Follow the Money — GSA IT Adopts Zero-Based Budgeting

Zero Based Budgeting Balance SheetI talk a lot about the innovations we’re implementing here at GSA, and usually that means discussing the technologies we’ve adopted, or the policies that underpin the changes we’re making in the workplace.  Ideally, each of those policies and technologies will save money, but we have other essential objectives as well, such as meeting Administration or GSA policy or compliance goals, or improving productivity and customer satisfaction.  Technology impacts everything within GSA in one way or another, and often drives our business volume and other important outcomes.  So in these dollar-conscious times in the federal government, it is imperative that our IT budget is transparently connected to our goals, objectives and mission, and identifies real solutions to existing and emerging problems or issues.  And that’s why the Office of the Chief Information Officer (OCIO) has adopted zero-based budgeting.

As a concept, zero-based budgeting is pretty straightforward: we start our new budget in every division having zero dollars to spend – and ask that each division demonstrate the need for its budget requests.  In this way, we’re able to “unpack” the budget and examine each element at a level of granularity we can act upon.  The result is that our IT budget is meticulously accounted for and isn’t just a reflection of last year’s budget plus inflation.

In this process, we review every IT program, both new and existing, for its function, need, and cost and then match it against GSA’s top-level strategic goals.  Zero-based budgeting focuses on understanding and justifying each budget line item request so managers are better able to assess requests and can understand the benefits provided by budget expenditures.  They can also establish an executable budget for IT activities.  The benefits are numerous:

·         Transparency and insights into spending: Because of the insights and transparency our budget provides, we can respond quickly when circumstances change.

·         Data-driven environment: Our budgeting approach allows the agency to have better visibility into the IT budget, and provides consistent data within and across programs. OCIO is easily able to reuse this detailed, zero-based, budgeting information to articulate to our stakeholders where every dollar goes and what outcome it supports.

·         Communication/collaboration: Zero-based budgeting prompts discussion among leadership regarding IT projects, how well they support the agency’s mission, and any overlap or misalignment.  And because we reach consensus on recommending which IT projects should and should not get funding, we have greater employee buy-in because of our group’s well-communicated decisions.

·         Eliminating waste: We can reduce costs by identifying and reducing overlapping or obsolete functions.  By contrast, we can identify possible alternatives that better fit our top-level strategic goals, our requirements, or even better pricing.

·         Ensuring project alignment with GSA’s goals: Because zero-based budgeting links expenditures to activities, programs with poorly defined areas or that don’t align with agency goals can be re-prioritized or defunded.

Zero-based budgeting’s greatest success in OCIO is that it provides one source of truth for budget data.  We save time and resources on data calls, and we’re able to provide an in-depth description of our budget that’s defensible to other organizations.

In this time of large-scale government transformation, our focus is on common-sense action with an emphasis on promoting efficiency, curbing spending and delivering results.  Zero-based budgeting is just one of the many ways OCIO is part of that transformation.