Federal IT Landscape Requires More Gold, Less Glitter

Federal chief information officers appear to be heeding the unofficial Missouri state slogan: “I’m from Missouri — Show Me.” In a challenging time for procurement of IT systems and services, CIOs are trying to adopt improved methods for acquiring and managing information resources.

In a recent survey of CIOs, federal officials charged with IT operations appear much more open to new ways of doing business, including a more comprehensive approach to managing IT resources. The change in attitude stems partly from frustration over existing procurement conditions and from the realization that prudence and performance will be the watchwords governing IT management in an era of tighter budgets and closer scrutiny by Congressional appropriators.

“The federal government has already begun transitioning to a more transparent, open and innovative environment,” said TechAmerica President and CEO Phil Bond.

“Federal CIOs are excited about playing a key role in fundamentally changing how the federal government and its constituents interact through the use of information technology,” he said. TechAmerica and Grant Thornton conducted the survey — the 21st annual report on federal agency CIOs.

Scant Preparation for Budget Cuts

However, the enthusiasm for doing things differently is tempered by CIOs’ dissatisfaction with status quo methods and procedures. For example, federal IT managers had little confidence in their organization’s ability to deal with current challenges, the survey showed.

“Few federal CIOs think their departments and agencies are ready for swift, sound decisions about looming budget cuts,” states the report on the survey results.

One of the most important parts of IT decision making is capital planning, the survey found. Respondents were asked to rank their unit’s capital planning procedure on a scale, with a grade of one for “very slow and cumbersome” and five for “fast and streamlined.” Federal departments, overall, scored a two, while agencies scored a three.

“We found that budgeting and capital planning were too often fragmented, and that CIOs mostly operate in a federated environment,” Norm Lorenz, global public service director at Grant Thornton, told the E-Commerce Times.

In essence, the IT shop supports a gaggle of different units within a department without any unifying element. This is often reinforced at the congressional level, where many different committees hold budget powers over agencies housed within a single department.

To overcome this impediment, CIOs increasingly are initiating “portfolio management” approaches to IT operations, in which they take a broad look at the entire enterprise of a department or agency, and try to design IT support mechanisms that are related.

More than 62 percent of the CIOs surveyed reported using a portfolio management approach; the interaction of various units makes it possible to better evaluate the performance of IT services and projects, even to the point of targeting — and jettisoning — projects that underperform.

Some CIOs noted that an informal atmosphere associated with the process is helpful in meeting IT objectives.

“Another benefit of portfolio management is that it is an ongoing process, and so you can tell what’s working and what’s not,” Lorenz pointed out.

Gradually, this attitude is introducing a much more pragmatic approach to IT deployment. For example, CIOs are tilting away from simply building IT infrastructure — almost for its own sake — to meeting actual mission requirements, the survey suggests.

“When you look at what the CIOs ranked as their top priority, three factors tied for first. That was lower costs, integrating systems and priorities, and providing security and privacy,” Lorenz said.

“Translated for vendors, that means ‘bring us something that will work and that’s economical.’ If the choice is between an interesting technology with all the bells and whistles and something that’s less interesting but provides best value,” he observed, “the guy with the best value is going to win every time. That’s how procurement is going to be in the foreseeable future.”

Another recent analysis of federal IT investment trends came to a similar conclusion.

The contentious debate over the U.S. budget has created an uncertain situation for all government contractors, including IT vendors, according to Ray Bjorklund, vice president at consultant FedSources.

At a recent FedSources presentation, he noted that “federal contractors will share in the sacrifice” of tighter budgets.

A More Disciplined Approach to IT

Despite an overall decline in federal contractor spending, from US$718 billion in fiscal 2011 to $698 billion in 2012, information technology spending will fare reasonably well. Federal IT spending will increase from $78 billion in 2010 to $78.5 billion in 2011, and then to $79.5 billion in 2012. Vendors will have ample opportunity to market their offerings, because the total number of federal IT projects will reach 6,593 in 2011 and 6,816 in 2012, according FedSources.

The inherent nature of IT to improve productivity will help keep federal spending at a high level, “but I think there will be a more focused approach to IT investments,” Bjorklund told the E-Commerce Times.

Recent moves by the Obama administration to promote more efficient IT management, including data consolidation and migration to the cloud, are examples.

Recently the General Services Administration rolled out a new contract mechanism for cloud procurements.

“I think that vehicle can be helpful for cloud adoption,” noted Bjorklund, “but existing mechanisms are also adequate. It’s essentially a shared service environment, and that concept is not exactly new.”

All contractors will need to adjust to the realities of reduced budgets.

“You’re literally going to see breakage of programs over the next year,” said Bjorklund. “We’re recommending that vendors be very, very conscientious about what their customers are going through. Federal agencies are going to have to unravel programs, and de-scope them. It’s going to create a longer acquisition cycle.”

The Federal Buzz: Notes on Government IT

GSA Seeks IT Help: The General Services Administration has launched an outreach effort to engage industry in an “exchange of ideas” that will assist the agency in “refining our service requirements and structuring the pending procurement for GSA’s Enterprise IT Management program.”

The EITM is responsible for providing management control across the enterprise by integrating and automating the management of IT applications, databases, networks, and systems across departments and disciplines, GSA said. Through a Request for Information (RFI), the agency is seeking responses from commercial IT providers by June 13, 2011.

Electronic Health Records: The U.S. Department of Health and Human Services is planning to survey health professionals about the use of electronic health records, according to a notice tucked away in the Federal Register of May 19, 2011.

The Office of the National Coordinator for Health Information Technology is requesting approval by the Office of Management and Budget to collect information “through a variety of research methods for developing and testing communications involving health information technology and health information privacy.”

The survey, which will incorporate focus groups and Internet mechanisms for data collection, will engage health professionals including physicians, nurses and others. ONC said it must determine the “informational needs and the most effective communication channels and formats for reaching and educating” health professionals about electronic records. HHS is accepting public comment on the proposed survey through June 17.

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