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IRS SYSTEMS MODERNIZATION: DOOMED, BUT ON THE RIGHT TRACK?

December 12, 2003

The IRS Oversight Board has been watching the Service's efforts to bring its data processing out of the electronic stone age. It's conclusion: flint and bone tools will have to do for awhile longer.

The IRS has had a "Business Systems Modernization" plan in place for some years. The report says "...last summer, the BSM program appeared at the point of unraveling. Virtually all of the projects with a major impact on improving customer service and IRS' internal operations and productivity were experiencing serious delays and cost overruns."

The Report goes through a litany of blown deadlines and overruns, but concludes, in effect, that we're up the creek, so we just have to keep paddling. The report recommends that the IRS reduce the scope of its modernization ambitions and try to get one important thing right - the "Customer Account Data Engine" (CADE), the super-database of taxpayer account information that will drive all of the other systems.

The report also warns the prime contractor of the project, Computer Sciences Corporation (CSC), that it is on thin ice:

Although the Board observed ongoing improvements in CSC's program management and some of its management processes, overall results did not change. Target dates and budgets continued to be consistently missed. In addition, CSC should have addressed much earlier many of the other issues previously discussed in this report.

The Board discussed this very serious concern with Commissioner Everson. While he also has misgivings about CSC's performance, he believes that he has established a strong working relationship with its executive management and has its complete commitment to work with the IRS to address previous shortfalls. While the Board accepts this conclusion, we believe that the Prime's performance must be monitored very closely and if significant improvements are not demonstrated quickly, a change should and must be made.

In addition, the report offers a number of other recommendations that look to us non-technical folk like they were produced by Dilbert's Mission Statement Generator. For example:

Recommendation 3: Enhance the systems development life cycle methodology to support more accurate estimates of future work phases and put into place the necessary processes to insure that the methodology is followed religiously. Again, this work is under way.

Recommendation 4: Enhance the program's contracting process and capabilities.

The Board also concludes that the basic system design is ok, if they can just figure out how to get it in place. Looking on the bright side, maybe it's reassuring that Big Brother lacks the competence to run a comprehensive database on all of us...

The Systems Modernization Team at work?

The report is not yet up on the IRS Oversight Board site.

UPDATE: It is now. (pdf format)

UPDATE: Dave Gross (see comment below) has a discussion on his site from a tech-guy point of view.

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