One of the most immediate benefits is the ability to identify what we call “shadow IT.”
The hope of Capital Planning Investment Management, or CPIC, is that it would provide federal Chief Information Officers with a greater decision-making capability while providing transparency to the US taxpayer on how IT dollars are invested. From the Clinger-Cohen Act through FITARA, the roll-out of Technology Business Management, or TBM, and continuing updates to the Office of Management and Budget Monitoring Rules, data gathered on CPIC has improved year by year. However the pledge of support for decision-making and clarity will not be completely met until we have adequate data to make real benchmarking possible.
OMB plans to publish these first benchmarks in the 2023 budget year. Before then, federal departments and agencies should mature their CPIC compliance by working on enhancing the accuracy of the data they gather and report on. This offers direct benefits in terms of finding gaps and inaccuracies in IT budget, thus ensuring that potential benchmarks are genuinely correct and therefore useful for decision-making.
Finding Shadow IT through Holes and Inaccuracies
One of the most immediate advantages of CPIC reporting, particularly though data is insufficient, is the potential to detect gaps and inaccuracies that can be further investigated in order to identify what we call “shadow IT.” These are IT costs that are not documented in the CPIC mechanism required by OMB. OMB introduced the TBM system in the CPIC reporting standards three years ago in an attempt to include greater granularity in IT expenditure. As defined by the TBM Council, the structure is structured to allow the federal government to operate IT as a corporation, accelerate creativity and business change, enhance services to people, increase cost transparency and increase accountability to taxpayers.
In the latest Gartner Study on National and Foreign Government Agencies, the average IT expenditure as a percentage of operational expenditure was conservatively estimated at about 105 in 2019. When we compare this to the real IT budget announced by federal agencies, the figure is always much smaller. This means that there are IT expenses that are not reported or falsely reported. One of the duties of all of us working on CPIC news is to investigate and uncover this shadow IT.
The approach to expose shadow IT is twofold: first the CPIC team can work individually with project leaders, make site visits and hold in-depth discussions with departments to figure out what is really going on. Second, the team should play the role of trainer and evangelist, educate project teams on how to report data efficiently, while at the same time highlighting the advantages of budget accountability in decision making that would be available for future benchmarks.
By working on uncovering shadow IT and educating teams to report IT expenditure accurately over the next year, data consistency will increase, leading to improved first-generation agency-to-agency benchmarks in the budget year 2023. At that point, CIOs will eventually reap the rewards of a decision-making mechanism that will allow them to handle IT dollars more efficiently and effectively.