USDA Restructuring: Refocus Info Share Program on Business Processes
Rather Than Technology (Letter Report, 08/05/94, GAO/AIMD-94-156).

Info Share, the biggest and most challenging modernization effort in the
Agriculture Department's (USDA) history, is intended to improve delivery
of services to customers of the farm service and rural development
agencies.  The magnitude of this effort is considerable--USDA has been
delegated procurement authority of $2.6 billion for Info Share.  GAO
found that USDA managers are not performing key business process
reengineering steps under Info Share necessary to fundamentally improve
the way these agencies do business.  Instead, USDA is managing Info
Share basically as a way to acquire new information technology rather
than as an opportunity to fundamentally improve business processes.  As
a result, USDA will probably spend hundreds of millions of dollars of
scarce resources to automate the current way these agencies do business
rather than to reinvent USDA.  At the same time, USDA may need to
replace some of its aging and outdated computers so that these farm
service and rural development agencies can continue to operate and
provide services while the Department reengineers business processes.
However, the Department has not identified its technology needs for this
interim period or the most cost-effective option for meeting these
needs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  AIMD-94-156
     TITLE:  USDA Restructuring: Refocus Info Share Program on Business 
             Processes Rather Than Technology
      DATE:  08/05/94
   SUBJECT:  Interagency relations
             Farm income stabilization programs
             Agricultural programs
             Federal agency reorganization
             Computerized information systems
             Information resources management
             Planning
             Operations analysis
             Agency missions
             Rural economic development
IDENTIFIER:  USDA Info Share Program
             
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Cover
================================================================ COVER


Report to the Chairman and Ranking Minority Member, Subcommittee on
Information, Justice, Transportation, and Agriculture, Committee on
Government Operations, House of Representatives

August 1994

USDA RESTRUCTURING - REFOCUS INFO
SHARE PROGRAM ON BUSINESS
PROCESSES RATHER THAN TECHNOLOGY

GAO/AIMD-94-156

USDA's Info Share Program


Abbreviations
=============================================================== ABBREV

  ASCS - Agricultural Stabilization and Conservation Service
  BPR - business process reengineering
  FCIC - Federal Crop Insurance Corporation
  FmHA - Farmers Home Administration
  IRM - information resources management
  RDA - Rural Development Administration
  SCS - Soil Conservation Service
  SSA - Social Security Administration
  USDA - U.S.  Department of Agriculture
  VBA - Veterans Benefits Administration

Letter
=============================================================== LETTER


B-257807

August 5, 1994

The Honorable Gary A.  Condit
Chairman
The Honorable Craig Thomas
Ranking Minority Member
Subcommittee on Information, Justice,
 Transportation, and Agriculture
Committee on Government Operations
House of Representatives

In response to your request, we are reporting to you on the results
of our review of the Department of Agriculture's (USDA) Info Share
program.  This program is the biggest and most challenging
modernization effort in USDA's history. 

Info Share is designed to improve operations and delivery of services
to customers of the farm service and rural development agencies
through business process reengineering (BPR) and the acquisition and
development of integrated information systems.\1 BPR is a management
technique for achieving dramatic improvements in cost, quality, and
customer service by making fundamental changes in the way an
organization performs its work.  The magnitude of this effort is
considerable--USDA has been delegated procurement authority of $2.6
billion for Info Share. 

In view of Info Share's size and its expected significant impact on
departmental operations, we reviewed USDA's planning for this
program.  Our specific objective was to determine whether USDA is
taking appropriate BPR steps under Info Share to improve the way the
farm service and rural development agencies do business. 


--------------------
\1 The farm service and rural development agencies include the
Agricultural Stabilization and Conservation Service (ASCS), Extension
Service, Farmers Home Administration (FmHA), Federal Crop Insurance
Corporation (FCIC), Rural Development Administration (RDA), and Soil
Conservation Service (SCS). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

To his credit, the Secretary of Agriculture has established a vision
of revitalizing USDA and improving operations.  This vision includes
establishing one-stop Field Office Service Centers that are to
incorporate new business processes to improve service to farm service
and rural development agencies' customers.  However, USDA managers
are not performing the key BPR steps under Info Share necessary to
fundamentally improve the way these agencies do business.  Instead,
USDA is managing Info Share primarily as a vehicle to acquire new
information technology rather than as an opportunity to fundamentally
improve business processes.  As a result, the Department is likely to
spend hundreds of millions of dollars of scarce resources continuing
to automate the current way these agencies do business and not
achieve the Secretary's vision of a reinvented USDA. 

At the same time, USDA may need to replace some of its aging and
outdated computer technology so that these farm service and rural
development agencies can continue to operate and provide services
while the Department reengineers business processes.  However, the
Department has not identified its technology needs for this interim
period or the most cost-effective option for meeting these needs. 


   BACKGROUND
------------------------------------------------------------ Letter :2

With the third largest civilian agency budget in the federal
government, USDA affects the lives of all Americans and millions of
people around the world.  USDA delivers services through a network of
over 14,000 field offices and depends on information technology to
accomplish its missions and provide services to its customers.  To
carry out its missions, the Department and its 43 agencies reported
budget outlays of about $63 billion in fiscal year 1993, according to
the President's fiscal year 1995 budget request. 

