Scaling Proven IT Modernization Strategies Across the Federal Government
Ten years after the creation of the U.S. Digital Service (USDS) and 18F (an organization with the General Services Administration that helps other government agencies build, buy, and share technology products), the federal government still struggles to buy, build, and operate technology in a speedy, modern, scalable way. Cybersecurity remains a continuous challenge – in part due to lack of modernization of legacy technology systems. As data fuels the next transformative modernization phase, the federal government has an opportunity to leverage modern practices to leap forward in scaling IT Modernization.
While there have been success stories, like IRS’s direct file tool and electronic passport renewal, most government technology and delivery practices remain antiquated and the replacement process remains too slow. Many obstacles to modernization have been removed in theory, yet in practice Chief Information Officers (CIOs) still struggle to exercise their authority to achieve meaningful results. Additionally, procurement and hiring processes, as well as insufficient modernization budgets, remain barriers.
The DoD failed to modernize its 25-year-old Defense Travel System (DTS) after spending $374 million, while the IRS relies on hundreds of outdated systems, including a key taxpayer data processing system built in the 1960s, with full replacement not expected until 2030. The GAO identified 10 critical systems across various agencies, ranging from 8 to 51 years old, that provide essential services like emergency management, health care, and defense, costing $337 million annually to operate and maintain, many of which use outdated code and unsupported hardware, posing major security and reliability risks. Despite the establishment of the Technology Modernization Fund (TMF) with a $1.23 billion appropriation, most TMF funds have been expended for a small number of programs, many of which did not solve legacy modernization problems. Meanwhile the urgency of modernizing antiquated legacy systems to prevent service breakdowns continues to increase.
This memo proposes a new effort to rapidly scale proven IT modernization strategies across the federal government. The result will be a federal government with the structure and culture in place to buy, build, and deliver technology that meets the needs of Americans today and into the future.
Challenge and Opportunity
Government administrations typically arrive with a significant policy agenda and a limited management agenda. The management agenda often receives minimal focus until the policy agenda is firmly underway. As a result, the management agenda is rarely well implemented, if it is implemented at all. It should be noted that there are signs of progress in this area, as the Biden-Harris Administration publishing its management agenda in the first year of the Administration, while the the Trump Administration did not publish its management agenda until the second year of the administration. However, even when the management agenda is published earlier, alignment, accountability and senior White House and departmental leadership focus on the management agenda is far weaker than for the policy agenda.
Even when a PMA has been published and alignment is achieved amongst all the stakeholders within the EOP, the PMA is simply not a priority for Departmental/Agency leadership and there is little focus on the PMA among Secretaries/Administrators. Each Department/Agency is responsible for a policy agenda and, unless, IT or other management agenda items are core to the delivery of the policy agenda, such as at the VA, departmental political leadership pays little attention to the PMA or related activities such as IT and procurement.
An administration’s failure to implement a management agenda and improve government operations jeopardizes the success of that administration’s policy agenda, as poor government technology inhibits successful implementation of many policiesThis has been clear during the Biden – Harris administration as departments have struggled to rapidly deliver IT systems to support loan, grant and tax programs, sometimes delaying or slowing the implementation of those programs.
The federal government as a whole spends about 80% of its IT budget on maintenance of outdated systems—a percentage that is increasing, not declining. Successful innovations in federal technology and service delivery have not scaled, leaving pockets of success throughout the government that are constantly at risk of disappearing with changes in staff or leadership.
The Obama administration created USDS and 18F/Technology Transformation Services (TTS) to begin addressing the federal government’s technology problems through improved adoption of modern Digital Services. The Trump administration created the Office of American Innovation (OAI) to further advance government technology management. As adoption of AI accelerates, it becomes even more imperative for the federal government to close the technology gap between where we are and where we need to be to provide the government services that the American people deserve.
