At $4.2B, the VA has one of the biggest IT budgets imaginable. To gain a deeper understanding of where the money was going and its impact on veterans, they turned to TBM and Apptio. We caught up with Willie Gaddis, Chief Financial Officer for the Office of IT, and his Director of TBM, Allison Maiwurm, to talk about how TBM is helping the VA achieve its mission.
Hi Willie and Allison. Thanks for taking the time to speak with us today. One of the major 2024 strategic goals for the VA is modernizing the technology it uses to serve the nation's 20M veterans. What role does technology play in delivering these services, today?
Willie: IT is everything that we do. It's the engine for every service that the veterans use from the mobile apps they use to check their benefits, to schedule an appointment, or when they go in for a face to face visit. These days, IT is central to any customer-focused business.
The fact that we have a centralized IT appropriation is different than any other department in government. We get appropriated IT dollars directly from Congress to support the veterans. We're required to report our execution to Congress monthly, based on the programs outlined in our budget appropriation. So for us, transparency is key, and TBM is one of those ways we are able – and now required – to capture our costs.
I've interviewed a lot of big companies. I've never heard of that level of scrutiny on a monthly basis. How does TBM help with that?
TBM introduces a new dimension and a fluidity between the finance view, the IT view, and the business view – whereas our budget structure is built on the program and project view that Congress wants to see.
Even though we don't charge our customers for a service, we will be able to see what that service is costing us. It's all about what we can do to enhance that service —and what value it brings to the Veteran experience. So this enhanced transparency is important for me, as a CFO, just to understand where the money is going.
For the CIO, who needs to understand the same thing, his job is to support agency priorities that support IT modernization programs, projects, etc.
Allison: TBM will help us communicate and have value conversations with the business. There is a lot of pressure on IT to deliver, and TBM provides a common framework and taxonomy to have those conversations to say, 'Okay, this is our set of services, and of those services, this is how much health is using, this is how much benefits is using, this is how much memorials is using.'
We will be able to ask the administrations, 'Are you getting the value out of the services that you're receiving and, if not, how can we make adjustments with the dollars that we have assigned to you?'
How long have you been doing TBM?
We started about a year ago. There's an [Office of Management and Budget] (OMB) mandate to implement TBM, which is echoed in the President's Management Agenda. We were already trying to understand our costs through activity-based costing (ABC), so we shifted gears and repurposed the ABC team to embrace the TBM construct.
Did you deploy Apptio as well at that time or were you trying to do this on spreadsheets?
Apptio came in around April , and that helped us organize things a little bit better than using Power BI.
How does TBM compare to ABC? Is it better, more inclusive?
Well, we're talking about understanding cost at the activity level, which is a little bit different than the TBM taxonomy and also not standard across the IT industry. TBM suits us better because now we are speaking a common language.
Allison: Since the TBM taxonomy and standards are governed by the TBM Council, we can benchmark ourselves against our peers. Right now we can benchmark at the Cost Pool and IT Tower layers, and we are looking to move toward benchmarking at the Services layer in the near future. So, that's the big value of a standard taxonomy.
In looking over the technology strategy in the VA Strategic Plan, I noticed that the VA is taking the same approach to new technology as many large enterprises. Specifically, cloud-first, buy vs. build mentality. Shared services are also a direction you are going in. Can you tell me how TBM helps fund these kind efforts?
The TBM model itself is beneficial because it gives us the ability to look at ourselves in an organized way across the entire IT enterprise. It allows you to look deep into a particular area of the TBM model: whether that means evaluating cloud vs. on-premises solutions; buy vs. build options, etc.
Cost transparency drives these efficiencies and begs the question: 'Can I be more cost efficient by buying this type of server versus what I have right now?' It's those kinds of questions that we hope to answer by using this model.
Allison: It's important to note that the model is not just something for the number crunchers. There is something for everybody. So, whether you're coming from Platform Services or you're the CIO, or you're leading Budget and Finance, it provides a common view with multiple perspectives that tell different facets of the same story. There's a story to be told on every level of that model, which you don't get through normal spreadsheets or other ways of doing business.
I know you've only been doing TBM and using Apptio's Cost Transparency and Cloud modules for a short time, but do you have any wins you can share?
I'll tell you there's a lot of insights. One of the wins is moving things to the cloud. We have a cloud migration strategy, and one of the key insights was that Apptio will allow us to integrate the cloud bills into the model to view that spending within the construct of TBM.
What percentage of VA IT is in the cloud today?
Based on what is in production and the total number of systems, less than 1%. Cloud is less than a year old, and we have a long way to go. VA is on track to move about 350 applications between now and 2024.
Okay, so we're coming up on the hour. Is there anything you want to bring up I haven't touched on?
TBM has really opened our eyes to a lot of things. It gave us the structure we needed. It gave us the ability to understand IT within this construct that has been embraced across industry and the federal government and to see how we’re trending over time.
We are looking at IT from the transaction level all the way up to an enterprise IT view. And then we're looking at the external-facing services and capabilities within this same framework. Rather than limiting us, this structure has provided an enormous amount of freedom.
Is that what activity-based costing doesn't give you? The ability to link all of that together into a story?
I think so because, again, we never got to the point where I was able to see the bigger costs. I could look at costs by individual activity, but that doesn't give me the services view that the business or our veterans would recognize. I don't think activity-based costing was getting VA to the point of understanding what capabilities we’re getting without a huge amount of ad hoc analysis.
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