Overall the federal government allocates 80 percent of its IT spending just to maintain legacy systems. Every day, precious money and resources — roughly 80 cents of every dollar — goes toward supporting yesterday’s technologies when it could be put to much better use implementing cutting-edge innovations, such as process automation and artificial intelligence, to improve service delivery and the customer experience.
That unfortunate reality makes every remaining dollar all the more precious. It’s money that agencies can’t afford to waste. Yet spending on “shelfware” — the software in an agency that no one uses — amounts to $18 billion in the government sector alone.
Thankfully, there are strategies that agencies can use to maximize investments in new technology (and limit waste), ensuring they stretch budgets as far as possible. But it can require a new way of thinking; after all, acquisition strategies previously designed to buy paper and toners are no longer applicable for purchasing licenses in an elastic computing ecosystem. Rather than shaping your acquisition strategy to align with vendor Terms and Conditions, consider the following recommendations to get the most out of your IT investment.
The first step is ditching static one-size-fits-all models that ignore mission-driven realities or agency-specific needs. These flat-rate offerings force agencies to compromise, buying into unnecessary plans and paying for services they don’t want. Agencies must instead insist on a targeted, dynamic pricing plan designed to measurably drive agency goals — thus allowing pricing to become a forcing factor in adoption and an enemy to shelfware.
Similarly, agencies should avoid adopting legacy subscription models that require customers to pay in advance, such that risks to consumption and adoption remain on your books. The old-fashioned practice of sizing license purchases against potential expansion does nothing to account for contraction. Agencies today should consider making the most of their investment with custom billing models that offer the potential to decrease software costs over time, and ultimately increase the return on their investment. Some vendors even offer usage or performance-based pricing, meaning that agencies will only pay for the licenses or features they use (further combating shelfware).
While each agency has its own goals, they still need to comply with regulations. Whether it’s FISMA, FedRAMP, FITARA, MGT or the Megabyte Act, the unfortunate reality is that most agencies spend valuable time and resources complying with these complex and labor-intensive requirements. A better approach is to look for ways to kill two birds with one stone, saving money while maintaining compliance by shifting portions of the compliance burden to vendor-partners.
And agencies would be wise to view these vendors as strategic partners, not just as software providers. The vendors can provide in-depth knowledge and insights on government regulatory requirements to help ensure you’re maintaining compliance. Ideally, they can offer insights from similar government deployments that might inform yours. And by all means make sure to fully utilize the ongoing support these vendors offer to get the most out of the systems, not just troubleshoot.
In addition, here are a few more tips to keep in mind:
- Don’t buy things you “might” use. Identify your specific needs — and buy exactly that. Should your needs change down the line, vendors will gladly sell you additional solutions.
- Implement what you buy. Otherwise, you’ll be back at square one paying for tools you don’t even use.
- Take advantage of all the technological capabilities on offer. If you can’t, perhaps you’re again paying for systems that are too much for your current needs.
- Conversely, manage your budget by only paying for what you use (pay-go). Add-ons, additional licenses and new capabilities will always be available should you need them.
Don’t let a dated legacy approach to software procurement leave you behind. Not only will this hold your agency back from pursuing innovative technology projects, it will also burn a big hole in your budget. The guidelines outlined above are a better fit for today’s landscape and can put you on the right track to a legacy-free future.
As vice president of Public Sector at Bizagi, Heidi Silver leads an expert team that support Bizagi’s public sector customers in delivering highly successful digital transformation initiatives. Starting out as an attorney and having since taken on multiple senior leadership roles in the technology space, she is now a leading specialist in helping organizations to deliver process transformation and automation change programs.