TEXT AS PREPARED FOR DELIVERY
March 24, 2000

TREASURY DEPUTY ASSISTANT SECRETARY (INFORMATION SYSTEMS) AND CHIEF INFORMATION OFFICER (CIO) TESTIMONY BEFORE THE HOUSE SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION AND TECHNOLOGY

Mr. Chairman and members of the Subcommittee, I appreciate the opportunity to appear today to discuss the role of the Chief Information Officer in the public and private sectors. First, I want to thank the Chairman and the other members of the Subcommittee for your continued support and encouragement toward the improvement of information technology performance and accountability in the Federal Government.

As many of you know, I serve as the Deputy Assistant Secretary for Information Systems and Chief Information Officer for the Treasury Department. In this role, I provide strategic direction and oversight for all information technology programs within the Treasury Department and its fourteen Bureaus. Since February of 1998, I have served as the Vice Chair of the Federal CIO Council where I play a key role in the strategic direction of the Council and the Federal Government's use of information technology.
Today, I would like to focus my comments on three issues: the evolution of the CIO in the federal government, some differences between the public and private sector CIO roles, and key challenges facing CIO's.

THE EVOLUTION OF THE CIO IN THE PUBLIC SECTOR

The role of the CIO in public sector is evolving through various stages. In the first stage, the role was ill defined and the CIO was thought of as a technician and then as an adjunct to the Chief Financial Officer (CFO). As a result of the Clinger-Cohen legislation, the work of the Federal CIO Council, the growth of the Internet, E-Commerce, and the success in addressing the Year 2K problem, the CIO is progressing towards a business partner and a peer with senior management. CIO's were able to demonstrate their value and the value of technology to their organizations while addressing the serious issues involved with Year 2K. In the private sector, many CIO's have evolved into a Chief Technology Officer working side-by-side with the CEO, as evidenced by the many .com organizations. The public sector CIO has not yet reached this level of influence.

As my colleague, the Associate Director of the U.S. General Accounting Office will attest, most business decisions today involve technology. The CIO should be positioned at the table with the CEO, COO and CFO where he or she can work as a team with senior management. It is critical that the CIO be involved in agency budget and resource allocation decisions. If CIO's are to be held responsible and accountable for results, they will need the authority to influence resource decisions. At Treasury, I am fortunate to have an excellent working relationship with the CFO, so I am involved in all investment decisions.

There is a disparity from agency to agency in the organizational placement and authority of the CIO. Regardless of organizational placement, CIO's must demonstrate value and earn credibility to be effective. In Treasury, I enjoy a strong working relationship between the CIO, CFO and other senior officials.

DIFFERENCES BETWEEN PUBLIC AND PRIVATE SECTOR CIO's

Although many of the key IT challenges within the public and private sector are similar, there are several areas where they differ. As public employees we must abide by statutory and regulatory requirements unique to the Federal Government. We agree that these requirements are important and necessary to guarantee the integrity of our actions for our citizens but we must also recognize that they impose constraints in our ability to procure products and services, recruit IT professionals, and quickly make resource adjustments to meet dynamic market priorities. Let me explain.

The public sector cannot compensate IT professionals at the same level as the private sector. We are constrained in hiring young IT professionals at entry levels competitive with the private sector. The private sector can recruit based on talent and compensate based on market conditions. We also have a difficult time justifying promotions based on specialized technical skills. The Federal CIO Council is working closely with the Office of Personnel Management to address these concerns.

Private sector CIO's can work directly with their CEO's to make immediate decisions on resource allocations and procurement priorities to meet changing market drivers. Public sector CIO's must plan well in advance and work through various layers of Government to achieve such change.

Another concern is the difficulty of the government to fund interagency and intergovernmental IT projects. Although the business cases for government wide efforts are compelling, the current appropriations processes make funding such projects problematic. The current "passing of the hat" approach to interagency project funding is not a viable long-term solution. The Federal CIO Council is working with OMB, the CFO Council and the other government wide groups to identify possible strategies to address this matter.

CIO's in the public sector also carry unique responsibilities to set information policies within their agencies and comply with government wide policies. The public sector CIO must find ways to reduce paperwork burdens on the public, adopt sound records management programs for historical archiving and disseminate government information.

KEY CHALLENGES FACING CIO's

Lastly, I would like to mention some challenges facing Federal CIO's. There have been several studies focusing on the challenges facing CIO's today. I had the opportunity to participate in many of these studies including the fine work done by GAO in the report they are releasing at this Hearing today. Challenges CIO's face include:

1. Taking advantage of rapidly evolving technology to make government more effective.
2. Hiring and retaining skilled IT professionals.
3. Assuring information systems security and privacy and preventing unauthorized system intrusions.
4. Obtaining adequate funding, particularly for interagency projects
5. Empowering the CIO as a key decision maker and ensuring that we cost effectively apply technology through such processes as IT capital planning and investment management within the agency

SUMMARY

In summary, I would like to reiterate that the position of the CIO is evolving in a positive direction. I believe the Year 2K success, the Internet, E-Commerce and other industry trends are creating a heightened awareness of the importance of IT. This heightened awareness will accelerate the evolution of the federal CIO consistent with the experience in the private sector. It will also result in the true implementation of provisions of the Clinger-Cohen legislation.

I would like to thank the subcommittee for the support it has given to the work of the Federal CIO Council. Without your support we would not have been able to achieve the National success we enjoyed with Y2K. I would also like to express my appreciation and commend GAO for the excellent work they are doing in this area. I would like to thank the members of the Subcommittee for the opportunity to present this morning. Mr. Chairman, this concludes my formal remarks and I would be happy to respond to any questions.