USDA has a major reorganization effort underway.  In December 1993,
Secretary Espy announced his reorganization plan for the entire
Department.  At the headquarters level, this plan includes reducing
the number of separate USDA component agencies and staff offices from
43 to 29.  The plan would also reduce federal employment by at least
7,500. 

Among other things, the reorganization will affect services provided
to farmers and rural development customers.  Under the Secretary's
reorganization plan, farm services will be carried out by two new
agencies:  the Farm Service Agency, which would be responsible for
commodity price and income support programs, agriculture loan
programs, and crop insurance; and the Natural Resources Conservation
Service, which would be responsible for conservation programs.  In
addition, the plan creates three new agencies to promote rural
development.  At the field level, the plan involves reducing the
number of field office locations from about 3,700 to about 2,500. 
The resulting 2,500 Field Office Service Centers would serve the farm
service and rural development customers. 

In recent years, USDA's farm service and rural development agencies
invested millions of dollars in computing hardware, software
applications, and personnel to automate their field offices.  These
investments, however, were done independently on an agency-by-agency
basis which resulted in separate systems with incompatible hardware,
software, and data.  Even today, these agencies' systems are
redundant, overlapping, and inefficient.  Further, the data are
incompatible, expensive to maintain, and a burden to the customer who
must repeatedly submit the same data and contact several different
USDA employees when conducting business at a field office. 

USDA has historically had great difficulty planning and implementing
these individual agency information technology projects.  For
example, we reported that USDA agencies had either poorly planned or
inadequately managed information technology projects which wasted
millions of dollars.\2 We also reported that ASCS' ineffective
oversight of a contractor's development of grain and processed
commodity inventory management systems led to the systems costing
nine times more than originally estimated, being installed 6 years
later than planned, and not meeting agency needs.\3

In June 1992 the Senate Committee on Agriculture, Nutrition, and
Forestry, noting that USDA was studying options for restructuring its
organization, raised questions about whether USDA's farm service
agencies should continue making major information technology
investments.  In this regard, the Chairman and Ranking Minority
Member urged USDA to postpone purchases beyond what was necessary to
maintain existing systems until the new structure of the Department
was clarified.  In response, USDA agreed not to purchase any new
computer technology beyond what was needed to meet immediate needs
and to create a consolidated program to meet these needs. 

In April 1993, USDA established a consolidated, multiagency program
called Info Share to improve operations and delivery of services to
customers of the farm service and rural development agencies.  USDA
designed this program to make improvements by (1) reengineering
business processes and (2) developing integrated information systems. 
According to the Deputy Assistant Secretary for Administration, the
business process improvement aspects of Info Share will provide the
greatest long-term benefits.  Further, the Secretary's Reorganization
Plan notes that Info Share is critical to enabling the farm service
and rural development agencies to reorganize--reduce office locations
and personnel--while improving service to the public through
reengineering business processes. 

An Executive Committee is responsible for overseeing the Info Share
program.  This committee is primarily comprised of the Under
Secretaries and Assistant Secretaries responsible for the current
farm service and rural development agencies, as well as the agencies'
heads.  USDA's Senior IRM Official--the Assistant Secretary for
Administration--is responsible for overall leadership of the Info
Share program and chairs the Executive Committee.  Info Share is
being managed by this Assistant Secretary's Office of Information
Resources Management through two managers who share day-to-day
management of the project.  In addition, six staff serve as team
leaders coordinating initiatives on business process
analysis/reengineering, application information systems, data,
acquisition/technical issues, telecommunications, and implementation. 

In August 1993, USDA received a delegation of procurement authority
from the General Services Administration to spend up to $2.6 billion
on Info Share.  Under this delegation, USDA plans to spend about $1.1
billion during fiscal years 1994 through 1999 primarily to acquire
computer equipment, software, telecommunications, and related
services.  In addition, USDA plans to spend several hundred million
dollars on personnel costs during this period for such functions as
developing, operating, and maintaining information systems for the
Info Share agencies. 


--------------------
\2 ADP Modernization:  Half-Billion Dollar FmHA Effort Lacks Adequate
Planning and Oversight (GAO/IMTEC-92-9, Oct.  29, 1991). 

\3 Information Resources:  Management Improvements Essential for Key
Agriculture Automated Systems (GAO/IMTEC-90-85, Sept.  12, 1990). 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To address our objective, we identified the key BPR steps of
reengineering methodologies by researching the subject area and
interviewing public and private sector organizations that have
implemented BPR.  We also interviewed senior USDA officials, Info
Share managers, and business process team leaders.  Appendix I
provides further details on our scope and methodology. 

We conducted our work between August 1993 and June 1994 in accordance
with generally accepted government auditing standards.  As you
requested, we did not obtain agency comments on a draft of this
report.  However, at the end of our review, we discussed the facts in
our report with USDA officials, including the Assistant Secretary for
Administration and the Director of USDA's Office of Information
Resources Management.  These officials generally agreed with our
findings.  We have incorporated their comments where appropriate. 


