White House Eyes Financial Systems Overhauls - InformationWeek
Government // Enterprise Architecture
08:56 AM
Connect Directly

White House Eyes Financial Systems Overhauls

Federal financial systems upgrades are too costly, complex, and poorly executed, White House says, as it announces major changes.

Characterizing federal financial system modernizations as too costly, complex, and poorly performing, the White House plans to "immediately halt" new procurements for financial systems and become significantly more directly involved in the process, according to a draft memo obtained by InformationWeek.

"Financial systems modernization projects have consistently underperformed in terms of cost, schedule, and performance," Office of Management and Budget director Peter Orszag writes in the draft memo. "This memorandum initiates a re-examination of those investments in favor of shorter-term, lower-cost, and easier-to-manage solutions."

While an Office of Management and Budget spokesperson declined last week to comment on the draft memo, in response to a question after a speech on Tuesday, OMB director Peter Orszag told InformationWeek that the White House would "have more to say about financial systems in coming weeks and months."

The memo is part of a broader administration push to make IT spending in government more efficient and effective. That push is exemplified by OMB's reliance on the federal IT Dashboard to track IT projects and its new TechStat sessions to work closely with agencies on underperforming IT projects.

The push was highlighted Tuesday as OMB released another memo instructing agencies to await further guidance on IT project management and formal reviews of at-risk IT projects. The draft memo on financial systems modernization appears to be part of that guidance, as the memo says it is part of a larger "IT project management reform effort" that would be disclosed in a memo signed by Orszag and White House chief of staff Rahm Emanuel.

Part of the financial systems modernization draft memo requires agencies to cut projects into shorter segments. Agencies would be required to split project segments and task orders into durations of less than 90 days, with the overall development of projects not exceeding 24 months. "This approach simplifies planning, development, project management and oversight, and training," the memo says, adding that segmented development also forces agencies to prioritize key financial functions. Funding will also be apportioned on a quarterly basis.

"The old model, to build a large financial system from scratch, is broken, and you're seeing in this memo that that model is broken," says David Lucas, chief strategy officer for federal financial systems company GCE Federal. "There are many examples where folks have failed in trying to build a system that way."

1 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll