Digital Transformation Trends in Federal Government

Top Six Digital Transformation Trends in Federal Government for 2018

We live in a world where the change is the only constant and customers are in-charge. Innovations in technology are fundamentally changing the way we interact with the world around us and changing what citizens expect from the government. Incremental adaptation to technical change and disruption is no longer enough and federal organizations must take positive steps to keep pace with innovation and change.  The federal government is often perceived as being behind the digital innovation curve, taking significantly longer to adopt web-based solutions than the private sector, with less enthusiasm and skill. But in recent years, several initiatives undertaken by federal, state, and local agencies are challenging that perception.Creating and optimizing digital services has become a top priority for governments in recent years. The factors driving this change are varied. Legislative mandates (such as the Office of Management and Budget (OMB) Circular 11 mandating incremental development), combined with evolving citizen expectations, changing technological, social, political and cultural landscapes are forcing federal agencies to consider broader digital transformation to become Agile, data-driven organizations. Customer experience (CX) focused digital transformation enables federal agencies to provide services that meet the evolving expectations of citizens and businesses, even in a period of tight budgets and complex challenges such as income inequality, geopolitical instability, and aging populations.

Digital Transformation Trends in Federal Government (2018)

Digital Transformation Trends in Federal Government (2018)

While digital transformation is multifaceted and complex, the continuing trends from last year and first three months of 2018 gives us a peek into the main themes of transformation in the U.S. government, more specifically the Federal government. Here are our top six digital transformation trends that continue to shape the priorities in the public sector.

1. Agility as Core

Agile approach to developing software iteratively and incrementally is a universally accepted norm for technology-related projects from developing a website, a business application or a full-fledged platform with all the bells and whistles. Agile has become not just an option for software development, but the only way to develop software – while continuously delivering value to users. An Agile mindset and culture, however, is a whole different story – and requires a new Agile operating model to be adopted across an enterprise. The key characteristics of this new operating model include focus on collaboration between business and IT, failing fast and bouncing back, learning through discovery, focus on customer experience and striving for continuous delivery of value to stakeholders. While many organizations in the private sector are embracing this operating model, the federal sector is fast-realizing that an Agile mindset is an absolute necessity when dealing with a mixed workforce of employees and multiple-levels of contactors, and mammoth multi-year projects. Furthermore, ever expanding priorities for a federal CIO organization such as OMB mandates (Cloud-First, Shared Services, Incremental Development, etc.), implementation of Technology Business Management (TBM) initiatives, ensuring good scores on Federal IT Acquisition Reform Act (FITARA) Scorecard, evaluating the impact of Modernizing Government Technology Act (MGT) on their portfolio/investments are pushing federal CIOs to question the status-quo and think about transforming the IT organizations to eliminate the silos between business and IT. Federal agencies are taking note of this need and are putting the building blocks in place for a broader transformation and adoption of Agile mindset/culture across the organization. While the level of Agility (maturity of implementation of the Agile operating model) varies from agency to agency, we expect to see more agencies start the journey to embrace Agility as the core characteristic of their operating models.

2. Optimized Operations

Federal organizations are leveraging technologies such as Cloud computing, Containerized deployments (Docker), DevOps, and Automation (Ansible, Chef, Puppet, etc.) to fundamentally change the way infrastructure and operations are managed.  DevOps based operational structures are streamlining development, integration, testing and deployment activities using automated tools and are eliminating silos between development and infrastructure operations. Agencies that adopted Agile and DevOps as a way to develop and deploy software are not only delivering value to customers in frequent intervals but are also leveraging automation configuration management and continuous integration/deployment to optimize operations. Cloud computing brought some sweeping and much-needed changes to the way infrastructure is procured, managed and monitored in the federal government. Cloud platforms such as Amazon Web Services, Google Cloud and Microsoft Azure are making it’s easier for agencies to acquire secure infrastructure resources quickly and scale on demand. The Cloud First Policy was released by The White House in 2011, “to accelerate the pace at which the Federal Government realizes the value of Cloud Computing. This policy is an important aspect of the government reform efforts working to achieve operational efficiencies by adopting “light” technology and shared services.” Almost seven years since this manifesto was released, federal agencies are increasing the pace of adoption, with the Department of Defense (DOD), General Services Administration (GSA), and several others issuing acquisition notices to acquire secure cloud-based products and services.  Even though agencies are still facing hurdles in deploying cloud-based solutions some seven years after the cloud-first policy, several agencies are breaking through the barriers by moving beyond deploying email in the cloud. An interagency working group called Cloud Center of Excellence (CCoE) kicked off in January 2017 with an aim to provide agencies with advice on best practices for cloud adoption (more than 140 participants as of September 2017). Furthermore, according to Deltek GovWin, there was strong jump in cloud related contract awards in federal civilian market in 2017, which saw a total contract value rise to about $3.2B. Cloud awards look set to accelerate sharply from this year onward, particularly if proposed cuts to civilian agency budgets go into effect. We expect this trend to continue and more agencies will be leveraging public and/or private clouds to run their business operations and customer facing workloads.

