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Anything worth buying once is worth buying 10 times?
Friday - 8/15/2014, 3:33am EDT
Founder of ChiefHRO.com
& Senior Vice President, ICF International
This column was originally published on Jeff Neal's blog, ChiefHRO.com, and was republished here with permission from the author.
I cringe every time I hear someone tell me they went into human resources work because "I'm a people person!"
HR obviously supports an organization's people programs, but there is far more to it than liking people. In many respects, HR is more about program design, development and management than it is about individuals.
One aspect of HR program management that needs a lot of work is HR information technology. Agencies are spending billions of dollars on HR IT, yet they are not getting billions of dollars in value. Why is that? And can it be made better?
The answer to the second question is yes, but it will take a change in how IT requirements are identified and systems are funded and acquired. That change is more consequential than it may seem, both in terms of impact and difficulty. The difficulty arises from the answer to the "Why" question about problems with HR IT.
HR systems in most agencies are under the purview of HR offices. In many departments, they are under the purview of multiple HR organizations at the departmental headquarters and at the bureau/component/agency/service level. On top of that, there is often no clear process for defining requirements and funding them.
When I arrived at the Department of Homeland Security in 2009, I found the department had more than 300 HR systems of varying sizes and cost. Many of them did the same thing and, in some cases, involved purchasing the same software multiple times. For example, we found more than a half dozen learning management systems (LMS), including two that had each been purchased by different components. Rather than using its combined purchasing power to get the best possible price through enterprise buys, the components operated on their own. A few key systems were standardized across the enterprise, but many were not.
The cost of that type of redundancy is substantial. It adds cost to licenses, development and administration. In the best of circumstances, it results in slightly different implementations of the same system. Other times it results in multiple solutions for the same problem, with no interoperability and greatly increased costs. Just as one example, consider that consolidating to one LMS in DHS could result in savings of $5 million or more per year.
Former DHS CIO Richard Spires and I decided the laissez-faire approach simply could not continue. We found our own organizations were part of the problem. An ongoing turf battle over who controlled HR IT meant key staff who should have been working on common solutions were distracted by constant discussions about who should do what. These were not problem people — they were good people stuck in a bad organizational construct.
We addressed the problem by placing the most technical HR IT folks under control of the CIO, but housed in the space of the Office of the Chief Human Capital Officer. We put a seasoned SES in charge of HR IT, and created a program management process to identify requirements, determine funding requirements, and oversee headquarters and component HR IT. We asked for and got a letter from the deputy secretary, Jane Holl Lute, requiring that any new HR IT systems be approved by the DHS CHCO and CIO. As a result, DHS is moving toward streamlining and reducing the cost of HR IT.
The issues DHS faced are not unique. They are repeated at the department and bureau levels in many places in the government. If every department and independent agency got complete control of HR IT, eliminated redundancy and improved program management, they might find there is enough money in existing budgets to fund everything they need to provide the best HR technology available.
It seems like a simple proposition, but our experience at DHS showed that it upsets too many parochial interests to be easy. Those interests are not limited just to people within the organization. In the case of DHS, much of the HR IT money is in component appropriations rather than at the DHS level. That makes moving the money around to manage smartly a bit more difficult, but not impossible.
So, am I recommending that happen? Should departments and agencies manage all of their HR IT at the highest level of the organization? Yes, but only for HR IT that is not common.
I believe there is another solution that is better but, admittedly, is much more difficult to implement, for systems that multiple agencies use.
The solution is not to define the enterprise as a department or agency, but rather to define it for core HR systems as the entire federal government. Core systems, like the LMS I mentioned above, payroll, benefits, timekeeping and record keeping, are so similar from one agency to another that there is little reason to buy them over and over and over and over.
One great example is the core HR system that agencies use to process personnel actions. In the Department of Defense, it is a customized version of Oracle HR. In other agencies it is PeopleSoft or a COBOL-based system from the Department of Agriculture National Finance Center. PeopleSoft and Oracle HR are both owned by Oracle. Why does the government buy the same system multiple times? Would it not be better to enter into one agreement with Oracle to buy one of their two systems? Even having one agreement to buy each of their two systems would be better than running multiple instances that are each tweaked just enough to make them harder to maintain and not easily used by multiple agencies.
If the government used only one such system, it would be far easier to ensure accuracy of transactions when employees move from one agency to another, and it could make it more likely that OPM would have complete and accurate records when employees retire.
Talent acquisition systems are another great example. Agencies are using systems from Monster, NGA.net, Taleo, Avue Technologies and a home-grown system from the Office of Personnel Management. All of those systems have their supporters and detractors.
OPM has made great strides in making it possible for those systems to work with USAJobs, the government's job board, but that still means applying for jobs is different from one agency to another. It might seem the easy solution is to go to just one system, but there has been so much invested in those systems that changing from one to another is far more costly than one might imagine. That doesn't mean there are not better ways to buy them. Why not have one agency (such as GSA or OPM) enter into an enterprise agreement with each of the providers, with agencies being able to use a modern talent acquisition system without having to go through the process of buying it and recompeting it every few years. While they are at it, establishing a blanket purchase agreement that allows agencies to buy assessment services from a variety of providers would make the process even better.
If the core systems were acquired using a more consistent enterprise approach, agencies could be free to use the resources they save to address other requirements for HR IT that truly are peculiar to their agency mission and workforce.
If HR IT becomes a partnership between the CHCO and CIO in every agency where that is not now the case, they will find they can get more done with the same or less resources. The only losers in the process are those who want to protect their parochial interests at the taxpayers' expense. Not a bad tradeoff if you ask me.
MORE COMMENTARY FROM JEFF NEAL:
"Jeff Neal is a senior vice president for ICF International and founder of the blog, ChiefHRO.com. Before coming to ICF, Neal was the chief human capital officer at the Department of Homeland Security and the chief human resources officer at the Defense Logistics Agency."