Federal System Modernization10.30.2017

Todd Hager Vice President, Macro Solutions

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The Modernization Push

1 Congress.gov2 GAO – Federal Agencies’ Need to Address Aging Legacy Systems

“…should a lot of these agencies be maintaining their own data centers? For many

of them, I think the answer is no.” - Dave Powner, GAO IT Director

Action in Congress1

Connected Government

Act

MGT Act

FITARA Enhancement

Act

SECRET Act

Hack the DHS Act

Customer experience needs improving

Costs too much to maintain

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Regulations and Funding Enabling Modernization

Vulnerability to cyberattacks

Key Drivers2

GAO Outlook 2016

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GAO2 Reports on Known Trends

42 GAO – Federal Agencies’ Need to Address Aging Legacy Systems

Missing 3 and 4

average system outage4

44hrs

needed to bring back on line12.5 FTEs

of nearly 300 government websites failed mobile test 3

92%42%

22%

41%

33% security

speedaccessibility

mobile friendliness

agencies not planning to meet goals by end of fiscal 2018

77% unable to measure server use

82% savings not realized in data center optimization plan

$2.7B$

The yellow line indicates the advent of modern systems (network-connected, graphically-enabled, data-driven, etc.) and signifies the obsolescence of many critical enterprise systems

Source: http://wwww/gao.gov/assets/680/677454.pdf

Replacement in development Replacement not in development

Age of Federal Enterprise Systems

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Treasury Individual Master File

Treasury Business Master File

DoD, Strat. Auto CC

VA. PAID

VA, Benefits Delivery Network

DOJ, Sentry SSA, Title

II Systems60

50

40

30

20

10

0

31355153535656

System Age in Years

The Modernization Triangle

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Modernization Playbook

Change Management Plan

Budget Management Plan

People

Technology Budget

bringing technology and people together (Efficiency)

bringing people and funding together (Business Value)

bringing technology and budget together, roadmap for implementation (Quality)

Modernization Playbook

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security

cloud

governance

Modernization Change Management

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Design Thinking

Agile Tools and Techniques

PaaS and SaaS

Repurpose and Reuse

IT Shop Upheaval

of senior agency personnel surveyed who considered skills and experience to be primary factors for their agencies’ inability to move to the cloud1

39%

of all security incidents had human error as a contributing factor3

95%

Projects initiated using agile jumped from 50% in 2016 to 80% in 20172

Agile Use

Federal Spending on IT O&M and Development, Modernization and Enhancement

Source: GAO analysis of Office of Management and Budget’s Information Technology Dashboard I GAO-16-696T

Operations and Maintenance

Development, Modernization, and

Enhancement

$19.2B$61.2B

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Federal Spending on IT O&M and Development, Modernization and Enhancement

Source: GAO analysis of Office of Management and Budget’s Information Technology Dashboard I GAO-16-696T

77% Imbalance

Operations and Maintenance

Development, Modernization, and

Enhancement

$19.2B$61.2B

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Source: GAO analysis of agency data I GAO-16-696T

% of IT Spending on O&M From FY 10 to FY 17

$80

$60

$40

$20

020172016201520142013201220112010

Total Federal IT Spending

$80.7$75.4 $75.7 $73.2 $75.6

$80.4 $81.5 $81.6

77%68%

$55.0 $53.0 $56.1 $56.8 $58.1 $61.2 $61.7 $63.1

Spen

ding

in B

illio

ns

Total Operations and Maintenance Spending

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Source: GAO analysis of agency data

Development, Modernization, and Enhancement20172016201520142013201220112010

Total Federal IT Spending by Type (in Billions)

60

50

40

30

20

10

0

$7.3 billion decline since

2010

Operations and Maintenance

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Baseline services and spend

Cost reduction planning DME vs

O&M

CapEx to OpEx

Recognize risk

Outcome-based engagement

Modernization Budget Management“Innovation can be driven from resource-scarce environments.” - Harvard Business Review

of the $90+B IT budget on operating and maintaining legacy systems1

77% 50%of agencies lack a permanent CIO4

$7.5BFederal IT systems contain

in technical debt2

of Federal CIOs said the majority of applications in their agencies are legacy systems3

72%

1GAO2GAO3Professional Services Council 2017 survey 4GAO 5US Congress – Promoting Value Based Procurement ACT 2017

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Modernization Business ValueImproved performanceImproved customer satisfactionReduced cost of ownership

Modernization Playbook

Change Management

Plan

Budget Management Plan

People

Technology Budget

Modernization Checklist

Get familiar with Management Act

Use Modernization Triangle to build case

Convert to Agile

Keep focus on efficiency and ROI

Align staff to new realities

Seek advice on roadmap

Incorporate PaaS or SaaS

Bake in security (DevSecOps)

Identify savings through consolidation, simplification and standardization

Baseline performance and track actuals to efficiency and ROI targets

F o r t u n e f a v o r s t h e b r a v e

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Send your message, advice, and suggestions atthager@macrosolutions.com

Come visit us at800 Maryland Ave NEWashington, DC 20002

Give us a call at202.618.8144

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Thank youFor listening today

Todd Hager Vice President, Macro Solutions

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