Three Pillars of Successful Program Funding: A Framework for Public Sector Agencies

In the wake of numerous modernization initiatives, technological innovation has continued to accelerate in the public sector, providing capabilities and advantages that would have been unimaginable just a short time ago. The problem is that capital planning and funding continues to look very much like it did 30 years ago. In this post, I’ll take a look at the problems these legacy approaches present in government agencies today, and I’ll outline how a new framework can help.

The problems with legacy technology funding approaches

For decades, investments in the public sector were largely based on projects. Leaders commit to funding a specific piece of work, one that has a clear start and finish. Leaders expect to fund these projects once. For each of these efforts, teams develop plans, get estimates, and ultimately obtain the budgetary approval needed to get started.

For a long time, these funding approaches were acceptable. Today, they present several key problems:

Problem 1: Technology moves way too fast, budgeting way too slow

Within many government agencies, it simply takes too long to go from kicking off a project and identifying a technology to actually being able to start using it. In many agencies, two years can elapse between the time a team selects a technology to the time it can actually be used—often it takes even longer. These multi-year procurement cycles are increasingly at odds with the rapid rate of technology advancements. For example, in a matter of months, AI-powered offerings like ChatGPT have seen massive adoption—and further accelerated technological advancement. Quite simply, the state of the art in any technology category today will look very different in two years.  For public sector teams, this means a technology is bordering on obsolete by the time they are ready to deploy it to production.

Problem 2: Legacy models tie up resources and accrue technical debt

What’s worse is that many existing applications have largely been dependent on operations and maintenance budgets and multi-year contracts. Assuming the standard two-year planning-to-deployment cycle, by year two of a contract, the chosen technology is already four years old—and invariably obsolete. For a 10-year contract, an organization may not start receiving a return on investment until year five. This leaves the agency tied up in a long-term commitment to a technology that provides diminishing value. Further, it means development, modernization, and enhancement (DME) funds can’t be moved to more value-added solutions. This all leads to significant technical debt that stifles modernization initiatives.

Problem 3: Technology is mission critical—not a one-and-done project

Today, government agency staff are confronting a completely different reality than the teams of prior decades. They’re working in a world in which technology is closely tied to the agency’s mission. For virtually any agency, organizational performance is highly dependent upon software to fuel virtually every critical service and process.

This exposes a fundamental disconnect. When an application is critical to an organization, it’s not something that can be treated as a one-and-done project. Teams can’t just deploy the application and move on; they need to continue to support and improve it.

Further, these enhancements will be integral in fueling the ongoing progress of the agency in fulfilling its mission. Further, these enhancements will need to continue for as long as that application serves the organization.

The costly implications of the status quo

Across a large swath of agencies, leaders continue to confront the futility of detailed, project-based planning. They see teams across departments making massive investments in time and money in order to establish a strategic long-term plan.

Once approved, plans change—introducing a whole new range of efforts, costs, and delays. This is a never-ending process. While working with a current year’s budget, teams need to be in some phase of getting the next year’s budget approved, and they may even need to be preparing for the following year. These acquire-to-retire asset lifecycles invariably span years.

In short, teams spend a massive amount of time developing a plan that will never be fully executed and they incur even more effort, lost time, and inefficiency when the plan inevitably changes.

These realities raise a fundamental question: Why keep working this way?

Today’s imperative: Fund teams, not projects

To meet your pressing imperatives, you and your teams can’t continue to operate the same way, funding work and projects. Now, funding, planning, and operating models need to go through a fundamental shift.

Now, it’s about funding the products and the teams that are delivering value.

Here are a few hallmarks of this team-focused approach:

• Teams are given persistent, long-term funding. This funding can span a fiscal year or extend across three, five, or even 10 years.
• Teams are organized around products and value streams, rather than in the siloed departments of the past.
• Teams work toward common, agency-level objectives.

Key pillars for success with modern public sector planning

There are three key pillars that form the foundation of a successful, team-focused approach to planning: empowering teams, governing innovation, and aligning technology and functional groups. The following sections offer an overview of each of these pillars.

Pillar 1: Empowering teams

In most agencies, top-down decision making is the norm. The problem is that centralized power in government tends to be slow and inefficient.

The key benefit of taking a modern, team-focused funding approach is boosting efficiency. Decentralizing decision-making is a big part of how this objective is realized. Instead of providing temporary funding to individual projects, you continuously fund the teams providing the products and services that deliver value. When teams have persistent funding, they can gain the autonomy to figure out what needs to be done and do it. As circumstances change, staff can adapt quickly and intelligently—without having to go back to a central authority. Ultimately, leaders empower teams, provide persistent funding, and get out of their way.

Pillar 2: Governing innovation

The reality is that most leaders have been forced to make hard tradeoffs in balancing demands for governance and speed. This is very much the case in the context of technology planning. Having a top-level decision-maker sign off on each project and scope change may serve to support some governance objectives, but it also can slow the agency to a crawl.

With this modern planning approach, teams move from focusing on preparing planning documents and seeking approvals, and instead focus on achieving key agency outcomes. By taking a new team-focused approach to planning in government agencies, teams are given key metrics and they’re afforded the autonomy to determine how to best achieve those metrics. That is how this planning approach helps foster directional alignment. In effect, governance is moved from front-end budget approvals to empowering teams and focusing on the outcomes they deliver.

In support of this approach, it is vital to establish visibility into what people are doing and how it affects the agency and its mission. Leaders need to be able to track value in real time, using unified data.

Pillar 3: Aligning technology with the agency mission

Historically, the performance of technology teams has been measured based on such characteristics as system resilience or the lack of bugs. Meanwhile, functional stakeholders keep asking for changes, additions, and enhancements—which all increase the risk of technology teams missing their objectives. This fundamental tension causes misalignment, miscommunication, and confusion among both technology and functional teams.

By taking a team-centric approach to planning, public sector agencies can avoid these conflicts and disconnects. When applying this approach, teams are organized around value streams that fuse functional and IT staff, who all have one set of shared goals. In this way, teams can begin to break down silos, foster cross-team alignment, and gain a unified focus on key outcomes.

Through this approach, priorities are based on negotiated agreements between functional and technology leadership. The trick is to strike the right balance between addressing agency priorities and backend technical and architectural objectives.  

Conclusion

Too much has changed in recent years to be employing a technology funding approach that’s been around for decades. By employing team-centric approaches, your organization can eliminate the waste, inefficiency, and inflexibility of old-school approaches. In the process, you can achieve significant improvements in organizational agility, efficiency, and performance.

To learn more, be sure to review our white paper, Three Pillars of Successful Public Sector Planning, released in 2024.