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In 2007, Adrian Fenty, the mayor of the District of Columbia, went on a mission to invest in making his municipal administration more responsive to constituents' needs. He appointed Vivek Kundra to serve as chief technology officer for the District of Columbia. Working with Mayor Fenty, Kundra successfully leveraged sizable technology investments to make government smaller, more open, and more accountable to the city, its employees, and its citizens. For example, Kundra eliminated unnecessary costs by the use of commercial software, and increased efficiency by streaming processes, such as the movement of paper.

 

During his campaign, Barack Obama said he would appoint a chief information officer to oversee the U.S. Federal Government's $71 billion annual IT budget. A month after taking office, President Obama appointed Vivek Kundra to oversee the world's largest IT budget. Kundra plans to focus on getting the entire federal government to make the appropriate investments and to have good oversight for the annual IT budget. Kundra's proposed agenda also resembles what he did as CTO for the District of Columbia -- lowering of the cost of government operations, driving innovation, driving transparency and accountability, and at the same time, ensuring a secure computing environment.

 

Enterpriseleadership.org recently sat down with Kundra to discuss how he plans to carry out his agenda while improving the way federal agencies use technology.

 

EL. What challenges have federal CIOs faced trying to be good oversight stewards for their department's technology budget?

 

VK. To begin with, technology has some macro challenges. Look at the scientific evidence around Moore's Law for how technology evolves and how you get new systems in place. You need creativity, and new approaches to solve the problems the federal government faces. Now put that against the backdrop of the institutions in the federal government. They have specific processes for how you evaluate most of the systems across the government. These processes are not very agile. For example, it can take anywhere from 12 months to 18 months for a procurement to go through. During this time, the requirements might have changed, the business case might have morphed, and the technology itself might have changed. Many federal CIOs have to look at things in this context as they run their agencies.

 

The federal government has 100s of bureaus and agencies, more than 10,000 IT systems, and 24,000 Web sites. When people hear the number of Web sites, they immediately say, 'Why so many?' It is because of the way the government has organized itself. Moreover, the federal CIOs have focused primarily on enforcing policies rather than rolling out solutions. The federal government has no central IT organization. Each agency does its own thing. It becomes difficult to have oversight based on business requirements. For example, the Federal Aviation Administration differs significantly from the National Institute of Health, which differs from the Dept of Labor. CIOs in each of these agencies approach problems in a different way. They need to look at areas where technology is a commodity.

 

EL. The Clinger-Cohen Act is supposed to provide some discipline and a set of controls for how departments manage technology across the federal government, but some CIOs say there are many inconsistencies across federal departments. Given that, what types of controls are you going to put in place to correct these problems so there is consistency and the rules are enforced?

 

VK. We need to rationalize how CIOs report information. The government is evolving in terms of technology. The Clinger-Cohen Act created the CIO role across the federal government, and put in an oversight process in place around the technology spend, especially for the annual government budget. As a function of the rigorous oversight reporting, I want to make sure that CIOs rationalize these reports, that we leverage IT to collect the data we need. We do not need any more actors in between when it comes to creating reports, scrubbing the data, and trying to glean insight from that data. An entire cottage industry has grown up around reporting and submitting reports.

 

After we have rationalized many of these reports, we want to make sure we are extremely transparent. We can do this in parallel when it comes to how we procure technology, what we procure it for, and where we stand with vendor performance.  By being transparent, we can divest ourselves of projects or initiatives that have not performed well or that have outlived their usefulness. In turn, we can invest in projects and initiatives that add the most value.

 

EL. Federal CIOs include a mix of political appointments and career CIOs? Do you intend to change that?

 

VK. I am not concerned how the CIO got his or her job. The important issue is to make sure we have the right person onboard. CIOs must know how to focus on business transformation so they understand how to leverage the power of technology. It is not about technology for technology's sake.

 

EL. What are you doing to eliminate redundant investments such as multiple networks or data centers? Do you have plans to aggregate some of these networks and data centers?

 

VK. Much of that work has begun to happen with our Smart Buy initiative. I am working on initiatives that are central to this administration. I have begun to push forward how we can create cloud computing within the federal government and how we can leverage the consumer cloud. These things will enable us to move toward more secure computing, and lower operational costs. We do not want to build 24,000 Web sites.

 

EL. Do you plan to use social media to share resources across the federal government?

