Accelerating the Adoption of Commercial Innovation in Government RESEARCH BRIEF
Accelerating the Adoption of Commercial Innovation in Government
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Executive Summary Government agencies are bullish on IT innovation. They see it as the most efficient way to marshal their resources, improve internal and external services, and make good use of their endless troves of data. In short, new technologies can pave the path for agencies to better perform their missions and meet the goals of the President’s Management Agenda (PMA). But they won’t get there alone. Government agencies face barriers when it comes to innovation. Tight budgets, legacy systems, an arduous procurement process and the limits of in-house talent aren’t the best ingredients for inventing — or even adopting — the next great thing. Innovation is a team sport; agencies that want to keep up with developments in the private sector need to develop collaborative relationships with the source of those technologies. These sources can include established vendors, startups, technology alliances and other nontraditional government contractors. Relationships with outside partners have been a hallmark of government innovation, with NASA’s space program serving as a prime example. The collaborations the agency fostered not only got man to the moon and made countless other missions possible, but they helped spawn a host of innovative technologies that pervade daily life, such as LEDs, smoke detectors and cordless power tools. Just as in the past, agencies across government should leave no stone unturned in the search for new mission-related solutions. By embracing diverse communities of tech innovation through collaboration and investment, agencies can find the emerging and transformational technologies that will make their modernization goals a reality.
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Survey Results To better understand how agencies are driving more innovation, GovLoop partnered with SAP NS2 to survey 157 federal, state and local government employees about the obstacles they face and the solutions they are adopting. Read on for survey results, along with observations about the responses.
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Partnership Proves Key to Innovation The PMA, which established the framework for IT modernization two years ago, leans heavily on innovation. And although agencies have made progress in modernization on several fronts, adoption of innovative technologies hasn’t been seamless. Survey respondents showed a strong interest in adopting innovative commercial technology. On a scale of 1 to 5, with 5 indicating the highest interest, about 83% of respondents rate their interest between 3 and 5, and about half at the highest levels of 4 and 5. Respondents were generally split on how their use of those technologies compared with that of the private sector, with 21% saying they have closed the gap with industry, 28% saying the gap has remained steady and 27% saying they’ve fallen farther behind. Some familiar hurdles stand in the way of getting to the next level of innovation. Budget constraints, cited by 69% of the respondents, top the list of barriers, followed by concerns about security and privacy at 47%, and cumbersome procurement processes and a lack of in-house expertise, each named by 46% of respondents. The most recent PMA update also cites “slow adoption of cutting edge commercial technologies due to onerous acquisition and authorization processes” among the challenges agencies still face. That’s where partnerships with the private sector can help. The National Institute of Standards and Technology (NIST) – which launched an Unleashing American Innovation initiative in support of the PMA’s lab-to-market Cross-Agency Priority goals – supports five strategies. They include increasing engagement with the private sector, building a more entrepreneurial research and development workforce, supporting innovative tools and services for technology transfer, and improving understanding of global science and technology trends.
FIGURE 1 On a scale of 1 to 5, rate your agency’s interest in adopting more innovative commercial technology? 1 = Little interest, 5 = High interest 2% 1 15% 2 34% 3 27% 4 22% 5
FIGURE 2 Which statement best describes your agency’s use of innovative commercial technology, compared to the private sector? 9% Our use of innovative tech matches or exceeds that of the private sector 16% I don’t know
21% We have closed the gap
28% The gap has remained steady
26% Our agency is falling further behind the private sector
FIGURE 3 What do you see as the greatest obstacles to your agency’s use of innovative commercial technology? Respondents selected up to three obstacles. 69% Budget constraints 47% Concerns about security, privacy 46% Slow procurement processes 46% Lack of in-house expertise 13% I’m not sure
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Working with established companies, startups and alliances allows agencies to uncover promising applications or other technologies that are worth investing in, whether through innovation hubs such as the Army Applications Laboratory, prize challenges such as those the Defense Advanced Research Projects Agency or Challenge.gov run, or alliances such as NIST’s Technology Partnerships Office. Collaborative relationships with the private sector also can help speed the deployment of new solutions, including some that are almost ready for prime time in government. Government should partner with commercial entities that already have 80% of a solution built, then customize it from there, said Brian Paget, Chief Strategy Officer at SAP NS2. “You should not be building apps from scratch,” he added.
have innovative technology but lack the mission knowledge to optimize it for government customers, Paget said. With input from agencies, a company that already has extensive experience working with government can look to tailor innovative technologies for agencies’ needs. Additionally, government agencies that want to close the gap between their use of technology and industry’s use of it need to align themselves with those third-party organizations.
