How Your Agency Chief Financial Officer Can Help Fund Your IT Modernization Project

While the government spends nearly $100 billion annually on IT systems, strategic spending is difficult. Public funds are often tied to purposes, making it harder to invest in IT and then directly allocate the spending, savings, and benefit of the investment to the mission, especially long-term benefits (A Roadmap for IT Modernization in Government, IBM Center for The Business of Government, Dr. Gregory Dawson, 2018).

The agency Chief Financial Officer (CFO) can help Chief Information Officers (CIOs) and program leaders obtain funding for their IT modernization and data transformation projects, but every CFO needs to understand the potential Return On Investment (ROI) and risks.

Below are key data points to present and questions you should answer for the CFO so they can help you get your project funded:

1. Build a business case: Federal CFOs can work with IT and program leaders to develop a compelling business case for modernizing IT systems. The business case should highlight the benefits of modernization, such as improved efficiency, reduced costs, and better security. Make sure you include a non-technical perspective if the CFO does not have a technical background.

Is this a High Risk High Value enhancement of security and privacy controls that are essential for the agency to serve the American people and/or whose security posture is most vulnerable? Have you assessed the current assets within the department to leverage existing technologies and minimize duplicative efforts?

2. Allocate budget: CFOs can work with agency leaders to allocate budget for IT modernization programs. This may involve reprioritizing spending or identifying additional or future funding sources.

“The most important thing is you got to have the money,” said Drew Myklegard, deputy Federal chief information officer at the Office of Management and Budget (OMB), at the Advanced Technology Academic Research Center (ATARC) Federal IT Modernization Summit. “Not all dollars that are put toward modernization yield the same benefits. So, we’re always trying to maximize that ROI and reduce our risk,” he explained. “The more mature an agency is when they’re thinking about those things, the more we’re likely to invest.” (Meritalk, Feds Say ROI, CFOs, Human Capital Are Keys to IT Mod Funding, by Grace Dille, Feb 8, 2023).

On the flip side, competing priorities and budget constraints at every agency can make it extremely difficult to get funding for your project, so you want to make sure your business case is the strongest and you have buy-in from as many leaders as possible.

Can you “cut and invest” strategies to reallocate funding from obsolete legacy IT systems to fund this modern technology?

Determine the impact to the agency if the project is not funded.

3. Establish metrics: CFOs can work with IT leaders to establish metrics that can be used to measure the success of IT modernization programs. These metrics should align with the agency’s strategic goals and objectives.

4. Prioritize initiatives: CFOs can work with IT leaders to prioritize IT modernization initiatives based on their potential to deliver the greatest benefits to the agency.

Will the initiative have a demonstrable and visible impact to the public?

Is the initiative in alignment with the agency’s mission? Does it clearly showcase how expected outcomes will enhance the delivery of services that reduces burden, improves performance, or has the potential to produce positive long term benefits?

How does it fit within the department? Do you have a clear linkage to the agency mission and leadership goals?

5. Partner with other agencies: CFOs can work with other federal agencies to identify best practices for IT modernization and to share resources and expertise.

Identify similar modernization projects at other agencies and how they were successful, to help build the case for your project.

6. Evaluate and report on progress: CFOs can evaluate and report on the progress of IT modernization programs to agency leadership, Congress, and other stakeholders. This will help ensure that the programs remain on track and that funding is being used efficiently and effectively.