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New Tools Help Business Units Read from the Same Balance Sheet November 2003
In the 1998 IRS Restructuring and Reform Act, Congress mandated changes to the way the IRS does business in order to make it more customer-focused. The new business processes and new information technology systems Congress called for led the IRS to establish its Business Systems Modernization Program. The IRS selected a prime integration contractor, together with contractor partners, to develop and implement business processes and systems. Through BSMO, the IRS plans, acquires, manages, and controls the work of those contractors. As the program has matured and the full scope of modernization has become apparent, BSMO's responsibilities have grown more complex, expanding to include the integration of modernization efforts with other IRS strategic planning processes and the establishment of business-focused governance. BSMO's responsibility for managing the simultaneous modernization of the IRS business and technology environments while ensuring that the IRS can continue collecting taxes has made even more urgent the need to build and strengthen program management capabilities. Standing up a dozen projects, monitoring the contractors implementing them, making critical decisions at key milestones, effecting transitions from old "legacy" systems to new ones, and justifying expenditures to Congress—these are some of the management challenges the IRS is facing as it moves toward enterprise modernization. With help from MITRE's Center for Enterprise Modernization (CEM, the IRS's Federally Funded Research and Development Center), the agency is addressing these challenges. It is laying the foundation for a cost-effective approach to meeting the public's need for a responsive, customer-service-focused organization, an approach based on partnership with customers, oversight organizations, and solution providers. A MITRE team with a wide range of experience in enterprise modernization has introduced to the IRS a number of tools and practices designed to help BSMO better manage acquisition, budgeting, scheduling, risk, and other aspects of the modernization process—all tasks that require bringing to bear large amounts of information. A New Level To enable the modernization effort to succeed, the IRS needed to create a new climate for doing business in which success would come not within the "stovepipes" of discrete projects but across the organization. So MITRE assisted BSMO in developing an organizational and governance structure that supports the efficient integration of both effort and systems. With MITRE's help, BSMO also developed a set of repeatable processes that will continue to stand, regardless of changes in the management of the agency. In this environment, success is measured by collaboration, information sharing, and adherence to the processes employees have been trained to use. "Once you have the system in place, it establishes the expectations people work under," says Reed White, an economic and business analyst with CEM. "For example, when you bring new people in, they understand, 'This is how I do it. I have to have these capabilities, and I am responsible upward through the chain to perform, and they will be monitoring my performance.'" A critical indicator of BSMO's ability to create repeatable processes came this past fiscal year. On the basis of BSMO's developing a set of compliant directives, process descriptions, and procedures, the IRS became the first civilian government agency to achieve Level 2 of the Software Engineering Institute's Software Acquisition Capability Maturity Model® (SA-CMM®). The work done to warrant this highly coveted designation boosts the IRS's ability to work with its contractors to acquire the software systems it needs on schedule and within budget. A MITRE team worked for over a year on a pilot project within BSMO to enhance the organization's acquisition management capabilities. “An organization usually starts at the stage where it has no repeatable processes,” says Barbara Toohill, who managed IRS Acquisition Management and Program Strategy for MITRE. “Instead, it starts new each time. As you move through the steps to achieve a higher level of the SA-CMM®, you become more capable and mature as an organization. Not only do you develop and institute repeatable processes, but you’re constantly improving those processes.” Problems and Solutions With maturity comes not only the capability to improve those processes but also to employ them at the program level to manage and integrate, efficiently and predictably, the various projects that have been chartered to develop new systems BSMO's primary mechanism for managing the range of modernization activities is the Enterprise Life Cycle (ELC), a process reengineering and systems development methodology. The ELC structures the creation of solutions in all of BSM's "six domains of change" (processes, organizations, locations, data, applications, and technology) through a series of milestones: 1) justifying the movement from initial vision to project launch; 2) adopting a preliminary business case; 3) authorizing project development; 4) deciding to launch the system that the project built; and 5) recognizing that the organization that will assume operation and maintenance is ready to do so. The responsibility for declaring that a particular project has achieved a particular milestone rests with the executives and managers at the highest level of the IRS's robust, tiered governance structure for