Information Management Reform: Effective Implementation Is Essential for
Improving Federal Performance (Testimony, 07/17/96, GAO/T-AIMD-96-132).

GAO discussed the implementation of the Information Technology (IT)
Management Reform Act (ITMRA). GAO noted that: (1) federal agencies have
failed to reengineer their business and program delivery processes
before acquiring new information systems, which results in costly IT
resources; (2) ITMRA should empower federal agencies to make wise
acquisitions of IT products and services; (3) lessons learned from other
governmentwide management reforms indicate the need for senior
management involvement, consistent oversight and leadership from the
Office of Management and Budget (OMB), and a focus on capital investment
and planning, reengineering, and performance measurement; (4) OMB has
organized interagency discussions on needed policy and guidance changes
and issued guidance on selecting, controlling, and evaluating agencies'
IT investments; (5) OMB has established an interagency Chief Information
Officers (CIO) working group to assist in developing policies, guidance,
and information needed for effective ITMRA implementation; (6) the
Administration is ensuring that CIO candidates are qualified and given
sufficient authority and responsibility and that core legislative
requirements are met; (7) challenges to ITMRA implementation include
involving top agency management, consistently directing CIO appointments
and organizational placement, building new IT skills, focusing on
internal implementation at the department-level, and continually
emphasizing an integrated management approach; and (8) congressional
support and oversight is essential to ensuring successful implementation
of ITMRA.

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

 REPORTNUM:  T-AIMD-96-132
     TITLE:  Information Management Reform: Effective Implementation Is 
             Essential for Improving Federal Performance
      DATE:  07/17/96
   SUBJECT:  Information resources management
             ADP procurement
             Procurement regulation
             Reengineering (management)
             Strategic information systems planning
             Cost control
             Interagency relations
             Management information systems
             Oversight by Congress
IDENTIFIER:  FAA Air Traffic Control Modernization Program
             IRS Tax System Modernization Program
             TSM
             National Performance Review
             OMB Information Technology Investment Guide
             GSA Time Out Program
             OMB 2000
             
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Cover
================================================================ COVER


Before the Subcommittee on Oversight of
Government Management and the District of
Columbia, Committee on Governmental Affairs
United States Senate

For Release
on Delivery
Expected at
9:30 a.m.
Wednesday
July 17, 1996

INFORMATION MANAGEMENT REFORM -
EFFECTIVE IMPLEMENTATION IS
ESSENTIAL FOR IMPROVING FEDERAL
PERFORMANCE

Statement of Christopher Hoenig
Director, Information Resources Management
Policies and Issues
Accounting and Information Management Division

GAO/T-AIMD-96-132

GAO/AIMD-96-132T


(511012)


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

  CIO -
  GSA -
  ITMRA -
  GPRA -
  FARA -
  NPR -
  PRA -
  FASA -
  OMB -
  CFO -
  IRM/IT -
  GITS -
  IT -
  IRM -

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

It is a pleasure to be here today to discuss issues surrounding the
implementation of the Information Technology Management Reform Act
(ITMRA) of 1996.  ITMRA requires significant changes to the way
government agencies manage and acquire information technology (IT). 
Its emphasis on senior executive involvement in information
management decisions, the establishment of Chief Information Officers
(CIO) as members of executive management teams, investment control
and capital planning, process reengineering, and the use of
performance measures to ensure accountability for IT spending results
are much needed management reforms.  In addition, ITMRA makes
important changes designed to streamline the IT acquisition process,
such as eliminating the General Services Administration's (GSA)
central acquisition authority, placing it directly with federal
agencies and encouraging the adoption of more manageable IT
acquisition projects.  In short, ITMRA empowers agencies with ways to
spend money wiser, not just faster. 

We have recommended many of these changes to the Congress and to
federal agencies we have audited over the last several years. 
Grounded in practices of leading private and public sector
organizations, ITMRA offers tremendous potential for significantly
improving how technology is used to support more informed management
decisions, increase the efficiency and effectiveness of government
operations, and--ultimately--provide more effective delivery of
government services to the public. 

