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FCW : January 2016
22 January 2016 FCW.COM FCW Roundtable The Federal IT Acquisition Reform Act puts agency CIOs in charge of their organizations’ IT spending, but there’s a catch: Most agencies have no clue how much IT is being purchased or at what cost. Transportation Department CIO Richard McKinney has been especially candid about the challenge. When asked during a December panel discussion how he would know when FITARA was working, McKinney replied: “I’ll define success when I can look my leadership in the eye...and say I understand my costs.” Although years of experience in both the public and private sectors have given him a “seat-of-the-pants sense” that FITARA- mandated changes will save money, he said, it’s impossible to point to numbers that can prove it. “I want to have real data.” Thanks to an industry/government collaboration that’s been underway since last spring, real data is now a real possibility. McKinney, Interior Department CIO Sylvia Burns, Agriculture Department Deputy CIO Joyce Hunter and others have been working with the TBM Council — a Bellevue, Wash.-based industry group devoted to better technology business management — to hammer out a standard taxonomy for categorizing federal IT costs. The council has a taxonomy and toolkit tailored to Fortune 500 companies, and a small working group has been meeting monthly since June 2015 to adapt those resources for federal agency use. The effort has been dubbed the Federal Commission on IT Cost, Opportunity, Strategy and Transparency — or the Federal IT COST Commission. McKinney said the TBM Council reached out to the Office of Management and Budget and offered to share its work. While on the West Coast in May, several federal IT executives sat in on a TBM Council board meeting and were sold on the taxonomy’s potential. “The private-sector CIOs just kept saying to me, ‘Richard, you’ve got to get to where you can understand your costs,’“ McKinney said. “‘Until you understand your costs, you just can’t have good conversations with the business units. You’re not going to be able to prove your point.’“ He added that all the industry CIOs had stories of how they’d identified cost discrepancies and opportunities for significant savings — and were suddenly viewed by their CEOs as strategic business partners rather than “cost anchors.” Suzanne Chartol, who is the TBM Council’s director for the Federal IT COST Commission, told FCW that the group is focusing on four workstreams: 1. A central taxonomy. This will help agencies group “IT costs for apples-to- apples comparisons,” Chartol said. There are towers and sub-towers for the categories of IT, as well as cost pools and sub-pools. “As you go up each layer, you’re rebundling and reclassifying the costs so you can do accurate benchmarking,” she said. 2. Investment workstreams. They will help agencies track IT assets over time, as many as 15 people for a larger department. No one expected adequate staffing anytime soon, however. “We’re going to have to get creative,” one CIO said. “There won’t be as many people as we want this year.” For larger agencies, a FITARA headcount of eight seemed to be a realistic, if ambitious, goal. But “I don’t know how we’re going to do that,” another CIO said. “Today, there’s nobody whose job it is to do this, or it’s everybody’s job. We need more resources under FITARA to look at all those acquisition oppor- tunities and look for efficiencies.” Others held out hope for help from the Office of Manage- ment and Budget. “In our pass-back, this year and last year, we got money for digital services,” one agency participant said. “That’s great. We would love to have resources for digital services. But there is more value in having some resources apply to FITARA and ensuring that we’re doing the things we say we’re going to do.... My hope for OMB and others is [that] they look at this and reconsider as well. Is there flexibility in how we get some of those resources?” A CIO who represented a large federated agency said his team might look to the components for help. “Can we cajole the agencies into funding a small portion of that contract [to cover FITARA implementation] and have some sort of reim- bursable agreement?” A non-CIO at the table urged her colleagues to turn to acqui- sition teams for help. “Don’t throw your requirement with your contracting office,” she said. “Invite the contracting office to come sit with your team. [They] really want to help you.” Several participants said more budget expertise is needed in CIO shops. “A very, very important part of what’s going to separate success from failure here is having that skill and that expertise in the organization,” one executive said. “To be suc- cessful, IT shops are going to have to have budget people who are as good as the agency budget people are — and better in the sense that they know IT backwards and forwards.” That reality check is sorely needed, a government participant agreed, because “we have good budget models, which are not to be confused with how IT really works.” CIOs voiced frustration at having so many needs with no way to fund them. “FITARA is an unfunded mandate,” one said. “And if I want to move some people around, I’ve got to look forward to nine months of paperwork to get these people over into the other side.” Still, an industry participant said, “we can’t let the fact that you’re not going to get all the resources in the CIO shop stop Why agencies don’t know what they spend on IT January 2016 FCW.COM 23 Chartol said, and determine “five years later, is it doing what you thought it was doing?” Those investments are then mapped back to the taxonomy. 