IT Managers Missing Their Cue

or years, the information technology community, like Rodney Dangerfield, got no respect. "Get us to the table, and we will show the world what we can do," IT managers pleaded. "Write a law requiring that each agency have a designated senior information resources management official, and things will get better." But the world changed little after enactment of the 1980 Paperwork Reduction Act and the cries continued.

Well, be careful what you wish for. Today, the 1996 Information Technology Management Reform Act, known as the Clinger-Cohen Act, is standing the IT world on its head. It replaced a statutory and regulatory regime based on managing the process of buying and using computers and maximizing competition with a management process based on making a business case for acquiring IT. The law requires agencies to appoint chief information officers and is forcing a capital budgeting view of information technology.

This focus was reinforced by an executive order setting up the CIO Council and by the Office of Management and Budget's Raines Rules, a new set of principles for evaluating IT investments. A new generation of political leadership-most notably, Charles O. Rossotti, the recently appointed IRS commissioner-comes from a background where technology is used as a strategic management tool.

As if the outside pressures weren't enough, the IT community managed to create its own crisis, the year 2000 problem. Because programmers saved computer memory by writing programs that allow only two digits to designate the year, the year 2000 (00 in the computer) will be indistinguishable from 1900. Everything from the banking and credit system to air traffic control could be disrupted unless the computer code is fixed or replaced. (See "Tick, Tick, Tick," January.)

Investing Wisely

Much has been written about the need for more careful scrutiny of information technology investments, and many of us have ideas on how senior managers can do a better job of investing in it wisely-or at least cutting their losses. What is often overlooked in this discussion is the billions of dollars (yes, I said billions) being spent and misspent on IT operations.

According to OMB, the 1998 budget calls for spending $27 billion on IT, or about 6.4 percent of the federal operating budget-up from 4.4 percent in 1988. While there are no reliable numbers on what portion of this money is for new investments, the bulk of it is spent to run the huge information technology apparatus we have built over the last 40 years-everything from the tax system to logistics and payroll.

Clinger-Cohen addresses performance- and results-based management of IT. It requires agencies to benchmark their operations against comparable public- and private-sector processes and organizations. The rhetoric is, not coincidentally, similar to the thrust of the 1993 Government Performance and Results Act.

IT managers will get to the table and senior program managers will have real control if, and only if, they speak the language of the business they are in. ITMRA got it right. Everyone understands the year 2000 problem not as a technical issue but because it could have serious consequences for agencies' ability to deliver needed services. That means IT managers must overcome their fascination with the technology and show how new projects and existing operating budgets contribute to organizational effectiveness. Also, they must focus on the total IT effort, not just the glamorous new systems but also the billions spent annually to keep the existing infrastructure going.

A Ways to Go

I recently had a chance to look at the IT operations at several agencies. Most had sound strategic plans, and their executive summaries said all the right things about the relationship between IT and the agencies' missions. But when you dug into the details, the proposals were simply about technology (e.g. replace the mainframe or upgrade the phones). Worse yet, the budgets were presented in such a way that no manager could figure out the connection between what was being spent and the organization's lines of business. No one in the organizations asked how the spending related to organizational outcomes or how costs compared to other comparable organizations.

Try this test: Ask your CIO the unit cost of anything-processing a payroll, issuing a check, handling a claim. Then ask what other comparable organizations are paying for the same thing. When we asked, we were typically unable to get an answer to the first question-or someone argued that nothing was comparable. That is bogus. There may be good reasons for differences, but you still have to ask the question. What happened in the organizations we surveyed was that the IT folks got what they asked for because senior managers didn't understand and thus were afraid to question or cut.

Clinger-Cohen, GPRA, and the Raines Rules all pose the right questions if managers have the courage and persistence to use them. Even as the fiscal pressures ease ever so slightly, they can't afford not to.

Franklin S. Reeder heads The Reeder Group, a Washington-based consulting firm. He taught project management at the University of Maryland's University College and served as program committee chair for the Government Technology Leadership Institute.