Economic stimulus package's stringent reporting requirements make big vendors see opportunity for profit.
With demand for hardware and software stalled by the economic recession, a growing number of technology vendors are hoping the $787 billion American Recovery and Reinvestment Act will provide them with some economic stimulus of their own.
Tough reporting and tracking requirements for stimulus spending that are coming little by little from the federal Office of Management and Budget (OMB) are spurring new software tools from big vendors like Microsoft, SAP and others that are tailored specifically for the management of stimulus projects.
Though it's not surprising that software companies would try to capitalize upon the Recovery Act to offer new products, the quick pace of their development has been unusual. And vendors and government officials agree that quick deployments are vital in this case. The first deadline set by the OMB for stimulus reporting is Oct. 10.
"These dollars are going to be watched closer than any federal dollar that has ever come out of the Treasury," said Dave Quam, the director of federal relations for the National Governors Association. "We're talking Congress, reporters, states, locals -- everyone is going to be watching this money. You might be able to know exactly where your tax dollar went at the end of the day. That's pretty remarkable considering where we are right now."
But challenges are ahead. States will be asked to do more than they've ever done before, Quam said. And the same burden of transparency and detailed recordkeeping has also been placed upon local governments. That's why software designed specifically for the stimulus is needed, vendors argue.
States received a bit of financial relief on May 11 when OMB Director Peter Orszag sent a memo to agency and department heads that permitted 0.5 percent of total Recovery Act funds received to be recouped on administrative costs. This would presumably include the deployment of software to track stimulus dollars.
Governments find themselves with a choice: purchase a solution that's built specifically for the stimulus, or forge ahead with enterprise software they already own.
Rich Robinson, the chief operating officer of San Francisco's Department of Technology, said when he read the Federal Segmented Architecture Methodology and the first draft of the stimulus package reporting requirements, he quickly realized that it would take from 18 to 24 months for his IT department to build an in-house reporting application -- much too long.
"What I initially saw was a significant gap," Robinson said. "The reason there was a gap was because the local governments -- being a city or county, you have lots of different agencies: public health, public transportation, law enforcement -- all to some extent do their own thing on project management and financial accounting."
Robinson said he knew that the 65 departments in the consolidated city-county government would have to be on the same page for stimulus reporting, because the hefty sum of at least $500 million is estimated to be awarded to San Francisco. He decided the best choice was to turn to a vendor for a solution, Microsoft's Stimulus 360. It has been deployed in San Francisco's controller's office, the mayor's office, and it soon will be used by the auditor's office.
Robinson believes San Francisco's stimulus projects will be under even more scrutiny than elsewhere because of the city's large community of activists. Therefore, he said it was important to get out in front of the reporting issue. But he said some of his peers in other large cities are probably falling behind.
"Chicago seems to be understanding, and Washington, D.C., and the state
of Tennessee. I think there are a couple of others. I think San Francisco and those cities are ahead in understanding the problem is fairly significant. What we don't want to happen, and I think the Obama administration is kind of showing its cards a little bit in saying, 'We're going to crack down if you can't meet the needs.'"
Microsoft's Stimulus 360 solution is built atop existing software that many governments already have -- Office, SharePoint, Microsoft Dynamics -- and may also include SQL Server, Virtual Earth and BizTalk. It's a collaborative workspace remixed into a brand-new intellectual property.
"There's an enormous amount of political and financial risk -- just the very nature of shoving this much money this quickly into the system," said Stuart McKee, the national technology officer of U.S. public sector for Microsoft. He is also former CIO of Washington state. "Our government systems have a hard time coping with that. This solution is intended to remove some of that friction to ultimately get some dollars through the system, not just faster but more effectively to get them to where they're needed, and yet alleviate some of the financial and political risk of a lot of money moving quickly."
According to McKee, here are the kinds of capabilities Stimulus 360 would give a government agency that's seeking stimulus money to do a broadband project:
It's imperative that governments do a good job managing data on the way in, McKee said, because when it's time to report to OMB in October, they might otherwise have a bunch of manual processes, and people will have to create data to report with.
"Unfortunately what's happening now is that most of these organizations are just overwhelmed with the scale of what's happening -- dollars are moving, processes are happening, and they're not capturing information during those processes," he said.
Microsoft's big selling point for Stimulus 360 is that it's built with software parts that many organizations already own, so the only additional cost is a modest licensing fee. It could be an attractive option because many states and municipalities are facing budget shortfalls.
But Microsoft is by no means the lone option. SAP announced this week a solution for stimulus accounting and reporting based on its Business Objects portfolio. The IBM Recovery Act Performance solution -- which comes in two versions, one for the feds and the other for states and locals -- provides a Web-based interface and dashboard powered by IBM Cognos. And there are other choices.
For example, Acumen Solutions' START program (Stimulus Tracking and Recipient Transparency) is built on the increasingly popular Salesforce.com platform, so it's a hosted solution. Greg Sanders, senior manager of public-sector services for Acumen Solutions, said the application's advantage is that because it's a cloud solution, it can be easily updatable with the most recent grant
information released by federal agencies, as well as reporting and accounting regulations from the OMB.
"We watch OMB, and we make sure that our application interfaces with OMB properly so that the state and local governments ... don't have to worry about that. They just get the data into the application, we keep the application lined up with OMB and keep it running for them," Sanders said.
A hosted solution is also advantageous, he said, because the OMB is in the process of designing the Web site that will take in all the reported data and then funnel it into the public-facing Recovery.gov. When those projects are ironed out, the START program will be updated so that an agency's data is input in the correct format, Sanders said.
The solution will also draw data back from the OMB and other federal agencies, which is particularly important for states and local governments, Sanders said. For example, he said that if Nevada wanted a full picture of all the state's stimulus-related projects, officials there could query the OMB database for all projects in Nevada regardless of who's funding or running them. "Not only does it report it to OMB, but it gives them an application that they can report on, run dashboards, run analytics so they can begin to know everything that's going on in their state," Sanders explained.