Modernization is a hot topic in the market and there is a lot more going on than projects funded by the Modernizing Government Technology Act.
Modernization has been a popular talk track for speakers on the federal circuit for the last few years, especially since the Modernizing Government Technology (MGT) Act of 2017 authorized the establishment of the popular Technology Modernization Fund (TMF).
Federal agencies have tapped into the TMF to get the ball rolling on some new projects. In fact, the TMF made a few new awards in October and February. The recently signed appropriations bill allocated another $25 million to the fund, for a total of $36 million remaining.
Be careful, however, not to spend too much energy chasing after TMF projects. By the time you hear about these projects, the teams handling the projects and the solutions they are using are already in place.
But don’t despair. While the initial TMF projects have been awarded, small-scale modernization projects tend to beget larger ones -- often in areas that the customer didn’t initially suspect.
Even if you’re not able to get a shot at TMF funds, you would still do well to look at the types of projects getting awarded and to use them as a model for projects to bring to your government customers. Understanding how the money is being spent will help you develop meaningful conversations that may translate into sales.
Current TMF awards and how to shape your sales conversations
The key to starting a meaningful conversation lies in getting a handle on the technologies that are driving agencies’ recent TMF awards.
The most recent TMF award was made to GSA for just over $20 million for payroll and management software on Feb. 11. The project intends to modernize an outdated payroll system with a software as a service (SaaS) solution that can be done in the current fiscal year, as opposed to waiting to secure funding in future years.
GSA was also awarded another project last year for $15 million to update and modernize 88 legacy applications, emphasizing open source architectures in the design of new applications. A $5 million award from last year to USDA also focused around optimizing legacy infrastructure and accelerating cloud adoption across the department.
Last year, the Department of Energy received $4 million from the TMF help it move more of its employees into a cloud email system. Earlier in February, the department received the rest of its award, for a total of $15 million.
It’s pretty clear what kinds of technologies are winning TMF dollars. When you meet with agencies that have won awards, you’ll need to speak to your capabilities in agile and DevOps development, cloud migration, and open source and open standards.
How to talk to customers about their working capital
Even if an agency hasn’t won a TMF award, this doesn’t mean agencies are unable to start their transformations. The MGT Act created a provision to establish a working capital fund at agencies if they didn’t already have one.
This provision would provide greater flexibility for program managers to plan and execute longer term modernization projects that could not fit within a traditional federal planning cycle. You’ll need how to talk to your program manager customers about how to best use their working capital fund.
The way it's supposed to work is simple: Agencies that can cut maintenance costs by modernizing old systems will be able to invest those savings into their working capital funds, rather than returning them to the Treasury.
This creates a real incentive to save within agencies, because the money won't be lost. Instead, it'll be moved to the capital expenditure side of the ledger. Anyone who can help customers measure the total cost of ownership for their systems should find success having that type of conversation with government program managers.
More broadly, however, this is a good opportunity to demonstrate value and customer knowledge by identifying areas where you know customers have an opportunity to modernize, showing them how your technology can get them there, and really driving those savings that MGT will require.
The most important part to understand MGT and TMF is that CIOs now feel empowered to make the kind of beneficial decisions that will improve their agencies’ IT portfolios. There’s political pressure on agency leadership to make sure that the CIO is given the necessary freedom to evolve an agency’s technology posture.
Keep having conversations around modernization initiatives with government customers, even if TMF projects have already been awarded.