by Richard Jacik
There once was, or so the story goes, a software vendor that was demonstrating
to prospective clients the tight integration between two systems. The
only problem was that the integration was being accomplished not by the
systems themselves, but by another employee of the vendor doing dual data-entry
behind the curtain.
True or not, the tale carries a common-sense technology lesson. It's difficult
or impossible to have a seamless customer-facing environment if your internal
systems aren't doing the job.
The difficult dream
In 1998 the Office of Student Financial Assistance (OSFA) set out
to fix the un-fixable. The embattled U.S. Department of Education, perennially
targeted for elimination by some Republicans, found itself the proud owner
of the federal government's first Performance Based Organization (PBO).
PBOs are intended to turn traditional bureaucracies on their heads by
modeling private sector mission-orientation and compensation plans for
federal civil servants. Procurements are streamlined and annual performance
reviews grade the organization's progress toward goals. Focused as they
are on improved services for customers, and greater accountability of
executives, pay and advancement in PBOs are tied to results.
OSFA's transformation, a massive undertaking, began with a modernization
plan that focused on re-engineering key business processes and applying
technology to improve services to its customers: students, financial partners,
and schools. Teams were formed (see accompanying list) to design and create
web portals and other technology initiatives aimed at improving the external
face of the office.
Climb every mountain
Like any decent strategic technology plan, however, OSFA's modernization
blueprint addressed ongoing shortcomings in back-office administrative
systems, in particular financial management. The Department of Education
is notorious for what might generously be called financial anomalies.
Its financial aid systems remain on the General Accounting Office's High
Risk list due to "inadequate financial reporting, bad reconciliation
of financial records, and poor control over information," cited by
the GAO as recently as January 2001.
That the strategic plan simultaneously would address back-office systems
and customer-facing systems is not surprising. Given ED's 11-year stay
on the GAO's High Risk List, however, there was anticipation that its
financial management systems would get the attention of the finest talent
at OSFA, to the possible detriment of niceties like web portals.
That's not what's happening though. OSFA is moving forward aggressively
with systems that help customers and partners work with them. But, as
the story goes, it is difficult to make customer-facing systems work properly
if internal systems are not up to snuff.
Difficult, not impossible
Depending upon an organization's tolerance for internal confusion, it
may choose to provide an external appearance of streamlined internal operations.
Customers will either be fooled like naive children or they'll figure
out the truth - damaging reputations and ruining projections.
Most schools struggle with similar issues. External clients - students,
parents, prospects, applicants - are likely to be impressed with portals,
eLearning, integrated one-stop online services and other niceties. But
investing in back-office applications for financials (student and institutional)
and human resources, and putting meaningful data into the hands of campus
decision-makers, can provide real competitive advantage for an institution.
Unfortunately, fixing back-office capabilities while bringing on the latest
customer-interaction technologies typically results in neither being accomplished
with great success. This has little to do with not spending enough money
on the problem or having insufficient skills to get the job done. It has
a lot to do with lack of focus.
Solution providers attempt to satisfy simultaneous back-and front-facing
requirements with applications that streamline and track administrative
processes, adding a window (a page, really) for customers. Such retrofits
of customer-centric computing onto back-office systems have evolved from
useless, to embarrassing, to tolerable.
Like OSFA, institutions that really want compelling customer-facing capabilities
do so at the expense of improving their core administrative applications,
at least in the short run. In the post-Y2K budget world, most organizations
are hard-pressed to do both.
There is another option. By looking at individual customer-initiated processes
from the customer-facing systems to the back-office systems that are involved,
it is possible to avoid the whole back-office/customer debate. With this
approach, the pieces that need it are re-engineered, one at a time, front-office
There's a catch
Of course, ERP vendors don't make it easy to implement one piece of back-office
functionality at a time. That's not how their systems were designed or
constructed. So they have a similar problem with customer-facing retrofits.
Vendors' track records on delivering component-based systems is roughly
analogous to OSFA's success in providing fiscal accountability.
Another pitfall of one-at-a-time retrofitting is an uneven user experience.
From screen to screen users are delighted with the new processes and disappointed
with the older ones that will eventually be fixed - they hope.
Fits and starts
New systems projects are by definition a political, financial and technical
struggle. The tendency to try to do too much, too fast, can dilute the
attention of senior management and spread critical resources too thin.
Given OSFA's broad set of targets such dilution is practically assured.
OSFA efforts still get passing grades, but not straight A's. Stanford
University's Maria Inciong has been working with financial aid technologies
for eleven years. She appreciates the fact that new and better technologies
for access, communication, and data transfer are the focus of OSFA's customer-facing
systems, but she's wary about the quality of what's going on behind the
"The whiz-bang technology is certainly compelling, but it shouldn't
be a preference over getting the foundation right," Inciong observes.
One of Inciong"s examples: access to the National Student Loan Data
System is better and easier than ever before with improved interfaces
and better usability, but she has doubts about the timeliness, and thus
the quality, of the data.
A real improvement
Despite the shortcomings, benefits are being realized. Inciong points
out that OSFA's initiatives have a by-product of improved communication
and collaboration between OSFA and its customers. "I'm not sure it
was intentional, but we work much closer with the Department of Education
on timing and proposed rules. That in turn, helps us serve our students
better,' says Inciong.
As for the efficacy of the PBO, Inciong hasn't seen dramatic results from
the revised organizational mission and reward programs. Indeed, she points
out that while changes are coming fast and furious, those with the greatest
impact came prior to 1998, or at least were in the planning stages then.
More to come
Roderick Paige, Secretary of Education, has announced the creation of
a working panel to create another blueprint, this one for management excellence.
In addition to continuing the modernization effort and making other offices
within the department of education more accountable, the goals of this
panel include getting clean audits from the agency's auditors, as well
as getting OSFA removed from the GAOs High Risk List.
If the PBO has bitten off more than it can chew, or has simply bitten
it off in the wrong order, then you wouldn't know it from their aggressive
plans. With five teams in place, each working on a number of significant
initiatives, the laundry list is long. Will something give? Pleasing the
customer is important, but pleasing Congress and the GAO may be mandatory.
Richard Jacik is president and co-founder of Information Methodologies,
Inc., higher education's leading enterprise web integrator. Contact him
at 703.435.0370 or via eMail at email@example.com.
OSFA's Team Initiatives OSFA's modernization blueprint describes five
newly created integrated product teams (IPTs). Each team is tasked with
modernizing, reengineering, designing, and implementing technology solutions
to support OSFA customers and internal processes. The IPTs and their responsibilities
Common Origination and Disbursement: Origination
and disbursement of federal Pell Grants and Direct Loans, and common reporting
standards for campus funds
Direct Loan Service Reengineering: Student
aid awareness and outreach, and the student profile database. Sunset of
the Central Data System (which has been in use since 1996)
Financial Partners Transformation: Lenders,
guaranty agencies, state agencies, secondary markets and services interaction,
data exchange, and interfaces
Portals: Web-enablement of key customer
processes including student and school access, applications, downloads,
and industry links
Financial Management Transformation: Financial
management system, best practices for financial organizations. Key customer
processes including student and school access, applications, downloads,
and industry links
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