Change, however, is easy to discuss but much more difficult to
accomplish.  Attention has now shifted from "what" to do about
pervasive problems to the "how" associated with implementing the
requirements of the law when it becomes effective in a few short
weeks.  And while a great deal of activity is underway to prepare for
implementation, much is not yet complete.  It is critical that the
momentum established thus far continue, and that steps to ensure
successful implementation be completed. 

Today, I would like to

  -- provide a brief snapshot of where IT management in the federal
     government stands today compared with the ITMRA standards that
     will be used to determine success in the future;

  -- share some lessons learned from prior legislative reform
     efforts, such as the Chief Financial Officers (CFO) Act and the
     Government Performance and Results Act (GPRA), that can be
     useful in ITMRA's implementation;

  -- cite the progress made in the implementation activities underway
     within the executive branch while highlighting several critical
     challenges that remain; and finally

  -- offer ideas about what the Congress can do to move ITMRA forward
     in a constructive manner and suggest evidence that may indicate
     early success or failure. 


   FEDERAL IT MANAGEMENT TODAY AND
   TOMORROW:  DEFINING SUCCESS
---------------------------------------------------------- Chapter 0:1

When one steps back and collectively evaluates how the government has
traditionally managed and acquired information technology, some
conclusions are painfully obvious. 

  -- On the whole, the federal government's track record in
     delivering high value information technology solutions at
     acceptable cost is not a good one.  Put simply, the government
     continues to expend money on systems projects that far exceed
     their expected costs and yield questionable benefits to mission
     improvements.  Familiar examples, such as the Federal Aviation
     Administration's Air Traffic Control modernization and the
     Internal Revenue Service's Tax Systems Modernization projects
     serve as stark reminders of situations where literally billions
     of dollars have been spent without clear results.  Moreover,
     agencies have failed to take full advantage of IT by failing to
     first critically examine and then reengineer existing business
     and program delivery processes. 

  -- Federal agencies lack adequate processes and reliable data to
     manage investments in information technology.  Without these key
     components, agencies cannot adequately select and control their
     technology investments.  As GAO's financial and information
     management audits have demonstrated over the last decade, it is
     sometimes impossible to track precisely what agency IT dollars
     have actually been spent for or even how much has been spent. 
     Even more problematic, rarely do agencies collect information on
     actual benefits to the organization accruing from their
     investments.  More often than not, results are presented as
     descriptions of outputs and activities rather than changes in
     performance or program outcomes. 

How should the Congress expect this scenario to change once agencies
take steps to implement ITMRA?  In 5 to 7 years, the Congress should
have a much clearer, confident understanding of the benefits to
agencies' performance that are attributable to IT expenditures.  On a
governmentwide basis, there should be higher overall success rates
for IT projects completed within reasonable time frames, at
acceptable costs, with positive net rates of return on investment. 
Modular, well-defined IT projects with short-term deliverables should
be the rule rather than the exception.  And institutionalized,
up-to-date management processes should be producing consistent
high-value investment decisions and results. 


   ITMRA MUST BE INTEGRATED WITH
   BROAD MANAGEMENT REFORMS
---------------------------------------------------------- Chapter 0:2

Mr Chairman, ITMRA also has to reinforce and be reinforced by other
important management reform legislation.  Just as technology is most
effective when it supports defined business needs and objectives,
ITMRA will be more powerful if it can be integrated with the
objectives of broader governmentwide management reforms. 

For example, changes made by the Federal Acquisition Reform Act
(FARA) and the Federal Acquisition Streamlining Act (FASA) are
focused on removing barriers to agencies obtaining products and
services from outside sources in a timely, efficient manner.  This is
crucial in the technology arena where significant changes occur very
rapidly.  ITMRA builds in essential investment and performance
ingredients that empower agencies to make wiser, not just faster,
acquisitions of IT products and services. 

The Paperwork Reduction Act (PRA) emphasizes the need for an overall
information resources management strategic planning framework, with
IT decisions linked directly to mission needs and priorities.  And,
the act also focuses on reducing unnecessary information requirements
on industry and citizens.  ITMRA can work in concert with PRA by
making sure that agencies understand what information is needed, the
purpose it is being used for, and ensure it is collected once and
shared many times. 