The Biden administration has adapted IT modernization efforts to address the pivot to AI innovations by having groups like USDS, 18F/TTS and DoD Software Factories increasingly focus on Data adoption and AI. With the Executive Order on AI and the Consortium Dedicated to AI Safety the Biden-Harris administration is establishing guidelines to adopt and properly govern increasing focus on Data and AI. These are all positive highlights for IT modernization – but there is a need for these efforts to deliver real productivity. Expectations of citizens continue to increase. Services that take months should take weeks, weeks should take days, and days should take hours. This level of improvement can’t be reached across the majority of government services until modernization occurs at scale. While multiple laws designed to enhance CIO authorities and accelerate digital transformation have been passed in recent years, departmental CIOs still do not have the tools to drive change, especially in large, federated departments where CIOs do not have substantial budget authority.
As the evolution of Digital Transformation for the government pivots to data, modernizedAgencies/Department can leap forward, while others are still stuck with antiquated systems and not able to derive value from data yet. For more digitally mature Agencies/Departments, the pivot to data-driven decisions, automation and AI, offer the best chance for a leap in productivity and quality gains. AI will fuel the next opportunity to leap forward by shifting focus from the process of delivering digital services (as they become norms) and more on the data based insights they ingest and create. For the Agencies/Departments “left behind” the value of data driven-decisions, automation and AI – could drive rapid transformation and new tools to deliver legacy system modernization.
The Department of Energy’s “Scaling IT Modernization Playbook” offers key approaches to scale IT modernization by prioritizing mission outcomes, driving data adoption, coordinating at scale across government, and valuing speed and agility because, “we underrate speed as value”. Government operations have become too complacent with slow processes and modernization; we are increasingly outpaced by faster developing innovations. Essentially, Moore’s Law (posited by Gordon Moore that the number of transistors in an integrated circuit doubles every 18 months while cost increases minimally. Moore’s law has been more generally applied to a variety of advanced technologies) is outpacing successful policy implementation.
As a result, the government and the public continue to struggle with dysfunctional legacy systems that make government services difficult to use under normal circumstances and can be crippling in a crisis. The solution to these problems is to boldly and rapidly scale emerging modernization efforts across the federal government enterprise – embracing leaps forward with the opportunistic shift of data and AI fueled transformation.
Some departments have delivered notably successful modern systems, such DHS’ Global Entry site and the State Department’s online passport renewal service. While these solutions are clearly less complex than the IRS’ tax processing system, which the IRS has struggled to modernize, they demonstrate that the government can deliver modern digital services under the right conditions.
Failed policy implementation due to failed technology implementation and modernization will continue until management and leadership practices associated with modern delivery are rapidly adopted at scale across government and efforts and programs are retained between administrations.
Plan of Action
Recommendation 1. Prioritize Policy Delivery through the Office of Management and Budget (OMB) and the General Services Administration (GSA)
First, the Administration should elevate the position of Federal CIO to be a peer to the Deputy Directors at the OMB and move the Federal CIO outside of OMB, while remaining within the Executive Office of the President, to ensure that the Federal CIO and, therefore, IT and Cybersecurity priorities and needs of the departments and agencies have a true seat at the table. The Federal CIO represents positions that are as important as but different from those of the OMB Deputy Directors and the National Security Advisor and, therefore, should be peers to those individuals, just as they are within departments and agencies, where CIOs are required to report to the Secretary or Administrator. Second, Elevate the role of the GSA Administrator to a Cabinet-level position, and formally recognize GSA as the federal government’s “Operations & Implementation” agency. These actions will effectively make the GSA Administrator the federal government’s Chief Operating Officer (COO). Policy, financial oversight, and governance will remain the purview of the OMB. Operations & Implementation will become the responsibility of the GSA, aligning existing GSA authorities of TTS, quality & proven shared services, acquisitions, and asset management with a renewed focus on mission centric government-service delivery. The GSA Administrator will collaborate with the President’s Management Council (PMC), OMB and agency level CIOs to coordinate policy delivery strategy with delivery responsibility, thereby integrating existing modernization and transformation efforts from the GSA Project Management Office (PMO) towards a common mission with prioritization on rapid transformation.
