Brian Fogg is vice president and chief technology officer for NCI, Inc.
The fiscal outlook for most federal information technology projects is grim, with declining or at best, flat budgets for the foreseeable future. Under such constraints, federal chief information and technology officers are becoming chief solutions officers (CSOs). They are having to think outside the box about how to approach technology acquisition projects
because they are starting to understand the lowest cost may not be the best approach for all technology acquisitions.
Let's first define the situation. Traditionally, CIOs are in charge of, or at least given responsibility for, overseeing IT and computer systems that support enterprise goals. CIOs also have great insight into the human side of the technology equation. They can see opportunities to use automation to drive further efficiencies and hopefully improve service delivery to enterprise consumers of the IT and computer systems.
There are two classic methodologies defining how CIOs approach decision making. The first is cost-based, or "doing the same for less," and the other is value-based, or "doing more for the same." The difference between these two constraints is where CIOs are starting to look for creative solutions that fit a tight budget while still aligning to their particular mission.
Doing the same for less
About five years ago, more emphasis was being placed on lowest price, technically acceptable (LPTA) contracts. This created an atmosphere that stifled most truly innovative opportunities. The government wanted to do the same for less.
The trend is now shifting back to best value as those older LPTA contracts run through their life cycles. What changed is a realization that low price should not be the primarydifferentiator for all projects. There needed to be room for some innovation, not only for cost savings but also for approaches to mission delivery.
What is innovative from an acquisition perspective may look dramatically different from the consumer's perspective. Early innovation focused on driving down costs. Yet new savings from automation and streamlined technology only goes so far. LPTA contracts did not have easy mechanisms to drive further innovations – especially mission-focused improvements – that were not envisioned during the initial contracting period.
To complicate matters, the government was challenged to not only achieve the LP side of LPTA, but the TA side, as well. What did it truly mean to be "technically acceptable?" As answers to that question became less precise, one outcome was a marked increase in protests of LPTA contracts. Federal agencies found themselves making decisions that they may not necessarily have expected to make.
CIOs can squeeze innovation out of a technically acceptable contract. But in this cost-constrained mode, innovation becomes a process of identifying those things that drive cost savings as opposed to increasing mission effectiveness. The more polarized the emphasis on cost savings becomes, the less of an opportunity CIOs and contractors have to collaborate on improving an ability to carry out their missions.
Best practices for finding the middle ground
That's where the CSO approach emerges, as CIOs creatively navigate a set of constraints imposed on them by the current tight fiscal budget. One set of constraints is largely cost-based while the other is value-based. The difference between these two approaches is that "doing more for less" is a tradeoff where the contractor must be as low priced as possible but open to innovation. CIOs are wisely moving projects from LPTA mode to best value, investing in an incremental price increase for a rise in value to their overall mission. In doing so, they shift from their traditional focus on technology implementation to a focus on the outcome of solutions.
In the meantime, there has been tremendous change in technology capability over the past five years. Looking ahead to the next five years and beyond presents an exciting snapshot of possibility. To keep up, CIOs are engaging in dialogue with contractors about what's available, the implications of potential decisions and what may happen in the outcome of the procurement. The contractors' goal here is not to push for a certain outcome, but to educate customers about the likely outcomes of certain decisions.
CIOs are shedding the trappings of LPTA in favor of the freedom to make informed choices that are in their best interests. As chief solutions officers, CIOs are adopting innovative solutions that net a healthy ROI without sacrificing the mission.