IRS drafting plan to decommission legacy systems as part of enterprise cloud migration

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The IRS is working on a strategy to decommission legacy IT systems well ahead of any actual plans to unplug machines.

IRS officials said Tuesday that the strategy to decommission its legacy systems is taking shaping shape in concert with the work of the Enterprise Digitalization and Case Management Office the agency stood up in July. That office will lead the agency’s migration of business processes from legacy systems and onto a cloud-based enterprise case management system developed by Pegasystems.

Brad Bouton, the director of the agency’s Enterprise Case Management Office, said the agency is drafting the decommission strategy well ahead of any plans to unplug and remove legacy systems because of the scope and complexity of the migration effort.

Bouton said IT officials refer to the IRS’ technology infrastructure as a “spaghetti map,” because so much data flows across a tangle of interconnected systems.

“You just can’t pull out one system and not worry about where the data goes,” Bouton said during the IRS’ virtual Emerging Technology Day hosted by the Advanced Technology Academic Research Center (ATARC). “We’re actually kicking that effort off in parallel with actually modernizing our processes, and migrating them to ECM.”

Migrating applications to a cloud-based enterprise case management system, Bouton said, will allow the agency to make better sense of its business processes, and what features and functionality the agency will need to turn off legacy systems.

This work falls under the six-year IT modernization strategy the agency launched last year, which focuses on four pillars: Taxpayer experience, enforcement, operations and cybersecurity. By the end of this process, the agency looks to modernize its Individual Master File, the engine behind the hundreds of millions of income tax returns filed every year.

This long-term IT modernization project is hardly the first of its kind. Bouton said he’s seen about two or three previous modernization initiatives during his tenure at the agency. But what’s different this time, he said, is that the business side of the agency realizes it can no longer take a “hands-off” approach to IT modernization.

Beyond the IT staff working on this project, Bouton said the IRS will have analysts, managers and executives provide more day-to-day leadership

“The business is all in on this, and for many in the business, this is a change. For decades, we’ve been told, ‘Well, IT sits over there and we sit over here, and we throw requirements over the fence and maybe they get done.’ That’s not how we’re doing business at all,” Bouton said. “Today with ECM and digitalization, the business is driving this with our IT partners to ensure that the outcome is what the business really expects to support future state vision.”

Congress over the past decade has cut the agency’s budget by about 20% over the past decade, and its IT budget has essentially remained flat.  But last year lawmakers passed Taxpayer First Act, aimed at improving taxpayer services.

IRS Commissioner Chuck Rettig said that legislation signals buy-in from lawmakers about the work the IRS is taking on.  “We don’t have to go up and explain what we want to do,” he said.

Rettig said IT modernization is essential for an agency that processed more than $3.5 trillion in gross revenue in fiscal 2019, and that the agency should “swing for the fences” when it comes to improving its level of service to taxpayers and catching up to the private sector in terms of the services it offers online.

“I would love it if the retail side of the world would say, ‘We want to be like the IRS.’ We want to be out ahead,” Rettig said.

But unlike retail or any private-sector business, the IRS doesn’t pick its customers and still needs to provide phone and in-person tax-help options to households that aren’t able to take advantage of the agency’s growing portfolio of online services.

Gbemi Acholonu, the agency’s digitalization strategy executive project director, said the agency remains mindful of the digital divide that makes online services inaccessible for some households and demographics, and has focused on making its internal processes digital even in cases where the IRS accepts paper tax returns.

“Though we’re focusing on the digital-first mindset, we do recognize that we’ll be receiving paper for a good number of years probably, and we’re looking at technology alternatives to help us convert that information from a paper medium, or voice medium, whatever we receive to an electronic format that is accessible throughout the organization,” Acholonu said.

Melissa Kaminin, the agency’s enterprise architecture director, said the IRS currently receives more than 100 million documents during every filing season. The IRS has more than 25 scanning systems that process all this documentation for the agency, but consistency remains a challenge.

“We need to be able to systemically retire some of these legacy systems … and that means change business process, it means changing the culture of the IRS, changing the workflows. So it’s not just technology,” Kaminin said.

Tracy Keeter, the deputy associate chief information officer for enterprise operations, said the agency recently completed the first phase of a multi-year electronic records management project. That first phase led the IRS to treat agency emails as permanent, unstructured electronic records. Those email records will eventually reside on the agency’s cloud-based ECM platform.

To keep up with this evolution in technology, Keeter said the IRS has developed an early draft of a workforce development roadmap that outlines what skills employees will need to work with a new suite of tools.

For all this work, the IRS still has one foot stuck in the past. The agency operates its Individual Master File, a core system for tax refunds, on a mainframe computer that’s 60 years old and programmed using assembly language code – what the Government Accountability Office refers to as “low-level computer code that is difficult to write and maintain.”

Keeter said the IRS continuously upgrades software and peripherals for its mainframe systems, and that agency reaches out to universities that still train people on using mainframes.

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