Information Technology Investment Management
The state of Georgia spends a large sum of money every year on information technology, including services, equipment, applications, personnel, software licensing, development, and maintenance. However, determining exactly how much is spent, where the money goes, and what taxpayers are getting in return can be difficult to report on in the aggregate. Coupled with this challenge is the need to better understand whether Georgia is receiving or could receive greater value for the dollars invested in information technology. This is likely to be a continuing challenge due to the rapid changes in technology each year.
The Georgia General Assembly has charged the Georgia Technology Authority (GTA) with compiling information from executive branch agencies about their IT expenditures and presenting a report to state leaders every year (O.C.G.A. 50-25-7.10). With comprehensive and accurate information, state leaders can make fact-based decisions about the allocation of limited state resources to support technology.
GTA uses the State Technology Annual Report Register (STARR) to collect data about IT expenditures from executive branch agencies. Information is requested in the categories of application, infrastructure, network, other IT costs, and projects.
The state has a more comprehensive understanding of the cost of infrastructure and network services than it does for applications. Infrastructure and network services are provided through the Georgia Enterprise Technology Services (GETS) program. Under GETS, Georgia can measure consumption and value through detailed reporting for all agency users of infrastructure and network services.
The following graph depicts the most comprehensive summary available of IT expenditures by infrastructure, network, application, and other IT costs in FY 2018, FY 2019, and FY 2020.
A total of 53 agencies submitted a report for FY 2020.
Complete listings of the agencies reporting, and their expenditures are in Appendix A and Appendix B. The agencies listed in Appendix A with NR in the “Reported 2020” column did not submit reports because:
- The agency no longer exists.
- Its expenditures were included in the report from an agency to which it is administratively attached.
- The agency is attached to one of the state’s constitutional agencies, which are exempt from filing the report.
In addition to constitutional agencies, other state entities with large IT budgets are not required to report their IT expenditures, including the University System of Georgia.
Did IT expenditures decrease in FY 2020?
Participating agencies spent over $685 million on technology in FY 2020, less than the $752 million reported in FY 2019. Several agencies reduced their IT spend by reducing mainframe costs. The difference in spending is attributable to:
- More accurate application costs captured in the application inventory
- More accurate IT full-time equivalent and IT contractor costs
GTA continues working with agencies to increase both the quantity and quality of data received.
Annual Investment Strategy Sessions
GTA’s investment strategy sessions in FY 2020 included agency decision makers in business, operations, and finance. The agenda was targeted to increase awareness of the challenges associated with technology investments while also providing tools and best practices for a variety of investment scenarios. The information gathered in these sessions provides the baseline for annual reporting on Planned New Investments as shown on page 28.
GTA enhanced the procurement review process to provide more proactive support as agencies plan for large investments.
GTA’s procurement review process continues to provide valuable feedback as agencies navigate complex requests for proposal (RFP) and provider service agreements. Over the past year, GTA reviewed more than 12 sets of procurement documents, including RFPs, requests for information (RFI), scopes of work (SOW), and contracts representing approximately $90 million in investments.
The state’s IT application portfolio included 776 applications in FY 2020, an increase of 204 since FY 2013. The following graph shows the number and percentage of applications by type:
Applications by Category (776 Applications)
The graph above shows the number of applications by category.
Note: These applications were categorized by the reporting agency based on definitions provided by GTA. Many applications are accessible on mobile devices, but they are not categorized as mobile-only applications.
New Investments by Agency
The FY 2020 total project portfolio of $585 million shows a significant decrease from FY 2019, primarily due to the large healthcare initiatives and more accurate planning estimates. The FY 2020 portfolio is tracking over 42 active projects in 15 agencies. Several projects span multiple years. In addition to the active projects, several large projects totaling $417 million are in the planning phase. The total portfolio of in-flight and planned projects is more than $1 billion.
The following chart and graph depict each agency’s percentage of the total budget for all active projects.
Planned New Investments by Agency
The following graph depicts the several large projects totaling $417 million that are in the planning phase.
The monthly reviews of the Critical Project Review Panel continue to have a positive impact on the success of the monitored projects. The panel limits its reviews to the most critical projects in the state’s portfolio. For FY 2020, the critical project portfolio was valued at $288 million and encompassed 11 projects in eight agencies.
The information below puts into perspective the value and benefits of portfolio management and oversight.
Applying industry statistical information (based on the Standish Group’s 2020 CHAOS Report) to our current active and approved portfolio of critical projects yields the following projected results:
- 23% of projects would be cancelled = $66.2 million
- 55% would cost 189% of the original estimate = $299.4 million
- 22% would be successful with no cost increase = $63.3 million
Without disciplined project, program, and portfolio management, the current portfolio of $288 million would deliver only 77% of the functionality originally planned.
The chart below displays how the state of Georgia compares to government and industry metrics compiled for the Standish Group’s 2020 CHAOS Report for technology projects. It measures only critical IT projects that were completed in each fiscal year. The chart indicates a decrease in successful projects from FY 2019 to FY 2020. Of the 11 projects in the critical project portfolio, only two projects completed. One red/failed project is reflected below on the project effectiveness graph. The project was the Electronic Data Systems project at the Department of Community Health. This project was cancelled due to irreconcilable differences between the agency and the project vendor. The green is a result of a large successful project, Card Production, conducted by the Department of Drivers Services.
Project Delivery Effectiveness (by % of $) FY 2020