Reimagining Government IT

Reimagining Government IT: An exploration of shared visions and challenges from IT’s biggest players

October 8, 2018

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Introduction Inertia has long plagued government IT, slowing modernization and preventing Feds from achieving IT advances and efficiencies that are commonplace in the private sector. Now, things are beginning to change. New legislation, funding opportunities, and technologies are here to turn the tide.

Have we reached a tipping point? What do agencies want from modern technologies? What roadblocks are still stifling their progress? And, most importantly – how can key agency functions work together to enable change?

In the “Reimagining Government IT� study, MeriTalk surveyed more than 300 Federal finance, IT, and procurement decision makers to understand their shared vision for the future and uncover critical disparities. The study examines modernization progress and challenges, and outlines how Feds in different functions can work together to drive good government through technology. www.meritalk.com

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Study Guide ▪ Throughout the deck, we will show perspectives from three key groups – Federal finance, IT, and procurement decision makers – noted as follows:*

Federal finance professionals

Federal information technology professionals

Federal procurement professionals

▪ We will also use the following definition of IT modernization, as provided in the survey:

“IT modernization” refers to building a more modern and secure architecture for Federal IT systems to improve citizen-facing services, make better use of emerging technologies, and improve security across the Federal enterprise

*See slide 22 for a breakdown of respondent titles and additional demographic information

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Executive Summary ▪ Federal finance, IT, and procurement pros say we’ve reached a modernization tipping point: ▪ 94% of Feds have felt a shift in momentum toward the future state of Federal IT – and 53% say it’s been significant ▪ 76% expect their IT modernization budgets to increase in FY19, and 69% agree their agency is tackling IT modernization in a more integrated, holistic way than ever before

▪ But current priorities may be missing the mark: ▪ Feds say training and workforce development is the #1 need to make their vision of modern government a reality – but empowering a modern workforce is not one of their top three priorities ▪ Reiterating the gap, just 28% of Feds feel very confident in the way their agency is preparing employees for the future of government IT – including a dismal 16% of IT pros

▪ Federal IT modernization – it’s complicated: ▪ 83% agree their agency’s future mission success depends on IT modernization, and 77% say wholesale change in government IT is feasible, but when asked how much of their FY19 IT budget will go toward modernization, Feds estimate just 23% – frustratingly in line with the well-know 80/20 operations and maintenance vs. new development status quo

▪ To achieve their vision for the future, Feds will need to capitalize on modernization momentum, focus on the workforce, and increase communication and collaboration across functions www.meritalk.com

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On the Edge of Innovation ▪ 94% of Feds have felt a shift in momentum toward the future state of Federal IT – and 53% say it’s been significant % who’ve felt a shift in momentum toward the future state of Federal IT* 100%

100% 75%

% who say we’ve reached a tipping point in Federal IT modernization

94%

98%

90%

75%

72% 50%

50%

25%

25%

0%

0%

Finance

IT

Procurement

Finance

63%

IT

70%

Procurement

Take away: All Three Sense a Shift *Over the past two years

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Impactful Initiatives ▪ Efforts like the Cybersecurity EO and Cloud First Policy are helping Feds move modernization forward

What efforts have been the most impactful?

#1

#2 #3

The Cybersecurity Executive Order

The Cloud First Policy

The MGT Act tied with FITARA*

Impact varies by function: Federal IT pros are more likely than procurement pros to see the Cloud First Policy as impactful – 77% vs. 65% Federal finance pros are more likely than procurement pros to see MGT as impactful – 77% vs. 60%

Take away: Overwhelmingly Positive, but Not One Size Fits All * The Modernizing Government Technology (MGT) Act tied with The Federal Information Technology Acquisition Reform (FITARA) Act

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Money Follows Momentum â–Ş 76% of Feds expect their IT modernization budgets to increase in FY19, including one in five who predict an increase of more than 10% How do you anticipate your FY19 IT modernization budget will compare to FY18?

It will increase by 1-10%

It will increase by more than 10%

Finance

58%

IT

21%

53%

Procurement

19%

58%

0%

20%

40%

19%

60%

80%

Take away: Investment Opportunities on the Horizon www.meritalk.com

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Why Now? ▪ Agencies say the majority of their high-value assets are in need of modernization What percentage of your agency’s high-value assets are in need of IT modernization?