The CFO Act requires sound financial management practices and systems
to be in place essential for tracking program costs and expenditures. 
ITMRA based-approaches to managing information systems should have a
direct, positive impact on the creation of financial systems to
support the higher levels of accountability envisioned by the act. 

GPRA focuses attention on defining mission goals and objectives,
measuring and evaluating performance, and reporting on results. 
Budgets based on performance information provided under GPRA should
include clear treatment of IT capital expenditures and its impact on
agency operations.  Similarly, ITMRA effectively supports GPRA by
requiring that performance measures be used to indicate how
technology effectively supports mission goals, objectives, and
outcomes. 


   USEFUL LESSONS EXIST FOR THE
   CHALLENGES THAT LIE AHEAD
---------------------------------------------------------- Chapter 0:3

Past experiences with other governmentwide reforms--such as the CFO
Act, the National Performance Review (NPR), the Paperwork Reduction
Act, and GPRA--indicate that implementation requires a significant
investment of time at senior levels.  Our own experiences in
assisting agencies with self-assessments of their strategic
information management practices have illustrated the many barriers
that must be overcome.  To date, our evaluation approach--which
involves all levels and types of management--has been used in at
least 10 agencies.  In every case, it has taken considerable
management time, talent, and resources to analyze organizational
management strengths and weaknesses and then put corrective action
plans in place. 

From the past, we know that the early days following the passage of
reform legislation are telling.  The level of governmentwide
interest, discussion, and senior management involvement in planning
for and directing change all indicate whether a "wait and see"
approach versus a "get ready to meet the test" approach is being
taken.  During this period, consistent oversight leadership,
coordination, and clear guidance from the Office of Management and
Budget (OMB) is essential to getting agency implementation off to a
constructive start.  Without common direction and constancy of
purpose from OMB, GAO, and the Inspectors General, agency executives
are left reacting and responding to advice and directives that may be
at cross purposes. 

It is also important that implementation actions focus on not only
the means (i.e., policies, practices, and process) but also end
results that are expected from the management reforms.  For ITMRA to
be successful, improved management processes and practices that focus
on capital investment and planning, reengineering, and performance
measurement are essential.  But these are only the means to achieve
the legislation's ultimate goal--implementing high-value technology
projects at acceptable costs within reasonable time frames that are
contributing to tangible, observable improvements in mission
performance.  Continuous oversight from the Congress that focuses on
these issues and strong support from the Administration are an
essential incentives for keeping agency management accountable and
focused on changes necessary to ensure more successful outcomes.  The
pilot efforts being conducted under GPRA also illustrate that outcome
and performance-based decision-making will not be an easy, quick
transition for federal agencies.\1 Performance reports provided to
the Congress under both GPRA and now ITMRA should become one of
Congress's major mechanisms for evaluating and ensuring agency
accountability.\2


--------------------
\1 Executive Guide:  Effectively Implementing the Government
Performance and Results Act (GAO/GGD-96-118, June 1996). 

\2 Managing For Results:  Achieving GPRA's Objectives Requires Strong
Congressional Role (GAO/T-GGD-96-79, March 6, 1996). 


   ITMRA IMPLEMENTATION ACTIVITY
   IS UNDERWAY
---------------------------------------------------------- Chapter 0:4

A flurry of activity is underway across the government to implement
new management processes required by ITMRA.  To its credit,
OMB--under the direction of the Deputy Director for Management--has
taken a leadership role in organizing and focusing interagency
discussions on changes needed to existing policy and executive
guidance.  Let me briefly summarize some of the major activities now
underway. 


      CHANGES IN EXECUTIVE BRANCH
      POLICY DIRECTIVES AND
      GUIDANCE
-------------------------------------------------------- Chapter 0:4.1

Several policy directives and guidance are being created or revised
by OMB to reflect changes required by ITMRA.  These include a draft
Executive Order on Federal Information Technology which is currently
with the President for review and signature.  This order will
officially create

  -- a governmentwide Chief Information Officers Council, composed of
     agency CIOs and Deputy CIOs and chaired by OMB's Deputy Director
     for Management, to provide recommendations to OMB on
     governmentwide IT policies, procedures, and standards;

  -- the Government Information Technology Services Board, staffed by
     agency personnel, to oversee the continued implementation of the
     NPR IT recommendations and to identify and promote the
     development of innovative technologies, standards, and
     practices; and

  -- the Information Technology Resources Board, staffed by agency
     personnel and used to review, at OMB's or an agency's request,
     an information systems development or acquisition project and
     provide recommendations as appropriate. 