   USDA IS NOT PERFORMING KEY BPR
   STEPS NECESSARY TO REENGINEER
   THE WAY IT DOES BUSINESS
------------------------------------------------------------ Letter :4

USDA is not performing the key BPR steps necessary to reinvent the
farm service and rural development agencies.  First, senior USDA
officials are not directly involved in managing the BPR effort and
directing the change.  Second, USDA is not adequately analyzing the
current business processes and establishing improvement goals. 
Third, USDA is not providing the training and expertise necessary to
guide BPR efforts.  Instead of following these steps, USDA is
managing Info Share principally as a vehicle to acquire new
information technology rather than as an opportunity to fundamentally
improve the way the farm service and rural development agencies do
business.  Accordingly, the Department's plan to acquire new
technology before completing its BPR effort is likely to result in
USDA spending hundreds of millions of dollars to further automate the
current way these agencies do business.  At the same time, while USDA
may need to replace some of its aging technology as it reengineers
business processes, the Department has not identified its needs for
this interim period and the most cost-effective option for meeting
these needs. 


      BPR INVOLVES SEVERAL KEY
      STEPS
---------------------------------------------------------- Letter :4.1

BPR is a management technique for fundamentally rethinking and
radically redesigning major business processes to achieve dramatic
changes in overall performance and customer satisfaction.  It is a
formidable undertaking and entails difficult, strenuous work because
it requires an organization's managers and employees to change how
they think and work. 

BPR consists of several key steps.  First, senior management must
recognize the need for change, commit to doing BPR, and then direct
the BPR effort.  Existing processes should then be described and
analyzed and measurable improvement goals should be set.  In
addition, senior management must support the BPR effort by
identifying training needs and determining whether outside expertise
is necessary.  New business processes should then be designed and the
organizational culture, structure, roles, and responsibilities should
be changed to support these new processes.  Finally, new business
processes should be implemented by acquiring and installing new
technology or redesigning existing technology to support the new
processes. 

Technology plays a key role in BPR by enabling process improvement
breakthroughs.  As such, knowledge of current and emerging technology
is important in planning new processes.  New technology can be
identified and acquired once the new processes have been conceptually
designed and it is clear what technology is needed to support them. 
Additional information on key BPR steps is contained in appendix II. 


      SECRETARY COMMUNICATES NEED
      FOR REINVENTING USDA BUT BPR
      EFFORT DOES NOT HAVE
      NECESSARY MANAGEMENT
      INVOLVEMENT
---------------------------------------------------------- Letter :4.2

The Secretary has taken the initial steps necessary to revitalize the
Department by recognizing a need for change and communicating a broad
vision of improving customer service through "One-Stop Shopping".  In
June 1993, the Secretary stated "Reinventing government is about
change.  One of the cornerstones of reinventing government is to stop
doing things the way that they've always been done...".  To begin the
reinvention of USDA, the Secretary is working with the Congress to
reorganize the Department.  At the same time, the Secretary's
Reorganization Plan states that Info Share will reengineer business
processes to improve service delivery to the farm service and rural
development agencies' customers. 

We support the Secretary's goals and efforts to reinvent the way USDA
does business.  In July 1993, we testified that USDA needs to be
fundamentally restructured, or "reinvented," in the context of the
management concepts, such as BPR, that guide many private sector
corporations, federal and state governments, and governments in other
countries.\4

Despite BPR's critical role in reinventing USDA and the importance of
senior management involvement, departmental managers responsible for
the farm service and rural development agencies are not directly and
personally involved and responsible for managing the BPR effort. 
Instead, USDA's IRM officials are responsible for the day-to-day
management of the BPR effort.  These IRM officials have assigned
responsibility for performing the BPR effort to one of the six Info
Share teams--the Business Process Analysis team.  This team is led by
a mid-level manager, who is several levels below the Secretary of
Agriculture.  In contrast, another federal agency with a major BPR
initiative underway involving its disability determination process,
the Social Security Administration (SSA), has assigned responsibility
for its effort to a senior manager who reports directly to the Deputy
SSA Commissioner and is a member of the SSA Executive staff. 

Without strong leadership and direct involvement by senior
leadership, it will be very difficult to fundamentally change the
culture at USDA and the processes that cross farm service and rural
development agency lines, such as enrolling customers in programs or
making and servicing customer loans.  In this regard, in May 1994,
after reviewing how leading public and private organizations improved
mission performance, we reported that accountability must be aligned
with decision-making authority when fundamentally changing work
processes that cross functional lines.\5 According to BPR experts,
processes that cross organizational boundaries offer the greatest
potential for benefits through reengineering.\6

However, the individual farm service and rural development agencies
have historically been autonomous and their mid-level managers
therefore have a vested interest in continuing the existing
processes. 

Moreover, the BPR effort under Info Share and the Department's
efforts to reorganize the farm service and rural development agencies
are occurring concurrently.  In addition to establishing a new
organizational structure for these agencies, the Department's
reorganization efforts involve defining how the agencies will operate
in the headquarters and field.  While representatives from the BPR
and reorganization efforts have met periodically and exchanged
information, these efforts are being planned and managed by four
different management structures as separate initiatives that are not
directly linked. 

