How the FITARA Scorecard Could Impact the Future of Software Licensing

Steven Wells is the senior director of program management for DLT Solutions.

Federal agencies didn’t fare so well in the latest Federal Information Technology Acquisition Act Scorecard, with more agencies’ grades declining than improving. This is especially true of the new category of software licensing where an astonishing 21 out of 24 agencies received an F grade.

New to the scorecard, the software licensing metric evaluates how well agencies have implemented the MEGABYTE Act, which requires agency chief information officers to improve software license management, including inventory and analysis of usage. While the software license optimization metric wasn’t included in overall scores this time around, it will be in the next scorecard.

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And this metric is about more than just checking a box. An Office of Management and Budget report found that federal agencies spend almost $9 billion on software through over 42,000 transactions, leading to unnecessary purchases and ultimately wasted taxpayer dollars. In a time of fiscal uncertainty and evolving regulations, it is critical for agencies to improve their approach to software acquisition and management.

Fortunately, there are immediate steps that both civilian and defense agencies can take to improve the acquisition and management of their IT assets, reduce cost of ownership and boost their score in December’s FITARA scorecard, which will be the first to officially include software licensing in total scores.

Centralized IT Acquisition and Management

One approach agencies can take to improve their FITARA score is to consolidate, centralize, and streamline IT acquisition and management by leveraging enterprise software license agreements, or ESLAs.  Centrally managed ESLAs streamline the acquisition process, leverage the agency’s buying power, and generally provide more favorable terms and conditions such as the ability to transfer licenses among agency organizations. Although ESLAs aren’t new, a well-negotiated and managed agreement can deliver cost savings or cost avoidance, return on investment, transparency and accountability to help achieve compliance with FITARA, MEGABYTE Act and OMB’s Category Management directives.

Centralized acquisition and management of IT will undoubtedly present a challenge for some agencies.  However, challenging the status quo of decentralized culture is a worthwhile endeavor and is fundamental for leveraging economies of scale through consolidated purchasing.  To be successful, a consolidated approach requires strong executive leadership and cooperation from the component organizations.  Such an approach is not just good practice, it’s a core principle that FITARA and Category Management have begun to address. FITARA codified the authority of the CIO to enact structural changes, while the Category Management policy mandates that each agency appoints a software manager to centralize license management, reduce duplication, and determine best practices regarding IT acquisition and management. With this authority, CIOs can better align purchasing in sub-agencies with overarching agency priorities and needs.

Establish a Comprehensive Software Inventory System

As directed by the MEGABYTE Act, agency CIOs must establish a comprehensive software inventory, including managing 80 percent of license spending and enterprise licenses using automated discovery tools.  This task is proving to be a herculean effort for many agencies due to the aforementioned decentralized cultures and disconnected or independent networks.  Comprehensive asset management tools are readily available that bring transparency to how software is purchased, managed and secured.  In short, technology is not the problem.  

If automated discovery and comprehensive asset management are “the long pole in the tent,” then an interim solution may be achieved through a creative approach to managing enterprise license agreements.  Web-based portals and inventory systems can help agencies consolidate, centralize, and streamline acquisition, while greatly improving visibility into asset management, reporting, trend analysis, and other metrics used to quantify ROI and make data-driven decisions regarding IT investments.  Some systems include robust capabilities that deliver efficiencies by automating business processes such as the IT request and approval process.  Acquisition workflow approvals—potentially up to the CIO or delegate—further support compliance with FITARA.  

Supplementing IT acquisition with supporting organization, program, project, and end user information provides agency software managers and CIOs with the data needed to evaluate costs savings or avoidance and reduce wasteful reinstatement fees and duplicative spending.  Software managers can then perform internal audits by comparing the data-rich acquisition records from the portal against actual licenses deployed.  

Where We Go from Here

Initiatives like FITARA, MEGABYTE Act and OMB’s Category Management Policy have set federal agencies on the right course to modernize federal IT through a smarter acquisition and management process. And government oversight is holding agencies accountable and forcing CIOs to ask the right questions when it comes to IT spending, acquisition, and implementation.  As CIOs gather more data and glean a greater understanding of their agencies’ technology usage, this process can only accelerate, unlocking and increasing the innovative potential within the federal government.  

Agency CIOs can leverage industry innovations and the increased authority granted by FITARA to better manage their software portfolios, save taxpayer dollars, and advance their missions. Together, we can build a leaner, more collaborative and accountable government.  Compliance with congressional mandates will simply be an outcome.