[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
THE PERFORMANCE OF FEDERAL CIOs: HOW DO THEY COMPARE TO CIOs IN THE
PRIVATE SECTOR?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MARCH 24, 2000
__________
Serial No. 106-174
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
__________
U.S. GOVERNMENT PRINTING OFFICE
68-507 WASHINGTON : 2001
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: (202) 512-1800 Fax: (202) 512-2250
Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH-HAGE, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Randy Kaplan, Counsel
Bryan Sisk, Clerk
Trey Henderson, Minority Counsel
C O N T E N T S
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Page
Hearing held on March 24, 2000................................... 1
Statement of:
Doll, Otto, commissioner, Bureau of Information and
Technology, State of Arizona, president, National
Association of State Information Resource Executives....... 34
Flyzik, Jim, Chief Information Officer, Department of the
Treasury, vice chairman, CIO Council....................... 25
Knutson, Gerald J., vice president, Communications and
Information Services, U.S. West............................ 64
Krupa, Suzanne, chief information officer, the Rowe Companies 70
McClure, David L., Associate Director, Governmentwide and
Defense Information Systems, U.S. General Accounting Office 4
Letters, statements, et cetera, submitted for the record by:
Doll, Otto, commissioner, Bureau of Information and
Technology, State of Arizona, president, National
Association of State Information Resource Executives,
prepared statement of...................................... 37
Flyzik, Jim, Chief Information Officer, Department of the
Treasury, vice chairman, CIO Council, prepared statement of 28
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Knutson, Gerald J., vice president, Communications and
Information Services, U.S. West, prepared statement of..... 66
McClure, David L., Associate Director, Governmentwide and
Defense Information Systems, U.S. General Accounting
Office, prepared statement of.............................. 7
THE PERFORMANCE OF FEDERAL CIOs: HOW DO THEY COMPARE TO CIOs IN THE
PRIVATE SECTOR?
----------
FRIDAY, MARCH 24, 2000
House of Representatives,
Subcommittee on Government Management, Information,
and Technology,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the subcommittee) presiding.
Present: Representatives Horn and Turner.
Staff present: J. Russell George, staff director and chief
counsel; Randy Kaplan, counsel; Matt Ryan, senior policy
director; Bonnie Heald, director of communications; Bryan Sisk,
clerk; Ryan McKee, staff assistant; Trey Henderson, minority
counsel; and Jean Gosa, minority assistant clerk.
Mr. Horn. The Subcommittee on Government Management,
Information, and Technology will come to order.
The purpose of this hearing is to assess the effectiveness
of Federal Government's chief information officers, the CIOs,
in comparison to their counterparts in the public and private
sectors.
The Clinger-Cohen Act of 1996 required each of the major
departments and agencies in the executive branch to appoint a
CIO to manage the agencies' information technology programs. In
addition, the Clinger-Cohen Act required that agencies reform
their information technology management organizations based
largely on the successful practices of the private sector. To
emphasize the importance of the CIO's role in management, the
act also required that the Federal CIOs report directly to
agency heads.
This morning the General Accounting Office will release a
new executive guide entitled, ``Maximizing the Success of Chief
Information Officers: Learning from Leading Organizations.''
This GAO guide acknowledges that the position of CIO in the
Federal Government is still evolving. And, in fact, agencies
are taking steps toward better utilizing the talents and
leadership of their CIOs. However, the breathtaking speed of
this information age demands an equally fast response from
Federal agencies. From e-government and e-security to e-taxes,
chief information officers in the private sector have provided
the technical and managerial expertise that has successfully
brought corporate America into an era dominated by high
technology. The private sector knows that information
management not only dictates how a business works, but
increasingly defines what that business is.
Federal CIOs must be empowered to provide the same type of
leadership in government agencies. The Federal Government's
senior management, the Cabinet Secretaries, agency leaders,
their immediate staffs and the CIOs, must rise together to
meeting the technical and management challenges that lie ahead.
The Federal Government cannot respond to the information age in
a stone age manner.
We welcome our panel of witnesses, and we look forward to
your testimony.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Horn. Let me explain how we work here. One, we swear in
all the witnesses.
No. 2, we go down the line of the agenda, and automatically
your full statement is put in the record. We would like you to
summarize it between 5 and 8 minutes, and that permits us to
have a lot of time for questioning and a dialog between members
of the panel.
So if you would stand, raise your right hands, we will
swear you in. And anybody that is going to be whispering to
you, put them up, too.
[Witnesses sworn.]
Mr. Horn. The clerk will note that all five witnesses have
affirmed the oath.
Mr. McClure is the Associate Director for the
Governmentwide and Defense Information Systems for the GAO.
STATEMENT OF DAVID L. McCLURE, ASSOCIATE DIRECTOR,
GOVERNMENTWIDE AND DEFENSE INFORMATION SYSTEMS, U.S. GENERAL
ACCOUNTING OFFICE
Mr. McClure. Thank you, Mr. Chairman. It is a pleasure to
be here and talk about the role of the chief information
officer in the Federal Government and to introduce our recent
study on maximizing the success of chief information officers.
Your subcommittee plays a very important role in focusing both
oversight attention and facilitating constructive dialog on
critical information management issues in the government, and
we are looking forward to working with you in that regard.
Mr. Chairman, we are witnessing an unparalleled movement
into the electronic and digital age for business and
government. In the Federal Government, technology investments
are paramount to realizing the programmatic results expected
under the Results Act, to improve basic fundamental management
and to maximize human capital skills. IT projects, as you know,
can produce spectacular improvements in operations and
performance if managed well. They can leave legacies of costly
failures if managed poorly. With the spending rate for IT
approaching $40 billion annually, we can ill-afford not to
manage these investments with increasing scrutiny and a demand
for tangible benefits at acceptable cost.
The CIO positions were created by the Clinger-Cohen Act in
1996 to tackle these issues. The progress to date is mixed and
uneven. We certainly made a lot of progress in many areas.
There is more interaction between Federal CIOs, program
managers, and chief executives in the Federal agencies than in
the past. Senior investment boards have been created and are
being used on a consistent basis across almost all of the major
Federal departments and agencies to make investment decisions.
We have a very active CIO Council that has brought
governmentwide attention to some important issues like
security, critical infrastructure protection, IT human capital,
and investment planning.
The heavy involvement of the CIOs in the Y2K problem also
helped to sensitize agency executives to the increasing role
that technology is playing in helping to achieve their mission
outcomes and in their daily operations. We have as a result of
the Y2K experience a much better inventory of mission-critical
systems in the Federal Government. However, we also have
problem areas that continue to persist, and in our reviews of
agencies since the Clinger-Cohen Act, we have noticed a
consistent pattern of problems.
There is inconsistent application of IT investment
management across the government, and incomplete cost-benefit
and risk data before projects are actually approved.
Improvements are needed in software development, architecture,
and certainly to security. These are areas where the Federal
CIOs can certainly help make marked improvements and move the
government forward.
Today we are releasing our executive guide on maximizing
the success of chief information officers. It is one in a
series of guides that we have put out on best practices in
information management and technology. Others have dealt with
investment management, capital planning, security, and human
capital, and many of these guides have formed governmentwide
consensus on how to basically approach some of the fundamental
IT management challenges in government.
What I wanted to do with you today is give you some
highlights of what we found in the study and answer any
questions that you may have about the specifics. We have a
chart up in the hearing room that basically outlines for you
what we found in the study, and I just wanted to again point
out some highlights.
We found some critical success factors, some guiding
principles, and some key players that are important to achieve
success of CIOs. The first column, downward column, on the
chart focuses on alignment and has to do with factors that are
outside the domain of the CIO. This is an important point. In
all of the case study organizations that we have looked at, the
success of the CIO was heavily dependent upon executive
management understanding, first, in the role of information
management to the organization, and second, in figuring out the
best positioning of the CIO in the organization structurally as
well as the skill set that meets the organizational needs and
problems that the company or the public sector organization is
experiencing at that moment in time.
There is no cookie-cutter approach to selecting a CIO. Our
study showed that. There is a fundamental need for both
business as well as technical skills. The key point is matching
the right person to the organizational needs at that moment,
and that direction coming from the executive level of the
corporation.
The second downward column deals with promoting
organizational credibility, and this is, again, an important
point to make in this regard. CIOs in these organizations
focused on earning credibility and establishing credibility,
and used a series of management approaches to do so. They
managed to put in standards, processes, and basic approaches
that consistently followed industry standards for good IT
management. They were constantly focused on results, and
balancing both short-term results with a need to show long-term
improvement. The need for short-term results was critical for
the CIOs to be able to establish their credibility record and
to partner effectively with the business side of the
organization.
In the third column are our execution responsibilities.