3. Innovative Acquisitions

Federal acquisition is not known to be an innovative function even though federal government is a procurement heavy space. It’s encouraging to see that federal procurement is going through a wave of digital transformation of its own, starting with leveraging big data analytics for making more data driven decisions to experimenting with Blockchain to automate procurement functions. The traditional practice of the government spending months or years writing down requirements for a potential software development effort and then requesting potential competitors to submit long proposals with their approach and price is slowly changing and giving way to more innovative procurement practices. Over the past two to three years, we have seen a rise in “alternate” acquisition practices that are prioritizing “seeing” the capability of a vendor instead of “reading” about it in a long proposal. Several procurements from U.S. Census Bureau, for instance, asked the vendors to present their approach to a panel instead of submitting a traditional proposal. Some agencies are also buying fixed number of sprints/iterations with a pre-specified amount of velocity instead of simply specifying scope and expecting the service provider to deliver. Other acquisitions from organizations such as 18F and United States Digital Service (USDS) leveraged more hands-on approaches such as hackathons to base awards on working software than a lengthy proposal.

Some agencies are leveraging alternate acquisition vehicles called “Other Transaction Authority” (OTA) agreements more extensively to acquire innovative technology services and products as these agreements enable agencies bypass some of the Federal Acquisition Regulation (FAR) laws and rules and create custom acquisition vehicles. OTAs were pioneered in part by the Defense Innovation Unit Experimental (DIUx), an innovation hub that is created to court nontraditional defense companies in Silicon Valley and other tech savvy cities. The Defense Department (DoD) has already jumped on OTA train and the use of OTAs doubled from 2015 to 2016 and grew another nearly 50 percent the next year. with over $2 billion worth of acquisitions in OTAs in 2017 alone. There are also efforts underway in the federal government to leverage innovative technologies such as artificial intelligence (AI), machine learning and blockchain to fundamentally change the way federal government acquires services from the industry. There are several innovative prototypes in progress to test the feasibility of using a promising ledger technology such as blockchain including this pilot by GSA. Despite these initiatives and growing number of success stories, progress and innovation in acquisition offices across federal sector has been patchy and fragmented. We expect the impetus created by Modernization of Government Technology act (MGT), combined with the momentum in the market place aided by digital technologies will continue to promote innovation and push the envelope in federal procurement practices.

4. Modernization of IT

The recently announced Modernizing Government Technology (MGT) Act created additional impetus to creating more robust citizen experiences and gives agencies resources to modernize, move to cloud, implement shared services, and improve their cyber defenses. Furthermore, the federal government is trying to propel technology modernization through a “Centers of Excellence” (CoE) model that will aim at pushing agencies’ networks and systems to adopt cloud and shared services. United States Department of Agriculture (USDA) will be the first agency to pilot this model in partnership with General Services Administration’s (GSA) Technology Transformation Service (TTS) with CoE around five areas – Cloud Adoption, IT infrastructure Optimization, Customer Experience, Service Delivery Analytics and Contact Centers. One of the key goals of this modernization effort is to use the concept of CoEs to improve customer experience across the federal government and transform federal agencies into effective, efficient, and customer-focused organizations. A combination of the OMB mandates such as Shared Services, Cloud-First, etc. and other legislative initiatives such as FITARA, TBM and MGT are changing the role of a federal CIO from a technology service provider and enforcer of enterprise governance to a facilitator and enabler of business objectives. FITARA not only gave budgeting power to CIOs, but also enabled IT to align much more closely with the mission objectives by gaining a seat at the “enterprise table”. In addition, technology innovations in cloud, Artificial Intelligence, Blockchain, etc. are forcing the IT organization and CIO to work closely with business to figure out the solutions that best align with business objectives and customer experience goals.

