Dec 31 2009

At the Root

Use sourcing management to optimize your CIO organization.

In simplest terms, federal agencies look to their CIOs to deliver effective information technology services and lead the implementation of projects that improve the performance of the mission.

But how do they do that? CIOs need to link three separate disciplines to succeed in their quest to meet this charge:

Strategy: Following the Office of Management and Budget’s leadership, CIOs have placed emphasis on architecting the modernization and operational blueprints for IT and on justifying the specific investments required to implement these plans.
Strategy defines the “what” and “when.”

Sourcing Management: Once the plan has been developed, the CIO needs to ensure IT resources are organized effectively to be able to implement the plan and deliver results. This discipline — sourcing management — includes components such as organization of staff and effort, human capital management and acquisition strategy.
Sourcing management defines the “who.”

Program Management: Now, the CIO must combine management and organizational governance processes to dynamically direct activities to accomplish the objectives. For CIOs, the critical programs tend to be projects — such as the modernization of the IT infrastructure or the implementation of improved application systems — and the efficient use of IT to deliver results.
Program management defines and directs the “how.”

By and large, CIOs have experience with developing strategies and managing programs; they know what’s required. But sourcing management is a fairly new demand.

Workforce Challenges

With an enterprise IT strategy in hand, a CIO must confront the legacy organization and workforce. In many cases, these existing elements will not be the best suited to implement the IT plans. What are the rules of engagement? How should the CIO proceed?

Like many large organizations, agencies have extensive requirements and processes related to structure, human resources, acquisition and the like. The first key for the CIO is to understand the tools available, how to use them, and the time and effort required to make changes using them. (See the chart below for an idea of some of the likely tools and the relative level of difficulty of using them to effect change.)

If you think about the components of an agency, there are some simple realities about how easy or hard it is to make changes. For instance:

  • The organization can be changed with reasonable justification and effort.
  • A contractor’s workforce can be improved easily.
  • Changes to the existing workforce are difficult.
  • Outsourcing existing federal functions is very


Another complication for the CIO is what’s called the multisector workforce. In today’s federal workforce, a mix of government and contractor personnel executes programs. In the case of the Defense Department, there’s also the military component. The rules by which CIOs can engage and direct these personnel differ by labor class. The organization and program management structure must be designed considering these differences.

What’s the most pragmatic course of action for a CIO? Essentially, it’s a four-pronged approach: Assume no radical change in the size of the federal workforce; organize the effort and structure to best execute; selectively contract out where it makes sense; and redeploy the existing federal employees to handle inherently governmental functions and other gaps in the revised organization.

Getting to the Source

Sourcing management refers to the collective assessment, analysis and decision activities involved in structuring the organization and workforce, and acquiring external capabilities. Every CIO needs to be well versed in this practice and should seek to educate and cultivate support from all C-level officials they must depend on to help with structuring the CIO organization. These might include all or some of the chiefs of HR, acquisition and financial management.

CIOs must focus on three critical areas: organization, workforce and acquisition. The first step in the sourcing management process is to craft an organization that will most effectively let the CIO drive achievement of the IT strategy and accomplish CIO goals.

There is no set formula, but the relative current status point of the CIO organization in its quest to achieve the target state is probably the most important variable. If the organization is in the early stages of an IT modernization, the CIO organization needs to include a strong project management capability. If the modernization has been substantially completed, a strong program management function to ensure ongoing operations excellence would be more critical. During this first step, the CIO needs to determine the skills required in the newly designed organization.

Parallel to the effort to conduct the organizational restructuring, the CIO should focus on the federal workforce. The first task with respect to workforce must be a skills assessment that the CIO can use to develop an inventory of the existing staff.

The second task is to map the inventory to the skills requirements of the new organization, considering which positions are inherently governmental and which are suitable for contracting out. As part of this process, the CIO should also develop an understanding of where the skills of federal resources can be broadened and extended via short-term developmental efforts.

At this point, the CIO has a new organizational structure optimized to execute the IT strategy for the agency and has slotted the workforce into that organization. The next step is to craft an acquisition strategy and identify specific acquisitions that will let the CIO obtain the skills and capabilities needed after deployment of the federal workforce. In managing this phase, the CIO must organize the work by identifying clear and compatible areas of performance and outcomes.

One final point of emphasis: Operational excellence requires ongoing focus and a near fanatical use of performance indicators and measures to drive the results most critical to the strategy and goals. What that means is that the CIO will also need a strong and well-funded quality assurance function.