When one steps back and collectively evaluates how the government has traditionally managed and acquired information technology, some conclusions are painfully obvious. On the whole, the federal government’s track record in delivering high value information technology solutions at acceptable cost is not a good one. Put simply, the government continues to expend money on systems projects that far exceed their expected costs and yield questionable benefits to mission improvements. Familiar examples, such as the Federal Aviation Administration’s Air Traffic Control modernization and the Internal Revenue Service’s Tax Systems Modernization projects serve as stark reminders of situations where literally billions of dollars have been spent without clear results. Moreover, agencies have failed to take full advantage of IT by failing to first critically examine and then reengineer existing business and program delivery processes. Federal agencies lack adequate processes and reliable data to manage investments in information technology. Without these key components, agencies cannot adequately select and control their technology investments. As GAO’s financial and information management audits have demonstrated over the last decade, it is sometimes impossible to track precisely what agency IT dollars have actually been spent for or even how much has been spent. Even more problematic, rarely do agencies collect information on actual benefits to the organization accruing from their investments. More often than not, results are presented as descriptions of outputs and activities rather than changes in performance or program outcomes. How should the Congress expect this scenario to change once agencies take steps to implement ITMRA? In 5 to 7 years, the Congress should have a much clearer, confident understanding of the benefits to agencies’ performance that are attributable to IT expenditures. On a governmentwide basis, there should be higher overall success rates for IT projects completed within reasonable time frames, at acceptable costs, with positive net rates of return on investment. Modular, well-defined IT projects with short-term deliverables should be the rule rather than the exception. And institutionalized, up-to-date management processes should be producing consistent high-value investment decisions and results. Mr Chairman, ITMRA also has to reinforce and be reinforced by other important management reform legislation. Just as technology is most effective when it supports defined business needs and objectives, ITMRA will be more powerful if it can be integrated with the objectives of broader governmentwide management reforms. For example, changes made by the Federal Acquisition Reform Act (FARA) and the Federal Acquisition Streamlining Act (FASA) are focused on removing barriers to agencies obtaining products and services from outside sources in a timely, efficient manner. This is crucial in the technology arena where significant changes occur very rapidly. ITMRA builds in essential investment and performance ingredients that empower agencies to make wiser, not just faster, acquisitions of IT products and services. The Paperwork Reduction Act (PRA) emphasizes the need for an overall information resources management strategic planning framework, with IT decisions linked directly to mission needs and priorities. And, the act also focuses on reducing unnecessary information requirements on industry and citizens. ITMRA can work in concert with PRA by making sure that agencies understand what information is needed, the purpose it is being used for, and ensure it is collected once and shared many times. The CFO Act requires sound financial management practices and systems to be in place essential for tracking program costs and expenditures. ITMRA based-approaches to managing information systems should have a direct, positive impact on the creation of financial systems to support the higher levels of accountability envisioned by the act. GPRA focuses attention on defining mission goals and objectives, measuring and evaluating performance, and reporting on results. Budgets based on performance information provided under GPRA should include clear treatment of IT capital expenditures and its impact on agency operations. Similarly, ITMRA effectively supports GPRA by requiring that performance measures be used to indicate how technology effectively supports mission goals, objectives, and outcomes. Past experiences with other governmentwide reforms—such as the CFO Act, the National Performance Review (NPR), the Paperwork Reduction Act, and GPRA—indicate that implementation requires a significant investment of time at senior levels. Our own experiences in assisting agencies with self-assessments of their strategic information management practices have illustrated the many barriers that must be overcome. To date, our evaluation approach—which involves all levels and types of management—has been used in at least 10 agencies. In every case, it has taken considerable management time, talent, and resources to analyze organizational management strengths and weaknesses and then put corrective action plans in place. From the past, we know that the early days following the passage of reform legislation are telling. The level of governmentwide interest, discussion, and senior management involvement in planning for and directing change all indicate whether a “wait and see” approach versus a “get ready to meet the test” approach is being taken. During this period, consistent oversight leadership, coordination, and clear guidance from the Office of