The grand design fallacy

The Internal Revenue Service has embarked on an in-depth review of its current 10-year modernization program. I emphasize current because the IRS has had an active 10-year modernization program in one stage or another for at least the past 23 years.

Although IRS officials have improved the agency's information technology as a result of the work over the past 23 years, the IRS is not as far along as its various 10-year plans promised.

As part of the effort to address the latest concerns, the IRS has initiated four studies by prestigious organizations to learn lessons from the recent past. One preliminary suggestion has been to depart from a grand design scheme and instead focus on smaller, more achievable chunks. In this case, only the faces change.

At least 12 years ago, Henry Philcox, then the IRS' chief information officer, came to the same conclusion. As an alternative, he set out to implement a plan based on achievable chunks. To many, including myself, Philcox's approach made a lot of sense.

In the years before he took over, the IRS had traveled unsuccessfully down the grand design road, assembling all requirements for the agency into one bundle and attempting to deploy an integrated solution over a long period of time.

Although it seemed appropriate, Philcox's approach exposed him to lawmakers on Capitol Hill and auditors at the General Accounting Office who criticized the IRS for lacking a grand design. They overlooked the fact that such plans to modernize the tax service had failed in the past.

What are the lessons to be learned from at least 23 years of bouncing from achievable chunks to grand designs and back? Who is to blame for the many missed target dates this time?

Some of the blame will, or could, be assigned to the manager, the contractor or the relationship between them. Blame will, or could, be assigned to the project management approach that was used, to the procurement approach, to the incentive systems governing behavior, to the lack of good measures or to the primitive state of the technology industry today compared to what is needed in this case. Blame will, or could, be aimed at personnel policies, which may have diminished critical skills in the tax agency over the years.

Managers often take the hits when the team performs poorly even though other factors may be the cause. The IRS, for example, has assigned a series of managers with years of experience in the agency as assistant commissioners for systems modernization.

The former IRS commissioner, Charles Rossetti, who was a founder of American Management Systems Inc., had a background in managing complex systems. The current commissioner, Mark Everson, has shown active leadership by calling for the reviews of the modernization project.

In the end, however, blame cannot be placed on these abstract factors, which are explanations for failure in all systems modernization cases.

The main reason for failed promises at the IRS over the years is probably the sheer size and complexity of the systems to be modernized.

Michael Laphen, president and chief operating officer of Computer Sciences Corp., the prime contractor for the IRS' modernization, showed a deep appreciation for the employees who often know the real details of a system. In a recent interview, he said, "one of the challenges both IRS and we have is getting people who really understand some of the nuts and bolts of the IRS legacy systems."

It is easy to do the preliminary studies and talk about a 10-year grand design. However, federal experience since the mid-1980s illustrates that most of them fail.

Grand designs in large, complex organizations — especially organizations that are at the heart of the relationship between the government and the public — may be too complex for anyone to understand without complete knowledge. And nobody has this knowledge, nor will anyone live long enough to develop it.

Furthermore, grand designs may be too complex to procure because winning or losing them can mean life or death for a company. They may be too complex to implement given the state of technology, software and management.

There will always be another person who comes along to say, "I am different." Unfortunately, some truly great people and great companies before you said the same thing. They make some progress but largely fail to deliver what is promised.

Achievable chunks, an alternative to grand designs, has worked in the past given patience on the part of oversight officials. The IRS should be given latitude and encouraged to work this way for an extended period, such as the next 10 years. Progress should be evaluated not every few months but every few years. This will allow time for the program of achievable chunks to jell.

McDonough is a consultant with Guerra, Kiviat, Flyzik and Associates Inc. and former deputy associate administrator for the Office of Intergovernmental Solutions at the General Services Administration.

About the Author

McDonough, an independent management consultant, left government in 2003 after a 35-year career in various senior management positions. He can be reached at frank@frankamcdonough.com.

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