Once a CIO is positioned, and once he or she determines how to
build credibility through informal and formal networks, we have
to get down to the business of implementation. Several key
practices were notable here. First, organizing the CIO
organization in a way that, again, provided effective services
and products to the organization that it served. Not all of
them were formed in the same fashion, not all of them were
focused on the same products and service delivery, but this was
a dialog they had to have with the business of the corporation
before they could figure out what skill sets and what
particular products and services were critical to achieving
mission or programmatic outcomes.
The last column deals with developing human capital. This
is pressing for private and public sector. It is a competitive
market. We noticed in the best practice organizations that we
looked at, there was a variety of techniques used for
attracting, retaining, and refreshing skill sets. And there
were a variety of techniques used to motivate employees
internally to make sure that they executed their
responsibilities in a very, very well-conducted fashion.
If we compare the Federal agencies to those practices, we
find one area of commonality, and that deals with credibility-
building. We see a lot of success in the Federal CIOs in the
last 4 years moving to use informal and formal means to
establish credibility.
In the other areas there is less commonality and distinct
chart differences. Federal organizations don't go through the
same process in which the chief executive officer along with
the executive peers figure out what specific skills they need
in a CIO before the selection is made. We see less interaction
between the CIOs in the Federal Government and the executive
management tier, and we also see less focus of the Federal CIOs
on performance measurement both at the project level, but, more
importantly, on the IT function itself, and how it is
delivering value to the organization as a whole.
So in conclusion, the study points out that there are
indeed areas where we can learn to capitalize more on
positioning and putting in place CIOs that can really make a
difference. Agency leaders must help facilitate success in IT
management. The CIOs are necessary, but alone they cannot do
this job. They have to have top executive support. They have to
have working partnerships with business--the business side of
the organization, and they have to have skilled and motivated
people to be able to pull off the vast range of
responsibilities that they have. The CIOs themselves can
reinforce these things, and in the years to come we should be
looking for CIO credibility to be enhanced through attention to
those specific areas. And progress has certainly been made, and
it is admirable progress in the short time since the passage of
the act.
I will be happy to answer questions specifically about the
guide as we move on.
Mr. Horn. Thank you very much, Mr. McClure.
[The prepared statement of Mr. McClure follows:]
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Mr. Horn. The document that I have been thumbing my fingers
through looks like a very thorough job, and I believe you might
have a best-seller at the Government Printing Office.
Next is Mr. Jim Flyzik, Chief Information Officer,
Department of the Treasury, and vice chairman of the CIO
Council. Mr. Flyzik.
STATEMENT OF JIM FLYZIK, CHIEF INFORMATION OFFICER, DEPARTMENT
OF THE TREASURY, VICE CHAIRMAN, CIO COUNCIL
Mr. Flyzik. Mr. Chairman and members of the subcommittee, I
appreciate the opportunity to discuss the role of the chief
information officer in the public and private sectors. First I
want to thank the chairman and other members of this
subcommittee for your continued support and encouragement
toward the improvement of information technology performance
and accountability in the Federal Government.
As many of you know, I serve as the Deputy Assistant
Secretary for Information Systems and Chief Information Officer
for the Treasury Department. In this role I recognize I provide
strategic direction and oversight for all information
technology programs within the Treasury Department and its 14
bureaus. Since February 1998, I have served as the vice chair
of the Federal CIO Council, where I play a key role in the
strategic direction of the Council and the Federal Government's
use of information technology.
Today I would like to focus my comments on three issues:
the evolution of the CIO in the Federal Government, some
differences between the public and private sector CIO roles,
and key challenges facing Federal CIOs.
The role of the CIO in public sector is evolving through
various stages. In the first stage the role was ill-defined,
and the CIO was thought of as a technician and then perhaps as
an adjunct to the CFO. As a result of the Clinger-Cohen Act,
the work of the Federal CIO Council, the growth of the
Internet, e-commerce, and the success in addressing the Y2K
problem, the CIO is now progressing toward a business partner
and a peer with senior management.
CIOs were able to demonstrate their value and the value of
technology to their organizations while addressing the serious
issues involved with Y2K. In the private sector many CIOs have
evolved into a chief technology officer, working side by side
with the CEO, as evidenced by the many dot-com organizations.
The public sector CIO has not yet reached this level of
influence. As my colleague, the Associate Director of the GAO,
has testified, most business decisions today involve
technology. The CIO should be positioned at the table with the
CEO, chief operating officer, and CFO where he can work as a
team with senior management. It is critical that the CIO be
involved in agency budget and resource allocation decisions. If
CIOs are to be held responsible and accountable for results,
they will need the authority to influence resource decisions.
At Treasury I am fortunate to have an excellent working
relationship with the CFO and other senior officials, which
allows me to be involved in all investment decisions.
There is also a disparity from agency to agency in the
organizational placement and authority of the CIO. Regardless
of the organization placement, however, CIOs must demonstrate
value and earn credibility to be effective.
Although many of the key IT challenges within the public
and private sector are similar, there are several areas where
they differ. As public employees, we must abide by statutory
and regulatory requirements unique to the Federal Government.
We agree that these requirements are important and necessary to
guarantee the integrity of our actions for our citizens, but we
must also recognize that they impose restraints on our ability
to procure products and services, recruit IT professionals, and
quickly make resource adjustments to meet dynamic market
priorities. Let me explain.
The public sector cannot compensate IT professionals at the
same level as the private sector. We are constrained in hiring
young IT professionals at entry levels competitive with the
private sector. The private sector can recruit based on talent
and based on market conditions. We also have a difficult time
justifying promotions based on specialized technical skills.
The Federal CIO Council is working closely with the Office of
Personnel Management to address these concerns.
Private sector CIOs can work directly with their CEO to
make immediate decisions on resource allocation and procurement
priorities to meet changing market drivers. Public sector CIOs
must plan well in advance and work through various layers of
government to achieve such change.
Another concern is difficulty of the government to fund
interagency and intergovernmental IT programs. Although the
business cases for governmentwide efforts are compelling, the
current appropriations processes make funding such projects
problematic. The current ``passing of the hat'' approach to
interagency project funding is not a viable long-term solution.
The Federal CIO Council is working with OMB, the CFO Council,
and other governmentwide groups to identify possible strategies
to address this matter.
CIOs in the public sector also carry unique
responsibilities to set information policies within their
agencies and comply with governmentwide policies. The public
sector CIO must find ways to reduce paperwork burdens on the
public, adopt sound records management programs, and
disseminate government information.
Last, I would like to mention some challenges facing
Federal CIOs. There have been several studies focusing on these
challenges. I had the opportunity to participate in many of
these studies, including the fine work done by GAO in the
report they are releasing at this hearing today. Some
challenges CIOs face include taking advantage of rapidly
evolving technology to make the government more effective,
hiring and retaining skilled IT professionals in the
government, assuring information system security and privacy in
preventing unauthorized system intrusions, obtaining adequate
funding particularly for interagency and intergovernmental
programs, and empowering the CIO as a key decisionmaker and
ensuring that we cost-effectively apply technology through such
processes as IT capital planning and investment management
within the agency.
In summary, I would like to reiterate that the position of
the CIO is evolving in a positive direction. I believe the Y2K
success, the Internet, e-commerce, and other industry trends
are creating a heightened awareness of the importance of
information technology. This heightened awareness will
accelerate the evolution of the Federal CIO consistent with the
experiences in the private sector. It will also result in the
true implementation of all provisions of the Clinger-Cohen Act.
I would like to thank the subcommittee for the support it
has given to the work of the Federal CIO Council. Without your
support, we would not have been able to achieve the national
success we enjoyed with Y2K. I would also like to express my
appreciation and commend GAO for the excellent work they are
doing in this area. I would like to thank the members of the
subcommittee for the opportunity to present to you this
morning.
Mr. Chairman, this concludes my formal remarks, and I would
be happy to respond to questions.
Mr. Horn. Thank you, Mr. Flyzik. That is helpful testimony
from the firing line.
[The prepared statement of Mr. Flyzik follows:]
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Mr. Horn. Next is Mr. Otto Doll, the Commissioner of the
Bureau of Information and Technology, the State of South
Dakota, and president of the National Association of State
Information Resource Executives.
Mr. Doll, we are delighted to have you with us.
STATEMENT OF OTTO DOLL, COMMISSIONER, BUREAU OF INFORMATION AND
TECHNOLOGY, STATE OF ARIZONA, PRESIDENT, NATIONAL ASSOCIATION
OF STATE INFORMATION RESOURCE EXECUTIVES
Mr. Doll. Thank you, Mr. Chairman and members of the
subcommittee. I appreciate the opportunity this morning to
share the State's insight into the dynamics of the CIO-Governor
relationship that has evolved over the last few years. Public
sector CIOs can be of vital importance to our public leaders'
decisionmaking on matters of governance. The proper alignment
of information technology to government programs is a key
enabler of effective government. A CIO who can support the
chief executive's vision, whether of a mayor, Governor or the
President, facilitates the achievement of government's goals.
