The Commerce Department saved more than $200 million in administrative costs over the last two years.
A large portion of that is easily attributable to the collaboration between Scott Quehl, Commerce’s chief financial officer, and Simon Szykman, Commerce’s chief information officer, who have partnered their offices to root out those inefficiencies.
Quehl and Szykman have formed the type of relationship that is rarely seen among senior agency officials, who many times have competing priorities and viewpoints.
The two offices teamed to reduce spending on back-office funding for things such as computers where Commerce used to support several hundred contracts but worked together to create just one departmentwide vehicle that is saving the agency 35 percent off of the previous cost for computers.
“We work truly as partners. We both report to our deputy secretary. When we undertake acquisition reform because we have to be more efficient in how we buy things, that is not purely a CFO, acquisitions or IT move, it’s all of above,” said Quehl, who wears multiple hats, including chief acquisition officer, chief human capital officer and assistant secretary for administration, which oversees facilities management.
Cyber is a good example
Szykman said the partnership he has with Quehl likely doesn’t exist in many other places. “Many of the things we have been able to accomplish in the IT community in Commerce have been largely supported by the office of the CFO,” Szykman said. “One good example is the advances we’ve made in cybersecurity. It’s been a departmentwide priority for quite some time and what we’ve managed to accomplish in the past two or 2-1/2 years is very much something that only was possible with the support from the office of the CFO.”
Commerce saw its Federal Information Security Management Act (FISMA) score from its inspector general increase by 3.5 percent to 81.4 percent in 2011 as compared to 2010, according to the Office of Management and Budget’s annual report to Congress.
Quehl said the decision to support Szykman’s priorities around cyber was easy when viewed from a risk-management perspective.
“I’m concerned not only about dollars and cents, although certainly that too, but overall management effectiveness where you must look at IT and cybersecurity,” he said. “Like everything else, you have to weigh risks, costs and make sure that cybersecurity initiative is being formulated, requirements defined, benefits understood and fairly planned through and bought into before we undertake such an initiative. Simon is central as a catalyst in working with his CIO counterparts in Commerce’s bureaus in defining and getting buy-in for that plan.”
One way Commerce ensures departmentwide buy-in is through its investment review board. Quehl and Szykman are co-chairmen of the body, which includes bureau-level decision makers from IT, program, acquisition and financial areas.
“We use a set of criteria to determine which programs and projects flow up to the department management level,” Quehl said. “Dollars is one factor. Mission criticality is another. There are other factors such as inherent risk that we are monitoring. We take this integrated project team approach and embed project principles in how we manage.”
Szykman said the boards have evolved over the past three or four years in being more focused on strategy and risk. “The boards, if you go back several years, were effective review boards, but not necessarily as effective in terms of really supporting decision making and effective risk management for these projects,” he said. “Ultimately, that’s the intent here is for the department level to help with the management of risk the department is exposed to.”
Quehl said the department sets standards and expectations for how the bureaus should manage programs and holds each CIO, CFO and other senior decision makers accountable.
One way the CFO and CIO offices are helping the bureaus is through the creation of an enteprisewide program and risk management office.
Szykman said these “third-party” program managers offer an independent perspective on projects to help ensure they stay on track.
The two-year-old office is paying dividends. According to OMB’s IT Dashboard, Commerce says 75 percent of all projects are meeting cost estimates and 65 percent are meeting schedule estimates.
The review board also has helped Commerce find and achieve administrative efficiencies.
Szykman said there is a strong CFO interest to advance the efficiency initiatives and move money to mission-critical areas.
Quehl said the viewpoint both offices bring is more strategy than any one back-office function, whether it’s IT or acquisition or finance.
“The Commerce Department two years from now will be a department that is even much better than it is today in terms of a consistent approach to how we plan, budget, manage our IT and other capital programs,” Quehl said.
Szykman said he too sees a different Commerce Department because of the partnership between his and Quehl’s office.
“It’s been very helpful to me to have the level of alignment that we have because I feel like I haven’t been the only one fighting for a certain set of priorities,” he said. ” I feel like the office of the CFO as an organization and Scott, as an individual, serves as advocates for my own priorities as well as theirs.”