Applying Technology Business Management Could Save $5.8 Billion in Federal IT Costs

Published: July 28, 2016

Business SystemsInformation TechnologyIT Reform

A recent report by the Federal IT COST Commission outlines how the federal government could save $5.8 billion by applying Technology Business Management (TBM) principles and implementing a “Federal TBM Taxonomy" for measuring and modeling IT costs.

The TBM Council, a nonprofit organization aimed at promoting IT best practices, formed a Commission on IT Cost, Opportunity, Strategy and Transparency (IT COST) in 2015 to study and offer recommendations to maximize federal IT investments.  The IT COST Commission is composed of more than 70 public and private sector IT leaders and is the first-ever joint public/private sector initiative to analyze and promote better technology usage through transparency into spending.   

The commission’s report, Accelerating the Mission: Recommendations for Optimizing Federal Technology Cost and Value in the Age of FITARA, contains 21 recommendations for improving the measurement and communication of federal IT costs using TBM. Key recommendations include adopting a standard taxonomy, employing a common set of TBM metrics, establishing a TBM office in each department, and employing these practices in every agency to achieve across-the-board standardization.

The report also outlines a set of standards that will support agency CIOs in:

  • Simultaneously reducing waste and increasing the efficiency and efficacy of public-sector IT spending
  • Using data-driven tools to demonstrate the cost, quality, and value of federal IT spending
  • Accelerating the implementation of the Federal IT Acquisition Reform Act (FITARA)

According to the TBM Council’s press release regarding the report, the recommendations and taxonomy will “provide public sector CIOs with the information and tools they need to rebalance their spending by eliminating redundancies, shifting dollars from maintenance to innovation and making more strategic technology investments.”

The IT COST Commission projects that the federal government could save $5.8 billion, at minimum, by employing their recommendations.  The commission derived this estimated savings figure by using a methodology from a recent Forrester study on the total economic impact of TBM implementation.

The report also includes over 200 suggested metrics that agencies could employ to analyze IT spending once TBM tools are in place. The real value of metrics is to help agencies make better business decisions, explained GSA CIO David Shive at an event debuting the report.

"If done right, it's a decision engine," Shive said. "It allows you to flip levers on potential investments, and say, make this investment, and here’s going to be the business outcome. Don't make this investment, which is a decision in and of itself, and here’s what the outcome is going to be. Do that for every single investment ... and you start to sense trends and can make good forward-looking decisions."