36%

Vast majority (75%+)

“Records and information management”

29%

14%

14%

Most (50-74%)

Some (25-49%)

Examples include:

A little (1-24%)

3%

4%

None

Unsure

“Most databases across the entire agency” “Missile defense computers”

All three groups agree roughly half of their high-value assets are in need of IT modernization

Take away: Leaning on Legacy www.meritalk.com

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Modernization Priorities ▪ Top modernization priorities include strengthening cybersecurity, modernizing legacy systems, and harnessing emerging technologies – but degree of importance varies by function What are your IT modernization priorities?* Finance

IT

75% Procurement

50%

25%

Strengthening cybersecurity

Modernizing legacy systems

Harnessing emerging technologies

Adopting cloud

Empowering a Streamlining and modern workforce accelerating acquisitions

Transforming citizen service

0%

Take away: IT Ranks Security the Clear #1 *Percentage who said each category was one of their top three priorities

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The Investment Mix ▪ To achieve their vision for the future, Feds agree they’ll need a combination of investments in technology, people, and processes

To achieve your vision, where should agencies focus change?

30%

30%

40%

Procurement says:

IT says:

Finance says:

29%

30%

41%

30%

32%

IT investments

38%

Reskilling personnel Transforming internal processes

Take away: All Important, but Tech Tips the Scales www.meritalk.com

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Turning Visions Into Reality ▪ Cybersecurity, data management, infrastructure improvements, and advanced analytics are critical to Feds’ vision for the future Most important tech for the future of Fed IT:* Finance

IT

Feds most want next-gen tech to deliver improved:

Procurement 100% 75%

50% 25% 0%

57%

Efficiency

56%

Cyber resilience

50%

Data accessibility

Take away: High Interest Across the Board *Percentage who said the technology was very or somewhat important to their vision for future IT

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Changes in Foundational Tech â–Ş To support these technologies, agencies ask for improved threat detection, modern architectures, and reduced complexity What steps does your agency need to take?*

01

02

03

Improve threat detection, intelligence, and management (51%)

Invest in modern architecture as a

foundation for digital transformation (42%)

Reduce network complexity through automation and reusable solutions (39%)

04

04

06

Improve technology business management (37%)

Utilize innovative platforms to speed delivery of new or re-platformed agency capabilities (37%)

Leverage shared services for interagency collaboration (34%)

Take away: Vision Takes Visibility *Respondents asked to select all that apply

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The Road Ahead â–Ş Moving forward, Feds agree their agencies need workforce development and a better understanding of IT needs What do you most need to make your future vision of government IT a reality?* 75% Finance

IT

Procurement

50%

25%

Training and workforce A better understanding development of IT needs and requirements

A clear vision of IT success

A defined, agencyspecific strategy or roadmap

More streamlined procurement processes

0%

Take away: Workforce Wins Out *Respondents asked to select all that apply

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Overcoming the People Problem ▪ While Feds say investing in their employees is a critical step in the modernization process, just over one in four feel very confident in their agency’s efforts today Feds say training and workforce development is the #1 need, on average, to make their vision of government IT a reality And 85% agree that the Federal government “can’t have modern technology without a modern workforce”

But, just 28%

feel very confident in the way their agency is preparing employees for the future of government IT

Take away: Must Walk the Workforce Talk www.meritalk.com

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The People Problem, by Function ▪ While all functions recognize the gap in workforce prep, IT and procurement are the least satisfied with current agency efforts

Finance says:

IT says: 86%

84%

Procurement says: % who agree we “can’t have modern technology without a modern workforce”

85%

43% 26% 16%

% who feel very confident in the way their agency is preparing employees for the future

Take away: Leadership & Execution Needed to Close the Gap www.meritalk.com

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Undervaluing HR ▪ Just 39% of Feds say the human resources function is very important to the modernization equation – significantly fewer than IT, mission leadership, and procurement How important are each of the following functions to the IT modernization equation?

