Accelerating Digital Service Delivery: The Future of Federal Technology Spending

In fiscal year (FY) 2019, government agencies have taken significant steps to modernize their legacy systems, particularly those that are citizen-facing and contain high value assets.

With the introduction of the President’s FY2020 budget, it is a great time to assess the progress made, understand the biggest tech trends driving innovation in government and outline how federal resources should be spent in FY2020 and beyond. But before we look ahead to the future, we must take a moment to reflect on the momentous changes that are setting the stage for the federal government’s digital transformation.

Paving the way for modernization

It’s not a stretch to say that Congress and the Administration have kicked the federal government’s modernization efforts into high gear. From the passage of the Modernizing Government Technology (MGT) and Connected Government Acts to the creation of the Technology Modernization Fund and the release of the President’s Management Agenda, both ends of Pennsylvania Avenue have taken bold steps to change the technology dynamic and improve digital service delivery. These developments have set the stage for a successful modernization journey. Today, agencies are armed with clear-cut strategies needed to replace their legacy systems with emerging forms of technology, lower costs and optimized employee efficiency.

Some federal IT policies have begun to dictate how budgets are allocated. A recent digital government policy doing this is the 21st Century Integrated Digital Experience Act (IDEA), which requires federal CIOs to work in harmony with heads of their respective agency as well as their CFO counterparts to ensure there is proper funding in place to support the law’s requirements of modernizing websites, digital services and web-based forms and applications.

The federal government has seen a gradual rise in IT funding, steadily increasing from $85.2 billion in FY18 to $92.4 billion in FY19, and with the initial draft of the FY20 budget in place, agencies, especially those within the Department of Defense and Department of Homeland Security, will see another bump in their IT budgets. As a result, they will be more empowered than ever before to see their modernization projects through from start to finish.

Taking a TurboTax-like approach to optimizing citizen services

American citizens are accustomed to having their most critical needs met and pressing questions answered with the tap of a screen or click of a button. That’s why it’s no surprise that a website or online form is the first place citizens typically interact with government services. For this reason, we are starting to see a greater appetite from the federal government to improve agency websites and digital services.

The FY20 budget calls out the need for greater customer experience in its list of cross-agency priority (CAP) goals, calling on agencies to make agency performance data readily available to the public. In addition, the CX-focused CAP goal also stresses the need for agencies to leverage private-sector best practices and government-wide customer feedback to inform their action plans for improving the delivery of customer-facing services. With increased budgets to support these projects, agencies could see an immediate impact.

The Environmental Protection Agency (EPA) is a great example. The EPA’s newly launched National Pollutant Discharge Elimination System (NPDES) site is a resource citizens can use to find facility and government performance data. By updating the system from a paper-based platform, the agency reduced the time spent processing paperwork by over 197,000 hours and total costs by $156 million.

While many agencies are reaping the benefits of modernizing their citizen services, all too often, agencies take a costlier approach by pouring money into legacy systems ill-equipped to meet the modern day needs of citizens. In fact, a report from IDC Insights shows that while the federal government spends $90 billion on IT annually, 78.9 percent is spent on operation and maintenance by civilian agencies. There simply isn’t enough budget spent on research, testing, development and evaluation (RTD&E), not to mention innovation.

However, for federal agencies to retire insecure systems and increase their use of modern technology that can vastly improve the citizen experience, the federal government needs to place a greater focus on the bottom line. It costs the IRS approximately $42-$53 every time the agency answers a customer phone call or written inquiry. Compare these costs with the 22 cents it takes to process the same requests using automated tools. This lower cost-margin is largely owed to software-as-a-service software (SaaS) like TurboTax, a resource that enables American taxpayers to file their taxes electronically through a tailormade website that is secure, easy to use and less expensive!

Through the enactment of the 21st Century IDEA Act, every agency will need to follow the EPA and IRS’ lead by successfully modernizing with electronic forms that can be processed to achieve greater mission outcomes and yield higher cost savings.

The future of federal tech will defy the status quo

The FY19 budget leverages innovative, commercial solutions to spur digital transformation. In FY20 we can expect the positive momentum to continue, with more agencies migrating to the cloud and digital service projects becoming more common. In fact, the FY20 budget states, “The Budget includes Agency specific initiatives to transform outdated systems to modern, secure, efficient solutions that leverage commercial technologies and modern business models.” As the Office of the Federal Chief Information Officer continues to roll out the Federal Data Strategy and prioritize PMA CAP goals in addition to workforce issues, we also expect to see more agencies leverage next generation, commercial technology—the kinds that the world’s leading businesses use—to support these long-term initiatives.

For example, Robotic Process Automation (RPA) is top of mind for the Administration. The Office of Management and Budget and the U.S. General Services Administration used RPA to automate tasks within the Office of the Chief Information Officer that previously consumed 12,000 hours of labor annually. In the same breath, the Defense Advanced Research Projects Agency (DARPA), the National Institute of Standards of Technology (NIST), the National Science Foundation and the Department of Energy are all making significant research and development investment requests in RPA’s more sophisticated counterpart, Artificial Intelligence. These expansive R&D efforts in government programs, ranging from DARPA’s “AI Next” campaign to the DOD’s Joint Artificial Intelligence Center, will likely result in greater utilization of AI and RPA across the financial, HR and procurement spaces within government. By automating functions that vary in complexity, we will see a gradual shift in the roles and responsibilities of government employees, as they will be responsible for handling more complex and strategic tasks.

To meet the ongoing requirements of the 21st Century IDEA Act and other critical IT policies, agencies can’t afford to remain stagnant. Instead, they must take proactive measures to reallocate their IT dollars to support RTD&E projects while also pursuing additional funding through the TMF, which could receive a $150 million allocation in FY20 if the current budget proposal is approved. By taking these steps, agencies can make inroads toward achieving their digital transformation goals.