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Successful Government IT Project Budgeting Begins With a Clear Business Case

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By Scott Lindsay

Senior Client Partner

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With many government agencies creating budgets for a fiscal year that ends every June 30, the fall kicks off another year of planning and budgeting for either brand new IT initiatives or confirming funding for ongoing initiatives. 

Planning and executing successful IT projects within the public sector takes a clear strategy roadmap, a compelling value proposition with a solid budget rationale, and the perseverance to push it through the approval gauntlet. In partnering with many agencies over the past several years we’ve learned the answers to the most asked questions by IT leaders when it comes to planning complex projects.

Here are a few of the questions I often hear from public sector IT leaders:

  • How can I estimate the cost of a complex technology project before the budgeting process begins?
  • What can I do to speed up the budgeting process? 
  • What kinds of IT projects have the biggest chance of being approved and funded? 

Budgeting: Make Your Business Case Clear

Most medium to large IT projects last 18 to 24 months, which take you from whiteboard to strategic roadmap and budgeting to design and implementation. Yet there will always be massive projects that span five years or more. That was the case with a project we worked on for Arizona’s Dept. of Agriculture.

This project had several key components: a cloud readiness and organizational assessment, modernization roadmap, legacy system assessment, business continuity and resource planning, and a technology strategy and budgets. The agency met with us originally to conduct a fast cloud readiness exercise and provide them with accurate funding estimates for the initiative. Arizona’s Dept. of Agriculture was awarded funding for this expansive project on the strength of its technology strategy roadmap, which made their plan easy to digest and consider.

Another reason to present a clear business case for projects is you’re likely competing with other agencies for funding. The pool of public money isn’t limitless, and with limited funds, budgets are often split between government agencies. The agency that most clearly communicates its project to decision-makers while demonstrating its impact on citizens, will usually win the day.

But before you do any of that you have to know how much the project will cost. Talk with an IT consulting firm early on to help you estimate costs. They can tap into a database of similar projects to quickly provide you with a “back-of-the-napkin” estimate.

Which IT Projects Deliver Maximum Impact for Dollars Spent?

While it’s true that public departments are competing for the same cache of funds, IT leaders can improve their chances of winning funding by advocating for projects that deliver the greatest value for most people. These could be projects that improve service delivery — sometimes referred to as improving the citizen experience — or projects that promise efficiency and productivity improvements for public sector employees.

Cloud migrations

The projects that promise the fastest ROI and deliver the most value are frequently centered around the cloud. By shutting down internal data centers and transitioning to your cloud provider of choice, for instance, you can redirect staff into business-critical functions instead of tasking them with installing and maintaining new servers. Private sector cloud adoption has soared in recent years and continues to be a key strategy to redirect resources and decrease capital and facilities costs. 

What’s more, many states across the country have adopted cloud-first strategies or are moving in that direction. NASCIO’s (National Association of State Chief Information Officers) 2019 state CIO survey revealed 34% of IT leaders had a cloud migration strategy, while 51% percent were developing one. Be mindful that cloud migrations can disrupt teams across departments and even agencies. To determine whether your agency or department is ready for a cloud migration project, consider a readiness assessment.

Website modernizations

More than any other technology project, website modernizations can immediately improve how government agencies serve citizens, creating the ability to deliver a fast and highly visible return on investment.

  • Can citizens interact with your agency electronically? 
  • Does your website have a modern feel? 
  • Is the website easy to use and intuitive? 
  • Do you provide your citizens with the opportunity to pay bills or fees online? Or are you still sending invoices through the mail? 
  • What’s inefficient, or not working in your agency now?

With this type of modernization, Arizona’s Dept. of Agriculture was able to improve how it served rural farmers in the state.  Many paper forms can now be completed online, which saves agriculture customers valuable time while creating administration efficiency for the department.

Plan Ahead and Go for Quick Wins

Regardless of the complexity or scope of your agency’s IT project, structure it in such a way that it can become a “quick win.” Quick wins have a clearly defined project scope, a reasonable budget, as well as a reasonable timeline.

While you’re defining technology project budgets and scope it’s helpful to apply the 80/20 rule when deciding what features and functions the new website or application should possess. The 80% applies to the core functionality your technology project MUST have. These are the key features you consider non-negotiable; the features and functions that will have the biggest impact. In my experience, the remaining 20% typically only applies to approximately 2% of your remaining use cases. In other words, invest the largest portion of your budget in the functions that deliver the most value whenever possible.

Beyond identifying and moving ahead with your quick wins, always plan ahead, prepare requirements and justify budgets for your midsize and larger projects. These are the projects you’ll eventually need an appropriation for. Resist the urge, however, to kick the “budgeting can” down the road and expect it to work out later.

Finally, plan for surprises that could upend government spending priorities. COVID-19, for instance, has shifted funding priorities across the public sector landscape, creating turmoil within hundreds of state, county and local government offices. Whether it’s a global pandemic, wildfires, or hurricanes, unplanned events have the capacity to disrupt business as usual. And your next carefully-planned IT project.

Learn more about our experience in the public sector or contact us to start a conversation.