the WHITE HOUSEPresident Barack Obama

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Applying Private Sector Best Practices in Information Technology

Summary: 
The Administration launches a new tool for agencies to use to assess the current maturity of their IT portfolio management process and make decisions on eliminating duplication across their organizations.

One year ago, a group of private sector leaders sat down with Administration and agency officials to offer to help the government adopt management best practices. The group, the President’s Management Advisory Board (PMAB), decided to spend the next year focusing on a variety of topics, including how the government buys information technology (IT).

And the effort has paid off. Over the past three years, the Federal Government has done much in adopting private sector practices to triage broken IT investments, reduce the IT infrastructure footprint, and innovate with less. For example, at today’s PMAB meeting, the Department of the Interior showed that by modernizing IT infrastructure and aligning resources to improve customer service, they will realize $100 million in savings from 2016 to 2020, for a cumulative total of $500 million. To date, there have been $11 million in cost avoidance by updating the scope of projects and $2.2 million in redirection of funds due to IT Spending Reviews.

These agency successes are a good start, but we need to do more. We still face an unacceptable amount of duplicative and low-value IT.  That is why Acting Director Jeff Zients today is signing a memorandum launching a new tool for agencies to use to assess the current maturity of their IT portfolio management process and make decisions on eliminating duplication across their organizations. This tool – which we’re calling “PortfolioStat” - gives agencies tools to look into the darkest corners of the organization to find wasteful and duplicative IT investments.

Over the next year, agency Deputy Secretaries or Chief Operating Officers (COO), are required to lead agency-wide IT portfolio reviews within their respective organizations, working in coordination with Chief Information Officers, Chief Financial Officers, and Chief Acquisition Officers. This level of executive sponsorship is a direct reflection of our belief that IT is a strategic asset that can dramatically improve productivity and the way agencies execute their mission. By June 15, agencies will complete a high-level survey of agency IT portfolio status and a bureau level information request for specific types of commodity IT investments that will used to baseline the maturity of agency portfolios.

Then, using the portfolio data gathered combined with other data available at the bureau and agency level, COOs will establish targets for commodity IT spending reductions and deadlines for meeting those targets; illustrate how investments within the IT portfolio align with the agency’s mission and business functions; establish criteria for identifying wasteful, “low-value,” or duplicative investments; and improve governance and program management utilizing best practices and, where possible, benchmarks.

Though this process is new for Federal IT, leading private sector companies have been leveraging improved IT portfolio management tools for some time. Private sector organizations that waste millions on duplicative and low value IT are destined to disappear. Competitive pressure has forced change and efficiency. Though there are differences between public and private sector work, my time in both makes me extremely confident that the best practices from a well-run company can be applied effectively to the Federal Government.

Steven VanRoekel is the Federal Chief Information Officer – for more information visit www.cio.gov.