Specifically, two separate reorganization teams--one headed by the
Deputy Under Secretary for International Affairs and Commodity
Programs and the other by the SCS Chief--are planning how the farm
service agencies will operate when reorganized, while a third
reorganization team--headed by the Deputy Under Secretary for Small
Community and Rural Development--is planning operations for the new
rural development agencies.  These three reorganization teams are
defining how the new Field Office Service Centers will provide
one-stop shopping for USDA customers, what services they will
provide, and what the roles and responsibilities of the Field Office
Service Center staff will be, before the BPR team analyzes existing
processes and conceptually designs new ones. 

USDA's approach for defining how the new Field Office Service Centers
will operate is not consistent with that recommended by BPR experts. 
BPR experts recommend that an organization first reengineer its
business processes and then define the new functions, roles, and
responsibilities that are needed to support them. 


--------------------
\4 Revitalizing USDA:  A Challenge for the 21st Century
(GAO/T-RCED-93-62, July 21, 1993). 

\5 Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994). 

\6 Michael Hammer and James Champy, Reengineering the Corporation:  A
Manifesto for Business Revolution (Harper Business 1993) and Thomas
H.  Davenport, Process Innovation:  Reengineering Work through
Information Technology (Harvard Business School Press 1993). 


      BUSINESS PROCESS ANALYSIS
      TEAM IS NOT ADEQUATELY
      ANALYZING CURRENT PROCESSES
      AND SETTING IMPROVEMENT
      GOALS
---------------------------------------------------------- Letter :4.3

Info Share's Business Process Analysis team is responsible for
identifying, analyzing, and redesigning business processes for the
farm service and rural development agencies.  Through June 1994, the
team has been primarily (1) developing an information strategic plan
and describing how data, functions, and processes could be
consolidated and (2) conducting forums with customers and employees. 
While these are positive initiatives, they do not analyze existing
processes in sufficient detail to support making meaningful changes
and do not include setting measurable goals for improvement. 

In November 1993, a USDA contractor assessing Info Share program
planning informed the Info Share managers that the Business Process
Analysis team was focusing on consolidating existing processes at the
farm service and rural development agencies rather than on
fundamentally changing the way they do business.  Despite this
assessment, Info Share managers did not refocus the team's
initiatives to ensure that real BPR was being done and that
measurable improvement goals were set.  They did not establish
quality, cost, and service delivery measures to determine how
effectively existing processes are meeting customer needs, nor did
they identify weaknesses and gaps in current processes that cross
farm service and rural development agency lines, such as program
enrollment.  While consolidating current or shared processes may
result in the agencies doing what they do now faster or cheaper, it
is not likely to result in serving customers in new and better ways. 

For example, ASCS' work measurement data shows that field office
staff spend about 80 percent of their time maintaining customer
records.  However, the Business Process Analysis team is not
collecting and analyzing such data to determine which processes staff
spend most of their time doing, measuring the processes' quality and
cost, or assessing how effectively the processes serve customer
needs.  By not obtaining such baseline information, USDA is not in a
position to adequately identify inefficient, costly, or needless
existing processes that are candidates for being eliminated and
replaced with new ones and will not be able to measure the degree of
improvement achieved by a new process. 

The Department has also not fully addressed the needs of its
customers.  To survey customer needs, USDA conducted forums with
customers and employees in 10 counties across the country.  However,
the primary goal of these forums was to obtain information from
customers regarding their needs from USDA's information systems
rather than focus on the customer's process-related needs, such as
problems encountered when enrolling in programs.  USDA did attempt to
select counties representing different demographic and agricultural
areas across the country.  But the limited scope of this effort, in
which customers and employees from only 10 of about 3,000 counties in
the United States participated, creates risk that USDA will not
identify a representative set of customer needs.  In this regard,
USDA's planning documents note that this effort "will not provide
statistically accurate requirements" and that "Info Share lacks the
time and skills required for complete analysis of customer
requirements." Consequently, after USDA completes these forums, it
will not have results it can rely on. 

USDA has also not set mission-based goals to measure and monitor BPR
progress under Info Share.  Instead, Info Share goals include
standardizing data definitions, speeding communications, and
streamlining and reducing the number of forms used to collect
customer information.  These goals are not stated in a measurable
manner and focus primarily on technology-related issues.  As a
result, monitoring meaningful improvement in quality, cost, and
service delivery will be difficult. 

In contrast, as discussed in our May 1994 executive guide, we
reported that a state agency used measurable mission goals to help
focus improvement efforts and drive organizational change to address
problems of high production costs, sloppy management decision-making
on resource allocation, and bureaucratic stovepipes that made setting
organization wide priorities next to impossible.\7 Before
establishing these measurable goals and tying them to statewide goals
and service to their external customers, the state agency's
improvement efforts--especially those involving information
systems--had little effect.  After establishing the measurable goals,
the agency began to eliminate or refocus low-value projects, more
sharply target existing projects on improving mission performance,
and generate new ideas on how to use information systems more
effectively. 