For the government to improve government services, it needs high-level leaders charged with prioritizing operations and implementation—as a COO does for a commercial organization. Elevating the Federal CIO to an OMB Deputy Director and the GSA Administrator to a Cabinet-level position tasked with overseeing “Operations & Implementation” would ensure that management and implementation best practices go hand in hand with policy development, dramatically reducing the delivery failures that put even strong policy agendas at risk.
Recommendation 2. Guide Government Leaders with the Rapid Agency Transformation Playbook
Building on the success of the Digital Services Playbook, and influenced by the DOE’s “Scaling IT Modernization Playbook” the Federal CIO should develop a set of “plays” for rapidly scaling technology and service delivery improvements across an entire agency. The Rapid Agency Transformation Playbook will act both as a guide to advise agency leaders in scaling best practices, as well as a standard against which modernization efforts can be assessed. The government wide “plays” will be based on practices that have proven successful in the private and public sectors, and will address concepts such as fostering innovation, rapid transformation, data adoption, modernizing or sunsetting legacy systems, and continually improving work processes infused with AI. Where the Digital Services Playbook has helped successfully innovate practices in pockets of government, the Rapid Agency Transformation Playbook will help scale those successful practices across government as a whole.
A Rapid Agency Transformation Playbook will provide a living document to guide leadership and management, helping align policy implementation with policy content. The Playbook will also clearly lay out expected practices for Federal employees and contractors who collaborate on policy delivery.
Recommendation 3. Fuel Rapid Transformation by Creating Rapid Transformation Funds
Congress should create Rapid Transformation Funds (RTF) under the control of each Cabinet-level CIO, as well as the most senior-IT leader in smaller departments and independent agencies. These funds would be placed in a Working Capital Fund (WCF) that is controlled by the cabinet level CIO or the most senior IT leader in smaller departments and independent agencies. These funds must be established through legislation. For those departments that do not currently have a working capital fund under the control of the CIO, the legislation should create that fund, rather than depending on each department or agency to make a legislative request for an IT WCF.
This structure will give the CIO of each Department/Agency direct control of the funds. All RTFs must be under the control of the most senior IT leader in each organization and the authority to manage these funds must not be delegatable.The TMF puts the funds under the control of GSA’s Office of the Federal Chief Information Officer (OFCIO) and a board that has to juggle priorities among GSA OCIO and the individual Departments and Agencies. Direct control will streamline decision making and fund disbursement. It will help to create a carrot to align with existing Federal Information Technology Acquisition Reform Act (FITARA) (i.e., stick) authorities. In addition, Congress should evaluate how CIO authorities are measured under FITARA to ensure that CIOs have a true seat at the table.
The legislation will provide the CIO the authority to sweep both expiring and canceling funds into the new WCF. Seed funds in the amount of 10% of department/agency budgets will be provided to each department/agency. CIOs will have the discretion to distribute the funds for modernization projects throughout their department or agency and to determine payback model(s) that best suit their organization, including the option to reduce or waive payback for projects, while the overarching model will be cost reimbursement.
The RTF will enhance the CIO’s ability to drive change within their own organization. While Congress has expanded CIO authorities through legislation three different times in recent years, no legislation has redirected funding to CIOs. Most cabinet level CIOs control a single digit percentage of the Department’s IT budget. For example, the Department of Energy CIO directly controls about 5% of DOE’s IT spending. Direct control of a meaningfully sized pool of money that can be allocated to component IT teams by the cabinet level CIO enables that cabinet level CIOs to drive critical priorities including modernization and security. Without funding, CIO authorities amount to unfunded mandates. The RTF will allow the CIO to enhance their authority by directly funding new initiatives. A reevaluation of the metrics associated with CIO authorities would ensure that CIOs have a true seat at the table.
Recommendation 4. Ensure transformation speed through continuity by establishing a Transformation Advisory Board and department/agency management councils.