In addition, revisions are being made to two important OMB management
and budget circulars.  Circular A-130, Management of Federal
Information Resources, is being changed to include the capital
planning and portfolio management requirements of ITMRA.  Circular
A-11, Preparation and Submission of Budget Estimates, is expected to
provide additional information on capital planning, including a new
supplement on planning, budgeting, and acquiring fixed assets. 

Further, an estimated 90 percent of GSA's Federal Information
Resources Management Regulation is expected to be eliminated in
response to ITMRA.  The remaining segments are expected to be issued
as parts of the Federal Acquisition Regulation, the Federal Property
Management Regulation, or OMB guidance. 

The OMB IT Investment Guide, issued last November,\3 establishes key
elements of the investment process for agencies to follow in
selecting, controlling, and evaluating their IT investments.  This
process will be used in the fiscal year 1998 budget submission cycle. 
The Investment Guide has been circulated among agency heads, CFOs,
and senior IRM officials.  In addition, OMB has made copies available
to each of its five Resource Management Offices responsible for
reviewing agency management, budget, and policy issues. 


--------------------
\3 Evaluating Information Technology Investments--A Practical Guide,
Version 1.0, Executive Office of the President, Office of Management
and Budget, November 1995. 


      INTERAGENCY OUTREACH AND
      COORDINATION
-------------------------------------------------------- Chapter 0:4.2

OMB has also organized an interagency CIO Working Group--comprised of
the existing senior IRM officials from the major agencies and
departments--to assist in developing the policies, guidance, and
information needed to effectively implement ITMRA.  This working
group has been very active, meeting once a month since January.  The
working group has created several interagency subcommittees that have
been working to provide suggestions to OMB on changes needed in
governmentwide policies and executive guidance to effectively
implement ITMRA.  Among these subcommittees are

  -- the CIO Subcommittee, which developed a paper on the
     appointment, placement alternatives, and roles and
     responsibilities of an agency's CIO;

  -- the CIO Charter Workgroup, which developed the proposed charter
     for the CIO Council; and

  -- the Capital Planning and Investment Subcommittee, which has
     discussed potential approaches to IT capital planning processes
     and is working on a proposal for pilot testing new processes at
     several agencies. 


   ADMINISTRATION IS TAKING A
   PROACTIVE, ADAPTABLE APPROACH
   TO IMPLEMENTATION
---------------------------------------------------------- Chapter 0:5

Because many of these activities are still underway, it is impossible
to make conclusions about them at this time.  However, taken as a
whole, they send several positive signals.  In each, OMB has played a
proactive leadership role while remaining flexible enough to adapt to
individual agency situations and needs.  In general, although the
depth and impact are uncertain, the direction of the guidance is
consistent with ITMRA. 

First, it is clear that the federal IRM/IT community is widely
represented and involved in these efforts.  Rather than being the
recipients of policy changes, agency officials are actively engaged
in helping formulate new guidance and standards.  For example, the
interagency working groups that have been assembled to provide input
on the CIO position and capital planning and investment processes
have representation from numerous departments and agencies. 

Second, initial steps are being taken to emphasize the importance of
selecting qualified CIO candidates who are being strategically placed
with defined roles and responsibilities within the agencies.  OMB has
asked that before the major departments and agencies establish and
fill these positions they formally submit information on (1) the
CIO's background and experience, (2) a description of the
organizational placement of the CIO position, including reporting
arrangements to the agency head and organizational resources expected
to be under the control of the position, and (3) a description of the
CIO's authority and responsibilities.  OMB expects to conduct
discussions with agencies should it have concerns that the intent of
the legislation is not being fulfilled.  OMB has also responded
formally to selected agencies where objections were raised about the
CIO position. 