Very important

Somewhat important

IT

79%

Mission leadership

65%

Procurement

28%

58%

Finance

34%

53%

HR

39%

39%

0%

20%

40%

17%

43%

60%

80%

100%

Take away: Bring HR to the Table www.meritalk.com

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Remaining Roadblocks â–Ş Finance, IT, and procurement face similar roadblocks, but to differing degrees What other roadblocks continue to stifle progress toward Federal IT modernization?* 75% Finance

IT

Procurement

50% 25%

Need to maintain certain legacy technologies

Lack of available budget

Lack of skilled IT workforce to implement

Disconnect between Lack of procurement Lack of effective IT, finance, and workforce trained in engagement procurement Agile Acquisition between mission and practices support programs

0%

Take away: Budget Uncertainties Hold IT Back *Respondents asked to select all that apply

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The Buck Stops Here ▪ Despite all of the talk of change, Feds estimate just 23 cents of every FY19 IT dollar will go toward IT modernization efforts – frustratingly in line with the traditional 80/20 paradigm

For the upcoming FY19, what is your best estimate on the percentage of your IT budget planned for IT modernization?

25%

23%

21%

Take away: Tough to Shake the Status Quo www.meritalk.com

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Still, Feds are Hopeful â–Ş Despite budget challenges, the majority of Feds say wholesale change in government IT is feasible Do you think wholesale change in government IT is feasible?

Yes, and it's happening now

Yes, but we're at least 5 years out

Finance

Maybe, but we're at least 10 years out

43%

IT

37%

27%

Procurement

43%

24%

0%

25%

20%

55%

50%

10%

75%

15%

100%

Take away: Finance is Most Optimistic, But All See Potential www.meritalk.com

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Promising Progress ▪ And, most believe we’re already making headway % who say IT modernization efforts have had a positive impact on overall morale over the past two years

100%

100% 75%

% who say their agency is tackling IT modernization in a more integrated, holistic way than ever before

85%

88%

86%

75%

74%

50%

50%

25%

25%

0%

0%

Finance

IT

Procurement

Finance

63%

IT

69%

Procurement

Take away: On the Right Track www.meritalk.com

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Putting it All Together ▪ Feds say communication and collaboration are keys to IT modernization – and nearly all agree these changes are mission-critical

83%

agree their agency’s future mission success depends on IT modernization

Going forward, how can Feds work together to drive good government through technology?

“

Training and development. IT is always changing and the workforce seems to get left behind”

“

Come to the table with a common vision”

“

Collaborate on projects that enhance capabilities and drive efficiencies while reducing roadblocks to procurement, training, and modernization”

Take away: Education & Collaboration Drive Good Government www.meritalk.com

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Recommendations Capitalize on Momentum: Feds are feeling a shift toward the future state of IT, and many agree we’ve reached a tipping point. Agencies must continue to push for wholesale change by leaning into recent executive efforts, educating employees on why things need to change, and promoting their successes along the way

Focus on the Workforce: Federal finance, IT, and procurement pros see training and reskilling government employees as critical to modernization success, but fewer than half say it’s a top priority and just 28% feel very confident in their agency’s progress so far. Agency leadership must recognize this gap, realign priorities, and partner with HR to execute their vision and effectively prepare employees for the future of government IT

Collaborate Across Functions: Finance, IT, and procurement decision makers don’t always see eye to eye. But where there’s not alignment, there’s opportunity. These teams must schedule time to come together, exchange experiences and challenges, design a shared vision for the future, and outline a roadmap to transform that vision into reality

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Methodology & Demographics MeriTalk and ACT-IAC conducted an online survey of more than 300 Federal finance, IT, and procurement decision makers in July and August of 2018. The report has a margin of error of Âą5.51% at a 95% confidence level.

Respondent job titles Financial decision maker:

Agency type 33%

Senior executive, manager, or other lead

(26%)

Analyst, technician, or administrator

(7%)

Procurement/acquisition decision maker:

33%

Senior executive, manager, or other lead

(21%)

Analyst, technician, or administrator

(8%)

Purchasing agent, buyer, or contract specialist

(4%)

Information technology decision maker:

Federal Civilian agency

67%

Federal DoD or Intelligence agency

33%

Expertise 100% of qualifying Federal decision makers are involved in financing, acquisitions, or procurement for their agency’s information technology solutions

34%

Senior executive, manager, or other lead

(22%)

Analyst, technician, or administrator

(12%)

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Thank You

Underwritten by:

www.meritalk.com casher@meritalk.com 703-883-9000 ext. 143 www.meritalk.com

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