--------------------
\7 Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994). 


      USDA IS NOT PROVIDING THE
      TRAINING AND EXPERTISE
      NECESSARY TO GUIDE BPR
      EFFORTS
---------------------------------------------------------- Letter :4.4

USDA is also not following the key BPR step of providing the training
and expertise necessary to enable the Department to successfully
analyze its current processes and reengineer them.  According to
leading BPR consultants, a key to success lies in having
reengineering teams that are knowledgeable of the key BPR steps,
mindful of errors other organizations have made in their BPR efforts,
and assistance by outside experts where necessary to overcome
institutional bias and parochial interests.  Also, these experts note
that the investment of resources for BPR has a long-term payoff and
sends a clear message throughout the organization of management's
commitment to their effort. 

While USDA has chartered a reengineering team--the Business Process
Analysis team--senior USDA managers have not supported the BPR effort
by ensuring that team members have acquired the skills necessary to
reengineer the farm service and rural development agencies' business
processes.  USDA's Business Process Analysis team members did not
receive training on business reengineering techniques until December
1993--9 months after they were assigned and working on the team. 
That training consisted of a 2-day overview course, which only about
half of the team members and none of the Info Share senior managers
attended.  In addition, only one of the team members had previously
worked on a BPR effort and this experience was limited to processes
within a program area of one agency.  It did not involve major
processes that cross functional areas. 

By contrast, in order to increase success with its BPR efforts, SSA's
reengineering team members received intensive BPR training and team
members visited organizations who had reengineered business processes
to learn about what is needed for success.  Moreover, senior
officials who are involved in SSA's BPR effort have had training on
the appropriate steps for BPR, including attending a session
administered by leading BPR authorities. 

In addition to the lack of BPR training and experience, USDA's
Business Process Analysis team consists entirely of USDA employees
from the farm service and rural development agencies.  According to
BPR experts, reengineering teams comprised exclusively of internal
staff that have a vested interest in the existing processes are not
likely to identify new and imaginative ways to do business.  Instead,
these experts say that teams should include external members that
understand BPR, do not hold an institutional bias, will question
widely held assumptions, and are ready to take risks.  However, USDA
does not plan to obtain outside expertise to assist the farm service
and rural development agencies reengineer business processes.  By
contrast, SSA consulted with experts in several other public and
private organizations who are using BPR and has consultants assisting
in its effort.  At the conclusion of our review, USDA officials
stated that, in response to our concerns, they are now considering
obtaining contractor support for their BPR effort. 


      USDA PLANS TO ACQUIRE NEW
      TECHNOLOGY BEFORE
      REENGINEERING BUSINESS
      PROCESSES
---------------------------------------------------------- Letter :4.5

One of the key steps in BPR is that an organization select and
acquire new information technology after it has conceptually designed
its new business processes, determined its new information needs, and
identified its new application system requirements.  Fundamental
changes to work processes are likely to impact information flows
within the organization as well as into and out of the organization. 
Accordingly, these changes may in turn result in new information
needs, application system requirements, and technology requirements. 

Rather than acquire new technology after new business processes are
conceptually designed, USDA plans to award contracts to acquire new
technology before the BPR effort is completed.  Specifically, USDA
plans to begin awarding contracts in late 1994 and early 1995 to
design, acquire, and implement about $500 million in new office
automation software, file servers, minicomputers, microcomputers,
peripherals, local area networks, wide-area networks, and other
equipment and support services. 

According to Info Share managers, the computer equipment to be
acquired will be based on open systems and employ an integrated set
of software tools.  As a result, they contend this equipment will be
sufficiently flexible to accommodate whatever business processes are
subsequently designed, even if those new processes are substantially
different than existing ones. 

However, a May 1994 report\8 developed for the National Institute of
Standards and Technology, disputes USDA's contention.  The report
concludes that open systems technology currently available in the
marketplace has limitations and will not meet all current and future
requirements that federal agencies have.  The report noted that
agencies often acquire hardware and software that they end up not
using because they put too much faith in open systems' standards
without a clear concern for mission objectives.  Therefore, the
report states that federal agencies should first determine how they
can best accomplish their missions and then identify and acquire
information technology solutions that will meet their needs. 

If USDA makes a major investment in new technology before completing
its business process reengineering, the Department is likely to find
that it will later need to spend millions more to augment,
substantially modify, or replace this equipment to support new
business processes.  Until then, USDA does not know if it is buying
too much of some equipment, too little of other equipment, or simply
buying the wrong technology solution.  USDA is also likely to find
that the limitations of the equipment it buys will force it to
continue to use existing, inefficient processes and not allow it to
achieve the dramatic improvements in customer service and efficiency
that new processes could accomplish. 

For example, according to the Business Process Analysis team leader,
implementing one-stop shopping in the proposed Field Office Service
Centers may entail new processes where services are integrated so
that customers will normally deal with a single USDA employee--a
customer service representative--for farm services and possibly
another for rural development services rather than a number of
employees.  This new way of doing business may require integrated
information systems with built-in decision-making tools. 