“You need to leverage commercial technology to get commercial innovation.” Brian Paget, Chief Strategy Officer, SAP NS2
Developing partnerships has a ripple effect, allowing agencies to take advantage of relationships being developed within industry. SAP NS2, for instance, recently launched NS2 Labs specifically to work with smaller companies that
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Cloud Emerges as Platform for Innovation Government agencies looking for ways to innovate their IT tend to look to the cloud as a means to that end. Government is in a transition phase with cloud, using it to both maintain legacy operations and progressively push into advanced applications. About a third of the respondents to the survey (32%) said they use cloud primarily to host legacy/traditional applications and data. But 35% said they were “beginning” to use cloud for new and innovative capabilities, and 21% said they were already there, using the cloud “increasingly” to field innovative solutions. Meanwhile, another 12% are ready to get on board, viewing the cloud as a strategic platform for innovation. Respondents leaned heavily toward cloud as a preferred platform for innovation and see benefits in cloud computing that match their goals. When asked which cloud capabilities are important, 77% of respondents said providing secure access to internal and external stakeholders, but also that cloud can help them make good use of data from disparate sources. About 63% said it was important to create a unified data fabric that integrates data from across the enterprise, and 52% cited it was
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FIGURE 4 At present, what best describes your agency’s use of cloud as a platform for innovation? 12% We see the cloud as a strategic platform for innovation 21% We are increasingly fielding innovative solutions in the cloud
35% We are beginning to use the cloud to deploy new and innovative capabilities 32% We are primarily hosting legacy/ traditional applications and data
FIGURE 5 On a scale of 1 to 5, to what extent do you see cloud serving as a platform for innovation over the next two years? 1 = Not at all, 5 = The platform of choice 4% 1
“The FedRAMP office can only do so much,” SAP NS2’s Paget said. The pace of authorizations doesn’t keep up with fast-moving developments in cloud computing, and smaller companies delivering innovative solutions don’t understand how to navigate the FedRAMP process, which creates a barrier for innovative technology. “The gap between the number of cloud solutions in the market and what’s accredited is getting bigger,” Paget said.
20% 2 33% 3 27% 4 16% 5
important to analyze unstructured data. Other respondents considered it important to apply technologies to draw useful information from the data; specifically, conducting predictive analysis (51%), delivering robust visualization (47%), and applying machine learning and AI (38%). Government agencies have worked well with cloud in terms of embracing infrastructure and with applications such as enterprise resource planning (ERP), which integrates business process management. In 2019 — 10 months ahead of schedule — the Navy completed the migration of 72,000 users across six commands to a cloud-based ERP system that tracks more than $70 billion in transactions annually. But moves to the cloud can be slowed down by the authorization process under the Federal Risk and Authorization Management Program (FedRAMP), which standardizes security assessments, authorizations and continuous monitoring for cloud products and services. Cloud services in the federal government need FedRAMP approval, and although the program has accelerated its certification process, increasing the rate of authorizations in recent years, it’s still not fast enough for some agencies.
This creates an opportunity to approach the market differently. SAP NS2 has historically focused only on deploying SAP technology but is now working with some of these smaller innovative companies to host, manage and accredit their solutions in FedRAMP and higher environments. “It’s taken us years of learning and lots of development hours, but today we have a very sophisticated and highly automated security management plane that we can leverage to accelerate and maintain accreditations,” Paget said. It’s this expertise that is the hardest to come by for smaller companies and why partners like GoSecure (formerly CounterTack), an advanced endpoint detect-and-response company, is partnering with NS2 to leverage the NS2 Cloud platform and expertise to deploy their solution for government consumption. Such private-sector innovations from experienced cloud providers will accelerate the availability of secure software solutions in the government marketplace. Availability is only one side of the coin, however: Agencies must also be open to and culturally ready to consume these technologies. Government agencies need a more seamless procedure for taking advantage of new developments in the cloud, not least of all to use cloud as the platform for launching other innovative technologies.
