Analysis Paralysis of Alternatives

February 27, 2021
Alex, I’ll take Federal IT Acquisitions for $400
“The maximum number of IT solution combinations that a federal agency could possibly evaluate during planning phases.”
“What is 5,040?”
“Correct”

First published under the Bush administration in 2008, OMB Circular A-11 directs agencies to perform an Analysis of Alternatives (AoA) when developing their budgets as part of the planning phase for significant new IT investments.  Understanding the chosen solution against alternatives helps to justify that effort and costs are expended as efficiently as possible.  Typically, these alternatives fit into one of seven categories set preferentially as:

1. Status quo – basically, don’t do anything

2. Existing licensed software – reuse licenses or buy incremental

3. Existing custom solution – add new functionality to what you already have

4. Federal shared service – reuse a cross-agency capability (payroll is a great example)

5. Government Off the Shelf Software (GOTS) – reuse code that was built elsewhere in the government

6. New licensed software – evaluate and buy new

7. New custom solution – build from scratch

Guidance requires agencies to compare at least three alternatives against the status quo as part of their budget submission process.  If it was only that easy.  Often, IT solutions can be a hybrid of alternatives and within each alternative there can be a number of options.  Basic statistics tells us that the total number of combinations given a set of 7 items, will yield 5,040.  Adding in multiple variables within each alternative further increment that number.

Clearly, it’s not feasible to evaluate so many combinations and, frankly beyond three or four, the capacity for teams to handle the volume of information to effectively compare alternatives falls off dramatically leading to analysis paralysis.  In my capacity as a consultant in the federal space, I’ve also seen the struggle agencies have to properly fund and allocate the resources to fully perform these activities to begin with.  

So how can agencies meet this well-meaning directive without delaying solutions by months or years?

The license layaway plan

Popularized during the Great Depression as a way for consumers to reserve products they desperately needed but were not financially equipped to fully purchase at the time, layaways ensured the item was available when payment was completed.  Perhaps not one hundred percent analogous but acquiring an application development platform can be thought of in similar terms.  If an agency determines that IT solution requirements can be met by a subset of the platform’s capabilities but structure the contract to reserve the option to acquire new functionality later, then the complexity of future alternative analyses drops significantly.  This approach basically changes a future analysis of new software into analysis of existing software.  This can even allow agencies to avoid the analysis of alternatives altogether because otherwise costly projects to build new functionality can be recast as maintenance by simply turning existing platform features on.

AoA-as-a-Service

The agency’s enterprise architecture group can further reduce the burden of analysis of alternatives by performing it once for the platform as a cross-enterprise solution allowing future initiatives to ‘inherit’ the work already expended.  These new efforts are then only on the hook for evaluating the incremental changes that they are introducing into the application, infrastructure, process or policy landscape.  With this approach a project team can assess the fit and function of platforms and choose to moved forward expeditiously.  The alternatives may still need to be documented for the sake of compliance, but they can be decoupled from the choice of using the platform allowing for faster starts.  The side benefit of analyzing the alternatives is that they can be compared to the actual cost and value delivered of the platform as a way to continuously justify their usage.

About Digital Forge

Digital Forge, LLC advances digital design and transformation of enterprises into world-class, high performing organizations ready to take on the challenges associated with an ever-accelerating emergence of new technologies and increasingly hard to meet customer expectations.  Our integrated digital design and transformation framework encompasses a holistic digital strategy combined with low-code/no-code application platforms and state-of-the-art networking capabilities to ensure your business outperforms competitors and pleases customers for years to come.  With decades of experience in strategy, management and IT consulting experience, our team of highly skilled practitioners partners with clients to achieve new levels of success.

About the author

Chip Taliaferro is the Founder and Chief Digital Guy at Digital Forge.  You can connect with him on LinkedIn or directly via email at chip.taliaferro@digital-forge.io