To achieve effective use of IT, the States have been
gravitating to CIOs reporting to the Governor. NASIRE's survey
shows 27 CIOs currently report to a Governor, up from 8 in
1996. A Cabinet-level reporting relationship appears critically
important. Technology has become too important to the business
of government today. IT is how business is delivered in
government; therefore, the CIO must be a party to the highest
level of business decisions. This is consistent with private
sector's direction as shown by companies such as General
Motors, whose CIO is at the board of directors level.
Three variations on this CIO structure currently exist in
State government today where the CIO reports to a Governor
without an advisory board, to a Governor after consulting with
an advisory board, or to a governing board and then to the
Governor.
NASIRE's survey also shows 29 States have some sort of
technology commission in a supporting or oversight role.
Separating technology from government programs seems impossible
today.
State CIOs are responsible for leading the Governor's
visions and goals into action. As such, the CIO needs to
inspire the leaders to dedicate political capital to the IT
agenda. One powerful dynamic of IT, whether a State is driven
by education, criminal justice, economic development or
whatever, IT can enable any of them.
State CIOs' scope of authority is primarily confined to the
executive branch of government, but has expanded in many States
to the educational systems, some into the judicial branch, and
a few into the legislative branch. Based on objectives set by
the Governors of the State, CIOs develop a process whereby each
agency is learning within the constructs of their organization
the breadth of the organizational information in a statewide
sense while working toward these common objectives. The larger
the enterprise view and responsibilities of the CIO, the better
the IT solutions Government achieves.
Functional authority of the State CIO is concentrated in
enterprisewide hardware and software systems as opposed to the
desktop world of personal computing, examples being
telecommunications networks, large data processing centers,
large information centers, data warehouses, and public access
facilities.
CIOs are gaining authority over IT purchasing and
acquisitions, IT facilities, IT personnel, and office
automation. By combining managerial and technical knowledge,
the State CIO can contribute significantly by bringing to
government economies and efficiencies of scale in procurement,
interoperability of systems, elimination of duplicative
processes, data-sharing capabilities, and security in privacy.
State CIOs' scope of approval authority is usually
overseeing of statewide IT plans and policies; approving
statewide technical IT standards, rate schedules, budgets,
personnel classifications, and salaries and resource
acquisitions. CIOs are being asked to improve individual
departmental IT rate schedules, personnel classifications, and
resource acquisitions.
Many States are considering their CIOs for operational
control of IT assets. The CIO is then in the best position to
ensure that IT investments are meeting the Governor's policy
objectives. This approach matches the private sector where CIOs
generally have budget and operational authority.
NASIRE's survey showed that 30 State CIOs have
responsibility in at least three of the following four
categories: planning, policy, standards, and acquisitions. Some
25 percent of CIOs have minimum dollar thresholds on their
scope of authority. Successful State CIOs spend most of their
time offering perspective, context, and direction to both
technology and program personnel. Considering the considerable
size and rate of growth of IT expenditures by government, the
CIO must advocate the wise deployment and use of IT resources
to solve business problems or to capitalize on opportunities.
Several elements have been found to contribute to
successful Governor-CIO approaches. Shared IT vision by both
the Governor and CIOs sets appropriate expectations of what
technology can and cannot do. Strong accountability begets
trust, the capital of governance. Sufficient level of authority
allows working across agency and jurisdictional boundaries.
Good management skills allows the CIO to get technologists and
program personnel to realize the IT vision. Balance of business
and governance orientations allows appropriate use of business
principles in a public sector context. And finally, the ability
to function in public administration allows the CIO to be
effective in the political and civil service spheres.
The State CIO also cooperates with local and Federal
authorities, often serving as the facilitator of
multijurisdictional initiatives. Governments see the value of
sharing information, such as law enforcement has seen for many
years, and integrating their processes in digital government is
enabling, as is sharing IT infrastructure such as networks.
Having a key authority figure in the CIO allows States to
better coordinate resources across local, State, and Federal
Government for the complex information systems required to
solve the governance of today.
The Y2K issue provided unique insight on the importance of
the CIO position in government. Y2K presented the most
extensive IT initiative ever undertaken, with coordination
being required between governments, businesses, and the public.
All aspects of IT were affected. Dealing with such a massive
project showed that we cannot rely on the stovepipe models of
the past. Until Governors took ownership of the Y2K problem
through their CIOs and the Federal Government took ownership
through the President's appointment of John Koskinen, the
proper coordination of policy and processes was not possible.
Mr. Koskinen, in essence, served as the CIO of the Federal
Government. He brought accountability and action to bear on the
Y2K challenge, just as the State CIOs were doing in the States,
as were many county and city CIOs across the country. Mr.
Koskinen aligned the numerous Federal agencies and provided a
single point of contact for the States, just as the State CIOs
were providing a single point of contact between the myriad of
State agencies and the Federal Government.
Why not have the structure in place to deal with nationwide
law enforcement standardization, digital government
initiatives, digital divide solutions, et cetera? In the
increasingly technology-reliant world we live in, the CIO
serves as the government's information management leader and
key strategist to the decision points facing our political
leaders. The role of aligning technology to achieve government
program goals has never been so crucial to effective
government. The CIO plays an essential role for making
information technology work for government.
Again, I appreciate the opportunity to share our thoughts
and look forward to your questions.
Mr. Horn. Well, thank you very much, Mr. Doll. That is very
helpful information.
[The prepared statement of Mr. Doll follows:]
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Mr. Horn. Next is Mr. Gerald J. Knutson, vice president,
communications and information services, U.S. West.
STATEMENT OF GERALD J. KNUTSON, VICE PRESIDENT, COMMUNICATIONS
AND INFORMATION SERVICES, U.S. WEST
Mr. Knutson. Mr. Chairman and members of the subcommittee,
this is a unique opportunity for someone of the private sector
to follow three distinguished gentlemen from the government
sector in discussing this subject. I have had the opportunity
in the past few weeks to review the GAO study, and was
interviewed as part of an input group into the study. I had not
really looked at it for some period of time, and then I was
asked to prepare a written statement for this subcommittee, and
I did do that. And then I went back and reviewed the final
version of the document, and I was very surprised to see that
the thoughts of the document paralleled the thoughts in my
statement.
Rather than being redundant with what you have heard out of
David and out of Jim from the public sector perspective and the
CIO perspective, which he does very well, and Otto from the
State perspective, I really do concur with the points that they
have highlighted and emphasized. They are extremely important
points, and I would like to touch on four points, somewhat
redundant, but I think they merit some further clarification.
As was stated, the government spends about $40 billion
annually on technology. In the private sector, we spend
generally in the range of 5 to 10 percent of our company's
revenue on technology investments. When we focus on spending
these significant dollars, I think it is very, very important
that the CIO is positioned properly. This has been the case for
successful CIOs and successful companies in the private sector
that the CIO does, in fact, become a significant member of the
lead team and report directly into the CEO. That has been
proposed, I know, in government, and it is working in various
ways in the government, but until the CIO is recognized and
given that authority and accountability across whatever
organizational entity you are dealing with, it will be very
difficult for that CIO to be successful.
It is also important then in that process that the CIO
participate in setting the visions for the company or the
organization and in establishing strategies that are business-
oriented. I am assuming the business entity does, in fact, set
strategies, and that they know what direction they are going to
go moving forward, and that the CIO is an active participant,
and, as a result of participating, has an ability to go back
and create the necessary strategies and set the priorities in
spending the very scarce dollars that are required to do the
work in technology.
Another area that is very important is in the area of
partnership. There must be established a mutual trust and
confidence level between the CIO and the members of the lead
team, and an ability to demonstrate that the CIO and the IM
organization is able to deliver on their commitments and to be
responsive to the needs of the business. What I have seen many
times in the private sector is that you don't get that sense of
trust and confidence between what the CIO is responsible for
and the IM organization and what the leaders of the corporation
or the lead executives would expect.
Another area is in sponsorship. The CIO cannot be
successful as an entity unto himself. He is very dependent upon
having very strong sponsorship from the business side that is
driving the requirements, driving the priorities, providing the
funds and the people to make it successful. In what I have
witnessed with the government is that there is a tendency to
throw the problem over the wall and expect the CIO to pick it
up and run within the confines of the technology community to
make it successful, and you don't see an equal partner that has
skin in the action and that is really involved and committed in
supporting and sponsoring the work. Unless you get that type of
partnership and involvement out of your business partner, it
will be impossible for the CIO to be successful.
