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A Word of Caution on Category Management

The Obama Administration has put a greater emphasis on improving government information technology (IT) and digital services than any other presidential administration in our history. We had a glimpse of the tech-savvy Obama campaign back in 2008, and again in 2012, with its adept use of social media and modern analytics. This approach continued when President Obama entered the White House, demonstrating his commitment to improving the federal government’s technology.

There is one presidential initiative, however, that seems to laugh in the face of progress and it could be a serious missed opportunity for the tech legacy of this administration if it is not corrected quickly. Despite efforts to modernize our federal IT, the “category management” initiative has repeatedly veered off course from trying to consolidate volume purchases to achieve lower prices and instead mandated outdated technology that are divergent from the form, fit, and function of commercially available information technologies (and I go into more specifics below). But, are we missing an opportunity to push government forward, modernize the technologies that are used to deliver citizen services and meet mission needs, and increase the level of security in those technologies? We encourage the federal government to leverage category management as a tool to drive additional savings for taxpayers while helping lift agencies out of legacy IT.

Category management is a tool born out of the retail industry to help streamline purchasing processes by creating groups, or categories, of similar products so organizations can consolidate requirements and increase purchasing power. While this tool has been experimented with on the U.S. state level and in smaller governments overseas, it has yet to prove it can scale to achieve efficiencies in a government as large and diverse as the U.S. federal government.

Sure, the U.S. federal government is the largest buyer of goods and services in the entire world (collectively), but does it act like a single buyer? And how is this different from the General Services Administration (GSA) Schedules, which are a collection of pre-categorized product and service offerings? We are just beginning to learn whether or not category management can be effective for IT purchases in the U.S. federal government as the nascent strategy gets implemented.

There are currently three IT category management policies in effect today, the most recent on mobility contracts released last week. The concept is simple in principle: all agencies need laptops, desktops, mobile devices and services, and software licenses, so why not consolidate the most basic requirements and buy the majority of these tools off of select government-wide contract vehicles? It makes a lot of sense and could deliver savings and efficiencies to agencies. It could even be used to push agencies into the 21st century as they seek to refresh their technology. When you dig into the specifics of the strategies, however, you find that there is a major disconnect between other forward-thinking tech policies coming out of the White House and these policies dictating what technologies agencies can buy.

For example, the laptop and desktop category, which went into effect in October of 2015, includes an option for those machines to run on a Windows 7 operating system. Windows 7 was released in 2009, the same year President Obama took office. To give perspective on how quickly technology changes, the iPad would not even be announced until a year later. If 80% of laptops and desktops were bought off of category management contracts, why would we want them having a minimum requirement of outdated technology? Just as importantly, that version of the Windows operating system is two generations old and has since been replaced with a more secure system that the company is actively shifting their support and maintenance focus towards as they evolve beyond older iteration of their products.

We see the same challenge occurring in the newly released mobility strategy, which creates a preference for hardware that is at least one generation old. Some would argue this approach saves money, but so will buying in bulk, so why not utilize a standardized contract to keep the government on pace with innovation instead of starting it a generation behind? This requirement also enhances the security risks, since newer products incorporate enhanced components and can support running more secure apps and communications functions.

In the same vein, the software strategy creates preferences for certain types of software development practices that are popular today instead of allowing for flexibility in picking the best tool for the job. And, none of these specifications account for the evolving technologies such as the Internet of Things (IoT) environment and the interconnectivity of devices and data, or the increasing popularity of convertible and tablet formats, or even the use of touch screen technology. The main reason for this is because managers focused on data regarding what agencies were buying instead of researching where the consumer market was going, and adjusting government purchases to follow that technology trend, thereby leveraging the consumer market with volume purchasing.

At the end of the day, these category management policies can provide the taxpayer with serious savings, and the IT Alliance for Public Sector (ITAPS) supports the effort to consolidate requirements and act as a single buyer because it means fewer government unique variances in products and fewer contracts that companies have to pursue.

Public Policy Tags: Public Sector