U.S. CIO: Financial changes needed beyond IT Modernization Fund

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The proposed IT Modernization Fund could be a game changer for agencies, but the government still needs to be smarter about its long-term IT investments and mindful of other methods to update its systems, U.S. CIO Tony Scott said Wednesday.

“I think it’s an ‘and’ model,” Scott said, referring to whether agencies need investment from the proposed modernization fund or their own seek out their own individual sources of modernization funding. “I think agencies are going to need funding within the agency to fund various things not tied to ITMF.”

Proposed by the White House as part of the president’s fiscal year 2017 budget proposal in February, the one-time $3.1 billion IT Modernization Fund would supply federal agencies that need it the most with the investment to break ground on their major technology updates. The revolving fund — which Minority House Whip Rep. Steny Hoyer, D-Md., introduced as legislation in April — could address more than $12 billion in outdated IT within 10 years, Scott said in the past.

While the modernization fund is a major starting point for replacing many of the government’s oldest IT systems, funding isn’t the only thing holding agencies back. To truly change, agencies need to also update their overly expensive and dated “capacity cost model,” which is used to measure the expenses needed for agencies to grow, Scott said. They will also need to change their focus to more cyclical and regular IT investments and re-investments.

“The cost of not [modernizing] is higher costs and, ultimately, irrelevance,” Scott said. “[ITMF] is how we get there, in part.”

However, “it’s not the whole solution,” he said.

Money is a continual problem for federal IT departments, who are overbooked and underfunded, Scott said. Many times, they are forced to ask legacy programs to take away from their budgets to make room for IT upgrades.

“The idea that we go around harvest from existing IT programs is like asking me to go out with a tin cup and say, ‘Everyone give me a quarter and I’ll put together the money we need to build the infrastructure and so on,’” he said.

The ITMF is meant to solve this conundrum by introducing initial investments to “ride the wave that technology could bring us,” using the savings from system upgrades to pay for the next line of advancements, Scott said. 

[Read more: U.S. CIO Tony Scott: $3B worth of federal IT systems aging out in 3 years]

When Scott worked at Microsoft, he said, he helped introduce an “automatic-replacement model” to focus on regularly scheduled updates. With servers, software and computers needing update about every four years, the company was able to increase its capacity, performance and size for the same cost. 

Meanwhile, Scott never had to ask for more money. 

“I guarantee you that there is enough savings, that if we can upgrade and modernize the legacy stuff we have, the payback is not going to be the problem,” he said.

Contact the reporter on this story via email: Jeremy.Snow@FedScoop.com. Follow him on Twitter @JeremyM_Snow. Sign up for the Daily Scoop — all the federal IT news you need in your inbox every morning — here: fdscp.com/sign-me-on.

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Agencies, Citrix, Government IT News, Innovation, Management & Budget, Tony Scott
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