Reaping the Benefits of Technology Is Central to Controlling Costs and Providing Better Services

One of the six major categories in our high risk series is obtaining an adequate return on multibillion dollar investments in information technology.1 We added this category in 1995 because we continued to find major system development projects that greatly exceed estimated costs, fall years behind schedule, and fail to achieve operational goals. These failures have left the Congress and executive branch severely handicapped by the lack of reliable data. Moveover, huge opportunities have been lost to use technology to reduce federal operating costs and improve program performance. The effective use of information technology is integral in some way to solving problems in all the high-risk areas mentioned in our 1997 series.  The seriousness of these information management problems is underscored by the fact that nearly every aspect of over $1.5 trillion in annual federal government operations depends on information systems.  Additionally, the American public, enjoying the everyday benefits of technology-driven service improvements in the private sector, are becoming increasingly frustrated with poor performance from federal agencies. In our 1997 high risk report on information management and technology,2 we focus on four major modernization efforts that provide a vivid study in technology management problems that, unfortunately, are all too typical across the federal government. •  The Internal Revenue Service (IRS) has spent or obligated over $3 billion since 1986 on its Tax Systems Modernization (TSM), which is designed to overhaul the paper-intensive approach to tax return processing. We reported in 1995 that the modernization lacked basic elements needed to bring it to a successful conclusion, such as a comprehensive business strategy for reducing paper filings and the requisite management, software development, and technical infrastructure. We made over a dozen recommendations to address these weaknesses, including implementing (1) a sound process to manage technology investments, (2) disciplined procedures for software requirements management, and (3) an integrated systems architecture. We reported in June and September 1996 that IRS had initiated many activities to improve its modernization efforts but had not fully implemented any of our recommendations. The Congress subsequently directed IRS to establish a schedule for implementing GAO’s recommendations. It also required regular status reports on corrective actions and TSM spending.  IRS and the Department of the Treasury have taken steps to address our recommendations and respond to congressional direction, but further concerted, sustained improvement efforts are needed.3 •  For over 15 years, the Federal Aviation Administration’s (FAA) $34-billion air traffic control (ATC) modernization has experienced cost overruns, schedule delays, and performance shortfalls. Though FAA has recently made important progress on aspects of the modernization, some serious problems remain.  Most notably, this large effort has long proceeded without the benefit of a complete systems architecture to guide the modernization’s development and evolution. Among other things, this lack of a technical blueprint has led to unnecessarily higher spending to buy, integrate, and maintain hardware and software. We have recommended that FAA develop and enforce a complete systems architecture.  Exacerbating the modernization’s problems is unreliable information on costs—both future estimates of costs and accumulations of actual costs.  We have recommended that FAA institutionalize a defined cost process and develop and implement a managerial cost accounting capability.4 •  The Department of Defense’s (DOD) Corporate Information Management (CIM) effort was supposed to save billions of dollars by streamlining operations and implementing standard information systems in areas such as materiel management, personnel, finance, and transportation. But after 8 years and $20 billion in spending on CIM, DOD has yet to meet its savings goals, largely because of its failure to implement sound management practices for CIM. We have recommended that DOD (1) better link system modernization projects to business process improvement efforts, (2) establish plans and performance measures and clearly defined roles and responsibilities for implementing CIM, (3) improve controls over information technology investments, and (4) not initiate system improvement projects without sound economic and technical analyses.5  DOD has yet to successfully implement these recommendations and continues to spend billions of dollars on system migration projects with little sound analytical justification. Recently, however, DOD has begun an initiative to better manage its technology investments using its planning, programming, and budgeting system. •  Similarly, the National Weather Service (NWS) has yet to resolve serious problems with its $4.5-billion modernization effort. New radars are not always up and running when severe weather is threatening and ground-based sensors fall short of performance and user expectations. We have recommended several