MGT Act funds tech spending for IT cost-cutting initiatives envisioned by MEGABYTE – and will help Federal agencies slash software spend by 30% or almost $3 Billion
Itasca, IL - May 1, 2017 - On April 28, 2017, Representatives Will Hurd (R-TX), Robin Kelly (D-IL) and Gerry Connolly (D-VA) introduced the Modernizing Government Technology Act of 2017 (the MGT Act) which provides funding for IT modernization projects aimed at efficiency and cost savings. Flexera believes the MGT Act gives teeth to other cost-cutting legislation, such as the Making Electronic Government Accountable by Yielding Tangible Efficiencies law ( MEGABYTE ), which mandates that federal agencies develop a plan to eliminate waste in Federal software spend -- but does not fund the investment necessary to accomplish its objective.
"Congress has been visionary through passage of laws like MEGABYTE in acknowledging opportunities for huge savings in Federal IT spend. But without funds - agencies can't comply with MEGABYTE and realize those savings," said Steve Schmidt, Vice President of Corporate Development at Software Asset Management expert, Flexera. "MGT Act does just that - it funds IT projects envisioned by MEGABYTE that will reduce waste and increase efficiency and security. We congratulate Representatives Hurd, Connolly and Kelly for their efforts and wish them success as the bill works its way through the legislative process."
The Federal government spends $9 billion annually on software. Thirty percent  of that spend, or almost $3 billion, could be saved by MEGABYTE compliance. MEGABYTE requires Federal agencies to enact common-sense software license management best practices - people, processes and technology - widely used already in the private sector. However, because MEGABYTE doesn't fund implementation of those best practices, many agencies are struggling to comply - which means they can't take advantage of the savings that MEGABYTE enables.
Software is one of the most complicated IT assets to procure, manage and optimize - and therefore one of the most wasteful pools of Federal IT spend. This is due to the complex contracts governing its usage, the difficulty in tracking contract compliance, and the complexity involved in ensuring agencies buy only the software they need and use what they have. The MGT Act, H.R. 2227, prioritizes funding modernization projects designed to fuel efficiency and cost savings, like eliminating waste and duplication.
Implementing well-established and proven Software Asset Management best practices will empower agencies to eliminate software spend waste. However, it does require up-front investment that will yield significant and ongoing ROI. By providing a vehicle for Software Asset Management investment that MEGABYTE envisions, the MGT Act will enable billions of dollars in savings annually on Federal software spend.
1 Source: Gartner: Toolkit: Evaluate Software Asset Management Savings With SAM Tool Justification Calculator, Hank Marquis, Gary Spivak, May 12, 2016 "Gartner clients that improve their SAM license optimization capabilities typically report up to 30% software spending reductions within one year."
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