Fed managers look to innovation despite tightening budgets

A bleak budget outlook has many federal IT managers dreading the near future, but some are using this penny-pinching time as an opportunity to innovate.

According to a new MeriTalk study titled "Innovators Anonymous," 96 percent of federal managers see lower budgets hurting mission performance, and more than half have seen negative impacts to programs they consider integral to their agencies' success.  (Download the report.)

And with close to three in four of the more than 200 agency managers surveyed reporting that they expect their budgets to be in worse shape by 2015, more than half have responded by ceasing to hire, cutting services and reducing federal employees.

Yet 20 percent of federal managers say they are banking on innovation, looking outside the Beltway bubble to explore new service delivery methods and alternative funding methods for their programs. In fact, these innovation-driven individuals spend almost one-third of their time "trying to get their agency to operate or look at things differently."

"Agencies are finding it increasingly difficult to do more with less and many believe their only choice is to do less with less," said Robert Knapp, Chief Operating Officer of NIC, which sponsored the study.

"Federal innovators get that there is a better way to deliver services to citizens, and that some of those approaches are win-win for the agency win-win and for the businesses and citizens they serve," Knapp said. "Budget cuts are real and so is no-cost funding."

About one-third of federal managers surveyed said they're looking at alternative funding approaches like a "no-cost system," in which development costs are offset by payments from businesses and citizens that use the revamped systems. Those managers identifying themselves as innovators said they believe 25 percent of agency budgets could be addressed by this kind of alternative funding approach, the study stated.

Still, implementing outside-the-box approaches isn't likely to be easy, as 73 percent of innovative managers said the most resistance to innovative solutions will come from agency leadership. Of those surveyed, 63 percent felt Congress would be a big obstacle to innovative success, with resistance to fees, limited best practices and legal departments charting in at 47, 45 and 32 percent, respectively.