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Leveraging IT Spend Information

Several interesting articles about IT expenditures have been in the news of late and they relate to our ongoing journey in the Technology Business Management (TBM) program.

Want to bring down the cost of government? Make wise investments in IT.

Here's an article (How Government Shrinks Itself—By Investing In Technology) discussing a recent study performed by professors from Temple University and the Universities of Illinois and Michigan on the impact that well-directed IT spending can have on bringing down the overall cost of government services. They conclude that every $1 spent wisely in IT can bring down the cost of government services by between $3.50-$4.

At the end of the article, you will find a link to the actual study which is awaiting formal publication in the academic journal Performance Management. How does this link to our TBM Program? As we continue on the path to better understanding our own IT expenditures and the business services they support, the data should help us prove out the study results (or, point us to areas that we can make improvements on how we are directing or managing our IT spend).

Are we alone on our TBM Journey amongst the public sector? Increasingly...no.

Here's an article (Why Federal CIOs Are Looking to Reduce Their IT Costs with Help from the TBM Council) letting us know that the Federal Government is also starting a TBM journey - and leveraging the TBM Council in that effort. The TBM Council is the non-profit industry organization that awarded us with a TBM Champion award last year.

As we (OCIO in conjunction with agencies) have refined the initial taxonomy of IT Resource Towers and Subtowers, we have (we think) improved the definitions and in some cases (like public safety radios), have created new subtowers that are unique to provision of government service. But - we are also doing our best to align to the evolving industry-standard taxonomy (known as ATUM). We've provided our feedback to the TBM Council on our evolving taxonomy and suggested improvements to their standards. This ongoing work and feedback loop will hopefully aid the federal effort, and we've offered to be a resource if/as desired.

What does our data tell us so far? Are we typical?

Last, our TBM software vendor (Apptio) has produced some data on what the IT spend profile looks like for their typical customer. You can see how we stack up in the charts below (or by viewing the blue bar chart below up against the charts on their website IT Economics article). In the future, I hope to also run our numbers up against the Gartner IT Budget tool.

Some data normalization has occurred based on the differences in taxonomy; our FY16 taxonomy will require less normalization. This normalization was more straightforward in the IT Resource Tower chart, and less so in the Cost Pool category where ‘Other’ includes some costs that would, if our Cost Pool taxonomy were more aligned to the new ATUM model, reside under Hardware, Software and Facilities. At such time as our 'Other' becomes more consistent, we are likely to look much more like the Typical IT Spend profile (at this time, we fall into 'People-Centric' archetype).