The other area is in a partnership with the leader of the
business entity or the government agency to help set the
priorities and determine within the constraints of the budgets
that are established, how they want to spend the funds and get
the work done through the assistance of the CIO. But again,
there has got to be very strong leadership from the business
side supporting the CIO to make that successful.
The last thing which was mentioned by Jim, and that is just
the nature of the government and how it operates. The
difficulty in getting funding; oftentimes the lack of
continuity in leadership and political appointments make it
difficult for a CIO to be successful. You need almost 3 to 5
years of involvement in turning things around and migrating
legacy applications into future technology solutions. With the
structure of the government, that becomes very difficult.
Anything that can be done to create some continuity over the
lifetime of that CIO, would be tremendously helpful in making
the CIO position successful.
With that I will be glad to answer any questions.
Mr. Horn. Thank you very much, Mr. Knutson. We appreciate
having you here.
[The prepared statement of Knutson follows:]
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Mr. Horn. The next member from the private sector is Ms.
Susan Krupa, the chief information officer of the Rowe
Companies. You might tell us a little bit about the Rowe
Companies. U.S. West we know about.
STATEMENT OF SUZANNE KRUPA, CHIEF INFORMATION OFFICER, THE ROWE
COMPANIES
Ms. Krupa. Thank you, Mr. Chairman and members of the
subcommittee and the other attendees here today, for the
opportunity to present before you my testimony of my
experiences in the private sector as well as some of my
experiences in the public sector.
The Rowe Companies is a five operating subsidiary firm. We
are largely in the area of home furnishings manufacturing,
which consists of Rowe Furniture, Mitchell Gold, and the
Wexford Collection, which is a case goods company.
In some of the challenges of CIOs in trying to attract
talent, I grapple with those same challenges, having my
manufacturing facilities that I am charged with managing the
staff there, both engineering and technology staff, in the
remote areas of the country, which is difficult to attract
talent. We also have two retail subsidiaries, which are
Storehouse Furniture, which is a national furniture chain, and
Home Elements, which is a mid-Atlantic/Southeast, moving into
the Midwest, home furnishing store as well.
In my capacity at the Rowe Companies, Mr. Chairman, Mr.
Birnbach is the chairman of the Rowe Companies, who I report
directly to, and I state that here in this session just to
emphasize the importance of the role of the CIO and where they
need to report in the organization. I have direct
responsibilities of reporting to the board of directors on a
monthly or quarterly basis on the status of IT initiatives.
These are mandates within the Rowe Companies.
In my past experience, just to emphasize that point again,
I was the CIO of KPMG Barons Group, which is the international
consulting firm of the U.S. Firm KPMG Peat Marwick. There I
reported to the chairman of KPMG Barons Group. I was part of
that executive management team, and it is critical in both
public and private sector to have the technology position
leveraged within the business organization.
Mr. Birnbach has made a commitment to proactively managing
information systems rather than continually building upon the
current systems investments in a reactionary manner. This
approach positioned the systems to support the growing
requirements and strategic direction of our business. He has
charged me with creating an environment that includes both best
business practices and technology talent in the furniture
industry; that is, our industry. He has required me to
capitalize on the synergies of the operating subsidiaries as
well as exploit the advantages that are embedded in the
autonomy of these operating subsidiaries, much like the
disparate agencies--looking at Mr. Doll's testimony, he has
disparate agencies to manage within State governments that have
their very different requirements.
I am sure the public area of waste and waterworks, if you
will, is very, very different than the financial offices. So I
am charged with the responsibility of meeting with those
business unit heads, if you will, or agency heads, in Mr.
Doll's case, and helping them in defining their requirements
and finding where the opportunities are that we can leverage
technology to help drive their business forward.
We are a service organization. Information technology is a
service organization. The Federal Government is a service
organization in much of what it provides to the citizens of
this country. That defines the criticality of the chief
information officer within the Federal Government as well as
the private sector.
Some of the things that we at the Rowe Companies and my
colleagues in the industry look at are a couple of terms that I
would like to share with you today, and I hope that we take
away and look in the Federal Government as a passionate vision
and mission that we should move forward with in this century.
The speed at which today's business environment is moving and
changing demands that information systems are not only seen as
operational tools, but as strategic systems that are employed
to achieve competitive advantage. And yes, there is competitive
advantage in the Federal Government.
In this century it is a requirement to utilize technology
to operate a global business with speed, efficiency and
information. In order to effectively accomplish this business
requirement, our information system strategies must
communicate, interface, share, and be sustainable. In looking
forward at the dynamic and evolving picture of what business
represents, what we do, who we are, and where we are heading,
we must continually ask ourselves what constitutes our core
business. With that can be a process, our intellectual capital
or property or business design. Nonetheless, it must always be
aligned to where the market is, and that is directly
translatable in the Federal Government. It must be aligned to
what the business at hand is.
Our core business may evolve faster than we have ever
envisioned. Therefore, it is absolutely critical that we have
business systems that assist and facilitate the management of
the strategic inflection points.
The mandate of all CIOs in this century is to motivate
change to affect the way we fundamentally do business. Yes,
this century we will change the way we do business both in the
public and private sector. This century clearly represents the
speed at which change can and will occur. CIOs should be
committed to employing strategic technologies in the next 5
years that will define this new generation, not only in the
private sector, more importantly in the public sector.
We will need to in our respective industries capitalize on
the intellectual capital of our team members who are the
market-makers of the past century. We must exploit the
boundlessness of the new team members that see the invisible to
achieve what was once thought impossible. The Internet, the
tool kits available to us today and the various technologies
will allow us to accomplish these objectives and this vision.
So I ask you today to empower the CIOs in the Federal
Government to effect and motivate change as we have been
empowered in the private sector to do so. I thank for your time
and the opportunity to be here today. I would be happy to
answer any questions.
Mr. Horn. We thank you very much also.
We are now going to begin the questioning, and I will start
with Mr. Turner, the ranking member of the subcommittee, and if
you have an opening statement, we will put that at the very
beginning as if read.
Mr. Turner will ask the questions for 10 minutes, and then
I will take 10 minutes until we have the questions out on the
table.
Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman. The subject of this
hearing is perhaps for our committee one of the most exciting
subjects that we can discuss, because I think the utilization
of information technology in government provides us with the
best opportunity that we have had in the history of this
country to reform government. The tools that can be utilized,
that can be harnessed, will make government more efficient,
much more cost-effective, much more consumer-friendly, and much
more transparent and open.
In the long term, our ability in government to use
information technology is going to be the thing that is the
real challenge of this century. Because if we do it
successfully, we will increase the public's confidence in
government, which is at an all-time low. We will be able to
increase the accountability and the cost-effectiveness in
government, and we will be able to provide the things by and
large which the public demands from government.
I understand we have 54 CIOs in Federal agencies currently,
and I would assume, Mr. McClure, and you correct me if I'm
wrong, that the emphasis that we have had on solving the Y2K
problem has probably been the priority of CIOs throughout all
of these agencies. And, of course, I guess many of these CIOs
have not been in place for all that long, 2, maybe 3 years at
the most, and this seems to be a critical time for this
particular hearing because we know that the CIOs' role in
helping solve the Y2K problem was all-consuming in many
respects.
Government, we all know, always works better when there is
a crisis. I think the chairman has rightly proceeded with our
committee to emphasize the issue of computer security, which is
a hot topic and comes about as close to a crisis as we can talk
about. But those of us who have served in government for a
while know that it is always better to have a crisis to make
things happen. I am hopeful that what we can learn from this
hearing and the work of this committee are ways that we can
look at information technology and its applications in
government in a broader sense so that we can accomplish the
goals that each of you have stated, and that is to make sure
that chief information officers in the public sector operate
like the successful companies in the private sector. Clearly,
in the private sector if you are not applying information
technology, you are falling behind; and the same is true in the
Federal Government.
I was interested in, Mr. Doll, and I am sure there are some
examples of States in addition to your own that represent
shining examples of successful implementation of information
technology. Perhaps I can brag a little bit about the State of
Texas, which was the leader, first in the Nation to promote the
idea of using smartcards for electronic benefit transfer for
the Food Stamp Program, which has saved millions of dollars,
eliminated much fraud, and made that program much more
accountable and efficient to ensure that those who are entitled
to the benefits receive them.
But in the early days of the State's efforts, from my
experience in the State legislature, information technology
officers or commissions, one of their first roles was to always
review and make recommendations regarding the acquisition of
computers and software for the various agencies so they would
be sure that they were buying the right materials. Have we
moved away in some of our better examples of State leadership--
have we moved away from that to the broader role of actually
suggesting ways and encouraging and implementing information
technology?
