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Federal, State CIOs Examine Business Impact Of IT Decisions

Government IT leaders are facing many of the same issues as their counterparts in private industry. Yet there are some significant differences, too.
PHILADELPHIA--The title of the conference held here last week, "Driving Strategic Results Through Technological Innovation," would likely resonate with pretty much any gathering of CIOs.

The attendees here, though, were from state and federal government agencies, including everything from the Food and Drug Administration to Department of Veterans Affairs and various intelligence-related organizations, to states from Michigan to Oregon and those located up and down the East Coast. This week's "Management of Change" conference was hosted by the American Council of Technology (ACT), an organization that brings together government and industry representatives to help share problems and solutions.

The gathering of 425 people included around 150 government IT leaders, with most of the rest of the attendees from vendors and consultancies, according to an ACT spokeswoman.

Much of the show discussion focused on making smart and effective IT investments, whether to share technology services among different federal divisions and agencies, and if so, how much and what exactly should be shared. Lee Halcomb, chief technology officer for the Department of Homeland Security and a conference co-chair, said during his opening remarks that some of the major goals of federal CIOs are "to take a business perspective on IT investment and serve as change agents."

There's already some IT-related sharing going on among federal agencies, from the grant-delivery process to the Department of Agriculture's infrastructure hosting for other agencies. Challenges include how to charge for these shared services and, even more critical, how to make sure that shared IT services reflect the business needs of all involved. After all, the mission of the FBI is very different from that of the Department of Commerce, even as many of the back-office functions - accounting, payroll, and the like - are similar.

Perhaps the major roadblock to taking a shared IT approach was explained by one conference attendee in this way: "Congress gives each agency their marching orders by saying they want us to do these specific things to serve the public. The money is then broken out by different projects, and the business side of each agency needs to report back to Congress, on a project-by-project basis." If IT staffers propose sharing different pieces of projects, the project leaders could be at a loss to explain how the money was handled for that specific thing, and the oversight process would be in jeopardy.

Agencies are just beginning to grapple with those issues.

For his part, Charles Rossotti, commissioner of the Internal Revenue Service from 1997 through 2002, spoke here about lessons learned during his time of turmoil at the IRS. The problem he faced, in a nutshell, was "antiquated technology married to obsolesecent business practices," he said. Previous IRS modernization efforts had failed, leading to congressional hearings and the call for Rossotti, who had an IT consulting background but no training as a tax accountant, to take the helm.

The crisis ultimately helped shake things up, Rossotti said, but he urged attendees to remember that "we were out to change the way the IRS worked, and not just change the technology. Business change has to lead the way." In fact, he said, he fought to delay the start of another major IT revamp until he had time to reorganize the business side of the agency. The idea was not to graft new technology onto "43 business units, each doing things in a different way."

Although the IRS has more "opportunities to use technology to effect business change," Rossotti said, there are some hallmarks of success. In 2004, around half of all taxpayers filed their returns electronically, reducing processing time and cutting down on human error. Also, the agency has begun the process of moving its taxpayer files onto a new database, has shuttered some processing centers and has started moving more resources into pursuit of more "serious tax abusers," he explained.

Before things began to turn around, though, the IRS' systems had gotten so antiquated that the agency's very viability was threatened. "If we were in the private sector, we would have gone out of business or would have been acquired by another company," Rosssotti said. "We didn't have that option " but it was extraordinarily risky and expensive to update the systems" at that point.

Rossotti urged federal and state IT managers not to let their systems become that degraded.

Another piece of advice had to do with the logistics of a big IT effort. A large part of the CIO's job is to bring together the IT and business folks, as well as the integrators and hardware and software vendors. "One of the hardest things to do " but one of the most important " is to make sure their interests are all aligned with the key objectives of your project. You need to make sure they have the right incentives to all drive toward the same goal; if one piece is succeeding but the overall project is not, you're in trouble," he said.

Leadership skills and culture also play a role. "How well and willing is the organization to face up to bad news? We had to encourage a process of acknowledging when things didn't go well." Rossotti suggested that the IT leaders in the audience make the effort to help their groups respond quickly to problems, make mid-course corrections and then "get on with it."

During his presentation, Rossotti had the opportunity to practice some of what he was preaching. At one point, another voice " besides his own—could be heard throughout the auditorium, saying "testing, testing" repeatedly. After this went on for over a minute, Rossotti, who had just stood, smiling and tapping his fingers against the podium, finally said, "It's fortunate that I'm really used to having technology that goes awry." After a few more moments, the problem was fixed and Rossotti went on with his speech.

Rossotti's talk did bring to light some of the differences between being a CIO in a government versus a private setting: dealing with Congress and the press, having every move analyzed and criticized and, in general, operating in the limelight. Although IT execs in private companies are accountable to their company's governing structures and/or shareholders, they rarely have to deal with this level of public scrutiny.

Then, too, the budgeting process can be problematic to say the least. For example, in the past few weeks, the House Appropriations Committee significantly cut the Veteran Administration's requested budget increase, in large part because the committee didn't find enough justification for a new IT project called HealtheVet. This is a new Web-based system aimed to replace the existing electronic medical records platform now in place at VA hospitals.

Similarly, FBI Director Robert Mueller told Congress this week that he still doesn't know how much it will cost to complete the bureau's computer overhaul. The bureau's Sentinel system will be going out to bid soon, and should be done by 2008.

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