Management and Budget (OMB) is essential to getting agency implementation off to a constructive start. Without common direction and constancy of purpose from OMB, GAO, and the Inspectors General, agency executives are left reacting and responding to advice and directives that may be at cross purposes. It is also important that implementation actions focus on not only the means (i.e., policies, practices, and process) but also end results that are expected from the management reforms. For ITMRA to be successful, improved management processes and practices that focus on capital investment and planning, reengineering, and performance measurement are essential. But these are only the means to achieve the legislation’s ultimate goal—implementing high-value technology projects at acceptable costs within reasonable time frames that are contributing to tangible, observable improvements in mission performance. Continuous oversight from the Congress that focuses on these issues and strong support from the Administration are an essential incentives for keeping agency management accountable and focused on changes necessary to ensure more successful outcomes. The pilot efforts being conducted under GPRA also illustrate that outcome and performance-based decision-making will not be an easy, quick transition for federal agencies. Performance reports provided to the Congress under both GPRA and now ITMRA should become one of Congress’s major mechanisms for evaluating and ensuring agency accountability. A flurry of activity is underway across the government to implement new management processes required by ITMRA. To its credit, OMB—under the direction of the Deputy Director for Management—has taken a leadership role in organizing and focusing interagency discussions on changes needed to existing policy and executive guidance. Let me briefly summarize some of the major activities now underway. Several policy directives and guidance are being created or revised by OMB to reflect changes required by ITMRA. These include a draft Executive Order on Federal Information Technology which is currently with the President for review and signature. This order will officially create a governmentwide Chief Information Officers Council, composed of agency CIOs and Deputy CIOs and chaired by OMB’s Deputy Director for Management, to provide recommendations to OMB on governmentwide IT policies, procedures, and standards; the Government Information Technology Services Board, staffed by agency personnel, to oversee the continued implementation of the NPR IT recommendations and to identify and promote the development of innovative technologies, standards, and practices; and the Information Technology Resources Board, staffed by agency personnel and used to review, at OMB’s or an agency’s request, an information systems development or acquisition project and provide recommendations as appropriate. In addition, revisions are being made to two important OMB management and budget circulars. Circular A-130, Management of Federal Information Resources, is being changed to include the capital planning and portfolio management requirements of ITMRA. Circular A-11, Preparation and Submission of Budget Estimates, is expected to provide additional information on capital planning, including a new supplement on planning, budgeting, and acquiring fixed assets. Further, an estimated 90 percent of GSA’s Federal Information Resources Management Regulation is expected to be eliminated in response to ITMRA. The remaining segments are expected to be issued as parts of the Federal Acquisition Regulation, the Federal Property Management Regulation, or OMB guidance. The OMB IT Investment Guide, issued last November, establishes key elements of the investment process for agencies to follow in selecting, controlling, and evaluating their IT investments. This process will be used in the fiscal year 1998 budget submission cycle. The Investment Guide has been circulated among agency heads, CFOs, and senior IRM officials. In addition, OMB has made copies available to each of its five Resource Management Offices responsible for reviewing agency management, budget, and policy issues. OMB has also organized an interagency CIO Working Group—comprised of the existing senior IRM officials from the major agencies and departments—to assist in developing the policies, guidance, and information needed to effectively implement ITMRA. This working group has been very active, meeting once a month since January. The working group has created several interagency subcommittees that have been working to provide suggestions to OMB on changes needed in governmentwide policies and executive guidance to effectively implement ITMRA. Among these subcommittees are the CIO Subcommittee, which developed a paper on the appointment, placement alternatives, and roles and responsibilities of an agency’s CIO; the CIO Charter Workgroup, which developed the proposed charter for the CIO Council; and the Capital Planning and Investment Subcommittee, which has discussed potential approaches to IT capital planning processes and is working on a proposal for pilot testing new processes at several agencies. Because many of these activities are still underway, it is impossible to make conclusions about them at this time. However, taken as a whole, they send several positive signals. In each, OMB has played a proactive leadership role while remaining flexible enough to adapt to individual agency situations and needs. In general, although the depth and impact are uncertain, the direction of the guidance is consistent with ITMRA.