 

VK. We need to do more of that. To date, it has been happening in a fragmented way. Let me give you a simple example about the public interaction with the federal government. Each federal agency has its own identity management system. If you wanted to participate in social media with the EPA versus the White House, you would have to log on to all of these multiple systems. When you look at social media, citizens want to be able to interact with one government, not with the multiple agencies. That is part of what we want to do. We want to create platforms that agencies can leverage through the cloud infrastructure, rather than rolling out independent solutions. We need to have an open ID platform across the entire federal government -- one that has to leverage the toolset instead of rolling out multiple ID systems.

 

EL. Every federal agency has a technology investment board and a capital planning board. Do you plan to put some of their information on data.gov?

 

VK. We are also looking to put more information on the projects themselves and the health of those projects. We need to evaluate which projects are sensitive or classified versus which ones we can put in the public domain. As with any information we share, we need to make sure that Web sites are easy to use, and do not use federal jargon. We want to expend much energy around that to make sure that information is readily available.

 

EL. How do you plan to leverage technology innovations either in the government or in the private sector when they may be buried deep in these organizations?

 

VK. I believe in the need to tap into the ingenuity not only of the American people but the federal workforce. I plan to spend much time with those people who are on the front lines because they are the closest source to the pulse of the customers. For example, I have been spending much time with the intelligence community and its Intellipedia collaboration project. I want to learn how we can scale some of these initiatives. We do not want to reinvent initiatives that are successful, but we want to scale those.

 

We need to look at what innovative solutions each agency has brought to bear, and how we can scale it cross the federal government. Many of these well-tested initiatives have started at the grassroots level by passionate people. We need to deal with the scaling problem, which is a problem I love to solve. I intend to spend much time with both folks who focus on policy, and those front-line people who implement these solutions.  I have already started my technology tour across the federal government to visit every single CIO and his or her staff. I want to understand all of the issues and to meet with some of the key employees who are driving change within those agencies.

 

EL. Will creating more transparency affect the way CIOs do their job?

 

VK. It will also not only affect the federal CIOs but everyone in the technology community. We are advancing a mission. It could be discovering biomedical knowledge at the National Institute of Health or the looking at how the Federal Drug Administration can protect consumers from bad drugs. Using technology to advance the core mission of government will force federal CIOs to become change agents. We know that change is a good disinfectant. Even better, it will fundamentally transform the way the federal government works. It will not happen overnight and it will not be easy. You can see that we are moving in a direction with recovery.gov. The president is committed to making this process transparent the same way he did during the administration transition. He posted documents online and collaborated with voters about what he did each day. He took questions online. These structural changes in the government's mission will make government more visible and accountable in citizens' eyes.

 

EL. What are you going to be doing to help the United States Postal Service keep from loosing money?

 

VK. The USPS's business has gone through massive transformation. Some of it has been successful, and some not so successful. Transparency and open government alone will not solve the USPS's business problems per se. We do not want to look at how transparency can ensure faster delivery of mail. Instead, we need to focus on how can we leverage technology to rethink what the 21st century post office should look like.

 

EL. Are you going to eliminate the practice where CIOs have to budget two years in advance?

 

VK. That issue is part of a larger federal budgeting policy. The issue is not limited to technology. It is much broader across the entire federal government. Whether it is procurement or the budget and the way the institutions were created, technology changes so fast and evolves so quickly that we need to relook at many of those policies. I am open to doing that.

 

EL. What valuable lessons have you learned from your experience working as the CTO for the District of Columbia?

 

VK. Having transparency and actually delivering on the promise of it can fundamentally change and transform the government. The power of innovation and a participatory democracy can really help us rethink how we look at the public, and how we treat the public and the role of government. The government does not need to look at citizens as subjects, but we can look at citizens as a public of co-creators of democracy and engage citizens to come in and help solve some of the toughest problems government faces. We do not have to do it alone and we do not have a monopoly on ideas. That was one of the most powerful lessons I learned as I engaged people in different areas. I advanced this entire notion of a digital public square where people can have access to government data, where they can see how their government is performing, where they can hold us accountable, and where they can help co-create solutions to solve big problems.

 

EL. Have you seen John Kao's book Innovation Nation which talks about carrying out a nationwide innovation program?

 

VK. I know about the book, but I have not read it. The function of some of our transformation includes channeling much of this energy around technology, engaging the public, and throwing ideas against the wall. We want to put the right resources behind solid, scalable, innovation ideas. Of course, we will use the scientific method to test many of these ideas. You will see innovation across the board, not just in one vertical whether that has to do with healthcare, energy, defense, or security. You are going to see innovation baked into the culture.

