SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS …

1 SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS . SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS . Table of Contents Overview Why must agencies submit data on their IT portfolios? What IT portfolio data are agencies required to submit? To which agencies do these data submission requirements apply? Where can agencies find additional INFORMATION on submission requirements? What are the submission requirements for Electronic Government and Line of Business Initiatives? Summary of Changes Instructs agencies to provide more granular IT investment data through alignment to the TECHNOLOGY Business Management (TBM) Solutions Layer with a phased implementation requirement ( SECTION ). Adds TECHNOLOGY Modernization Fund (TMF) investment reporting ( SECTION ). Adds requirements for the base case analysis document ( SECTION ). Updates the Electronic Government (E-Gov) and Line-of-Business (LoB) initiatives table and removes entry for Hiring LoB ( ).

2 Overview OMB Circular No. A 130, Managing INFORMATION as a Strategic Resource, requires agencies to establish a comprehensive approach to the acquisition and management of INFORMATION resources. That approach should include effective IT planning, IT budgeting, and IT investment management processes. Agencies must submit INFORMATION generated by those processes to OMB as part of budget development. That INFORMATION will be made public via the Federal IT Dashboard, with exceptions made for procurement- sensitive INFORMATION and data related to national security systems. This SECTION provides general guidance related to reporting on IT INVESTMENTS along with IT budget and spending analysis. SECTION provides guidance on INFORMATION to be supplied in budget requests that include IT. Agencies should continue to focus on strengthening IT portfolio management by assessing the effectiveness of current IT management practices and taking opportunities to improve IT resource allocations.

3 To maximize the effectiveness of discussions about the cost and value of IT, agency leaders must have access to authoritative data. Building on the successful implementation of the collection of agency IT Cost Pool and Tower data, agencies should begin to plan for the reporting of IT investment data at the Solutions level of the TECHNOLOGY Business Management (TBM) taxonomy Because OMB recognizes that not all agencies are currently able to provide Solution-level data, implementation of these reporting requirements will be phased in over a three-year period. Agencies OMB Circular No. A-11 (2022) Page 1 of SECTION 55. SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS . should continue to report IT Cost Pools and Towers data as they work toward reporting Solutions-level data. Beginning with FY 2025 budget submissions, agencies will report a subset of Solutions-level data that maps to their IT services, as detailed on the Federal Integrated Business Framework (FIBF) website.

4 Agencies will complete their reporting of Solutions-level data the following year with the FY 2026. budget submission. Why must agencies submit data on their IT portfolios? The budget development process includes analysis, tracking, and evaluation of the risks and results of agencies' major capital INVESTMENTS in INFORMATION systems. 1 Agencies must submit their IT investment budget data to OMB using the TBM Version taxonomy, which enables agencies to track their IT. budgets in smaller cost categories provided by the TBM framework. Agencies must also analyze their IT. budget request and their IT spending. The proposed IT budget should be presented and assessed in a manner consistent with the agency's overall budget request (see SECTION ), and should be informed both by historical spending levels and by any plans for future expenditures required to meet IT.

5 Performance objectives. The agency's analysis of its IT spending should align with the prior year's estimated or enacted budget and the estimated or enacted budget for the current year. As described further in this SECTION , the IT portfolio data submission requirements that agencies must meet vary depending upon the type of investment designation assigned to each IT expenditure. More detailed technical specifications for the submission of required data are publicly available in the 2024. document on the Federal IT Dashboard. What IT portfolio data are agencies required to submit? As part of the budget cycle, agencies must submit to OMB various pieces of IT budget and management INFORMATION on their portfolio of IT INVESTMENTS . As used in this context, the term IT investment has the meaning given in SECTION 10 of OMB Circular No.

6 A 130. The required data submissions must include reports on the management and performance of individual IT. INVESTMENTS within the agency's portfolio, as well as analysis of the agency's planned TECHNOLOGY spending for the upcoming budget year. Agencies are required to designate each of their INVESTMENTS in IT. resources as either major, non-major, or standard. An IT investment is major if it is so designated by either the agency responsible for the investment or by OMB. When deciding whether a given investment qualifies as major, agencies should consider any relevant factors, including the following: o Whether the investment requires special management attention because of its importance to an agency's mission or its implications for agency programs or policies;. o Whether the investment was designated as a major IT investment in the previous budget submission.

7 O Whether the investment has a high annual cost ( , the total requested amount exceeds $10 million) or high projected total lifecycle cost;. 1 See 40 11302. Page 2 of SECTION 55 OMB Circular No. A-11 (2022). SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS . o Whether the agency CIO has designated the investment as a high risk;. o Whether the investment involves a Tier I High Value Asset;. o Whether the investment has a high-visibility profile with agency executive leadership, congressional leadership, and/or the public. For each major IT investment , agencies are required to provide OMB with a supporting business case analysis. That business case analysis must document, at a minimum: o Project-level planned, projected, and actual costs, as well as start and end dates of projected life-cycle costs, including development, modernization, and enhancement costs, as well as operations and maintenance costs (Note: Activity-level cost and schedule reporting is no longer required).

8 O Anticipated benefits of the investment to the agency's mission;. o The current performance of the investment in meeting its business or mission purpose;. o The extent to which any benefits or costs are expected to be shared by other Federal agencies or State or local governments;. o The use of an incremental or non-incremental development methodology;. o An assessment of investment risks, including cost, schedule, and performance risks;. o A discussion of cybersecurity risks that may affect investment performance; and o The risk rating assigned by the agency CIO. Business case analysis is only required for major IT INVESTMENTS and will be submitted per the Federal IT Dashboard's application programming interface (API) schema. Non-major IT INVESTMENTS are those that are not designated major by the agency or OMB, or are designated as a standard IT investment .

9 Standard IT INVESTMENTS are expenditures of IT resources that include, but are not limited to, commonly used enterprise-wide INFORMATION systems and services, computing infrastructure, and other TECHNOLOGY services and applications that are commonly used across agencies. Standard IT INVESTMENTS may also include those indirect, general, and administrative costs that are not included in major or non-major IT. investment reports, but do support the agency's IT and INFORMATION systems. o Each standard IT investment may be classified into one of the following categories: IT. Security and Compliance, IT Management, Network, Data Center and Cloud, End User, Output, Application, Delivery, and Platform. 2. o Business case analysis is not required for IT INVESTMENTS designated as standard IT. INVESTMENTS .. 2 These categories are drawn from the types of IT resources (towers) delineated by the TBM Council in TBM Taxonomy Version (Dec.)

10 2020). OMB Circular No. A-11 (2022) Page 3 of SECTION 55. SECTION 55 INFORMATION TECHNOLOGY INVESTMENTS . Regardless of investment type, IT INVESTMENTS receiving TECHNOLOGY Modernization Fund (TMF). funding must report all IT projects. Agencies are required to update their IT portfolio management and budget data at least twice annually. The submission of IT portfolio management and budget data concludes with an affirmation by an appropriate level of agency leadership that they have reviewed and approve of the agency data being submitted. Agency personnel with questions about the IT portfolio data requirements outlined here may consult with the appropriate OMB Desk Officer for additional assistance. To which agencies do these data submission requirements apply? The following agencies are required to submit their IT portfolio management and budget data to OMB.