Mr. Doll. Most definitely. State CIOs are more in an
analytical view of how do you align technology to, in essence,
digitize government as well as solve its problems. I think
there is an inherent understanding that the more technology we
can apply to what has in the past been a very paper-intensive,
process-intensive organization called government, the better
off the States will be.
You are right, it is a very competitive environment out
there. We are competing with each other on the State level as
well. We kind of view ourselves much as private industry does.
They compete with their competitors where we turn around and
provide the best government possible to our citizens and our
businesses within our State relative to applying technology as
an enabler. So, yes, you will see us, whether it is South
Dakota or whatever State, looking at how we take the
technologies that are in existence, the ones that are on the
horizon, and applying those to the process of governance.
Mr. Turner. Are you in a position to have enough of an
overview of the various States' activities to really be able to
share with us what you think the best model is for chief
information officer status at the State level?
Mr. Doll. What we find in talking with my colleagues and
the surveys that we have done, as I mentioned, we are quickly
migrating to the chief information officer being at a Cabinet
level; reporting directly to the Governor; having authority, at
least from a visionary and a strategy standpoint, across all
State government, executive branch for sure, and at times even
over judicial and legislative branches; and we do not see that
trend stopping. We feel that that is something that is just--in
the future you will find all CIOs reporting to a Governor, and
that is one thing for sure that I think is of the success
model.
I think the other key aspect is that the CIOs themselves
are probably also going to get more and more responsibility
over operational matters. Take a look at standardizing
technology.
I am lucky in South Dakota as the CIO because I have both
operational and strategy. I set all standards for all State
agencies. Most States have IT run by each of their State
agencies, and so they have more of a coordination effort,
whereas I have that direct line responsibility. I think that
more States of the smaller and midlevel populationwise will be
moving toward my model. Such States as Kentucky, that size of
State is going to move more toward some of the operational
responsibilities also now falling under that CIO.
So I think those are two basic trends and what people feel
they need to have, that level of authority, as well as have
that level of exposure to what each of the State agency
programs needs done, because with that level gives you access
and input into decisionmaking about those programs.
Mr. Turner. Mr. McClure, how does what we see going on in
the Federal Government today match up with the models that Mr.
Doll is talking about that he believes to be a successful model
for CIOs?
Mr. McClure. It has always been said that the States are
the experimental stations for federalism, and I think what we
see in the States is very reflective of what we see in the
private sector. We actually spent time with the CIO in your
State, Carolyn Purcell, a great example of a CIO focused on
providing tremendous oversight and continuity to standards and
to common approaches to systems being built across State
agencies.
In all of the States that we visited, three others in the
study, what we found were CIOs were focused on the unique
problems, situations and opportunities confronting State
government. Although they are common, many of them had
different needs at the time. In one State the CIO was charged
with bringing spending under control and making sure that
dollars were being spent wisely. In another State, a State CIO
was focusing on e-government and making sure that service
initiatives were being sent electronically. So very much in
line with private sector models in which you will find that the
CIO is matched for the problem and the opportunity that is
being presented to the organization at that moment. And finding
someone that can actually hit that problem on the head is very
critical. There is a lot of correlation between State CIO
models and what you see in the private sector.
In the Federal Government we have a very mixed
implementation with, again, the same story, but not nearly as
much focus as we see in the States, where State CIOs are
partnered with Governors and really participating at very high
executive levels in decisionmaking for IT. Again, it is not
across the board in the Federal Government. Mr. Flyzik sits in
on some of the most important decisions made at the Treasury
Department. He sits at the table. That is simply not uniform
across all of the Federal agencies at this time.
Mr. Turner. I yield back the balance of my time.
Mr. Horn. Mr. McClure, let me pursue a couple of things
here. Your testimony raised several challenges about Federal
CIOs and what they face that may not be common in industry,
including the nature of the Federal budget process, the lack of
involvement of top management in key IT projects and human
capital constraints.
In your opinion, do you think we should look more toward
what the private sector CIOs do in their entities, and try to
make those opportunities for the Federal agencies, and
particularly looking at the CIO management frameworks that
would work and wouldn't work in government as to what you see
out in the States and the major cities of America?
Mr. McClure. I think there are some great opportunities for
Federal CIOs to learn tools, techniques, and practices being
used in the private sector that are clearly applicable in the
Federal setting. I think Jim raised some very good points about
differences in the Federal sector, that being mainly that our
executive management levels at the Federal level are focused
mostly on policy, less so on operations and management. We have
a budget process that allows multiple entry points for funding
streams to be changed. We have inflexible personnel systems
compared to most private sector organizations. However, and I
think Jerry will back me up on this as well, the private
companies are faced with the same problems. There is high
turnover in corporate executives, uncertainty in funding
streams at many points in time, and there is a competitive
hiring and retention market for all of us.
So these are not insurmountable barriers for Federal CIOs.
It just means the speed, the pace, and the direction in which
you are going to see the reform in government might not
parallel what you would see in the private sector.
Mr. Horn. In your survey did you take a look to see if the
CIOs were simply fully devoted to the CIOs? I had a problem
about 5 years ago with a few agencies, one of which was the
Treasury Department, where the Assistant Secretary for
Management seemed to want to take over everything, and that is
not what we did when we passed those laws. We want full-time
CFOs and CIOs. They are big jobs, and they should not be
diverted. That is why a lot of these agencies were not doing
very well either.
What did you find out in your survey? Do we have too many
people under one hat, or do we get an independent CIO in the
Federal Government?
Mr. McClure. In the private sector and in the States, you
see CIOs focused exclusively on IT issues. The reporting
relationships may vary. You see CIOs in private sector
reporting to CFOs, to the heads of the corporations. There is
not a consistent model, but there is a clear difference.
I think there has been tremendous improvement in the
Federal sector in that the majority of CIOs in the Federal
Government now are focused on IT. We have relatively few dual-
hatted or multihatted CIOs.
Mr. Horn. How many do we have? Can we get them for the
record?
Mr. McClure. I think there are approximately three CIOs
among the 24 CFO agencies that are dual-hatted where they are
either the CFO as well as the CIO, or they have another
significant responsibility. That is a marked improvement from
the years prior to the Clinger-Cohen Act.
Mr. Horn. Do you remember the three?
Mr. McClure. I believe I can. It is at HHS, at Justice, and
there is one other. I can provide it for the record.
Mr. Horn. As I remember, the lowest grade that we gave in
the Y2K exercise was the Justice Department. That might explain
something.
Mr. McClure. The other is Department of Defense.
Mr. Money at Defense is a multihatted CIO.
Mr. Horn. Maybe we are just going to have to put it in the
appropriations bill. They will probably get the message that
way.
The Federal Government, would they benefit from a Federal
CIO, and would they act in the capacity role that Mr. Koskinen
had? He wasn't really a CIO, he was a coordinator to get the
job done, and he did a fine job. What is the General Accounting
Office's sort of findings in that regard?
Mr. McClure. We have been in favor of the concept of a
Federal CIO. When the Clinger-Cohen Act was debated in its
early stages, we were supportive of the creation of a national
CIO, as it was being called at that time. I think there is a
great deal of value that can be gained from having a person
that can focus full-time attention on IT issues across the
agency and department lines. Continuity, direction, and
attention to issues could be ensured by that kind of position.
We are spoiled. We have had a unique individual named John
Koskinen serve in that capacity when he was Deputy Director for
Management and did an admirable job; and as the Y2K Coordinator
another very, very stellar job.
I think what one has to look at is what person with what
characteristics do you want in that position? Where do you want
the position housed? Who should that person report to, and
where should that position be housed? There was debate in the
early years about putting it in OMB or making the Deputy
Director for Management in effect the national CIO. As you
know, that person also serves, in essence, as the national CFO
and has focused a great deal of attention on financial
management issues.
So there is a great deal that can be gained from it. There
can be a great deal gained from an individual serving in that
capacity focusing only on the most pressing IT issues, whether
that is critical infrastructure protection, security in general
for IT, or for electronic government. We have shown the model
can work, particularly if it is supported by both the Congress
and the administration.
Mr. Horn. What are the downsides of this? Do you know what
might be wrong about it?
Mr. McClure. Well, I think there are always pros and cons.
If this person does not have the support from both Congress and
the administration, if this person cannot work across the
organizational lines of the government effectively and is not
empowered to make things happen, and held accountable for
making things happen, then I think we are fooling ourselves
about the impact. In all situations where Mr. Koskinen has
served in that capacity, he had those traits going for him.