Other organizations that use a customer service representative have
found that this concept offers numerous benefits.  For example, we
reported that one organization reduced the number of employees that
customers had to deal with from as many as 16 different "experts"
down to 1 general purpose customer service representative.\9 To
accomplish this, the organization analyzed and reengineered its
customer service process.  By doing so, the organization found that
its technology needs changed substantially--the number of supporting
computer systems went from over 70 under the old process to 1 highly
integrated system under the new process.  The reengineering effort
resulted in simplifying the tasks needed to service the customer and
employing a highly integrated systems environment.  After
implementing the new process and supporting technology, the
organization found that its new customer service representatives
could handle inquiries without referral at all to other
employees--single point problem resolution. 

We have previously reported that choosing new technology components
before reengineering business processes and adequately analyzing and
understanding the technology needs to support the new processes would
result in only marginal improvements in mission performance.  For
example, we reported in November 1992 that the Veterans Benefits
Administration (VBA) was proceeding with a $94 million acquisition of
computer hardware and associated software before reengineering its
claim process and determining how information technology could best
be used to modernize its operations and improve service to
veterans.\10 We determined that the new technology VBA intended to
buy would potentially reduce the average claims processing time of
151 days by only 6 to 12 days.  A VBA senior manager acknowledged
that until VBA redesigned its business process, new technology would
produce only marginal improvements in the delivery of services to
veterans. 


--------------------
\8 Report of the Federal Internetworking Requirements Panel, National
Institute of Standards and Technology, May 31, 1994. 

\9 Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994). 

\10 Veterans Benefits:  Acquisition of Information Resources for
Modernization is Premature (GAO/IMTEC-93-6, Nov.  4, 1992). 


      USDA HAS NOT DETERMINED ITS
      TECHNOLOGY NEEDS FOR
      CONTINUING TO OPERATE UNTIL
      BPR IS COMPLETED
---------------------------------------------------------- Letter :4.6

Because BPR is not a quick fix approach but rather takes considerable
time and analytical effort, the Department may need to replace some
of its existing aging and outdated computer technology to enable it
to continue to provide current services.  According to the Deputy
Assistant Secretary for Administration, some existing information
technology is failing and USDA is fast approaching a situation where
its ability to continue delivering programs will be affected.  For
example, USDA officials claim that some of ASCS' field office
computer equipment is experiencing maintenance and capacity problems. 

The Department's current plan is to begin awarding Info Share
contracts in 1994 for information technology to meet immediate needs
and to transition to USDA's future computing environment.  However,
USDA has neither determined the technology needed to continue to
provide services while reengineering business processes nor
identified the most cost-effective option for meeting these needs. 
Further, until USDA conceptually designs new processes and determines
the technology needed to support them, the Department does not have
the information necessary to define its future computing environment. 
Consequently, if USDA acquires technology beyond what is needed to
continue to provide services while reengineering business processes,
the Department risks spending millions on technology that may not
meet its future computing needs. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

The Info Share program provides USDA with an opportunity to
dramatically improve and reinvent the way the farm service and rural
development agencies serve their customers.  The Secretary has
demonstrated his commitment to revitalizing these agencies by
establishing a vision for one-stop Field Office Service Centers and
embracing Info Share as the Department's means for reengineering
business processes.  However, BPR is not an easy undertaking and will
not be accomplished overnight because it will require USDA managers
and employees to fundamentally change how they think and work.  The
success of the Department's reengineering efforts will depend to a
large extent on the commitment and involvement of senior USDA
officials, with assistance and guidance from those with BPR training
and expertise. 

Despite the Secretary's commitment, USDA's current Info Share
approach runs a high risk of not resulting in significant
improvements in the way the farm service and rural development
agencies do business.  Although touted as a BPR effort, Info Share is
not that--senior agency officials are not involved, business
processes are not being examined, measurable goals are not being
established, and training and expertise are not being provided. 
Rather than focusing on reengineering business processes, USDA is
using Info Share principally as a vehicle to acquire additional
information technology.  Unless USDA concentrates on reengineering
business processes, the Department will spend millions of dollars of
scarce resources and risk that this project will only further
automate the current way of doing business and may not meet future
needs.  At the same time, it is both appropriate and necessary for
the Department to devote attention and resources to satisfying its
computer technology needs for continuing to operate and provide
services while it reengineers business processes. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :6

To ensure that USDA takes appropriate steps to reengineer business
processes, we recommend that the Secretary of Agriculture refocus the
Info Share program to ensure that BPR is properly planned, conducted,
and implemented.  At a minimum, the Secretary should: 

  require that the Under Secretaries and Assistant Secretaries for
     the farm service and rural development agencies be directly and
     personally involved and responsible for directing the BPR
     effort;

  designate a senior manager who would be responsible for managing
     the BPR effort on a day-to-day basis and would report directly
     to the Under Secretaries and Assistant Secretaries;

  direct that the BPR effort be linked to the Department's
     reorganization initiative;

  identify and provide the necessary BPR skills, training, and
     expertise for a team that will reengineer business processes,
     and, if necessary, acquire needed BPR expertise from external
     sources;

  establish an independent advisory group comprised of private and
     public sector representatives, including customer
     representatives;

