It's been compared to changing the tires of a car while the car is in motion. But even this metaphor doesn't quite capture the magnitude, complexity, and difficulty of engaging a large government agency in a successful enterprise modernization effort.

Since the Internal Revenue Service (IRS) was established in 1952 to collect federal taxes, its mission has evolved, and the volume and complexity of its operations have mushroomed. Today, to collect $1.9 trillion in annual taxes, more than 102,000 IRS employees access approximately 300 legacy systems on 84 mainframe computers from 4 vendors, 1,500 mid-range computers from 23 vendors, and mosre than 100,000 individual computers running over 18,000 vendor-supplied software products and 50 million lines of computer code. In response to 23 million inquiries a week, 22,000 customer service representatives refer to a Tax Code that has expanded from 812 pages to more than 3,500.

As IRS Commissioner Charles Rossotti has stated, "The most challenging aspect of the IRS strategic plan is that we must continue current operations to administer the largest and most complex tax system in the world, while simultaneously reengineering and improving its most fundamental underpinnings."

The Center for Enterprise Modernization (CEM), MITRE's Federally Funded Research and Development Center (FFRDC) for the IRS, has learned from its collaborations with the IRS, the U.S. Customs Service, the U.S. Coast Guard, and the Department of Veterans Affairs, that the underpinnings of modernization involve more than technology. Indeed, "modernization is not primarily a technological issue," says CEM Deputy Director Mike Blom. "It's technology and organizational challenges, people challenges, program management challenges, and business challenges. It's all about applying a wide range of expertise to the entire modernization challenge and approaching modernization as a continually evolving way of doing business."

Enterpise modernization is a complex, organic, and even somewhat amorphous endeavor. Its proximate goal is to transform government agencies by wedding the latest technology with proven business practices to help government agencies, like the IRS, provide the same kind of efficient and responsive service provided by the private sector, which uses technology and updated practices to change the way it does business. Now in its fourth year of partnership with the IRS, CEM has recognized a more fundamental goal, indispensable to the more immediate one—to make modernization a continuous process as it spreads throughout the entire agency.

Bringing this about, however, takes time, and difficult tasks lie ahead. Government agencies have urgent needs, including strategic planning, architecture, infrastructure development, capability development, and the implementation of end-user applications, but the resources to address these needs are limited. This shortage makes planning more difficult and, combined with the ever-changing environments of government agencies, makes modernization a long-term project that hinges on continuity, institutional memory, and an enterprise approach for its success.

In the Trenches

As a result of our work with the IRS and its other government customers, we have a deep understanding that modernization must be a way of life throughout an entire enterprise, rather than an effort confined to a few isolated areas of an organization. Likewise, for modernization to be successful, an agency must maintain an enterprise-wide perspective and build business strategies with the long term in mind—at least 10 to 15 years. Modernization must be viewed as evolutionary, an important ongoing part of an agency's work.

When the IRS and The MITRE Corporation jointly prepared the FFRDC Sponsoring Agreement, the IRS expected that: "MITRE's FFRDC will provide unbiased advice and assistance—to help IRS officials determine, monitor, and evaluate the technical direction of the modernization effort in an environment free from both internal constraints and external market and profit related influences. The contract will provide a critical infusion of expertise, which could significantly influence the mission. It is expected and desired that the FFRDC will have a long-term commitment to, and a personal stake in, the success of the mission of the IRS."

Initially, our efforts focused on the IRS's Business Systems Modernization Office (BSM). Joining forces with the IRS just before a prime contractor was selected for the modernization project, CEM helped the BSMO and the prime contractor, Computer Sciences Corporation, build the management and technical capabilities needed for the modernization of tax administration.

We responded to the BSMO's urgent needs by providing critical expertise and delivering required work products. And CEM staff members remained on the job while personnel changes took place at both the BSMO and the prime contractor—establishing itself as a knowledgeable and stable partner for the agency.

"You learn their culture by being in the trenches with them, and that's what they respect," says Diane Schulte, CEM's program director for IRS Strategic Management and Integration. "It's not just the learning factor, it's also the trust factor. If you can work with them to bring it together at the project level, you're better able to give sound strategic advice at the executive level, and they are more apt to listen to suggestions."

As the relationship has evolved, CEM has worked with the IRS to move toward an appreciation of the comprehensive, evolutionary nature of modernization, and of the need to integrate systems, processes, and governance enterprise-wide. As a result, the IRS has asked us to take on a greater array of tasks and a role as a trusted and accountable strategic partner responsible for helping IRS decision makers identify action alternatives for increasingly complex modernization issues.

The IRS has also referred other agencies to CEM. The IRS FFRDC Sponsoring Agreement permits us to perform work for the Department of the Treasury and other agencies "in public interest situations on a non-interference basis when this work is not inconsistent with the goals of the IRS." The IRS leadership recognizes that the lessons we learn from working on other modernization efforts enhance our ability to support the IRS.

Long-term Success

The success of modernization for any government agency is hard to gauge given the ever-changing environment in which these organizations work. But we are helping government agencies lay their foundations for evolving into agencies that meet and exceed the expectations of the American public. "The goal for CEM is to measure our success based on our sponsor's and customers' successes," says CEM Senior Vice President and General Manager Gene Cross. "These are long-term programs, so success ultimately has to be measured by the long-term mission success of our government partners."

—by W. Russell Woolard

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