Rossotti: Hear skeptics

Federal employees' wariness about top-down change in federal agencies is not necessarily a bad thing, said a former Internal Revenue Service commissioner.

"People that really care about the mission, down there at the bottom, say, 'They're going to do what?' " Charles Rossotti said earlier this week during a Northern Virginia Technology Council breakfast. "And you know what? They've got very good history on their side. Lots of those changes do indeed screw up and make it worse."

Rossotti was IRS commissioner from 1997 through 2002. When he began as agency head, the IRS was in the throes of a crisis threatening to overwhelm agency managers. The tax agency spent $3 billion during the 1990s on an attempt to modernize its tax processing system that produced no results.

"Basically they were promising everything to everybody and delivering nothing," Rossotti said. When he arrived at the IRS, less than 10 percent of tax returns were filed online. Although an IRS Web site existed then, "the 12 people in the basement that had started it still thought they owned it," Rossotti said.

A fractured organization caused information technology modernization to occur pell-mell. "There was a guy in Philadelphia who had developed his own e-filing system," Rossotti said. "He had developed this himself with just a couple of people that he had somehow reallocated under the table."

Clinton administration officials recruited Rossotti partly because of his IT background -- he co-founded systems integration firm American Management Systems. He now works for the Carlyle Group.

Most employees do not actively resist change, but they do wait to see what will happen, because change efforts come and go along with political appointees, he said. Overcoming internal inertia requires leaders who advocate reform and listen to skeptics, Rossotti said. "They may be wrong, but they're not always wrong," he said.

Separating business process reform from technology modernization is a mistake, he added.

Managing technology modernization requires a stomach for bad news, Rossotti said. During the 1990s, people managing the effort were not encouraged by executives to honestly report problems, so top managers heard nothing but good news about modernization efforts "until it totally blew up," he said.

Making changes to modernization plans isn't necessarily a sign of mismanagement, Rossotti said. In fact, if officials do not alter implementation plans over time, "they're not managing that program," he said.

He praised the IRS' current modernization effort, which started in 2001. "Especially in the last year, the level of success in terms of actually delivering systems has been rather amazing," he said.

But tax agency problems "are not completely fixed ... . The technology has years and years of work in it," he said.