  direct the reengineering team to identify and analyze existing
     business processes and work flows and apply quality, cost, and
     service measures to determine how effectively USDA is currently
     meeting customer needs; and to establish measurable,
     mission-driven goals;

  determine, after analyzing existing processes and setting goals,
     how

existing processes can be redesigned or eliminated altogether to
reduce costs, improve quality, and better meet customer needs and

systemic changes can be made to the organizational structure,
culture, roles, and responsibilities in order to support the
reengineered processes and implement the new processes; and

  defer the award of planned nationwide Info Share contracts for the
     farm service and rural development agencies until after USDA has
     (1) defined and tested new business processes and (2) determined
     new information needs, application system requirements, and
     technology requirements necessary to support the new business
     processes. 

To ensure that USDA can continue to operate while reengineering
business processes, we recommend that the Secretary direct the Under
Secretaries and Assistant Secretaries for the farm service and rural
development agencies to

  determine and document their agencies' critical technology needs
     for continuing to operate until BPR is completed; and

  determine, document, and pursue the most cost-effective options for
     meeting these needs. 


---------------------------------------------------------- Letter :6.1

Although we did not obtain agency comments on a draft of this report,
on June 28, 1994, we did discuss the report's contents with senior
USDA officials, including the Assistant Secretary for Administration
and the Director of USDA's Office of Information Resources
Management.  Although these officials generally agreed with the facts
presented, they pointed out that they believe senior USDA managers
are involved in and responsible for the Department's BPR effort under
Info Share.  While we recognize that senior managers serve on the
Info Share Executive Committee, the Info Share Program's BPR team
leader reports to IRM managers, rather than directly to the Executive
Committee or to other senior managers who have the authority to make
fundamental changes to business processes, such as those that cross
agency lines.  Moreover, departmental managers responsible for the
farm service and rural development agencies are not directly and
personally involved and responsible for directing the BPR effort. 

These officials also stated they believe the $500 million in
technology that USDA plans to award contracts for in 1994 and 1995
will have sufficient flexibility to support migration to their future
computing environment.  We believe, however, that technology
currently available in the marketplace has limitations and may not
meet all future requirements of the farm service and rural
development agencies.  As such, USDA may spend millions of dollars on
technology that will not effectively support its needs after business
processes are reengineered. 


---------------------------------------------------------- Letter :6.2

As arranged with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 30 days after the date of this letter.  At that time, we will
send copies to the Secretary of Agriculture; the Chairmen and Ranking
Minority Members of the Senate Committee on Agriculture, Nutrition,
and Forestry; the Senate Committee on Governmental Affairs; the
Senate and House Committees on Appropriations; the House Committee on
Agriculture; the House Committee on Government Operations; the
Director, Office of Management and Budget; and other interested
parties.  Copies will also be made available to others upon request. 

This report was prepared under the direction of Joel C.  Willemssen,
Director, Information Resources Management/Resources, Community, and
Economic Development, who can be reached at (202) 512-6253.  Other
major contributors are listed in appendix III. 

Gene L.  Dodaro
Assistant Comptroller General


SCOPE AND METHODOLOGY
=========================================================== Appendix I

To address our objective, we identified the key BPR steps of
reengineering methodologies.  We compiled these steps after
thoroughly researching the BPR subject area by interviewing numerous
public and private sector organizations that have implemented BPR
(Social Security Administration, Ontario Ministry of Revenue, GTE
Telephone Operations, IBM Credit, and IBM Canada); interviewing
several BPR consultants (Computer Sciences Corporation, James Martin
Government Consulting, Ken Orr Institute, and Pacific Rim
Consulting); obtaining BPR training (James Martin's Business
Re-engineering and Technology Transfer Institute's Business Process
Reengineering), and researching BPR literature (Reengineering the
Corporation:  A Manifesto for Business Revolution and Process
Innovation:  Reengineering Work Through Information Technology). 

We then contrasted the key BPR steps with the steps USDA is following
to reengineer business processes.  In doing so, we analyzed the
Secretary of Agriculture's testimonies to the Congress, USDA's
Reorganization Plan and fiscal year 1995 budget request, and other
pertinent USDA documents.  We also interviewed top Department
managers, including the Deputy Assistant Secretary for
Administration, heads of the six Info Share agencies, senior
officials involved in the farm service and rural development
reorganization efforts, and reviewed available minutes from meetings
held by these officials to determine their involvement in the BPR
effort. 

In addition, we reviewed USDA's Info Share project management
structure, particularly the positioning of the reengineering team,
and contrasted this structure with other organizations doing BPR.  In
doing so, we also interviewed Info Share managers and team leaders to
ascertain how other initiatives and projects within the Info Share
program were related to the BPR effort.  Furthermore, we collected
data on the resources USDA allocated to its BPR effort and the BPR
training received by Info Share managers and the business process
analysis team members. 

