To get more out of their IT, IRS tries A-B-C

The IRS is applying the ABCs of government to get more out of its shrinking budget.
The tax agency is using A-76 (competitive sourcing), best practices (of industry) and consolidation (of its data centers) to improve its internal processes and meet the public’s increased demand for online services.

“In spite of the budget, we’ve got to spend money on ourselves in figuring out how to improve ourselves,” said Terry Lutes, IRS associate CIO for IT services.

Beginning Oct. 1, the IRS will operate and manage its three data centers as one computing center with three physical locations. The agency is restructuring its data centers, which had operated independently with their own processes. That meant disaster recovery, for example, was complicated, Lutes said.

Right tools

Once the IRS has tools to monitor and manage the three facilities and their IT assets, including disaster recovery, it should be at or near standard best practices for data center operations, Lutes said.

The agency also will try to save money and become more efficient by competing federal jobs with the private sector to manage their desktop systems under Office of Management and Budget’s Circular A-76.

The competition involves 2,700 full-time positions that support 500 locations around the country.

“We know we can use this process to fundamentally restructure how we do the work,” Lutes said.

Also come October, officials will add cost accounting to the agency’s Integrated Financial System, which the IRS implemented last year. The IRS has lacked measures to track cost accounting for discrete components of its work. “We absolutely know how much contract money is spent, but our labor is just a big blob,” Lutes said.
Fiscal year 2006 will become the baseline year by which the IRS tracks these labor costs.

The IRS also is looking to private companies’ best practices for IT organizational performance measures. For example, it has 3,000 contractors and employees doing application development.

“But we have no performance measures for the organization,” he said.

The business process improvement in application development and network restructuring will take about three years to complete, but officials will take the initial steps this fall, Lutes said.

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