IRS reaches 'world class' stature for technology, management processes

Friday - 11/9/2012, 5:25am EST

Terry Milholland, IRS commissioner, Part 1

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Terry Milholland, IRS commissioner, Part 2

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The IRS may finally have an answer to its long struggle to update and upgrade its major systems that collect and track the nation's revenue.

The tax agency isn't getting more money or more people, or even that technology silver bullet. Instead, Terry Milholland, the IRS chief technology officer, went after the agency's business processes.

Milholland said the IRS earned level 3 certifications for the Capability Maturity Model Integration (CMMI) and the IT Infrastructure Library (ITIL).

This means the IRS has met these industry standards to bring it up to "world- class" standing when it comes to the processes for developing technology and managing the change new IT brings.

"The big benefit for users is our estimates for work are far more reliable. That is, what resources do we need in terms of dollars? What skills do we need to do the job? And our schedule estimates are far more reliable and consistent," Milholland said in an interview with Federal News Radio. "In addition, the quality goes up dramatically... [W]hen we began, we were not measuring defects and the impact on the users from their lost productivity because of a particular defect. By doing this and establishing metrics, you begin to change IT into the business partner that understands the impact on the business when we make mistakes."

Lacking discipline led to IT struggles

Milholland became the IRS CTO about four years ago and found a much different approach to systems development.

For more than a decade, the IRS has been in a constant struggle with its Business Systems Modernization (BSM) effort.

It has seen numerous inspectors general and Government Accountability Office reports, and heard from private sector experts, all faulting and criticizing the planning and performance of the BSM initiative.

In April, IRS Commissioner Douglas Shulman said BSM has been underfunded, with the agency spending less than 3 percent of its budget on long-term enhancements. GAO said it's not a lack of funding, but a dependence on out-dated systems.

All together, the IRS' struggles are well documented and well known.

Shulman is stepping down next week as the commissioner after nearly five years at the helm. Add to these challenges the IRS needs to annually update its systems based on changes enacted by Congress to the tax code.

Milholland could attribute some of those problems to a lack of systems development discipline.

"We tended to be stuck in the 1990s with what I'll call a guild shop mentality, which is where you have some very superb people, masters of their craft, and with them on various projects, are people with varying degrees of skill, journeymen and women and apprentices, people who are basically new and a lot less experienced," he said. "Each one of those projects would deliver based on the tenets of the master and each would do it differently than someone else. And thus projects would all be siloed and people would use different programming practices, different programming languages, would deliver systems with varying degrees of quality, and this was across the entire IRS. While we always were able to deliver during filing season, we were having difficulty in many areas that would seem to repeat themselves, problems would occur over and over again."

No more choices, just standards

To break the guild culture, Milholland decided to take the IRS on the path toward CMMI and ITIL maturity.

Each level takes 18-to-24 months and is as much about change management as it is about changing internal processes.

"Each master has a favorite programming language, say C# or C++, or someone decided this application would run on Solaris because they liked it. The change now is that decision is taken away," he said. "You have architecture process in which we have selected certain technology standards that you will follow and you no longer have that choice. For example, I declared Java would be our standard development language and along with that comes a number of tools and that the environments we would develop on would be Linux."

Milholland said developers still can make their case if they can show why the standards will not work.

"It was no longer a case of constantly picking and choosing among competing choices. You have a choice and this is it," he said. "That itself was a dramatic thing the way the enterprise would operate."

The IRS has high expectations for what moving to CMMI and ITIL level 3 means more broadly for the agency.