Strategy #3 – Accelerate system retirements
Good choice for replacing agency-specific systems, applications and
For some systems, the most sensible path forward is to simply retire them. A thorough portfolio analysis can determine which systems are aligned with current and future business needs or are candidates for retirement. By eliminating redundant or underused systems, CIOs can demonstrate rapid progress on multiple fronts: reducing costs and vulnerabilities, increasing efficiency and freeing up resources for other modernization initiatives.
In some cases, the application itself is managed by a specific program while the support and infrastructure costs are borne by IT. Many CIOs are familiar with the frustration of having to maintain legacy technology to power outdated applications, which drive up costs and risks agency-wide. This scenario can create a disincentive to modernize where the costs and benefits are not distributed equitably. A detailed business case showing total and ongoing costs for orphan systems can provide additional motivation for programs to modernize—or serve to justify higher chargeback fees for those that elect not to.
In terms of migrating systems to the cloud, the conventional wisdom is that they should be rearchitected first to fully capitalize on native cloud capabilities. However, in some cases, a more accelerated “lift and shift” approach is preferable. Using this model, agencies can retire legacy infrastructure faster and then invest the cost savings in subsequent cloud optimization. For evidence that this approach can pay off, look to the Federal Communications Commission (FCC), where former CIO David Bray was able to slash spending while delivering better performance.
When Bray took over as CIO of FCC in 2013, he uncovered 207 systems—some dating back more than 20 years. Those systems were being maintained by nearly 400 contractors whose tenure averaged 15 years. All told, the agency was devoting 85 percent of a $64 million IT budget to legacy systems. Within four years, FCC had cut legacy spend by 35 percent through a modernization plan focused on delivering small wins, migrating to cloud computing and trimming back contracted personnel.
In terms of shifting from CapEx to OpEx, FCC replaced its aging Consumer Complaint Center with a commercial SaaS solution. The SaaS option cost just $450,000 and was deployed in only six months—a fraction of the $3.2 million and two-year timeframe quoted to build a new system internally. The agency also deployed a cloud-based Electronic Comment Filing System without requiring new money from Congress. Those initial successes prompted the agency to go “all in” on cloud with “Operation Server Lift.” Moving racks of servers to facilities run by a commercial cloud provider has led to an immediate decline in legacy spend.
Strategy #4 – Partner to capture & share program cost savings
Good choice for modernizing large, agency-specific systems
Investments in modernization can produce cost savings far beyond the IT budget itself. The challenge for many agencies is capturing and recognizing these benefits, especially as they can often dwarf IT savings alone.
With this play, the CIO engages with program leaders to build a joint business case to justify a modernization investment based on total financial impact. For example, collaboration between the CIO and program leaders can reveal significant opportunities to redesign and improve business processes, including adopting automation. The growing maturity of digital platforms makes it easier to jointly develop prototypes to demonstrate and validate these proposed performance improvements.
Ultimately, better processes and more up-to-date systems can yield reductions in cost to serve, fraud, waste & abuse, supply chain and other program costs—funds that can then be reallocated to further modernization efforts by both IT and the programs it supports. Furthermore, initial successes can make it easier to work with other programs on win/win partnerships to improve performance and reduce costs.
Learn More: Read the entire Federal CIO Playbook: IT Modernization report for additional insight. This report provides step-by-step guidance for creating a sustainable, enterprise-level IT modernization strategy within the federal government. Use the View Full Report button to access and download the expanded PDF.
For more on empowering change agents to deliver mission outcomes, visit Digital Government Transformation.