FIGURE 6 As data moves to the cloud, which capabilities would your agency consider to be important? Respondents checked all that applied to their agency.
77% Providing secure access to internal and external stakeholders 63% Creating a unified data fabric that integrates data from across the enterprise 52% Analyzing unstructured data 51% Conducting predictive analysis 47% Conducting predictice analysis 39% Applying machine learning and AI
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Counting on Analytics When it comes to innovation, agencies are pinning much of their hopes on analytics, particularly when putting their vast stores of data to use. With cloud as the platform, they could access data from a variety of sources and in a variety of formats. Agencies could use machine learning, artificial intelligence (AI) and other advanced tools to glean information to help improve services, make better decisions and fine-tune operations. More than three-quarters of survey respondents said they saw an important role for analytics in improving management, operations and service, ranking it from 3 to 5 on the 1-5 scale. Among uses for analytics, supporting collaborative decisionmaking led the way, with 67% of respondents identifying that as a key point of interest. Not far behind were gaining deeper insights into the performance of agency operations (66%) and insight into services for internal and external customers (64%). Respondents also saw benefits in using ad hoc and what-if analyses to explore alternative courses of action (47%) and enabling users to create and share their predictive models (37%).
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FIGURE 7 On a scale of 1 to 5, to what extent do you see analytics playing a role in improving the management, operations and services of your agency over the next two years? 1 = Little or no role, 5 = An important role 3% 1 18% 2 24% 3 29% 4 23% 5
But they’re not there yet; when asked about their use of data analytics, 6% said they have an enterprise data analytics solution or integrated capability in place. Respondents were somewhat split on whether analytics would be an organizationwide activity. Thirty-nine percent said they’re increasing efforts to integrate analytics across the organization. Almost a quarter (24.4%) said a program or department independently manages data, with limited integration. Another 11% said they’re moving toward using a single data analysis capability or platform.
FIGURE 8 Which of the following benefits of advanced analytics are of interest to your agency? Respondents checked all that applied to their agency. 67% Supporting collaborative decision-making 66% Gaining deeper insights into the performance of agency operations 64% Gaining deeper insights into the performance of services provided to internal and external customers 47% Using ad-hoc and what-if analyses to explore alternative courses of action 37% Enabling users to create and share their own predictice models
Cloud can provide access, since not all of an agency’s data will be in one place. Tools such as AI can clean unstructured data — which accounts for about 80% of what agencies have — identify patterns, locate applicable datasets and even offer recommendations for action. AI.gov, launched by the White House last year, emphasizes the importance the federal government places on AI as a tool for everything from science and health care to manufacturing, agriculture and security, while stressing the need for collaboration and investment in AI R&D.
Analytics is an area in which agencies can pursue collaboration through open data sharing initiatives and take advantage of the most advanced tools available. Innovation by commercial providers of analytics software is evolving rapidly, and agencies could invite companies to demonstrate what’s possible with state-of-the-art technology. The government’s data problems are not unique; the commercial world deals with the same trends. But by using advanced analytics tools, corporations have transitioned to real-time digital boardrooms for running their businesses. By embracing these technologies, government agencies can do the same.
FIGURE 9 How would you characterize your agency’s use of data analytics and related solutions at present? 6% We have an enterprise data analytics solution or integrated capability in place 11% Moving toward use of a single data analysis capability or platform
39% We’re increasing efforts to integrate the ability to analyze data acros the organization
20% I’m not sure 24% Data analysis in our organization is managed in independently by program / department, with limited integration
By using advanced analytics tools, corporations have transitioned to real-time digital boardrooms for running their businesses. By embracing these technologies, government agencies can do the same.
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The Way Forward Government agencies face a gap between what they want to do with their IT operations and the innovative technologies — either available or being developed — that can make it happen.
FIGURE 10 How would you characterize your agency’s adoption of cloud computing?
Budget and procurement restrictions account for much of that gap, along with a workforce without the necessary skills in every area. Although government has moved to speed certification processes for programs such as FedRAMP and reduced the time it takes to obtain Other Transaction Authorities, agencies could still benefit significantly from collaborative arrangements with industry.
