The Time for IT Modernization is Now; Can Congress Make It Happen?

By Chris Wiedemann, Consultant

Those of you who have been following our blog (or the myriad news sources surrounding federal IT) will be familiar with the many challenges facing government IT managers: cybersecurity, cloud migration, enabling mobility, providing more effective and efficient services to the American public…the list goes on.

As if that wasn’t difficult enough, federal customers are faced with flat or shrinking budgets, an increasing share of which goes to maintaining costly legacy systems instead of the modernization that federal technology desperately needs. According to estimates by US CIO Tony Scott, roughly 80% of total federal IT expenditure goes to steady state, or operations and maintenance – and that share is only going to increase. We’ve often heard about legal, cultural, or regulatory barriers to IT modernization and cloud adoption, but the question underpinning everything else remains: How can government actually pay for the modern technology it needs to execute its mission?

Two pieces of legislation currently being discussed on the Hill attempt to answer that question. The first, introduced by Rep. Steny Hoyer in April, seeks to make the $3.1B IT modernization fund first requested in the President’s FY17 budget a reality. This would create a separate fund at the Treasury available to any agency seeking to make a capital expenditure in new infrastructure or capability, and would be “topped up” with savings achieved through that modernization. However, while some view passage as a necessary step towards a 21^st century federal infrastructure, others have raised doubts – and the bill is currently languishing.

Perhaps likelier to pass is a more recent bill, viewed by some (including one of its sponsors, Rep. Gerry Connolly) as complementary, which would devolve the modernization fund to individual agencies. Rather than leaving a central pool of money at the Treasury, Rep. Will Hurd’s MOVE IT Act would allow agencies to set any money they save through modernization efforts aside into a multi-year working capital fund, rather than remitting it back to the Treasury. Although not as far-reaching as the central modernization fund, MOVE IT still creates a valuable framework for agencies that are able to bring the cost-saving potential of data center optimization and cloud migration to bear – and it does not require additional appropriation, which could make it more palatable to Congress.

If MOVE IT passes, salespeople will naturally want to target agencies that are best able to make use of the reinvestment potential it provides. Pay attention to Congressional FITARA scorecards, particularly in the area of data center optimization – since the agencies Congress deems successful on that front will have the most available working capital to target with your cutting-edge technologies.

Either bill that gets passed means more incentive for federal agencies to invest in technology that will cut their IT costs and bring them into the 21^st century. It also creates huge potential for the tech industry  that will surely take shape in the coming years.

Want more guidance on what agencies to target? Reach out to immixGroup’s Market Intelligence organization today.