Third, recognizing the governmentwide shortage of highly skilled
managerial and technical talent, several mechanisms are being
established to help leverage IT skills and resources across agencies. 
Establishing the Information Technology Resources Board, the CIO
Council, and Government Information Technology Service Board all
demonstrate a recognition of the need to channel experienced
management and technical resources towards significant problem or
opportunity areas, particularly large, complex systems development or
modernization projects that show early warning signs related to cost,
schedule, risk, or performance. 

Fourth, a governmentwide implementation focus is being maintained. 
Especially noteworthy is the broad-based level of support and
interaction covering IT issues that transcend specific agency lines. 
The Government Information Technology Services Working Group (GITS)
serves as an excellent example of what can be achieved through
interagency cooperation.  In implementing many of the IT-related
recommendations of the National Performance Review, GITS has
effectively promoted electronic sharing of information across agency
lines and to citizens. 

Fifth, special attention is being paid to core requirements of the
legislation--establishing CIOs and improving IT capital planning and
investment.  These two provisions are directly aimed at strengthening
pervasive management weaknesses we find in most federal agencies: 
(1) getting top executives to determine how major technology projects
are intended to improve business goals and objectives, (2) getting
program managers to take ownership of IT projects and holding them
accountable for the project's success, and (3) institutionalizing
repeatable processes aimed at scrutinizing project costs and risks
against delivered benefits. 

OMB, in considering revisions to existing management and budget
circulars, has recognized the need to better integrate and
consolidate existing agency guidance in order to improve its own
oversight and alleviate imposing unnecessary reporting burdens on the
agencies.  The Deputy Director for Management convened a special
working group to revise OMB's current management bulletin on agency
budgeting and planning for fixed capital assets, which includes major
information systems acquisitions.  The revised guidance is being made
a supplement to OMB's Circular A-11, the primary budget preparation
guidance for federal agencies.  In addition, OMB has drafted changes
to Circular A-130 to be compatible with ITMRA, including the
requirement that agencies develop consistent decision criteria that
allow IT investments to be prioritized based on costs, benefits, and
risks. 


   SEVERAL CHALLENGES MUST BE
   ADDRESSED TO IMPROVE CHANCES
   FOR SUCCESSFUL IMPLEMENTATION
---------------------------------------------------------- Chapter 0:6

ITMRA implementation activities, taken as a whole, indicate a
willingness among agency officials and OMB to meet their
responsibilities and expectations under the act.  Nevertheless, we
see critical challenges in five specific areas.  Without addressing
these challenges and additional effort to solidify current
initiatives, implementation will be at risk early on.  Let me briefly
discuss each. 


      GET TOP AGENCY EXECUTIVES,
      NOT JUST IRM OFFICIALS,
      INVOLVED
-------------------------------------------------------- Chapter 0:6.1

Our observations of the implementation activities leads us to
conclude that much of the involvement within federal agencies is
heavily tilted towards IT and IRM officials and does not include top
senior officials.  Most of the interagency working groups come
exclusively from IRM and strategic planning offices.  Yet, our
research of leading public and private organizations clearly
demonstrates that strong leadership, commitment, and involvement in
capital planning, investment control, and performance management must
come from the executives who will actually use the information from
these processes to make decisions.  Although there has been
communication with the President's Management Council about ITMRA
requirements, it is unclear how seriously this reform is being taken
by senior agency management. 


      STRONG, CONSISTENT DIRECTION
      IS NEEDED ON CIO
      APPOINTMENTS
-------------------------------------------------------- Chapter 0:6.2

Many of the agencies' actions to date in contemplating CIO
appointments do not reflect a full understanding of either the letter
or the intent of the legislation.  The CIO position under ITMRA seeks
a strong, independent, experienced, executive-level individual who
can focus senior management attention on critical information
management issues and decisions.  Yet, some individuals being
considered lack clear track records and adequate business or
technical experience.  In other cases, the placement of the CIO is at
a lower management level than what the legislation intended. 
According to information from OMB, 13 of the 27 largest departments
and agencies have named CIOs.  It is our understanding that three of
these agencies have been advised by OMB that their CIO positions meet
the requirements of the law.  Our own review of the information being
submitted to OMB by agencies indicates that the breadth of experience
varies widely among the individuals being considered for the
position.  Signals coming from the Administration need to be strong,
clear, and more consistent on the importance, placement, and skills
associated with the position. 