We also evaluated the business process analysis team's plans and
activities for assessing existing business processes.  Specifically,
we interviewed the team leader and team members to identify the scope
of their various BPR efforts.  We also analyzed the team's charter,
strategies, and planning documents, and reviewed the results of
completed efforts to determine the extent to which the team was
identifying and analyzing core business processes and applying
quality, cost, and service measures to determine how effectively
customer needs were being met.  Additionally, we reviewed this team's
plans to identify whether measurable improvement goals had been set
for all BPR efforts.  We also obtained and evaluated a contractor's
assessment of Info Share's business process reengineering efforts. 

Finally, we interviewed Info Share project managers, including USDA's
Director of Information Resources Management, and Info Share team
leaders, and reviewed planning documents, budgets, and milestones to
determine when USDA plans to acquire new technology.  We also
interviewed the Info Share agencies' Senior Information Resources
Management Officials and reviewed their analysis of their agency's
technology needs, if available, to assess whether the agencies had
determined their needs for continuing to operate until BPR is
completed, and whether they had identified the best option for
meeting these interim needs. 

We performed our work at USDA's headquarters in Washington, D.C., and
at farm service and rural development agency's offices in Ft. 
Collins, Colorado; Kansas City and St.  Louis, Missouri; and
Washington, D.C.  We also visited field sites in Bolivar County,
Mississippi and Osage County, Kansas; and a contractor's site in
Arlington, Virginia. 


DESCRIPTION OF BUSINESS PROCESS
REENGINEERING
========================================================== Appendix II

Business process reengineering (BPR) is a management technique for
achieving dramatic improvements in cost, quality, and customer
service by making fundamental changes in the way an organization
defines its mission and performs its work.  BPR is based on a
thorough understanding of an organization's customers, their needs,
and the environment.  BPR is focused on improving business processes
that create and deliver value by satisfying the customer's needs. 
Generally these processes cut across functional, geographic, and
organizational units. 

While automation is not a necessary part of BPR, information
technology plays an important role as an "enabler".  Advances in
information technology offer innovative opportunities for
organizations to completely rethink the way they do their work.  For
example, organizations may (1) establish telecommunications networks
to allow workers at different locations to work collaboratively, (2)
employ expert systems to allow one person to do tasks that previously
required several specialists, or (3) use shared databases so that
customer service representatives, who have access to all information,
can address customer concerns without transferring them to other
components of the organization. 

BPR is characterized by: 

  a top management-driven effort to scrutinize and challenge the
     current management tenets of the organization and its mission,
     based on the needs of the customer and the environment;

  identifying and analyzing core business processes and applying
     quality/cost/service measures to determine how effectively they
     are meeting customer needs;

  thinking boldly about how processes can be redesigned or eliminated
     altogether to reduce costs, improve quality, and better meet
     customer needs; and

  making systemic changes to the organization's structure, culture,
     roles, and responsibilities in order to support reengineered
     processes. 

The following highlight the key steps of BPR: 

1.  Have the organization's top management commit to the need for
change and drive the effort to scrutinize and challenge the current
management tenets of the organization, based on the needs of the
customer and the environment.  In addition, certain pre-conditions
should be in place before the task of business process reengineering
can proceed.  Such pre-conditions include: 

  creating a shared vision of the future based on customer needs and
     the environment;

  communicating and gaining acceptance of the vision and the need for
     change from major stakeholders--internal and external people and
     organizations that will be affected by the change;

  developing a BPR project management structure that ensures
     continuous top management involvement; and

  establishing the reengineering teams. 

2.  Develop a strategy for reengineering that is linked to the
organization's business vision and strategy.  This strategy should
include plans for: 

  prioritizing reengineering projects;

  allocating appropriate resources; and

  training reengineering teams and if necessary, acquiring BPR
     expertise. 

3.  Assess the existing processes, including: 

  analyzing the current work flow and process performance by applying
     quality/cost/service measures;

  understanding process-specific customer needs;

  identifying weaknesses/gaps in existing processes; and

  setting outcome-oriented goals for new processes and defining
     measurable performance indicators to monitor progress in meeting
     the goals. 

4.  Create reengineering breakthroughs which include: 

  creating ideas for new processes, including determining how other
     organizations have designed similar processes--sometimes
     referred to as benchmarking-- which usually employs technology;

  selecting best approach;

  developing the work flow of the new processes;

  changing the supporting organizational culture, structure, roles,
     and responsibilities; and

  prototyping, testing, and adjusting the new processes. 

5.  Implement the new process, including activities such as: 

  developing a transition plan that not only focuses on implementing
     the new processes but also the supporting organizational
     structure;

  acquiring and installing new technology and/or redesigning the
     existing technology to support the new processes;

  training and preparing the organization for the change, especially
     changes to the culture;

  institutionalizing the new processes; and

  monitoring the new processes to determine whether they are meeting
     improvement goals and make adjustments, where necessary, to the
     new processes. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, WASHINGTON,
D.C. 

Stephen A.  Schwartz, Assistant Director
William D.  Hadesty, Technical Assistant Director
Christopher E.  Hess, Staff Evaluator

KANSAS CITY REGIONAL OFFICE

George L.  Jones, Evaluator-in-Charge
Troy G.  Hottovy, Senior Evaluator
Sheldon H.  Wood Jr., Staff Evaluator

