There was a great article published a few days ago by Steve O'Keeffe on how many federal CIOs are not earning passing grades on their FITARA report cards. FITARA, the Federal IT Acquisition Reform Act, is a piece of legislation passed in December 2014 that puts federal agency CIOs in control of IT investments.
FITARA requires federal agencies to provide the Office of Management and Budget (OMB) with visibility into their tech spending in order to optimize investments, specifically around data centers. The OMB provides a process for agencies to review their IT investment portfolios in order to reduce duplication and waste, consolidate acquisition and management functions, and increase cost savings. In other words, free up money to modernize.
FITARA was enacted in response to incredible amounts of technology redundancy across the federal government and a struggle to understand the cost and performance of IT investments. This lack of visibility into technology spending means that federal IT leaders are limited within their ability to benchmark IT spend within federal entities and between federal private-sector counterparts.
In 2015, the OMB engaged with the non-profit TBM Council (a CIO-led body representing more than 4,500 public and private sector IT leaders) to provide federal CIOs with a standard model for measuring and tracking their IT spending. This led to the release of the report, Accelerating the Mission: Recommendations for Optimizing Federal Technology Cost and Value in the Age of FITARA.
Armed with these recommendations, federal CIOs now have a view into their technology spending using standard classification for on-premises and cloud spending (including infrastructure, applications, business capabilities). This “Technology Business Management Taxonomy” also provides views into the cost of data centers by geography, utilization and capacity. In its current year Circular A-11 budget guidelines, OMB has mandated the following:
To gain more detailed information about IT spending across the Government and to accelerate learning related to the Technology Business Management (TBM) Framework, TBM cost pool (financial view of IT) and IT Towers (IT view), agencies will be asked to provide the following data for each investment:
- Development, Modernization, and Enhancement (DME) and Operations and Maintenance (O&M);
- IT Cost Pools; and
- IT Towers
With a lack of flexibility in spending, many CIOs have tried to use spreadsheets and expensive consultants to hand-craft this proven discipline. Given the complexity of IT costs, this is virtually impossible. Often times, federal CIOs are left with a simple static report after a long and expensive consultative study.
Private sector IT leaders facing similar challenges have adopted software solutions to meet their needs.These automated solutions, like Apptio, include hundreds of pre-defined data models, rules to automate allocations and hundreds of valuable analytics and reports. Armed with this information, CIOs and other senior leaders are able to model the unit costs of on-premises data centers and cloud services like Amazon, Azure and Google before making a large investment.
We’ve already seen dozens of public sector organizations adopt Apptio to classify their spending and see immediate value. For example, GSA is one of the few agencies to receive a good score of “B+” in their FITARA evaluation. In fact, GSA has cut 17.8% from its IT budget over the past four years, or well over $100 million recurring per year. The top grades are going to those that are automating TBM.
In fact, the Department of Justice's Executive Office for Immigration Review (EOIR) and the US Environmental Protection Agency (EPA) have recently issued their own case studies outlining the value they’ve seen from Apptio and TBM. The State of Washington also issued a TBM case study earlier this year with best practices for federal adoption.
As the new administration applies more pressure on the agencies to drive optimization though the CIO Council, wasted technology spend can be re-applied to new innovation for the federal government agencies. Technology is a great enabler for digitizing the federal government further. At Apptio, we want to bring the same unprecedented visibility into the technology spending that we have delivered into the private sector.
To learn more about how Apptio can support FITARA, please visit Apptio’s website.