and before that was Managing Director for Electronic Publishing at the Atlantic Media Company. The founding editor of NationalJournal.com, Schneider also helped launch the political site PoliticsNow.com 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, WashingtonPost.com, Slate, Politico, National Journal, Governing, and many of the other titles listed above.
Schneider is a graduate of Indiana University, where his emphases were journalism, business and religious studies.
Click here for previous articles by Schneider, or connect with him on Twitter: @troyschneider.