OMB: Financial systems modernizations are back in business

A yearlong overhaul of dozens of federal financial system modernization projects is largely complete and the next phase is managing “steady state” operation and ongoing implementations, an administration official said June 29.

In June 2010, the Office of Management and Budget halted work on about 30 financial system programs at various agencies. The projects were re-evaluated by OMB and subsequently reconfigured, downsized or canceled. Now work on the restructured projects is underway.

“All are up and running,” Danny Werfel, controller for OMB’s Office of Federal Financial Management, said at a financial modernization industry event on June 29. “There are no more holds on any project.”

OMB puts brakes on financial system modernizations

Werfel sought input on sustainment strategies from the American Council on Technology-Industry Advisory Council (ACT-IAC). The industry group delivered its recommendations at the financial modernization event.

OMB asked how to best manage hybrid systems in which some parts of the systems are modernized and other parts are legacy systems, and how to set criteria for determining whether to make incremental investments in existing systems or larger investments in modernization programs.

Having new systems under construction shouldn't be an excuse for poor performance of existing systems, Werfel said. “You still have a responsibility to get the most of your existing systems.” And with budget constraints, agencies may need to “leverage their existing systems longer,” he added.

In a report, ACT-IAC executives recommended a portfolio management approach that focuses on developing capabilities, rather than on specific systems. They also recommended developing a decision framework for determining whether to spend more money, improving communications with vendors and drawing on new technologies such as cloud computing, to a greater degree.

Werfel, who said ACT-IAC’s recommendations will be reviewed, and praised the industry group’s feedback as being a valuable tool for helping to manage the financial system modernizations on an ongoing basis.

“This is very helpful,” Werfel said. “I consider this a very important data point. I gave them my most vexing policy questions.”