How federal agencies can drive efficiency through AI and modernization
3 practical strategies for improving service delivery, accelerating outcomes, and scaling impact.
Federal agencies have long recognized the need to modernize legacy systems to improve efficiency and deliver smarter, more cost-effective services to the American public. What’s different today is the scale, speed, and complexity of that challenge and the tools available to meet it.
Advances in technology, combined with pressure to improve efficiency, create an opportunity to double down on digital modernization efforts that deliver greater value to taxpayers and citizens. Federal CIOs and agency leaders can accelerate their efficiency gains by adopting three proven strategies.
3 strategies to help agencies modernize securely and effectively
These three strategies can help agencies modernize while protecting the security and reliability of essential services. They draw on lessons from ICF’s enterprise modernization work.
1. Build a cadre of AI champions to scale value
AI empowers agencies to accelerate and improve the delivery of government services. By integrating AI into programs and initiatives, agency leaders can significantly boost employee productivity and mission effectiveness. For example, we built an AI solution for FDA that helped the agency streamline the drug label safety review process—allowing reviewers to identify potential issues quickly and paving the way for improved patient safety and medication use.
But AI can only achieve its potential when it is given the contextual knowledge that those closest to the mission possess. This is why it’s essential to get program and mission specialists working with technology in secure environments. Together, they can identify applications that deliver mission value.
2. Empower cross-functional teams to deliver big impact
The shift to Agile software development led to the creation of fusion teams: small, cross-functional teams that blend technology and business domain expertise. Engaging fusion teams in a rapid prototyping approach enables agencies to deliver valuable functionality with greater speed and efficiency.
What does this look like in practice? We partnered with CMS to modernize its laboratory certification process, converting a legacy paper-based certification process to a digital one. Agency leaders assembled and authorized a fusion team that could make coordinated decisions across business goals, user needs, and technical requirements. The approach helped CMS move the modernization effort forward more quickly.
3. Collaborate across data silos to unlock insights
Departments and agencies must collaborate across datasets to maximize resource sharing and improve efficiency.
By embracing modern data standards such as Fast Healthcare Interoperability Resources (FHIR), agencies can break down silos and set the stage for improved data access and sharing. In our work with federal clients, we have seen the impact of data harmonization on program efficiency and mission outcomes, as well as the power of real-time data sharing APIs to improve public health emergency response.
Data sharing streamlines reporting, allowing hospitals to focus on patients while agencies access the data they need, when they need it.
Looking ahead: Sustaining and scaling impact
Digital modernization and AI offer the promise of smarter, faster, and more efficient government service delivery. But to achieve long-term, sustainable impact that truly moves the needle, agencies must shift from one-off projects and pilots to an enterprise-wide view of their modernization efforts. Here’s what that can look like in practice:
People: Embrace visionary leadership
If federal leaders could do one thing to accelerate AI implementation, they’d choose:
- 21%: Governance/Guidance/Ethics and legal clarity
- 17%: Streamline/Accelerate procurement and acquisitions
- 15% (tie): Comprehensive training and workforce development/AI literacy
- 15% (tie): Data access and quality/Standardization/Reduce data silos and fragmentation
Source: ICF and GovExec Intelligence
Transformative leaders bring transformative results. Federal agency leaders should focus on using advanced technology to deliver better citizen experiences and accelerate time-to-value. They must take an intentional approach to modernization that prioritizes innovation and outcome improvement.
That approach requires governance that protects security and reliability without unnecessarily slowing innovation. Policies and regulations remain essential to the safe and reliable delivery of government services, but technology can help agencies meet those requirements more efficiently. For example, automated tools for managing software bills of materials (SBOMs), penetration testing, and security scans can help teams maintain compliance while accelerating delivery.
In many cases, the challenge lies not in the policies and regulations themselves, but in how agencies understand, interpret, and apply them. Existing laws and procurement strategies offer more flexibility than many assume, but it takes vision and leadership to explore the art of the possible. For example, cloud technologies employ automated mechanisms instead of manual efforts. This has transformed the authority to operate (ATO) process by introducing automated security controls, continuous monitoring, and active cyber defense as part of a modern DevSecOps process. The result is the continuous ATO (cATO), a modern authorization process for organizations that want to move faster.
Process: Measure what matters
Defining success in digital modernization goes beyond cost savings to encompass mission impact, service quality, and agility. Agencies should use existing operational metrics, leverage real-time data analytics, and introduce objectives and key results (OKRs) to chart progress against desired outcomes.
The key is focusing on outcome-oriented measures that directly relate to action and efficiency. Every measure comes at a cost—there's a cost to gather it, a cost to report on it, and a cost to evaluate it. Instead of extensive measurement frameworks, agencies should use metrics that support timely decisions and measurable improvements, continually assessing performance against priority mission outcomes without getting overwhelmed by an unmanageable volume of data. This pragmatic approach ensures that measurement is a tool for action rather than an end in itself, allowing agencies to make informed decisions that lead to tangible results.
Technology: Invest in platforms and cloud solutions
Investments in cloud technologies and modern platforms are crucial for meeting efficiency objectives. These platforms provide the infrastructure for seamless data integration, real-time analytics, and enhanced collaboration, driving significant efficiencies—such as the 86% reduction in processing time we helped the Department of Commerce achieve through the modernization of a legacy correspondence case management solution.
Federal agencies spend approximately 80% of annual federal IT funding operating and maintaining existing systems, including legacy technology. The U.S. Government Accountability Office (GAO) has documented this pattern across multiple reports since 2019. By investing in modern platforms and cloud-based technologies, agencies can reduce maintenance burdens, lower long-term costs, and redirect resources toward mission delivery and service improvement.
Efficiency isn’t a new federal priority, but today’s leaders have an opportunity to drive it in ways that are smarter, more sustainable, and better aligned with mission success. The key is not only adopting new technologies but also ensuring solutions are implemented in a way that creates lasting impact.