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Best practices to prevent the federal government from blowing its technology budget

INFORMS Journal Manufacturing & Service Operations Management Study Key Takeaways:

  • The study examined archival data on 240 US federal government technology programs in 24 federal agencies.
  • The researchers found that the practice of postponing baseline goals is a key driver behind the continued increase in the federal government’s technology program budgets.
  • Dividing a program into smaller work units and increasing the competence in program management can dampen this increase and lead to significant cost savings.

CATONSVILLE, MD, May 11, 2021 – When the U.S. federal government spends billions of dollars in taxpayers’ money running technology programs, you wouldn’t want to know where that money is going? A new study identified ways to reduce federal spending when implementing these taxpayer-funded technology programs.

In order to monitor the implementation of these programs, the federal government lays down a basis, which is an overall plan consisting of the planned budget, the schedule and the scope of the program. The problem is that federal technology programs are being redefined several times. So if the base is changed, it may appear that a program is not over budget when in fact it is over the originally planned budget.

New research results in INFORMS Journal Manufacturing & Service Operations Management examines the drivers of these fundamental changes and identifies mechanisms to reduce these changes, thereby improving the use of the tax contributions associated with such programs.

“Taxpayers’ Taxation: An Empirical Study of Drivers of Fundamental Change in Federal Government Technology Programs,” written by Dwaipayan Roy, Anant Mishra, and Kingshuk Sinha, all of the University of Minnesota, examines archive data on 240 technologies in federal government programs in April 24 Federal agencies.

“We find that significant savings can be made by reducing fundamental changes in larger-scale programs, when federal agencies and contractors make greater efforts to break a program into smaller units of work, and managers with high levels of technical and practical knowledge in “Program Management.” A skill that is critical to managing multiple interrelated projects, “said Roy, professor at the Carlson School of Management.

“Base changes can serve as early warning signals for federal agencies and contractors to identify programs that may face execution issues and to make corrections during the course,” Roy continued.

Another key finding is that federal technology programs using the agile methodology have seen more fundamental changes.

“Scope creep can be higher in programs like this because these programs often lack sufficient up-front effort to develop the initial baseline and rely too heavily on adjustments during execution. The up-front effort is indeed critical to better managing adjustments and avoiding them of the time-consuming approval process required to revise a baseline, “added Roy.

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About INFORMS and Manufacturing & Service Operations Management

INFORMS is the leading international association for professionals in the fields of operations research and analytics. Manufacturing & Service Operations Management, one of 17 journals published by INFORMS, is a leading academic journal dealing with the production and operational management of goods and services, including technology management, productivity and quality management, product development, cross-functional coordination and practical research. For more information, see http: // www.informed.org or @informs.

Contact:

Ashley Smith

443-757-3578

asmith@informs.org

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