In addition, four agencies have provided information to OMB
indicating a desire to integrate the functions of the Chief Financial
Officer with the Chief Information Officer.  Mr.  Chairman, as you
have noted in your public statements, this was not the intention of
the legislation.  Moreover, a task force report recently submitted to
OMB from the Industry Advisory Council argues strongly against
combining the two positions.  The CIO was created to give an
executive-level focus and accountability for information technology
issues and ensure greater accountability for delivering effective
technology systems and services.  In light of the existing problems
in most agencies and the significant duties and responsibilities
under each act, agencies would be best served by keeping the two
positions separate.  The problems associated with financial and
information management in most federal agencies are very significant
and require attention from separate individuals with the appropriate
talent, skills, and experience in each area. 


      ATTENTION NEEDED TO BUILDING
      NEW IT SKILLS, NOT JUST
      LEVERAGING EXISTING ONES
-------------------------------------------------------- Chapter 0:6.3

Critical, sustained, high-level attention is needed on new skills in
government that are essential to proposing, designing, building, and
overseeing complex information systems.  Recruitment efforts and
strategies need to be established and retention of existing skilled
staff reexamined.  The magnitude of the challenges facing federal
agencies in the IT area demand more talent than currently exists. 
Although one subcommittee of the interagency CIO Working Group has
been created to examine this issue, it has not yet been given the
attention it deserves. 


      BESIDES GOVERNMENTWIDE
      EFFORTS, OMB AND AGENCIES
      MUST KEEP FOCUSED ON
      INTERNAL IMPLEMENTATION
      STEPS
-------------------------------------------------------- Chapter 0:6.4

One area of particular concern is how the legislation is to be
implemented at the department level versus their major subcomponents,
namely agencies and bureaus.  To date, neither the federal agencies
or OMB have determined how newly required investment control
processes, IT performance management, or IT strategic planning will
be differentiated by organizational tiers within government entities. 

Additionally, it remains unclear how OMB's own internal ITMRA
implementation responsibilities will be strengthened.  Although we
have not yet fully evaluated OMB's efforts, there appears to be
insufficient attention to preparation for the oversight and
evaluation of agencies' IT capital planning and investment processes. 
OMB has yet to explicitly define as part of its own ITMRA
implementation strategy how it expects to fulfill its
responsibilities for (1) evaluating agency IT results, (2) ensuring
capital planning and investment control processes are in place, (3)
using accurate and reliable cost, benefit and risk data for IT
investment decision-making, and (4) linking the quality and
completeness of agency IT portfolio analyses to actual budget
recommendations to the President. 

With the phasing out of GSA's Time Out program--designed to get
problem-plagued systems acquisition projects back on track and force
improvements in agency IT management processes--the weight placed on
OMB's oversight responsibility has further increased.  Under the OMB
2000 reorganization, program examiners in OMB's Resource Management
Offices will have primary responsibility for evaluating agency IT
budget proposals and evaluating the implementation of governmentwide
IRM policies.  It remains unclear how OMB expects to train these
examiners to evaluate the IT portfolios of the agencies over which
they have oversight responsibility. 

Mr.  Chairman, we will soon be issuing a report to you and Chairman
Clinger of the House Committee on Government Reform and Oversight
that specifically focuses on IT investment decision-making in five
case study agencies.  Our findings highlight important shortcomings
in these agencies' capabilities to meet the expectations of ITMRA's
investment control provisions.  Based on this work, we will outline
specific recommendations to OMB for ways it can improve its oversight
role in this area. 