4% Decreasing, with some applications/data being pulled back 17% Accelerating adoption
Collaboration can get innovative technologies into use faster and help agencies pursue an incremental, iterative approach in areas such as cloud computing, where a steady transition can be better than a headlong rush. The federal Cloud Smart strategy, while aiming to “fully actualize” the potential of cloud technologies, also emphasizes “thoughtful execution that incorporates practical realities.” For most agencies, the migration to the cloud, whether by design or because of circumstances, has been gradual. Thirty-nine percent of survey respondents described their agencies’ cloud adoption as slow but steady, while 17% said the pace was accelerating. About 23% said little had changed recently. Perhaps acknowledging some mistakes made during cloud’s early days in government, about 4% said they were decreasing cloud adoption – pulling back some applications and data from the cloud.
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18% I’m not sure 23% Little change
FIGURE 11 What is your agency’s primary model for deploying cloud solutions? 7% Public cloud services 15% Private cloud
Research Brief
46% I’m not sure
32% Hybrid cloud, incorporating both
It needs to be intentional and collaborative to work best. We always prefer a co-innovation model with our government partners.
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39% Slow but steady increase
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Brian Paget, Chief Strategy Officer, SAP NS2
Government agencies are somewhat uncertain about the type of cloud environment they’ll settle on. Nearly half of the respondents (46%) said they weren’t sure what type of primary cloud model their agencies would deploy, although 32% said they expect a hybrid model incorporating both public and private clouds. Fifteen percent expect private cloud to be the primary model, while 7% expect to rely mostly on public clouds. Many experts say that a hybrid approach is likely the best platform for innovation, though that can vary by agency, depending on mission. Government agencies don’t want to get locked into a single vendor for cloud services, preferring to adopt a cloud-agnostic approach, though it may be more beneficial to focus on a cloud-native approach, which focuses on a containerized environment of microservices.
Cloud-native applications designed to function in the elastic, distributed environment of cloud platforms are repeatable and scalable. Agencies can manage them via DevOps processes that allow for continuous delivery, including delivery of innovative apps. “We build and deliver all of our secure software applications to be infrastructure-agnostic and cloud-native,” SAP NS2’s Paget said. Whether through cloud computing or other avenues, government agencies looking to take advantage of innovation need to seek out collaborations with industry and mine the possibilities of nontraditional partnerships through innovation hubs, accelerators, technology alliances and other communities. Those potential partners are willing, but agencies also need to reach out. “It needs to be intentional and collaborative to work best. We always prefer a co-innovation model with our government partners,” Paget said.
FIGURE 12 What do you see as the key drivers for the adoption of cloud-based solutions? Respondents selected up to three drivers. 50% Delivering higher quality of services to internal users 49% Improving our ability to manage enterprise resources 43% Delivering higher quality of services to the public/external stakeholders 36% Developing new mission-related solutions 24% I’m not sure
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How SAP NS2 Helps The cloud can be a game-changer for agencies, as it helps them innovate more quickly. Unfortunately, most agencies will find there’s a steep learning curve before they can become more agile and begin reaping the full the benefits. Agencies can look to SAP NS2 for the experience required to quickly and securely adopt the cloud as a platform for innovation. The company specializes in helping organizations migrate on-
premise solutions to a secure cloud. It focuses on highly regulated environments, including the intelligence, military, health care and finance sectors. Additionally, SAP NS2 has cloud service portfolios for payrolls, supply chains, enterprise resource planning and experience, human capital and talent management. Learn more at: www.sapns2.com/cloud
Conclusion Government has often been at the forefront of new technology developments, but the pace of technological innovation — in areas such as cloud, mobile computing, AI and the Internet of Things — has outstripped governmental ability to keep up without outside help. Add in budget and procurement restrictions and the concentration of talent in the private sector, and government agencies more than ever need to partner with commercial entities to ensure effective, efficient and secure operations. As the survey indicates, government agencies know that innovation overall, and technologies such as cloud computing and data analytics specifically, are essential to meeting their goals. But achieving those goals will depend on building collaborative partnerships with outside parties –where most of the innovations in today’s technology landscape are happening. Working with established companies and technology alliances, innovation hubs, investors and startups is key to finding the next wave of mission-critical solutions.
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