Mr. Horn. Just as a matter of history, I might say the
Deputy Director of OMB for Management didn't really do anything
at that point. He retired. And it's a good choice when he came
out of retirement, but while he was in that job nothing much
was happening on the year 2000. They should have been 10 years
ahead of that. And the danger I see with a central CIO, is
there's a tendency in bureaucracies for the counterparts in the
agencies to say, well, we want to be on the good side of the
OMB or whatever and pretty soon Secretaries lose their own
people to the center of the operation because it's very heady.
You go over there and you're in the White House complex in a
way and they sort of get out of sight, and I say that based on
a lot of experience, 18 years in the biggest education system
in this country. And that's exactly what always happened when
you had, say, 19 to 23 campuses and you had a headquarters type
that didn't know a campus from a headquarters frankly but he
was the headquarters type. So you'd find your top people just
picked off and going to nothing but meetings usually and not
much happening. But that's what makes me a little dubious about
how you do it on a centralized basis.
I think the key to Mr. Koskinen was his personality. When
we got him out of retirement, and he did a superb job, he put
the burden on the networks the CIO counsels and others that got
the job done rather than create a whole permanent bureaucracy
on the subject, and I think that's why the success came there.
Do you have anything else on the pluses and the minuses?
Mr. McClure. I think the same issues we talked about in the
appointment of any CIO would apply to the national CIO. There
has to be an understanding of what that position is needed for,
where that position would be, and how you're going to hold a
person accountable and make it a credible position. Those are
really key factors that if we create that position need to be
worked out so we're again not misleading anyone about what the
intention or the purpose of the position is.
Mr. Horn. Mr. Doll, I understand and to the private sector
too where a lot of measurements are being developed by CIOs and
that fascinates me because we frankly haven't done very well at
the Federal Government in terms of measuring things and when we
had a hearing a few years ago, we found that in South Carolina,
in Minnesota, in Oregon, very exciting things were occurring in
terms of the measurement of the effectiveness of the programs.
This town is still too oriented on simply the finance side of
it and I think they are struggling with how do you get an
efficiency, an effectiveness measurement.
What can you tell us about what the private sector and what
the States are doing in that regard because that's exactly the
kind of information a Governor needs, a chief executive officer
needs, and which basically we haven't really had in this town
because it's been so fiscally oriented.
Mr. Doll. What we find in the States is not only a drive to
account for IT resources and how they are used, but also on the
outcome measures and that's probably the largest area of study
that we see the States doing right now. An example will be look
at how people have tackled education. All the States are doing
an awful lot with education, whether it be South Dakota, and
the fact that we measure not how many schools are connected to
the Internet but how many simultaneous teachers,
administrators, and students can be on-line, not just
technology. So one thing that we find is that we still have to
rely on measurements that may be taking place today at a
programmatic level but ensuring that from the technology
standpoint, we also have our set of measures that we're
starting to drive those metrics into some of the base
established metrics of our programs and that starts to give
Governors a real view what are we getting for our money and
also just how quickly are we evolving because we all understand
unfortunately you cannot do these things overnight usually and
that adoption and adaption of technology, whether it be by a
citizen, a schoolchild, whomever, takes time. And so what we
look for is the base measurements so that Kentucky, South
Dakota, as I mentioned, Texas, even--I've seen some examples in
California, Minnesota, Michigan, ones that I'm familiar with
are really driving to metrics that allow people to understand
when they make a decision, what's the impact. And that
ultimately drives a lot of future decisions.
Mr. Horn. Mr. Doll, has your association, the National
Association of State Information Resource Executives, have they
put out any compilation of these measurements? It seems to me
you would have a best seller there. That's what people are
searching for.
Mr. Doll. We haven't to date. What we have established is
we have an organization, and I know the acronym. It's SITC and
I forget what is stands for. It's a State information
technology consortium which is tackling those issues. They
started with risk management and now they've moved into metrics
and maybe through that effort we're going to be able to compile
what's--and maybe even do case studies of what's working in the
States. But at this point unfortunately I'm not able to give
you a document.
Mr. Horn. How about it, Mr. Knutson and Ms. Krupa, what do
you feel on measurement standards besides the finance one?
Mr. Knutson. We struggled over time to come up with
meaningful measurements in the field of technology, but I think
over recent years we have done a very good job, been able to
measure things that are operationally oriented and we can
pretty much demonstrate what the impact is to the business as a
result of our success with those measurements. Things like
availability and response time are things that people deal with
on a day-to-day basis in using technology. The one where we've
been having more difficulty with is in the area of how well do
we deliver programs and projects and demonstrate quality
relative to the work that's done in those areas. Now, the thing
that we have found to be most successful is where we've been
able to tie measurements to impacts, to customers, to
employees, to shareholders, things of that nature where there's
something real tangible that you can relate to in terms of what
your performance might do in dealing with those people.
The other thing we have found is you can measure, measure,
measure, but unless the measurements drive the behavior that
you want, they are very little value. We really focus on what
are the key measurements that drive the behaviors within the
company and within the organization that will give us the
outcomes that the business expects in terms of service, in
terms of dealing with products and services and more. Most
importantly in terms of the impact on our customers, we try to
tie the behavior-related measurements to what will be the
impact on our customer.
Mr. Horn. Ms. Krupa.
Ms. Krupa. Thank you, Mr. Chairman. One of the things that
we have embraced and I have brought a copy of today with me
that I will share with my colleagues in the public sector,
traditionally in the industry, most of the metrics were based
on our Y return on investment or cost-benefit analysis. Today
we have a new model. It's called return on opportunity. This
model includes not only leveraging the technology that's out
there and taking that into consideration, there are factors of
the human side of it.
Mr. Doll spoke to the adaptability and adoptability of the
citizens, whether it be a schoolchild, a schoolteacher, or the
Governor himself in the State of South Dakota. There is that
factor that needs to be calculated. There's a cultural shift
that needs to be measured and taken into consideration. Some of
the metrics we are beginning to adopt in the Rowe Companies is
this return on opportunity because we too are in an industry
and in an environment where we have intellectual capital and
human capital within our organization that has been with us for
40 plus years and sometimes it is quite difficult to take these
individuals and bring them forward and have them adopt and
adapt to these technological changes.
So what we do is when we do put programs in place that help
them adopt and adapt to these changes, we do have a metrics.
This metrics, if I can just list off some of the things that it
takes into consideration and it's the perfect metrics.
Obviously everything can be improved upon for the electronic
government or electronic business aspect of our industries
today. It takes into consideration the decreasing of time to
market. In translation into the Federal Government. That means
the decrease in time it takes to deliver different and more
quality services to the citizens within the State of the
Federal Government. It also takes into consideration what is
the overall value, what are the value propositions? The ROY
really never took into consideration the value propositions,
the ones that are the intangible, the feel good value
propositions, which make people want to use the technology and
leverage it in what they do every day, which clearly translates
into reducing our operating costs both in the public and
private sector. And I will leave copies of this. I'll make some
copies today and ensure that my----
Mr. Horn. Thank you. We'll put it into the record at this
point without objection.
Mr. Flyzik, can you tell us what the CIO Council is working
on when it comes to measurement standards that might be ideal
across the whole Federal Government?
Mr. Flyzik. Mr. Chairman, I acknowledge the fact that the
government a few years back with Governor Clinger in the
Government Performance Results Act that we weren't accustomed
to doing good measures and working measures, and at the time we
did create a committee called our capital planning and
investment committee which was to look at that very issue. As
opposed to each independent Governor agency trying to figure
out how to do things, we decided we'd have a committee that
would be able to look at best practices in the private sector,
work being done by GAO.
The committee has been working on new types of investment
tools that we're looking to proliferate across government to be
able to do a better job. The tools that we've been looking at
focus on performance measures as a first step. What do we get
in terms of measures for the investment. I also agree quite a
bit with Ms. Krupa's statement that we not only need to look at
quantifiable ROYs but in government we've got other qualitative
aspects that need to be taken into account. In the case of
Treasury where I have law enforcement bureaus, it's very
difficult to put a quantifiable number on what is better public
safety or better law enforcement. We have those unique issues,
yet we all know they are important issues to the citizens of
the country, so we need to find ways to use these investment
tools to standardize across government.
We've actually worked with members of your staff in the
past of the subcommittee on some of the capital planning tools
that we're looking to use and perhaps proliferate across
government to standardize in what we're doing.
Mr. Horn. Is that very helpful? Does the GAO have any
comments now having listened to this discussion?
Mr. McClure. Mr. Chairman, in 1998 we put out yet another
best practices study on this very issue, performance
measurement for IT. I would be glad to make a copy available to
you. It argues for using a balanced set of measures, both
quantifiable and qualitative that looks at the impact of IT on
strategic directions of the organization, financial, customer
and innovation and learning. It's very much a balanced basket
of measures. That's really what we saw industry doing. We did
the same thing looking at private sector and four State
governments who had also put in these kinds of balanced,
measured approaches. We can certainly make that available to
you and have shared that with the CIO Council and have been
very supportive of it.