modernization. And how do those executives and managers ensure that they and the people who work for them know what’s going on, that they can track actual program and project status against goals, that they can make decisions and then communicate them so that they can be acted upon? A key tool that enables them to read from the same balance sheet is the BSM Dashboard managed by BSMO’s Management Information Center. The Dashboard is a Web-based database containing data relevant to key modernization functions. Its colorful graphical output allows a Dashboard user to determine at a glance a project's cost and schedule performance, risk status, business results, and numerous other indicators. An objective ratings system in green, yellow, and red allows IRS executives, BSMO managers, oversight agencies, contractors, and MITRE to determine how a project is measuring up against stated goals, to discover early on whether a project is behind schedule or over budget. An intuitive interface enables users to call up additional quantitative and analytical data with a simple mouse-click, and to generate in minutes analytic and summary reports that, before the Dashboard was implemented last year, could have taken weeks to compile. The Dashboard, in White's words, is "a Level 2 type thing to do," meaning an example of how BSMO, with MITRE's help, has set up a consistent and repeatable process to carry out important functions and share information. Cost-effective and Comprehensive Approach The Dashboard could also help the IRS achieve a particularly desirable goal for any organization: save money. By providing a history of the costs of similar projects in the past, the Dashboard supports BSMO managers with standards by which to judge whether the cost estimates of the prime contractor are realistic. The Dashboard's historical data on cost estimates, together with its ratings and analyses, should help the IRS better manage contractors, thus improving the agency's ability to hold down costs. Earned value management is intrinsic to BSMO's program performance monitoring. One of the responsibilities of the team that coordinates BSMO's well-established program analysis function is to analyze earned value for each project, and for the overall program, on a monthly and ad hoc basis. Modernization executives regularly review the earned value summary reports and interpretive graphics generated through the standard metrics and drill-down capabilities of the Dashboard. In addition, BSMO's Performance Management Office selects, collects, and provides performance measurement data and analysis to the Dashboard on a monthly basis. In combination with the earned value data, these quantitative and qualitative measures support executive and managerial decision-making by providing insight into the modernization program's progress toward fulfilling its goals and advancing performance. Another of the critical processes that employ the Dashboard involves managing risk. The IRS's risk management program is an organized, systematic, and program-wide decision-making methodology for increasing the likelihood of achieving Modernization goals by identifying, analyzing, planning, tracking, controlling, communicating, documenting, and ultimately mitigating risks. MITRE has developed several tools for implementing that methodology by providing early warning of problems that may jeopardize a project. One such tool is the Risk Management Web page. Its purpose is to provide a systematic and repeatable process for identifying risks within a project and communicating relevant information to managers who will act to address them and to other interested parties who will be affected by them. The contents of that Web page are integrated with the Dashboard. Putting the Tools to Use With the foundation laid, CEM's team at the IRS is following up with action to further develop the program management tools and practices it has helped introduce—many of which began as pilot programs—and to encourage their use on a day-to-day basis. MITRE staff members continue to work closely with BSMO executives and managers to refine those tools and processes and to help develop new ones. "MITRE's got a core group of practitioners and seasoned professionals in all the areas supporting the IRS," says CEM's Jim Kienhofer, who has worked on the integration of risk, costing, and scheduling functions. "So it's not a situation where we offer explanations or solutions that come with no understanding of their real world issues. The solutions come from experience in government and industry, and from being successful in the types of things we're trying to get them to do." Meanwhile, efforts are ongoing to make the new tools available to more people, to increase consistent process and information sharing across the IRS. Judging from the monthly statistics the IRS keeps on the use of its tools, their acceptance is accelerating. "I think the numbers show that the tools are getting accessed a lot," said Kienhofer. "Ten thousand hits or so in a month is amazing. And the key thing is, some of the time it's the people who aren't in BSMO who are adapting to the policies and procedures, or are at least exploring them and coming to see, 'What are we hearing about that's so good? Let me go take a look at it.'" Sharing information by word of mouth, of course, is an age-old method of communicating. It can only support the more technologically advanced methods that MITRE has helped introduce. —by W. Russell Woolard Related Information Articles and News
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