How can public agencies fix their IT procurement challenges?

Behind the scenes at many public agencies, you’ll find technology that lags way behind the tech that even the average citizen carries around in their pocket.

For example, the master file at the Internal Revenue Service runs on code from the 1950s. The Baltimore police department relies on a 20-year old system for tracking and reporting crime. The San Francisco property tax assessment system runs on computers from the age of the floppy disk

These are not just isolated cases: in fact, seventy percent of the government’s IT budget is spent on maintaining legacy systems. 

 

The IT modernization challenge 

 

Obsolete technology is expensive and time-consuming to maintain (to the tune of $13.6 million per year in the case of the aforementioned IRS system). Still, public agencies struggle to get the budget for modernization—and when they do, the IT procurement process is plagued by challenges. 

Obstacles to effective IT modernization include: 

  • Outdated regulations that are out-of-step with the market 
  • Long and burdensome procurement processes
  • The complexity of decisions with many stakeholders

Given the rapid pace of technology change, governments must modernize or risk falling further behind. Key to this modernization is a more flexible IT procurement approach that can adapt to a quickly-changing technology marketplace. 

Making government IT procurement accessible for smaller players

 

The traditional approach to IT procurement is to put out a lengthy RFP that provides a list of specifications and asks vendors to demonstrate how they meet those specifications. 

However, this approach is time-intensive and complicated to navigate for vendors—meaning large incumbents often have a leg up over small companies. Ironically, when it comes to advanced technology, it is frequently these small companies who have the agility to refine a market-leading offering. 

For governments to engage more innovative small and medium-sized businesses, they need to channel some of that agility into their own procurement process. 

The agile approach can be implemented in different ways: 

  • “Request for Ideas’ or other open-ended tendering formats to learn about a new market
  • Structuring the RFP around the problem to be solved, rather than an exhaustive list of specs 
  • Including pilots or iterative stages in the contracting process 

Flexibility through cloud-based software

The next significant step is leaving behind government’s traditional preference for on-premise software in favour of a cloud-based model of service.

This recommendation emerged from the 2018 White House Report on Federal IT Modernization, which called for an aggressive migration from legacy systems towards commercial cloud services. Why? Greater innovation, decreased costs, and dramatic service improvements for both agencies and citizens.  

The strain of keeping legacy systems updated and protecting against security threats has become untenable. In contrast, Software-as-a-Service (SaaS) tools: 

  • Require no infrastructure or dedicated on-site personnel
  • Can be implemented quickly and right-sized to agency need
  • Can be kept up-to-date with ongoing releases
  • Can react quickly to evolving cybersecurity threats 

These features make it the more secure and cost-effective choice. 

The White House Report outlined various action items—from guidelines to policy changes— to enable agencies to more easily acquire and adopt Software-as-a-Service (SaaS) tools. But the authors also noted that it’s not all about policy and procedure.

 “An active shift in the mindset of agency leadership, mission owners, IT practitioners, and oversight bodies” will be required to realize the mandate of modernization. 

Ultimately, vendors deserve an equal playing field, citizens deserve modern services, and public agencies deserve to be empowered with the best technology for the job. By changing the approach to IT procurement, everyone can benefit from technology innovation. 

For more, read the GovTech eBook: Understanding Procurement Technology and How to Use It