[Note.--The GAO report entitled, ``Executive Guide,
Measuring Performace and Demonstrating Results of Information
Technology Investments,'' may be found in subcommittee files.]
Mr. Horn. Thank you. My turn has long since gone and I'm
giving Mr. Turner 20 minutes for his questioning.
Mr. Turner. Thank you, Mr. Chairman. I have come to the
firm conviction that we do need a Federal Chief Information
Officer. I noted, Mr. Chairman, your concerns about the pluses
and the minuses. There's no question that if not structured
properly, it could be ineffective, but it does seem to me when
we look at some of the best State models, the CIO is a cabinet
level, and I don't mean to necessarily say that our CIO,
Federal CIO, you'd call him a cabinet officer. That implies, as
the chairman feared, that somehow there's a big bureaucracy
under him because that's the nature of Secretaries at the
Federal level. The CIO at the Federal level needs to have
direct access to the President, and he needs to be at the table
so that his ideas can be shared as issues of government are
discussed. And if a Federal CIO is properly empowered, it seems
that he would then have the ability, Mr. Flyzik, to chair that
CIO council that you're the vice chair of and when discussions
occur about ideas for the implementation of new technology and
trying to move toward an e-government, then the President and
the Federal CIO can make the decision that we're going to
choose this particular agency as the pilot program to see if
it's going to work.
For example, there's no reason in the not too distant
future that every performance-based budgeting activity of every
Federal agency should be real time where Federal managers can
see at any moment what the status of those performance measures
are. Now, if that's correct, obviously the way to proceed in
that direction is to pick out one agency and direct that agency
to do it so we can see how it works. It seems like where we are
today is that, Mr. Flyzik, I would gather when you meet with
your counterparts and the CIO Council, there's probably a room
of very frustrated people not only because they struggle with
their role within their agencies but because there is a lot of
good ideas floating around and somebody has got to try it but
nobody has any direction about who is supposed to jump first.
If we could have a CIO at the Federal level who had direct
access to the President where these ideas could be implemented
on a pilot basis within the Federal agencies, we'd have our
best opportunity to see meaningful information technology
utilized in the Federal Government.
Am I misstating the attitude, Mr. Flyzik, of those who
gather--I guess you meet monthly?
Mr. Flyzik. We meet as a full council every other month. We
have an executive committee, which I also chair, which meets
monthly, and we have six committees based on what we have
identified as the key subject matter, such as we've talked
about here today, the work force effectiveness, critical
infrastructure, security privacy and so forth. They meet in
some cases several times per month and they have working groups
working with them. And you make some excellent points, Mr.
Turner, and I think it's a mixed group. There are some CIOs
that feel that they are empowered. There are others that I
guess the term frustrated would pertain.
Again I believe we're evolving in a positive direction. I
think that term empowerment is the one I've heard this morning
over and over again, and the feeling is that we do need some
empowerment to do, as you talk about the central authority that
has the ability to do intergovernmental, interagency
coordination or as you talk about a kind of an executive agency
approach. Some feel the CIO Council can rise to that role.
Today I believe the Council lacks some authority to control
resources to be able to rise to that level.
The John Koskinen model had associated with it funding that
was set aside for that particular program with some control
over that funding. What we do not have as a Federal CIO Council
is authority to control funding to that degree to be able to
effectuate the kinds of change that you are referring to. I
agree with the chairman's remarks that those are, so to speak,
who would determine how it is implemented.
I was also involved with the early days of Clinger-Cohen
working with Members up here on that and the discussion at the
time was downsizing, streamlining. We didn't want more
bureaucracy. We wanted to do away with layers and layers of
authorities and so forth that we felt needed to be.
So if implemented incorrectly, we could wind up again with
more layers of approval processes as opposed to streamlined
empowerment of individual agency CIOs. Nevertheless, I do agree
with your points that we need some authority that can put in
place the kind of things we need to do on a governmentwide
basis because the business cases are compelling, that it makes
sense to do that from a customer perspective.
Mr. Turner. Mr. McClure, I'm going to ask you this
question. We don't have anybody on our panel today from OMB but
in my investigation into the issue of a Federal CIO, one of the
things that comes up is that the Office of Management and
Budget is reluctant to support this kind of approach and
obviously it's an infringement or perceived to be an
infringement upon their turf. Address that issue for me and
kind of get that out on the table because obviously we pursue
this idea. That's one of the hurdles we're going to have to
overcome. How do you view that issue?
Mr. McClure. Well, I think the Office of Management and
Budget, since the passage of Clinger-Cohen, along with the key
players that helped put that legislation together have taken
the position that accountability for IT has definitely been
pushed to the agencies. You remember Clinger-Cohen eliminated
the Brooks Act model in which it was really a tail-end look at
procurement and acquisition by a central authority and instead
we wanted focus at the front-end for planning of IT projects.
In that spirit, I think OMB has pushed more of the
accountability for planning of IT and results of IT into the
agencies, agency heads, agency CIOs and that certainly is their
interpretation of the spirit of that legislation.
OMB's role is very key in this whole process. OMB reviews
agencies' IT budget submissions as part of the process of
constructing the President's budget and using the tools that
are available under Clinger-Cohen, which is effective data and
analysis showing a business case, effective cost estimates, and
some estimates of return whether it's tangible or intangible,
and improvements are some things that OMB has a role in
examining and asking questions about it in the formulation of
the budget.
So I think their push back is that the accountability model
has shifted under Clinger-Cohen more to the agencies. They do
recognize the role they play in reviewing agency IT submissions
and in that regard, again they play a critical role.
Mr. Turner. Am I correct in sharing my concern that the
suggestion of a Federal CIO is going to at least be met with
some skepticism by some in OMB or am I misreading that concern?
Mr. McClure. I don't know what the current position of OMB
is on the topic. In the past they were not supportive of it for
many of the reasons that I stated in the discussions on the
debate of Clinger-Cohen up on the Hill before Mr. Cohen's
committee. So I don't know what the current position is in
terms of favoring or disfavoring the creation of the national
CIO.
Mr. Turner. Well, I guess that's an issue we're going to
have to study further, obviously if there are legitimate
concerns that need to be taken into account. But if I'm hearing
you correctly, it sounds to me that the responsibility has been
moved to the agency CIOs and therefore there may be less
interest in providing leadership from the top than there should
be and I guess in effect for me reinforces the idea that a
Federal CIO who is near a cabinet level official might have an
opportunity to provide the kind of leadership the executive
branch and the President should be providing to the
implementation of information technology. So I'd like to work
with you on that because I want to pursue this. Mr. Flyzik, do
you have any thoughts to offer on this subject?
Mr. Flyzik. As I mentioned before, the empowerment issue
comes to mind and the need for someone or somebody or some
group to have the empowerment to do governmentwide and
intergovernmental kinds of programs. The Koskinen model, as we
talked about, worked in many ways because we were viewing
government not as by agency by agency but as functional sectors
of our country, and I think that is something that needs to be
done because I think there are some tremendous opportunities.
You mentioned smart cards in Texas for food stamps,
obviously a very, very effective program, and if you step out
and look at government from the point of view of the customer
of government, they don't see a Department of Treasury and a
Department of Justice and a Department of Agriculture, nor a
Federal, State, local. To them there is one government.
Therefore, we have this need and let's stay with your
entitlement example.
Today in this country we have people receiving SSA, SSI,
Food Stamps, Medicare, Medicaid, Aid for Family with Dependent
Children, and so forth and so forth. They are all dealing with
independent government processes, entities sometimes filling
out forms redundantly over and over and over again. There is
this need for someone or somebody, some group to begin focusing
on what we can do from that customer point of view.
In my mind I have the virtual department of entitlements
coming to the forefront here. That does not mean we need to
reorganize the government. What it means is we need to take
advantage of the inherent infrastructure and IT capability to
coordinate what we're doing so we can deliver that one face to
the customer. So someone applying for one entitlement program
finds about all the other entitlement programs that are
available on one smart card. We not only deliver those food
stamps but we deliver SSA, SSI, or any other entitlement
payments.
I think we cannot only improve service but we can probably
eliminate a lot of fraud, waste and abuse in these programs
because we would have better capacity to identify those kinds
of problems. I think all of us see these kinds of activities
and the need for again a person or a group or someone in power
to be able to work so we can fund these intergovernmental
approaches where I think some of the real big payoffs in the
government's use of technology in the future will come from.