5. Focus on Customer Experience

Providing excellent services to citizens, businesses and other organizations is at the core of most federal agencies’ missions. Citizens are increasingly demanding the same level of customer experience from government agencies that they receive from private sector companies like Uber and Amazon. Whether ordering a ride on demand from their smartphones or products for same-day delivery from Alexa, customers — employees, partners, and citizens alike — have growing expectations for fast, seamless, personalized and unified CX. Crafting optimal Customer Experiences (CX) is both an art and science and the Federal Government is striving to create more user-centric services and tools for its workforce and citizens alike. Designing effective customer experiences more than just creating “user-centric” interfaces and starts with deeper, more complete understanding of “customers” through techniques such as Design Thinking.

Late last year, senate passed an amended version of the Customer Experience Act of 2017bill that that expresses “the sense of Congress that all agencies should strive to provide high-quality, courteous, effective, and efficient services and seek to measure, collect, report, and utilize metrics relating to the experience of persons interacting with them to continually improve services.”. Organizations such as 18F and United States Digital Service (USDS) are changing the way government services are provided to citizens by offering best practices, playbooks and other practical guidance to agencies. For instance, the Digital Services Playbook by USDS offers 13 key plays drawn from successful practices from the private sector and government organizations, if followed, can help improve customer experience across agencies. ACT-IAC, an industry-government collaboration and advocacy community organization, is actively working on releasing a playbook that provides best practices based, actionable guidance to federal agencies on how to offer better experiences to citizens. offers a Customer Experience Toolkit and a whole host of resources for creating a CX strategy, its implementation, rollout, how to measure customer satisfaction and how to act on the data collected. Agencies are starting to look at the citizen’s experience more comprehensively than just the touch points —along the entire journey taken—to really understand how to improve experience, engagement and customer satisfaction meaningfully. Customer experience driven digital transformation can fundamentally change the way federal agencies operate by enabling the agencies to create solutions and products that, first and foremost, solve/address the needs of the customer.

6. Continuous Security

We live in an era when no discussion about digital transformation and optimal user experience is complete without talking about security. Cybersecurity attacks are a form of 21st century warfare that is forcing governments to work around the clock to protect citizen data and infrastructure. With citizens’ increased virtual presence and the large amount of highly sensitive information now stored online, all sectors continue to make improvements to cyber security and protection. There is increasing awareness that any technology initiative or project needs to take a security-fist approach and recent attacks on government websites and servers are providing more impetus for security management and monitoring to be more continuous. For instance, DHS has doubled down on addressing cybersecurity risks in IT supply chains after the recent news that Russian hackers had penetrated United States power grids. Furthermore, the rise of the Internet of Things (IoT), blockchain and other emerging technologies adds several challenges to the digital security landscape. Agile development and DevOps processes are changing the way developers handle security by introducing security control awareness early in the project lifecycle and reducing the downstream risk by automating configuration management through tools such as Ansible, Chef and Puppet. Furthermore, several cloud-based infrastructure monitoring and management tool vendors are offering innovative security solutions such as continuous threat monitoring using Artificial Intelligence and advanced analytics that process data and identify potential threats in real-time. We expect these trends to continue and security to be at the forefront of all digital transformation initiatives in any federal agency.

Parting thoughts…

Federal agencies have long ways to go in their efforts to transform themselves to be more Agile, data-driven organizations. However, there are already multiple initiatives underway as illustrated by some of the trends outlined above and it is encouraging to see federal government moving in the right direction. By taking steps now to better understand customers, collect data and provide actionable insights to employees on the front lines, federal agencies may be better prepared to comply with possible legislative mandates and help their agencies lower costs, inspire employees, achieve mission objectives and enhance citizen experiences.

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