How to improve your agency’s FITARA score? Start with software licensing and MEGABYTE compliance.

This is the first in a series of posts to address how agencies can improve their efficiency and effectiveness in regards to their FITARA Scorecard. This first post focuses on MEGABYTE compliance.

In 2014, Congress passed the Federal IT Acquisition Reform Act – commonly referred to as FITARA – to help federal agencies reduce IT waste, improve how IT is purchased and managed, and drive technology reform across all federal agencies. One of the most important pieces of the legislation is an annual “scorecard” that grades agencies on how well they are doing.

In November 2017, the House Oversight committee released the latest scorecard, and while there has been some improvement since the first scorecard in 2015 – USAID achieved the only ‘A’ on the FITARA Scorecard – the results aren’t good:

• Only 3 agencies improved their scores
• 15 agencies made no improvement
• 6 agencies actually had their scores go down

Considering that FITARA is the standard by which agencies are now being judged, there is clearly a lot of work to be done.

While the team here at Censeo has contributed to the conversation around FITARA (see FITARA Roundtable: How To Improve IT Reform), given the visibility of the FITARA scorecard, and its importance as a key metric for agencies to manage their efficiency and effectiveness, we know that agencies need to act quickly to make improvements before the first 2018 scorecard is released.

With that in mind, Censeo Consulting has created a list of steps that your agency can take to receive an ‘A’ when the results are released in spring of 2018.

The first area we have identified for improvement is federal agencies’ software license management which is part of the MEGABYTE Act of 2016. Considering 70% of agencies scored an F in this area, it is an area for immediate improvement by just about every agency.

3 Keys to a better MEGABYTE Grade on the FITARA Scorecard

Our analyses and work with federal agencies shows that the federal government spends $6 billion annually on software licenses and maintenance. The software dimension of the scorecard is designed to measure if agencies are following best practices in managing software licensing and costs. While agencies may feel they are following established buying patterns and GSA protocols to get the best price, our work tells us that this doesn’t always achieve the best results or deliver the efficiencies agencies are looking for.  So how does one get started improving the software licensing to improve their FITARA scorecard grade?

Step 1: Create a Software License Inventory

The first step is figuring out what software your agency actually has and is using. A software license inventory is key. Some things to consider as you put this inventory together include:

• Follow the 80/20 rule: Identify the publisher(s) to inventory first, looking for the largest number of licenses and your top-spend contracts
• Automated or manual inventory: Determine if you will collect license data using a manual approach (i.e.., data calls) or with an automated software asset management tool.  Be realistic about what a tool will give you… there will still be a lot of manual reconciliation and clean up with automated software.
• Synthesis: Analyze your data, specifically looking for 1) the number of licenses you use, 2) the license-counts you are authorized to use based on your contracts, 3) the overall costs of your licenses, 4) the contracts used for each software publisher

Step 2: Develop a Software Centralization Plan

Next your agency needs to develop a plan to centralize and improve the licensing monitoring system. Be sure to consider:

• License models: For major publishers, determine the optimal license model, including analyzing SaaS delivery models. This may differ across offices, which may use different components of suite products
• Right sizing: Identify where you are over-buying licenses, where you are using more expensive software than you need (i.e., Professional vs. Standard), and if there are more cost-effective delivery models that meet your business needs
• Future proofing: Identify any business or IT changes that will change your license needs in the future; be sure your plan addresses your future needs

Step 3: Track and Report Savings

Finally, figure out how to report your savings and document your improvements. Be sure to consider:

• Savings methodology: Determine how you will calculate savings, using an OMB approved methodology
• Calculations: Identify your baseline costs, such as the list price for a license on a GSA schedule, and compute the difference between that rate and the price you paid
• Reporting to OMB: Aggregate your savings by publisher and report as part of OMB’s annual Spend Under Management data

The MEGABYTE requirements represent a significant opportunity for federal agencies to realize immediate savings and increase their FITARA scores. The key is to take a holistic approach and look for opportunities within your agency to implement these best practices – and taking that first step to improve your licensing management and compliance with the MEGABYTE Act.

If you are interested in receiving more details on how Censeo Consulting can help your organization get started, contact us today to set up a consultation.