Mr. Turner. Thank you. Mr. Doll, when you surveyed the
States, what sector of government has been the best example of
the utilization of information technology? For example, are we
seeing more progress made in agency-to-agency transfer of
information? I suppose in Texas we have on our mind of course
the success of the food stamp program and elimination of fraud
in it. The issuance of licenses would seem to be an area which
would be an easy one for State government. I don't see why
anybody anymore would have to go to any State office and get a
driver's license renewed. You ought to be able to look forward
to the day when you can fill out the information and take the
visual test and at some point you ought to be able to have your
picture made right there and have that transferred to the
office and printed out on that card that comes back to you.
Where are the real areas that we've seen significant
progress in terms of the out decision of information
technology?
Mr. Doll. I think you find utilization of technology in a
number of the major programs. You mentioned food stamps. The
whole welfare arena, social services activities, most
definitely in the financial side of government. Obviously
that's a natural progression to technology, early adopters they
were. So in the past I think you'd see some of those major--
where you find, though, everybody's focus, even though I can't
say that the majority of States are there because we're not in
the areas of digital government where any and all permits are
on-line. You will find today of course probably any form that
you need to fill out in most States is physically available for
you to download, fill out, and mail in or fax or what have you,
maybe even e-mail but a true interactive on-line association
between the citizen and State government. That's what everyone
is working for and that's the hottest area of development
currently.
You find Arizona with some of the things they've done in
the driver's license world, some of the permits in South
Dakota, you can get your birth certificate, a copy of that on-
line without having to talk to anybody, et cetera. Just as in
South Dakota we're probably only down around 15, 20 percent of
the transactions in South Dakota can be done on-line at this
point. We have a project to turn that up to about 80, 90
percent over the next 18 months. We just started at the
beginning of this year.
So I think you will find that there is a quick shift to
again automating the processes of government so that the
citizen can do it from home, a business can do it from work, et
cetera.
Mr. Turner. Thank you. Mr. McClure, give me the best
example of a Federal agency that has utilized information
technologies to improve its efficiency, cost effectiveness, and
consumer friendliness. What is the best example of an agency
that's doing that, of course present company excepted?
Mr. McClure. It's hard to point to the best, Mr. Turner. I
think what we have and what we continue to find are pockets of
excellence in government, as you would expect. We've seen and
the CIO Council is very good at every year recognizing a
handful--when I say a handful, anywhere from a dozen to two
dozen successful IT projects in government where there have
been specific, tangible, and recordable outcomes of improvement
in service delivery or cost effectiveness.
In the last year, the Council identified many projects
dealing with e-commerce oriented activities, buying and paying
of services on-line, similar to what Mr. Doll was talking about
a moment ago. There have been examples of personnel systems
that have been enhanced to be much more user friendly and much
more dynamic rather than the old paper processes.
Where we really need to focus our attention in the
government, despite these successes, are on the large, large
modernization projects where we are spending enormous sums of
money with high expectations, and we have several of those that
have been ongoing for years. Many of them are beginning to turn
around that GAO has focused on and worked now collaboratively
with the agencies to try to improve those successes.
Mr. Turner. What agencies are you referring to? Internal
Revenue Service?
Mr. McClure. Certainly TSM modernization at IRS has been a
turnaround. The Commissioner and new CIO have put in place many
leading practices similar to what we have talked about today.
Again, the story is not complete but the turnaround picture is
quite promising. Decisions are being business led. There are
business cases. There's attention to architecture. These are
things that in the years past we didn't pay attention to.
The same is true in some of the other modernizations,
including FAA and the National Weather Service, where we have
pointed out problems in the past but we're starting to see more
and more management attention to standards, to good software
practices, and to adequate management attention to the project
outcomes.
I think those are itself areas where we need to focus a
great deal of our attention because of the vast sums of money
that are being spent.
Mr. Turner. Thank you, Mr. Chairman.
Mr. Horn. Thank you, Mr. McClure, Mr. Doll, Mr. Knutson, I
think you have flying arrangements before problems occur in the
Midwest. If you have some parting words we'll be glad to have
them and we'll keep the record open if on the plane you have
nothing else to do except try to find a flight, why we'd be
glad to put it in the record at this point without objection.
So if you have any summation, we'd certainly welcome it.
Mr. Knutson. The one thing I would say relative to a
Federal level CIO is it appeared in the discussion there's a
lot of expectation that by just naming that individual in that
position certain things would happen. That may or may not be
true. I think putting someone at the highest level possible in
the area of technology is a very good decision. You can't
assume by just doing that that the types of things that Jim was
talking about will happen by default. You need very strong
sponsorship from the agencies and the buy-in from those
agencies and their willingness to give the authority to make
things happen. Unless you have the complementary structure
around that position from government as a whole, that position
will not be successful.
Mr. Horn. Mr. Doll, any parting comments?
Mr. Doll. As I mentioned in my talk, we in the States have
found and I believe it's a general consensus across the States
that we looked hopefully that a national CIO will emerge in
some form. Because we really saw the value. Year 2000 was the
best example, but also in some of the things that are happening
in the justice world. Security is another major concern for us
as who do you have to go to right now. We know what it's like
to going to all the agencies within State government. For us
also to turn around and go from one to many within the Federal
Government makes our lives harder, and so I would encourage you
to consider that model because as we're moving to that model
ourselves, I think we would say that it's been very successful
in the States that have accomplished it and most of the States
that are not there yet are talking or actually in the process
of getting there and having that level of person within the
organization.
Finally, I'd say that that individual is not only key but
very difficult to fill. We understand that. We get a lot of
folks from the private industry these days into that role. And
in my comments one of the things I mentioned was their ability
to act within the political and civil service theater is very
important. I come from the private sector myself even though I
have some government service under my belt with GSA. At least I
had exposure and some orientation to governance from that level
and that is really key. If someone cannot operate within that
realm, you're going to find it very, very difficult to succeed.
Mr. Horn. One of the problems, obviously, on getting CIOs
into the Federal Government and also at various levels is
simply the financial situation, and what have you found in the
private sector on that and how has that changed in the last 5
years? A lot of good people from the Federal Government have
left for the private sector.
Ms. Krupa. Mr. Chairman, I myself share the same sort of
experience as Mr. Doll. I have worked both in public and
private sector. And one of the, I think, challenges and
opportunities for those of us who have been in the technology
arena for quite some time is not to jump ship, and that also
the same challenges occur in the private sector, not to jump
ship, if you will, from one organization to the other.
I think, as Mr. Doll said, it is difficult but what we have
to look for in that individual in the Federal Government, the
person coming into that position understanding the value that
they are going to bring to that position and not so much a
monetary driver and there are those people out there. It is
going to be a search.
It is going to be somewhat difficult, but I feel there are
those senior level executives out there. Today I think sitting
at this table is representative of the senior level executives
that are out there that have made commitments to their
organizations. I agree that the position needs to be structured
and clearly defined, but I concur there needs to be a position
at the national level that helps define strategy and vision and
helps go to the different agencies and different State levels
with those CIOs and collaborate. The one thing we don't do a
good job in this country is, and Mr. Turner has cited over and
over again in his questions, is who is doing what is
communicate. We don't leverage the synergies and exploit the
successes that we have from State to State, from agency to
agency. And the private sector has grappled with that for years
and we're just coming into that light. We've scratched the
surface of how important communication is.
I have five different operating subsidiaries, and I know in
the order of magnitude in the Federal Government, it is small
but the model I think is important to what you're trying to
accomplish. They each have five different requirements. I have
VPs and director of ITs so, if you will, CIOs in those
operating subsidiaries, so I sit in that position in the
private sector reporting at, if you will, the cabinet level,
the executive level to the chairman to define strategy, to
define a vision, to define missions to capitalize on the
synergies in these operating subsidiaries. That's what we need
to do I believe in the Federal Government.
Mr. Horn. That's very well said and that reminds me that we
are going to keep the record open. If you have some more good
ideas on the way, please ship it to the staff here and we will
be glad to put it in the record because what we want to do is
get people talking just as you're talking about the
communications among levels of government and private sector
and nonprofit sector. Universities, some of us had chief
information officers 20 years ago, so it isn't new to a lot of
us.
Would the gentleman from Texas have any more questions? If
not, we're going to thank the staff that put this together and
that's J. Russell George, staff director and chief counsel. I
don't see him here right now. Matt Ryan is to my left, your
right, senior policy director on these matters, Bonnie Heald,
director of communications, sitting in the back there. Bryan
Sisk, clerk, Ryan McKee, staff assistant. And for the minority
we have Trey Henderson, counsel on behalf of Mr. Turner and the
subcommittee minority; Jean Gosa, minority clerk; and we had
two people deciphering all of our languages today and one was
Doreen Dotzler. The other is Laurie Harris and we thank you
both.
With that we're adjourned.
[Whereupon, at 11:42 a.m., the subcommittee was adjourned.]