3. Key performance indicators. The goal is to identify benchmarks that should be adopted governmentwide. It’s a phased approach, Chartol said, and the group is working with a General Services Administration team that does benchmarking for metrics much broader than just IT. But she said finding good key performance indicators for governmentwide IT could be “the toughest nut to crack.” 4. Reports and data requirements. Agencies are already saddled with countless reporting requirements, and multiple CIOs at FCW’s Dec. 3 roundtable discussion on FITARA implementation complained that OMB, the Government Accountability Office and agency inspectors general all have their own metrics for agency IT. OMB has asked the working group to make recommendations for possible improvements on that front, Chartol said, but “one of our biggest hurdles is federal government participation — helping to surface all those requirements.” It’s not just CIOs who are participating, however — more than 30 feds from a range of agencies have contributed. GSA has employees working on each of the four workstreams, Chartol said, and a small team from OMB is participating as well. “We have a couple finance folks engaged,” she said, “and would love to have a couple more.” And the group has been actively recruiting to get acquisition experts engaged, “particularly around the taxonomy.” On the industry side, executives from Cask, Cisco, Deloitte, Capgemini Government Solutions, First American, Tanium and a number of other IT firms are taking part. McKinney told FCW that he recently previewed the group’s work to date for the CIO Council and “got a lot of positive feedback” from the group. “Everyone is very anxious to see this succeed,” he said. The group will meet again this month and aims to have the government IT taxonomy ready by March. Then comes the challenge of gathering and cleaning the necessary data. It’s a big project, McKinney said, but one worth tackling. “If we really want to have meaningful comparisons, we need to have ways of measuring our costs that are real,” he added. “That’s where I want to take FITARA.” — Troy K. Schneider us from trying to do this. Having been in these roles, it looks like an excuse, and it doesn’t go over very well.” One government IT executive agreed, adding that her agency had to borrow employees to craft the implementation plan. “We went to [the components] and said, ‘Here’s what we need to do. We will take whomever and whatever you could give us to get to the end zone in both August and November.’” “It wasn’t ideal,” she added. “We wanted dedicated resources, but we worked around it. And it gave them skin in the game. They were there every week, working with our team.... By building the sausage, they could see what it took in order to get to success.” “It is that partnership model and co-opting resources” that will be the key, a former CIO said. “I know it’s not easy, but that is the model that you have to start to drive for in order to get the resources.” ...all with an eye on the clock Resources or no, most of the participants said 2016 would be critical — partly because of OMB’s deadlines but mainly because they wanted to make progress before a new administration arrives in January 2017. “We have to do FITARA this year like our house is on fire,” one CIO said. “Next year, when you’re in a transition, IT is not the first thing to think about. It’s going to take some time for people to understand.” Another CIO, however, cautioned against overpromising. “FITARA is a three- to five-year runway, but no one wants to hear that,” he said. “A lot of us want to do the right thing. We’re looking for it, but we know that we’re not in for a sprint. We’re in for a marathon.” There was some agreement on that point, with several par- ticipants saying many in government don’t believe rapid trans- formation is possible. “There’s been too much of, ‘Keep the old systems going because the investment to do a new system is so massive,’” one executive said. “‘Let’s not even do it until this thing is completely not workable.’” Others around the table said CIOs had too often been the brake, and the community risked squandering FITARA’s poten- tial if IT leaders don’t move quickly. One current CIO was particularly strident on the subject. “When we go to folks in leadership positions who are deliver- ing mission, they say, ‘I can’t wait five or 10 years to get that capability,’” the CIO said. “And what do they do then? They go on the side, and they create the capability. They say, ‘My CIO didn’t meet my needs.’” “I’ll define success when I can look my leadership in the eye... and say I understand my costs.” Transportation Department CIO Richard McKinney
November and December 2015