Budget Realities and Risk Aversion Result in Incremental Federal Business Systems Modernizations

New Deltek GovWin IQ report explores key trends, drivers, challenges and opportunity areas in agency business system modernization efforts

HERNDON, Va. – February 13, 2015 – According to a new report from Deltek – Federal Enterprise Business Systems, 2015 – agencies are targeting business system consolidation and standardization in an effort to increase interoperability and transparency and decrease costs. Federal contractor-addressable spending on enterprise business systems for financial management, human resource management, asset and materials management and general administration will total $10.6 billion in FY 2015, which is a slight increase over FY 2014 spending levels. The report uncovers spending trends that provide insight into agencies’ business system consolidation and modernization goals to help contractors align their efforts to agency strategies.

Federal agencies face significant policy and legislative pressure intended to improve financial management, increase spending transparency, improve efficiency, and gain tighter control over assets. Two major elements in meeting these objectives are the Federal Shared Services Strategy and Cross-Agency Priority (CAP) goals, which aim to create common standards and increase the capacity of Federal Shared Service Providers in the areas of financial, human resources, technology, and acquisition management. Progress requires agencies to take an enterprise-wide, portfolio-based view of requirements to eliminate redundant spending.

However, agency progress in achieving these goals has been slow and elusive. “Due to budget constraints, many agencies have approached business system modernization incrementally and focused on core enterprise functionality,” says Angie Petty, Research Analyst at Deltek. “Most agencies plan to introduce additional capabilities over time.”

Many enterprise business systems consolidation and modernization initiatives have been underway for a number of years, most beginning with financial management and human resource management. Part of the challenge in FY 2015 and beyond is to continue those efforts while incorporating some of the more recent advances, such as cloud computing, advanced analytics and mobility.

The state of the federal workforce also impacts enterprise business system investments. The number of federal employees with expertise in business operations, such as accounting, personnel management, contracting and supply chain management, has remained relatively flat in comparison to the overall federal workforce. However, the complexity of agency business operations is growing, and driving the need for better tools to support improved performance, management, training, automation, integration and analytics.

Federal agencies view business systems as commodity IT, however spending in this area is relatively stable compared to other types of traditional commodity IT solutions. Not surprisingly, spending on human resources management business systems is expected to grow by 8.5% over FY 2014 levels to $3 billion. Financial management systems spending of $3.4 billion for FY 2015 shows more modest growth of 4.7% compared to FY 2014.

For more information on the Federal Enterprise Business Systems, 2015 report, visit Deltek.com/GovWin. The report is free to subscribers of GovWin’s Federal Industry Analysis program. Press interviews can be arranged by contacting Lauran Cacciatori.

About Deltek

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About GovWin IQ

Deltek’s GovWin IQ provides the market intelligence tools and analysis government contractors need to gain a competitive advantage and be a formidable player in the federal market. Backed by a team of government research and analysis experts, GovWin IQ provides the most powerful, comprehensive, and timely lead generation and business intelligence solutions available. More than $1.8 trillion opportunities are tracked every year. www.Deltek.com/GovWin

For further information contact:

Lauran Cacciatori
Senior Director, Corporate Marketing and Communications
+1 703.885.9947