      CONTINUE TO EMPHASIZE AN
      INTEGRATED, NOT SELECTIVE
      MANAGEMENT APPROACH
-------------------------------------------------------- Chapter 0:6.5

ITMRA embraces an entire set of comprehensive management reforms to
IT decision-making.  These parallel the set of strategic information
management best practices we recommended in our May 1994 report,
Executive Guide:  Improving Mission Performance Through Strategic
Information Management and Technology--Learning From Leading
Organizations.  As we have learned from our research of leading
private and public organizations, long-term, repeatable improvements
in managing IT are most successful when a complete set of information
management practices are conducted in concert with each other.  While
much attention has been focused on the capital planning and the CIO
provisions of ITMRA, equally intensive agency attention to other
areas (e.g., strategic planning, business process reengineering,
performance measurement, and knowledge and skills development) is
also essential.  Within a short period of time, efforts should begin
to marshall agency attention to these key areas. 


   MOVING ITMRA IMPLEMENTATION
   FORWARD:  CONGRESSIONAL SUPPORT
   AND OVERSIGHT IS ESSENTIAL
---------------------------------------------------------- Chapter 0:7

Mr.  Chairman, time is of the essence in order to meet congressional
expectations that agencies begin acquiring and managing IT according
to the approaches outlined in ITMRA.  Agencies should be taking
short- and long-term actions to change management processes to comply
with the legislative requirements and intent. 

In overseeing the implementation of ITMRA, we suggest that
congressional oversight in the short term focus on assessing critical
agency actions in four areas that have direct bearing on the ultimate
success of the law in producing real, positive change: 

  -- Closely monitor the caliber and organizational placement of CIO
     candidates for departments and agencies.  Past experience with
     the initial selection of CFOs in the federal government
     indicates that the rush to fill the position may take precedence
     over careful deliberation over choosing the right person.  The
     caliber of the individuals placed in these slots can make a real
     difference in the likelihood of lasting management changes. 
     This has been demonstrated through the success of the CFO Act. 
     After some initial problems, well-qualified individuals were
     selected for these positions.  Early signs of success will be
     the establishment of a pool of high-caliber CIOs who can
     effectively support agency heads on IT issues at appropriations
     and oversight hearings.  However, an early warning sign of
     failure will be if individuals are elevated or reassigned within
     their organizations with little regard to qualifications,
     experience, or skill. 

  -- Focus on the evaluation of results.  The Congress must
     continually ask agency heads for hard numbers and facts on what
     was spent on information technology and what the agency got in
     return for the investment.  These evaluations, wherever
     possible, must focus on information technology's contribution to
     measurable improvements in mission performance.  Improvements in
     productivity, quality and speed of service delivery, customer
     satisfaction, and cost savings are common areas where
     technology's impact can be most immediate.  Early signs of
     success will be examples of measurable impact or where high-risk
     IT projects with questionable results are stopped or delayed as
     a result of IT investment control processes.  Early signs of
     failure will be examples where high-risk, low-return projects
     continue to be funded despite claims of management process
     changes. 

  -- Monitor how well agencies are institutionalizing processes and
     regularly validating cost, return, and risk data used to support
     IT investment decisions.  Informed management decisions can only
     occur if accurate, reliable, and up-to-date information is
     included in the decision-making process.  Project cost data must
     be tracked and easily accessible.  Benefits must be defined and
     measured in outcome-oriented terms.  And risks must be
     quantified and mitigated to better ensure project success. 
     Early signs of success will be agency examples where IT
     contributions to productivity gains, cost reductions, cycle-time
     reductions, and increases in service delivery quality and
     satisfaction are quantitatively documented and independently
     reported. 

  -- Get the right people asking and answering the right questions. 
     Throughout the budget, appropriations, and oversight processes,
     top agency executives, OMB program examiners, and members of the
     Congress must consistently ask what was spent, what was
     achieved, and was it worth it.  Agency heads must be able to
     clearly answer these questions for their IT capital
     expenditures. 


-------------------------------------------------------- Chapter 0:7.1

Mr.  Chairman, the success or failure of this critical legislative
reform will have far reaching impact.  Rising public expectations for
improved service and the need to improve the efficiency of federal
operations to support needed budget reductions all depend on wise
investments in modern information technology.  We look forward to
working with this committee to make ITMRA a success and appreciate
your leadership in spearheading this effort.  That concludes my
statement Mr.  Chairman.  I would be happy to answer any questions
you or other members of the Subcommittee may have at this time. 


*** End of document. ***