IT Waste at IRS

[Ben]

I was somewhat flabbergasted for three reasons:

1) That this was reported via The Hill, which is generally staunchly in the "more government" camp.

2) The actual IT cost per IRS employee.

3) The average cost of IT per employee in private industry. While the IRS cost is outrageous, this seemed high to me as well, though then I thought about it a bit.

IT was a collateral duty for me in gov, something like 15-20% of my time. Of that, as much as I complained about it, dealing with knuckleheads breaking stuff was probably less than 20% of that time, with the rest taken up by IT bureaucracy. Then add in that there were a ton of people like me in the field, probably twenty people in DC also dealing with it across my division, then they had probably 20 people above them at the office level, then more at the agency level, then more at the department level, then the top end telling all the fed departments what to do, then FTE time adds up quickly.

Then add in crap like initiating new infrastructure, taking five years to do it only to have to scrap it because it's now obsolete, and I can see where those reported numbers come from (though the IRS still seems way high even for fed.gov). Also, there's no reason for 94% of IRS employees to be provided a mobile device plus support. Is every dang employee out in the field or teleworking? It seems like fully half of them should have nothing but a terminal working off VM servers.

http://thehill.com/blogs/pundits-blog/the-administration/340293-does-trump-have-a-point-in-saying-the-irs-could-trim?amp

[Perd Hapley]

Does Trump have a point in saying the IRS could trim billions in waste?

I thought when Trump said something, that made it bad-think. 

[mtnbkr]

I only skimmed the article, but I'm not particularly scandalized by it.

I spent 10 years as a contractor for DoTreas (GTE, then Verizon after BellAtl merger).  IRS was one of my customers and I spent a lot of time working with that bureau.

Since then (7.5 years), I've worked for a large multi-national IT services firm with large customers worldwide.

NOTHING in that article is unique to IRS or FedGov.  Large corporations (and many smaller ones) are just as guilty of it.  If you think a profit-driven company is necessarily better with money or resources than FedGov, you're deluding yourself.  You don't hear about it, because you don't have visibility into the inner workings like you do with the Govt.

FWIW, many of the IT folks I dealt with at Treasury were more competent than their peers in private industry.  I know that goes against the common perception, but it was my observation.  There was a real sense of mission and fiscal responsibility at the various management/director levels rather than profit-driven motives.  While my experience in private industry was "how can we do it cheaper", the govt was more about "doing it better" or at least "doing it better within these budget constraints" (the latter seems identical to the "do it cheaper" idea, but it's more about staying in budget rather than cost cutting for profit's sake).

Oh, to Ben's point about people, FTE are the largest cost center in my world as well.  We're moving a LOT out to India because you can get roughly 5 "Specialists" there for the price of 1 in the US ($15k vs $95k). 

Chris

[Ben]

FWIW, many of the IT folks I dealt with at Treasury were more competent than their peers in private industry.  I know that goes against the common perception, but it was my observation.  There was a real sense of mission and fiscal responsibility at the various management/director levels rather than profit-driven motives. 

In general, I found I also interacted with competent people, who all seemed to have mostly the same complaints as me, in that it was the ginormous bureaucracy attempting to integrate itself that caused most of our frustrations. Trying to streamline and standardize in something as big as fed.gov is like herding cats, and even when people in IT want to do their best, there are always entrenched middle managers, that though they have no IT expertise, have somehow been given positions where they can dictate IT policy at their level, or just choose not to implement it with little, or belated consequences, which can become a huge bottleneck between what DC wants done, and what gets through to operational IT.

I also have no doubt other branches of fed.gov have high "per employee" IT costs. I'm just thinking $30K per employee is something above the average. I'd be interest to see a breakdown by agency though.

[HankB]

I worked for a very large multinational highly diversified tech company for over 30 years.

The unofficial corporate IT motto was "If your system isn't broken, we'll fix it until it is."

[just Warren]

The thing is it's not waste for the people on the reviving end of the money-flow. Its their profits and they are absolutely going to be willing to spend some percentage of it to keep the rest flowing.

So who are they and how can they be leveraged into abandoning the money? I assume there are contracts in place that just can't be voided.

Or can Trump's people just cut off the flow through, say, an executive order?? Will lawsuits ensue? 

[mtnbkr]

The thing is it's not waste for the people on the reviving end of the money-flow. Its their profits and they are absolutely going to be willing to spend some percentage of it to keep the rest flowing.

So who are they and how can they be leveraged into abandoning the money? I assume there are contracts in place that just can't be voided.

Or can Trump's people just cut off the flow through, say, an executive order?? Will lawsuits ensue? 

Depends on the nature of the contract in place for the service and how much capability for flex there is in the service being offered.

If the service in question is strictly X for Y, then there's not much Trump can do unless there's an exit clause.  If the contract allows for a consumption based model, then Trump can reduce costs by reducing consumption. 

Chris

[Pb]

mtnbkr, I don't think a gov is necessary always less efficient than private businesses.... but when private business are too inefficient they go out of business (absent gov interference).  This causes them to stop wasting money and labor.

80% of new businesses fail because they are inefficient.  Let us assume that the gov is just as efficient as private business, as unlikely as that is, with an 80% incompetency rate.

Do 80% of gov programs stop because they are failures?  No.  They continue being failures and wasting money and labor that could be used productively elsewhere.

That is a huge difference.

[mtnbkr]

BTR, the problem is you're comparing a large enterprise (gov) to small businesses.  Make your comparison with Fortune 500 or larger companies and you'll see more parity.  I see more parallels in the very large multinationals with .gov than I do with the "free market". 

Chris

[RevDisk]

BTR, the problem is you're comparing a large enterprise (gov) to small businesses.  Make your comparison with Fortune 500 or larger companies and you'll see more parity.  I see more parallels in the very large multinationals with .gov than I do with the "free market". 

At that stage, from what I've seen, there's huge overlap between the govt and the megacorps. But yes, hubris is an amazing thing at megacorps and govts.

[Pb]

BTR, the problem is you're comparing a large enterprise (gov) to small businesses.  Make your comparison with Fortune 500 or larger companies and you'll see more parity.  I see more parallels in the very large multinationals with .gov than I do with the "free market". 

Chris

Yes, what you are saying makes sense.