With $74 billion allotted to IT for civilian federal agencies in 2024, the U.S. federal government is the largest single consumer of information technology (IT) in the world. 

Given that America’s technology sector remains the world leader in the innovation and production of commercial software capabilities, taxpayers might reasonably expect that U.S. government agencies are leveraging the same cutting-edge capabilities that power the lives of fellow citizens and the businesses in our communities. 

Unfortunately, this is not the case. 

Recent independent reporting from Garland LLC estimates that only 15% of the government’s IT budget goes to commercial off-the-shelf (COTS) products, including software and cloud technology. 

That means tens of billions of dollars every year are spent propping up and maintaining outdated legacy systems that are fundamentally less effective, less efficient, and less secure. These glaring examples of inefficient spending have led Congress to take action.

In a recent Government Accountability Office (GAO) report, Congress’s watchdog outlined federal agencies’ inconsistent and incomplete data on software spending, making it difficult for those agencies to determine which products they actually own and operate. 

Furthermore, GAO’s analysis showed that most agencies are incapable of understanding how their software is being licensed or what use restrictions come with those agreements, opening up agencies to exorbitant costs that eat into their ability to fund critical programs.

Only 15% of the government’s IT budget goes to commercial off-the-shelf (COTS) products, including software and cloud technology.

GAO’s findings have bolstered the call from Congress to ensure agencies better understand, rationalize, and optimize their software purchases. It’s also a big reason why Congress is working to pass the Strengthening Agency Management and Oversight of Software Assets Act, which could save the federal government hundreds of millions of dollars annually.

Building Continuous, Value-Added Innovation in Government

What if there were a solution that minimized the need for multiple products and licenses and worked to eliminate duplicative software spending? There is, but you need to know what to look for.

With legacy ERP systems, the responsibility for maintaining customizations, supporting integrations, solution testing, disaster recovery, audit and compliance, and other IT-related efforts falls on the consumer. These “extras” can account for up to 70% of your total cost. 

Additionally, because legacy system upgrades and enhancements are so costly and time-consuming, they’re often pushed aside in favor of more pressing initiatives. Next thing you know, you’re several releases behind and struggling to catch up. 

Cloud-based software vendors such as Workday can develop, support, and deploy a single version of software across all customers, enabling them to deliver continuous, value-added innovation rather than maintaining multiple software versions. Most importantly, it helps our customers save money and improve performance so they can more effectively deliver mission outcomes for the people they serve.

Workday Helps Agencies Adapt to Change

Workday delivers core HR functionality built on a cloud architecture that features a highly adaptable object data model. This means agencies can be more agile, configuring business processes that won’t break or disappear with every new update. Reporting with Workday is built in and designed to run custom reports on business process execution or any business process step, bringing automated process flexibility with built-in governance.

Another benefit of Workday is the predictable fee model, which can often be moved from a capital expenditure to an operational expense on financial statements. For federal agencies, this means more predictable budgeting and fewer “surprise audits” from legacy software vendors that impose unnecessary costs and risks to agency missions. 

In addition to having a favorable impact on an agency’s financials, the model ensures that Workday is always working to meet customer requirements—through outstanding service, reliable technology, and continuous innovation. 

Workday knows that federal agency CFOs, CIOs, and CHCOs want to save costs, improve performance, reduce cybersecurity risks, and enhance their customer experience. Our offerings can help them get ahead of the problems identified by Congress and GAO—meaning, they can spend more time (and less money) delivering high-quality services that meet their missions and support taxpayers. 

With Workday:

  • Customers share IT infrastructure and operational resources

  • New features or performance enhancements benefit all customers simultaneously

  • Updates are managed by Workday at no extra charge

  • Data center operations, applications, and data are protected by world-class security

  • Service-level agreements include response time, uptime, backup, and disaster recovery

  • Ongoing maintenance and performance tuning is provided

  • Perpetual licenses (pay-as-you-go pricing) don’t exist

The ability to stop wasteful software spending is here, and Workday continues to make those solutions available to our growing federal customer base.

Also, it’s not too late to register for the Workday Federal Forum on May 22, 2024 in Washington, D.C. I’ll be there along with IT and HR professionals from across federal agencies to network and glean insights from industry experts during this half-day event. I hope to see you there!

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