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Dear New IRS CIO: Admit Disastrous Failures And Outsource All IT

I haven't had a nice high-colonic IRS audit in a while, so what the heck: Of all the deep-seated horrors within the IT organization you now head, this is the killer: "60% of the IRS employees contacted by testers posing as help desk workers were talked into changing their computer passwords over the phone." A new CIO can't fix that -- but wholesale outsourcing will.

As my colleague John Soat pointed out earlier, the IRS has just appointed you, Mr. Art Gonzalez, to a highly challenging role as its new CIO. Your IT-leadership career path is impressive -- Oxford Health Plans, Kmart, Great Western Bank, and Western Airlines -- and we wish you all the best in this challenging new role. As CIOs of all stripes have begun moving rapidly from back-office high priests to front-line business executives, their ability to have an impact on customer service, customer satisfaction, customer retention, customer loyalty, and customer profitability has soared. And since you and your specific employer touch many millions of customers in ways that have been, let us say, not always optimal, your new CIO role gives you an unprecedented opportunity to dramatically affect that customer-centric cycle of service, satisfaction, retention, loyalty, and profitability. But as you must know from the two years you've already spent with the IRS as deputy CIO, it won't be easy.

Maybe you can get control over the runaway IT projects that have cost hundreds of millions while delivering next to nothing. Maybe you can restore some measure of confidence in the IRS's ability to learn from and never allow repeats of the data breaches that have exposed so much confidential financial information. But how in the world are you going to change a culture of information-security apathy that spans a massive and deeply entrenched bureaucracy of 100,000 employees, of whom a projected 60,000 would willingly give away over the phone passwords to deeply confidential data?

Based on your willingness to take this job, Mr. Gonzalez, we all have every reason to believe you are a man of considerable integrity, knowledge, and courage. And I'm sure that of the 7,000 people in your IT organization, most are diligent, industrious, and eager to do the best job they can.

But is this a battle that can be won from within? Or, would your chances of success -- even a little progress -- be improved by a radical change in which you brought in outsiders to run the whole show? In many cases, large outsourcers such as IBM Global Services have assimilated into their own workforces some or all of the IT workers from the client -- perhaps that would provide the opportunity for the best and brightest of your 7,000 IT employees to make a real difference.

One thing is certain: You've got the money. With an annual budget of $2 billion, that's not an issue. Rather, it's a matter of will, of vision, and of decisiveness. Will the IRS choose to continue to bumble along as it has been, treating its customers as inconveniences at best and antagonistic opponents at worst? Or will the IRS take this chance to dramatically overhaul its moribund IT strategy to allow IT to be a driver of customer-centric service, satisfaction, retention, loyalty, and profitability?

All the best to you, sir.

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