Unbundling the Enterprise: How API Strategies Can Transform the Public Sector

The Public Sector’s Unique Challenge

Government agencies face a fundamental problem: Imagine if you couldn’t sell your old car when buying a new one, but instead had to maintain every vehicle you (and your ancestors) ever owned in perfect working condition. This is essentially the reality for public sector CIOs, who inherit decades of legacy systems that must be maintained alongside new initiatives. “Unbundling and the Public Sector,” authored by Stephen Fishman and Matt McLarty from Boomi, proposes that the same API-based strategies transforming private enterprises can revolutionize government institutions—despite significant structural obstacles.

Unlike private businesses that can retire outdated systems and redirect resources, government institutions often find themselves in a downward spiral. They allocate approximately 80% of IT budgets to maintaining legacy systems, leaving minimal resources for innovation. Each new administration brings different priorities without the ability to sunset previous programs, creating an unsustainable accumulation of technical debt.

Why Traditional Modernization Fails

The paper identifies several structural barriers that hinder transformation efforts:

1. Mission vs. Profit Mismatch: While private companies can justify investments through financial ROI, government agencies must connect technology improvements to mission outcomes that may take years to materialize.
2. Budget Recovery Disincentives: When a CIO successfully modernizes a system to reduce costs, the savings are typically removed from their budget rather than reinvested in further improvements.
3. Procurement Limitations: Government purchasing processes often mirror waterfall development methods, resulting in systems that are obsolete by the time they’re deployed.
4. Legislative Constraints: Many processes are mandated by law, limiting flexibility and innovation.

The Power of API-Based Optionality

Despite these challenges, Fishman and McLarty argue that “unbundling”—the practice of breaking down monolithic systems into discrete, reusable capabilities through APIs—is even more crucial for government agencies than for private companies.

This approach creates what they call “optionality,” the ability to rapidly reconfigure existing capabilities to meet new requirements without building entire systems from scratch. The authors summarize this philosophy with a simple but powerful insight: “preparation beats prediction.”

While their book Unbundling the Enterprise: APIs, Optionality, and the Science of Happy Accidents focuses on how this approach drives profit in the private sector, this paper extends those concepts to mission-driven organizations. The authors propose that API strategies in government should prioritize improving mission effectiveness, reducing time-to-value for citizen services, and creating ecosystems of reusable components.

Finding Hope Through Practical Experience

The paper shares insights from Mia Jordan, former CIO of several divisions within the DOE and USDA, who provides a refreshingly optimistic perspective. Despite the constraints, Jordan highlights numerous success stories, including healthcare.gov’s recovery and the Centers for Medicare and Medicaid Services’ cloud migration initiatives.

Jordan’s approach balances pragmatism with persistent optimism, demonstrating that transformational change is possible within government institutions. Her experience reveals that successful public sector modernization requires:

1. Executive Alignment: Connecting API initiatives to existing executive orders or administration priorities around customer experience and government efficiency.
2. Mission Connection: Making explicit connections between API strategies and mission outcomes, helping stakeholders understand how unbundling supports their core objectives.
3. Financial Partnership: Creating agreements with financial leaders to reinvest operational savings into further modernization rather than surrendering them to budget cuts.
4. Distributed Capability: Embedding API expertise throughout the organization rather than centralizing it, ensuring that modernization efforts remain connected to mission-critical work.

The authors cite Bobby Saxon, former CIO of the Centers for Medicare and Medicaid Services, as a pioneer who successfully negotiated arrangements to reinvest efficiency gains into further modernization—creating a flywheel effect rather than a one-time improvement.

The Path Forward

The paper concludes that the fundamental challenge for public sector organizations isn’t technological but financial. By aligning API and optionality initiatives with financial value rather than pursuing piecemeal technology-centered approaches, government leaders can create sustainable transformation.

Fishman and McLarty emphasize that public sector institutions actually have more to gain from unbundling than their private counterparts, precisely because they face greater constraints. The ability to adapt quickly with limited resources makes API-based optionality an essential strategy for agencies drowning in technical debt and bureaucratic restrictions.

They offer a vision where government systems can evolve continuously rather than requiring massive, disruptive replacements every decade—potentially saving billions in taxpayer dollars while delivering better citizen experiences.

Beyond the Technology

Perhaps most importantly, the authors argue that successful transformation requires leadership that can maintain optimism while confronting brutal realities. Jordan exemplifies this balance, acknowledging the enormous challenges while maintaining unwavering faith in public servants’ ability to overcome them.

The authors make a compelling case that despite political polarization, API-based efficiency is an area where bipartisan agreement is possible. Both administrations have promoted government modernization, even if through different mechanisms, suggesting that these approaches can survive political transitions.

Why This Paper Matters

For anyone leading technology initiatives in government, nonprofit, or mission-driven organizations, “Unbundling and the Public Sector” offers valuable insights that go beyond typical modernization advice. By adapting proven private sector strategies to public contexts, leaders can break the cycle of escalating costs and diminishing returns.

The paper challenges the resigned acceptance that government technology must be slow, expensive, and ineffective. Instead, it presents practical strategies based on real experiences from public sector leaders who have successfully navigated similar challenges.

Rather than proposing wholesale reorganization or massive funding increases, the authors advocate for incremental, strategic changes to how technology investments are approached, evaluated, and governed. This makes their recommendations particularly valuable in resource-constrained environments.

The Bigger Picture

Beyond its practical advice, the paper contributes to an important conversation about how digital government services can evolve to meet citizens’ expectations. As private sector digital experiences continuously improve, the gap between what people experience as consumers versus citizens continues to widen.

Fishman and McLarty’s approach offers a pathway to close this gap without requiring unrealistic budget increases or complete organizational overhauls. By focusing on creating reusable capabilities that can be rapidly reconfigured, government agencies can become more responsive to citizen needs even as those needs evolve.

The full paper, available in the Spring 2025 issue of the Enterprise Technology Leadership Journal from IT Revolution, provides additional details on implementation strategies, governance approaches, and specific case studies that will be valuable to any public sector technology leader looking to drive meaningful change in their organization.

- About The Authors

Leah Brown

Managing Editor at IT Revolution working on publishing books and guidance papers for the modern business leader. I also oversee the production of the IT Revolution blog, combining the best of responsible, human-centered content with the assistance of AI tools.

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