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Blog Insight > Innovation in Federal IT: The Road Ahead

Innovation in Federal IT: The Road Ahead

Innovation is probably one of the most liberally used buzzwords. While every business leader knows that it’s important, nobody seems to agree on its exact meaning or how to go about implementing it. It’s important to realize that innovation does not necessarily mean inventing breakthrough technologies, rather, innovation is about finding proactive ways to maximize process efficiency. The long-term benefits of true innovation will always outweigh the short-term implementation cost. 

What’s stopping us? 

In today’s federal fiscal environment of decreasing resources and increasing scrutiny, there is a growing pressure on agencies’ leadership to utilize the available resources in an efficient and outcome-driven manner. While such forces should drive innovation, counter forces—such as archaic acquisition processes, aversion to risk, and a culture of status quo—have impeded large scale adoption of fresh innovative approaches. 

Innovation is about finding proactive ways to maximize process efficiency. 


According to a recent survey by Accenture, only 21 percent of government agencies have given employees opportunities to work on independent projects. Only 9 percent set aside time for brainstorming. When asked to grade their agencies’ support for innovation, only 8 percent rate their agency as “excellent,” and just 22 percent say the level of support is “good.” More than half (56 percent) say a lack of institutional support hinders innovation within their organization. While a few federal agencies have tried to encourage innovative practices, the success stories have largely remained scattered and have—more often than not—resulted from personal heroics rather than a sustained, scalable culture of innovation. 


However, the past 12 to 18 months have seen some noticeable shifts. A number of agencies are setting up innovation-friendly acquisition strategies to establish partnerships within the IT service provider community and embrace emerging technological advancements. This should create a win-win scenario for both the Federal Government and commercial entities. As the industry leaders like Google, Amazon, and Microsoft continue to invest in emerging technology capabilities, the federal sector offers a highly diverse and complex range of use cases to innovate around these capabilities and solve real-life business challenges. 

Opportunity for the small business 

More importantly, as the federal agencies explore innovative implementation of emerging technology areas such as Cloud Engineering, Cyber Security, Internet of Things, and Artificial Intelligence, doors are opening for small businesses to offer support services across these specialized areas. 

Per industry experts, the federal IT services landscape will see a significant shift over the next 5 years. The key element to success and long-term viability for small businesses will be their ability to build core expertise in the emerging technology areas and offer innovative implementation capabilities. 

IT as an innovation-enabler 

It is important to keep in mind that Information Technology only serves as an enabler to innovation. Successful innovation starts with a thorough understanding of business process gaps and the ability to implement cost-efficient and durable technological solutions. Since innovation inherently encourages exploration of new technologies and approaches by “pushing the envelope,” it also poses a significantly higher degree of uncertainty compared to a regular project around requirements, tools and technology, and resources. This is a classic example of “positive risk.” Such uncertainties, if managed properly, eventually make way for an innovative solution. 

…uncertainties, if managed properly, eventually make way for an innovative solution. 


Therefore, as the Government prepares to embrace innovation, the key success factor will be for the customer and the vendor community to acclimate their traditional outlook towards risk management and return on investment (ROI). For innovation to be successful, parameters such as Acceptable Risk, Risk Sharing, Innovation Assessment, and Cost of Failure need to be defined and communicated across the stakeholders. This will set the stage for positive collaboration and help build a scalable and resilient culture of innovation.