First, OMB should establish a Transformation Advisory Board (TAB) within the Executive Office of the President (EOP), composed of senior and well-respected individuals who will be appointed to serve fixed terms not tied to the presidential administration and sponsored by the Federal CIO. The TAB will be chartered to impact management and technology policy across the government and make recommendations to change governance that impedes rapid modernization and transformation of government. Modeled after the Defense Innovation Board, the TAB will focus on entrenching rapid modernization efforts across administrations and on supporting, protecting, and enhancing existing digital-transformation capabilities. Second, each department and agency should be directed to establish a management council composed of leaders of the department/agency’s administrative functions to include at least IT, finance, human resources, and acquisition, under the leadership of the deputy secretary/deputy administrator. In large departments this may require creating a new deputy secretary or undersecretary position to ensure meaningful focus on the priorities, rather than simply holding meaningless council meetings. This council will ensure that collaborative management attention is given to departmental/agency administration and that leadership other than the CIO understand IT challenges and opportunities.
A Transformation Advisory Board will ensure continuity across administrations and changes in agency leadership to prevent the loss of good practices, enabling successful transformative innovations to take root and grow without breaks and gaps in administration changes. The management council will ensure that modernization is a priority of departmental/agency leadership beyond the CIO.
Ann Dunkin contributed to an earlier version of this memo.
This idea was originally published on November 13, 2020; we’ve re-published this updated version on October 22, 2024.
While things have not changed as much as we would like, departments and agencies have made progress in modernizing their technology products and processes. Elevating the GSA Administrator to the cabinet level, adding a Transformation Advisory Board, elevating the Federal CIO, reevaluating how CIO authorities are measured, creating departmental/agency management councils, and providing modernization funds directly to CIOs through working capital funds will provide agencies and departments with the management attention, expertise, support, and resources needed to scale and sustain that progress over time. Additionally, CIOs—who are responsible for technology delivery—are often siloed rather than part of a broad, holistic approach to operations and implementation. Elevating the GSA Administrator and the Federal CIO, as well as establishing the TAB and departmental/agency management councils, will provide coordinated focus on the government’s need to modernize IT.
Elevating the role of the Federal CIO and the GSA Administrator will provide more authority and attention for the President’s Management Agenda, thereby aligning policy content with policy implementation. Providing CIOs with a direct source of modernization funding will allow them to direct funds to the most critical projects throughout their organizations, as well as require adherence to standards and best practices. A new focus on successful policy delivery aided by experienced leaders will drive modernization of government systems that rely on dangerously outdated technology.
We believe that an administration that embraces the proposal outlined here will see scaling innovation as critical. Establishing a government COO and elevating the Federal CIO along with an appointed board that crosses administrations, departmental management councils, better measurement of CIO authorities, and direct funding to CIOs will dramatically increase the likelihood that that improved technology and service delivery remain a priority for future administrations.
The federal government has many pockets of innovation that have proven modern methodologies can and do work in government. These pockets of innovation—including USDS, GSA TTS, 18F, the U.S. Air Force Software Factories, fellowships, the Air Force Works Program (AFWERX), Defense Advanced Research Projects Agency (DARPA), and others—are inspiring. It is time to build on these innovations, coordinate their efforts under a U.S. government COO and empowered Federal CIO, and scale solutions to modernize the government as a whole.
Yes. A cabinet-level chief operating officer with top-level executive authority over policy operations and implementation is needed to carry out policy agendas effectively. It is hard to imagine a high-performing organization without a COO and a focus on operations and implementation at the highest level of leadership.
The legacy of any administration is based on its ability to enact its policy agenda and its ability to respond to national emergencies. Scaling modernization across the government is imperative if policy implementation and emergency response is important to the president.
By acting now, the Administration can create clear career pathways for workers and better equip federal agencies with critical workforce insights to optimize national investments.
Adopting and transforming to a government-wide shared service business model can save money, improve customer experience, improved decision-making power, and more.
The federal government can leverage existing authorities and hiring mechanisms to respond to staffing needs for emerging policies, technologies, and crises in near-real time.
A federal agency takes over 100 days on average to hire a new employee — with significantly longer time frames for some positions — compared to 36 days in the private sector.