Washington state's strategy for tracking IT spending

The state of Washington’s first efforts to bring technology business management to its IT spending practices began in 2010 when the legislature mandated annual reports and specific evaluation requirements for investments.  As interest grew in monitoring the cost of IT along with the business services IT provides,  officials in the Washington's Office of the CIO worked to refine the strategy through the creation of a state TBM program.

The TBM Council serves a guide for private and public sector organizations that want promote better strategies for IT spending.  Washington's OCIO uses a version of the taxonomy developed by the council that allows agencies to make IT spending comparisons with the private sector as well as other government agencies.

In January 2016, the state decided to use the TBM Council's taxonomy to help 44 participating agencies monitor IT spending by identifying pools of cost (such as software, services, labor or facilities)  and IT resource towers (such as data centers, networks or compute resources).

The Washington TBM program is built around three main audiences that want insights from the data.  Agency leaders and CIOs need information to respond to inquiries, while the state legislature gets annual reports on TBM spending.All state agencies in Washington are required to put information on their financial transactions into statewide system called the Agency Financial Reporting System, the source system for statewide reporting, Cammy Webster, senior program manager of the OCIO’s TBM program, told GCN.  AFRS is being used the OCIO to implement the TBM strategy.

All agencies that spend over $250,000 in IT -- which accounts for 95 percent of all IT spending in the state  -- are required to report TBM information to the OCIO. Each agency puts in financial information weekly into AFRS that is validated throughout the month. 

“We didn’t want to reinvent the wheel on agency ingrained fiscal practices, so we analyzed each agency and gave them the freedom to choose whatever mechanisms that are appropriate to use the templates assigning the costs into the IT resource towers,” Derek Puckett, a TBM consultant at the OCIO, said.  “We decided to use the system that we have and change a bunch of our business practices to get the results that we need without changing fundamental financial practices.”

Webster and Puckett worked with the state’s Office of Financial Management to establish rules in the TBM software to decide which fields get assigned to specific cost pools.

“We have architected and brought about practices in our program to allow the agencies to work independently on how they move their money through our financial system,” Webster said.  “We’ve brought in a way that agencies can all have common denominators on how they report out and still have a federated government without centralized IT.”

The OCIO is using Apptio’s suite of TBM solutions to get a bigger picture of the state’s IT spending.  Apptio’s taxonomy approach incorporates the TBM Council’s work, but it is has also added new features such as cloud billing standards based on Amazon Web Services and Microsoft Azure usage.  “We are using Apptio’s out-of-the-box dashboard to give us a lot of value immediately, but our processes have helped us to turn the corner to make this work for the state,” Webster said. 

The OCIO is interested determining the total cost of applications that flows out the business units and customized services being used, which isn’t common practice in TBM, according to Webster. 

At a July meeting convened at the White House on TBM with government agencies and the private sector, Webster said she learned how other organizations are using the TBM software in their operations.

 “We figured out that we are not so unique from the private sector when it comes to identifying cost and taxonomy,” she said.  “It is important for us to benchmark our spending not only to other governments but also to the private sector using the public taxonomy.”

Despite the Washington OCIO’s success with TBM, its current process is a second attempt to get state agencies on board with the IT spending tracking system.  Before the program was relaunched in 2016, Webster and Puckett visited 44 agency CIOs and CFOs to get their perspective on what they wanted to see from the TBM program, and they worked with those stakeholders on a strategic approach to solve common issues.

 “The best thing governments can do is to take stock of where their IT spending practices currently are and work within the boundaries to create an early value goal to improve processes,” Webster said.  “Start small and capture a win by identifying an area for immediate improvement so you don’t get analysis paralysis with too much information to even get started.”

Although Washington has one of the more advanced government TBM programs, Apptio CEO Sunny Gupta said his company is involved in other states such as Iowa and Kansas as well.  Apptio is also the process of getting approved for the Federal Risk Authorization and Management Program.

As Apptio amasses more data on TBM practices, the company is also shifting toward using its aggregated and anonymous data for intelligent analytics. 

“We are working on technology in our labs to incorporate machine learning into our datasets and gain the ability to predict things before they happen from a financial perspective,” Gupta said.

Editor's note: This article was changed Oct. 26 to correct the number of CIOs Webster and Puckett visited.