A new day for IT management (again)

Every 10 to 15 years or so, the pendulum of government management reform swings perceptibly. It is usually marked by a flurry of legislation in which government attempts to take advantage of prevailing commercial trends — for example, the Federal Acquisition Streamlining Act, Paperwork Reduction Act and Clinger-Cohen Act. Those swings are accompanied by tension between the need for big changes to get big results and the disruption caused by those changes.

We appear to be on the cusp of the next major set of reforms. The fiscal 2010 Defense Appropriations Act includes a provision that represents a complete reversal on one of the hot-button issues in information technology spending: the use of cross-agency shared services as a way to reduce costs and standardize services.

The provision, in Section 8118 of the law, states that intelligence agencies cannot spend fiscal 2010 funds for any business management IT system without clearing it with the Office of the Director of National Intelligence. Agencies must assure ODNI that the project fits into the Business Transformation Office's approach to business process re-engineering, return on investment, compatibility with the enterprisewide business architecture, performance metrics and information assurance.

Taken together, those factors direct agencies down the same path that drove the commercial world toward shared services.

So why the sudden support for business transformation using cross-agency initiatives? I believe it is simply the recognition of a technology trend many years in the making: the commoditization of IT.

The concept was best expressed by writer Nicholas Carr several years ago in an MIT Sloan Management Review article called “The End of Corporate Computing.” In it, Carr argued that the fragmented model of corporations obtaining IT on their own will give way to one in which they essentially rent IT services from a centralized source, just as they obtain electricity or water from a utility.

That model is the foundation for such innovations as shared services and cloud computing in place of client/server, agency-unique IT. It promises quicker access to leading business practices and much greater bang for the government’s IT buck. It’s reasonable to conclude that the fiscal 2010 appropriations law, when coupled with the Obama administration’s cloud initiative, signifies a new era of government IT-based business transformation that points to a shared-services/cloud computing world.

How do we effectively prepare for this new era? Here are three suggestions.

• Begin to evaluate the various functions at your agency that fit the commoditization model, such as human resources, procurement and financial. You should discover not only how an existing client/server model separates those functions but also where they overlap.
• Examine the Office of Management and Budget's line-of-business segment architecture, Apps.gov and lines-of-business solutions to see where opportunities exist to capitalize on what others are doing.
• Look at your agency’s pain points, those ad hoc data calls and out-of-date, expensive data warehouses that result from client/server-based systems that don’t provide the information you need. You’ll need to be familiar with client/server obstacles before you can begin to adopt new integrated business solutions.

Policy-makers are addressing how shared services can yield measurable business transformation results for government agencies. Preparing for that transition will make it that much easier to accomplish.

This article represents the views of the author only and does not necessarily represent the views or professional advice of KPMG.