actions for correcting these problems and have also recommended that NWS improve its technical capabilities to design and manage the modernization. NWS has addressed some of our concerns in these areas, but others remain. We also recommended that NWS establish a sound decision-making process for managing the modernization’s massive investment and getting promised returns from technology. Finally, the modernization effort has long gone without a systems architecture to guide it. In response to our recommendations, NWS has begun to develop a technical blueprint for the modernization. However, until a systems architecture is developed and enforced, the modernization will continue to incur higher system development and maintenance costs.6 Correcting problems in these four major modernization efforts is important. But we also recognize the need to address and overcome the root causes of the government’s chronic information management problems.  To do this, GAO has worked closely with the Congress and the administration to fundamentally revamp and modernize federal information management practices. We studied information management practices at leading public-sector and private-sector organizations—ones that have dramatically improved their performance and met mission goals through the use of technology. In our executive guide to improving information management, we identified proven techniques used by these successful organizations and developed an integrated set of information management practices for federal agencies.7 The 104th Congress used these best practices to craft the first major information management reform legislation in over a decade: the Paperwork Reduction Act of 1995 (PRA) and the Clinger-Cohen Act of 1996.  These laws emphasize involving senior executives in information management decisions, establishing senior-level Chief Information Officers, tightening controls over technology spending, redesigning inefficient work processes, and using performance measures to assess technology’s contribution to achieving mission results. These management practices provide agencies—such as IRS for tax systems—a practical means of addressing their information problems, maximizing benefits from technology spending, and controlling the risks of system development efforts. Past experience has shown that the early days following the passage of reform legislation are telling. Let me quickly highlight areas where this Committee can ensure that these reforms get off to a strong start. 1 Over the last 6 years, federal agencies have obligated about $145 billion to activities related to information technology. This figure does not include many additional billions of dollars that go to software embedded in Defense weapons systems. 2 Information Management and Technology (GAO/HR-97-9). 3 Tax Systems Modernization: Management and Technical Weaknesses Must Be Corrected If Modernization Is to Succeed (GAO/AIMD-95-156, July 26, 1995); Tax Systems Modernization: Actions Underway But IRS Has Not Yet Corrected Management and Technical Weaknesses (GAO/AIMD-96-106, June 7, 1996); and Tax Systems Modernization: Actions Underway But Management and Technical Weaknesses Not Yet Corrected (GAO/T-AIMD-96-165, September 10, 1996). 4 Advanced Automation System: Implications of Problems and Recent Changes (GAO/T-RCED-94-188, April 13, 1994); Air Traffic Control: Good Progress on Interim Replacement for Outage-Plagued System, but Risks Can Be Further Reduced (GAO/AIMD-97-2, October 17, 1996); Air Traffic Control: Complete and Enforced Architecture Needed for FAA Systems Modernization (GAO/AIMD-97-30, February 3, 1997); and Air Traffic Control: Improved Cost Information Needed to Make Billion Dollar Modernization Investment Decisions (GAO/AIMD-97-20, January 22, 1997). 5 Defense Management: Stronger Support Needed for Corporate Information Management Initiative to Succeed (GAO/AIMD/NSIAD-94-101, April 12, 1994); Defense Management: Selection of Depot Maintenance Standard System Not Based on Sufficient Analyses (GAO/AIMD-95-110, July 13, 1995); Defense Transportation: Migration Systems Selected Without Adequate Analysis (GAO/AIMD-96-81, August 29, 1996); and Defense IRM: Critical Risks Facing New Material Management Strategy (GAO/AIMD-96-109, September 6, 1996). 6 Weather Forecasting: Radars Far Superior to Predecessors, but Location and Availability Questions Remain (GAO/T-AIMD-96-2, October 17, 1995); Weather Forecasting: Unmet Needs and Unknown Costs Warrant Reassessment of Observing System Plans (GAO/AIMD-95-81, April 21, 1995); Weather Forecasting: Improvements Needed in Laboratory Software Development Processes (GAO/AIMD-95-24, December 14, 1994); Weather Forecasting: Recommendations to Address New Weather Processing Systems Development Risks (GAO/AIMD-96-74, May 13, 1996); Information Technology Investment: Agencies Can Improve Performance, Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, September 30, 1996); and Weather Forecasting: Systems Architecture Needed for National Weather Service Modernization (GAO/AIMD-94-28, March 11, 1994). 7 Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology—Learning from Leading Organizations (GAO/AIMD-94-115, May 1994).