Agencies chip away at BSMs

A March 16 report from the Government Accountability Office had a familiar ring to it: .GAO had for years critiqued the efforts of federal agencies to modernize their business processes and the IT that drives them, often saving its sharpest words for the IRS and Defense Department.This time, it highlighted a continuing lack of discipline on processes including requirements management, testing, data conversion, system interfaces, and risk and project management. It also called for improvements in enterprise architecture, investment management and security.In another March report, GAO, while congratulating the IRS on recent progress, chided the agency for mishandling the requirements phase, in which the business processes to be automated are described.In recent years, GAO has laid blame on some agencies’ faulty management of IT contractors and said poor leadership and planning at DOD led to a stovepiped supply chain system that left soldiers in Iraq short of vehicles, tires, Meals Ready-to-Eat and even paychecks.Why are so many agencies having trouble, and what is the solution? Agency and industry experts offer a variety of reasons.It’s no secret that many of the most expensive, over-schedule projects involve enterprise resource planning systems from vendors such as CGI-AMS of Fairfax, Va., Oracle Corp. and SAP America Inc. of Newtown Square, Pa.ERP systems are extremely complex programs that typically cover core accounting functions, such as general ledger, accounts payable and invoicing, but often include closely related mission-critical functions, such as logistics and procurement. Many observers of the ERP industry say such projects typically are led by IT departments, which runs counter not simply to current conventional wisdom but to actual evidence showing that successful projects tend to be led by the business side of the house.Joseph Kehoe, vice president of the federal consulting practice at Computer Sciences Corp., which is involved in several modernization efforts including centralizing data operations at NASA and a SAP installation for the Army’s logistics program, said agencies must perform gap analyses to see how the software’s functions—which are typically geared to the private sector—match with public sector needs.System integrators such as CSC are often called in to perform such analyses, then assist agencies with the difficult task of changing their business processes.Perhaps the most common cause of modernization setbacks is almost too obvious to mention in jaded IT circles, yet is nonetheless the aim of recent business-alignment mandates from the Office of Management and Budget: failure to make technology serve business processes.“You have to design with a basic understanding of how you do business today,” said Gary Ambrose, vice president and client director of IBM Federal, which is involved in numerous modernization projects at DOD and other agencies. “Modernization is not doing something new—it’s doing things in a new way.”Inadequate and inconsistent funding of projects is another culprit, according to Tish Tucker, a veteran of modernizations at the Agriculture Department and Agency for International Development, now a senior official at a national intelligence agency.“You never get what you need to do a job,” Tucker said. “There’s a tendency to fund everything a little bit.”But close collaboration between chief financial officers and CIOs can foster an enterprise perspective that brings more predictability, said Tucker.Ambrose said the problem in DOD is that budgets tend to be prepared at the large-command level. “The CIOs don’t usually have access to large pools of organizational dollars,” he said.Ambrose added centralizing the management of modernization projects can improve the odds of success. He called DOD’s recent creation of the secretary level Business Transformation Agency a step in the right direction (see Q&A with Paul Brinkley.As GAO noted, vague requirements can lead to expensive, time-wasting change orders near the end of a project, sometimes crippling the entire program.Mark Johnson, senior vice president of public sector sales at Oracle, said his company tries to avoid another common pitfall, scope creep, by being actively engaged at the executive level once senior managers buy into the program. He said Oracle is then in a position to say, “ ‘Before you go down that path, let us take [the requirement] to our engineers to see if it’s in the next release, or to see if we can build it for you so you don’t have to customize [the system].’ ”A sharp focus on business processes can help organize the IT modernization strategy itself, said Lt. Gen. Michael Peterson, Air Force CIO.“We chose applications we knew a lot about,” said Peterson, describing a recent success in consolidating applications. “We were able to class them in functions, find overlap and converge systems.”These experts agree that many of the solutions spring from the Clinger-Cohen Act of 1996 and the IT business alignment initiatives that followed from OMB.“I think Clinger-Cohen, quite frankly, set the groundwork for better modernization,” said Lisa Schlosser, CIO of the Housing and Urban Development Department.The Federal Enterprise Architecture, for example, encourages system consolidation and interoperability, and can cut development time by making it easier to reuse components, an approach HUD uses when developing applications.Other IT governance mandates, such as OMB Circular A-11, which calls for IT business cases, known as Exhibit 300s, also have helped improve modernization projects. And as OMB has added portfolio analysis and project management methods and software that can help align IT with business goals while speeding implementation, CIOs and other experts say things are getting better.“From the highest level, one would look for well-vetted requirements documentation, effective program controls including EVM [earned-value management], an IV&V [independent verification and validation] program to serve as a management watchdog, and executive sponsorship to ensure adequate resources are brought to bear,” said Karen Evans, OMB’s administrator for e-government and IT.Portfolio management can help prioritize expenditures and avoid waste as well.“If you’re really doing it, you’re not funding everything,” Tucker said. “It’s good to have a financial person looking at the portfolio. If you just have the techie folks looking at it, you’re probably losing the portfolio management aspect.”Some experts suggest taking on these large projects in modules and showing success to both users and oversight authorities.Oracle’s Johnson said incremental capabilities and momentum are important, because agencies need their end users involved and excited about the changes.“You need quick wins,” Oracle’s Johnson said. “Roll out incremental capability.”Tucker’s formula perhaps summarizes it best: good communication and governance, a steady and healthy funding stream, and experienced and talented project managers.