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Connecting Financial Management Standards and Innovation

Compared to topics like next generation technologies and other innovations, a discussion on standards is not likely to excite a crowd. But if you take a closer look at the history of innovation, standards are not a hindrance - they are a strategic instrument that help make innovation truly impactful.

Let's take a look into the creation of the worldwide web. When Tim Berners-Lee developed the web, he was trying to simply link documents in a sharable format and had little need for standardization.

As the web grew, so did the ideas about how to use the web. As browser companies and developers started to support different presentation ideas and visions, it became impossible to build a website that would display equally well in all versions of all browsers. Enter standardization.

To increase usability and the interaction of web-related products, several standards were adopted (including HTML, XML, and CSS). Standards allow every web page to communicate across browsers and platforms. In other words, the web page works regardless of your browser and whether you are on your phone, tablet, desktop or other device.

These standards allow developers to generate something original, innovative, and effective on a large market scale. What is relevant is that these standards:

  • Cut development and maintenance time
  • Allow for more interoperability and compatibility, and
  • Create a common knowledge base.

To get similar benefits in the federal financial management (FM) arena, FIT is promoting financial management standards.

Like the web example, when the government started using FM systems there wasn't much standardization. Each agency was responsible for its own system and developed its own requirements for their system. And just like in the web example, as the scale and number of system versions in use grew, cost and compatibility issues arose. FM standardization was needed.

FIT is engaged in defining flexible, outcome-oriented standards that will promote innovation. We and our partner agencies in the Financial Management Standards Committee FM work group are conducting a project to define the common data elements found in federal Financial Management systems.

By defining these elements, we're creating a common knowledge base to allow for improved interoperability with connecting systems (for example, travel and procurement). This will pave the way for new FM features, more effective products, and FM innovation to impact federal agencies on a larger scale.

Do you want to learn more about the interplay of FM innovations and standards? Contact us at FIT@fiscal.treasury.gov and look for more updates at this location as FM standards and innovation develop!

Quick References

OMB 16-11, Improving Administrative Functions Through Shared Services

Circular No. A-123 Appendix D, Compliance with the Federal Financial Management Improvement Act of l996

OMB M 13-08, Improving Financial Systems Through Shared Services

OMB M 10-26, Immediate Review of Financial Systems IT Projects

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