 

Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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Originally founded as a local bricks and mortar mortgage company, Quicken Loans has leveraged technology in order to do business in all 50 states from several locations. Quicken Loans, within less than a decade, has become one of the nation's largest online lenders, the 10th largest retail mortgage broker in the U.S., and Michigan's largest mortgage company. The company closed $18 billion in home loan volume in 2007 and more than $80 billion in the last five years. In 2007 at the height of the mortgage industry crisis, Quicken Loans stopped doing second mortgages, home equity lines of credit, deferred interest loans, and Alt-A products. Today, Quicken Loans does FHA loans, VHA loans, and reverse mortgages.

Investing in a good work environment and in developing employees has contributed much to Quicken Loan's success. Fortune's list of the 100 Best Companies to Work For in the U.S. has included Quicken Loans in the top 20 for five consecutive years. Metro Detroit has also named Quicken Loans the Best and Brightest Company to work at. For 2008, Quicken Loans ranked second on Computerworld's list of the 100 Best Places to Work in Information Technology, and held the number one spot in 2005, 2006, and 2007.

Enterpriseleadership.org recently sat down with Frank Laura, Quicken Loan's chief information officer, to talk about how IT creates business impact, how he communicates it to the leadership team, and how he motivates the IT organization.  Here is what he has to say:

EL. What important IT investments have you made recently?

FL. We've invested much money in virtualizing our environment and building out our Web-based services applications. We build most of our technology. We've been doing that for a number of years even before it was the in thing to do. We've invested heavily in the development infrastructure and the server infrastructure to do virtualization. These improvements will enhance our agility and will give us the ability to save some money, not only in energy and in data center space.

We've also bought some larger servers. We've engineered into this hardware the ability to have redundancy internal to the server, as well as the ability to slice up and to use every last CPU cycle the server can muster.

EL. How do you measure the effectiveness of your virtualization efforts?

FL. We've virtualized more than 400 servers. If you talk to a number of companies, you're going to get numbers all over the place, such as compression ratios. Virtualization can definitely skew your results. We got good results from many of the single server-type things all the way up to business process-oriented things. As the business demand grows or shrinks, we can spin off new servers or decommission servers within minutes. You may look at some applications and say that you only have a five to one ratio here. It doesn't sound that great. With other applications, you might have a 20 to 1 ratio or a 50 to 1 ratio. It depends on the application and how you use it.

EL. How do you define business impact and how do you keep the executive team abreast of it?

FL. We measure some things from a technology perspective. It helps us that we've satisfied internal customers. On the other hand, we're concerned about how well we satisfy our external customers. We strive for a 92 percent satisfaction rate or higher from our external customers. I pay attention to what our external clients tell us. Our team looks daily at the numbers.

We rely heavily on business intelligence. In fact, we track everything from financial information all the way through production numbers at the beginning of a loan, to the end of the loan process, and through to post-closing. Our business intelligence (BI) infrastructure consists of highly skilled people whom analyze the numbers and report on them for our executive leadership team. The BI team understands what the business finds important and helps the executive team find numbers they need for supporting critical decisions. This process happens on an automated basis. We continue to build out that platform.

EL. Do you communicate business impact down to the troops?


FL. People on the team like to know that sort of information. They really like to know they're making a difference. We communicate business impact in a variety of ways. I have many one-on-one meetings with IT team leaders and people who are on the front lines. I'm very happy to share this information with them.

We have a very open culture, especially around information disclosure. To this end, communication readily flows throughout the organization. We do relay company information either verbally or through company-wide email. For example, our CEO often sends out information to the entire company about what we doing. He might send a message about how a particular change made an impact to our business, how quickly we got into a new line of business, or how we achieved efficiency through some technology improvement or process improvement.

EL. Can you easily link technology investments to new markets, to new customers, and to improved business processes?

FL. Yes! We've designed into our systems some ways to track how a new marketing initiative, for example, or an arrangement we have with an online partner, directly impacts revenue and profitability. We have those things built into our systems as part of our processes. We can trace things back very accurately.

EL. What did it take to achieve the open communications that you have in your organization?

FL. Our culture supports open communication. You can't have an organization that doesn't believe that sharing information is a something that can be taken lightly. Everyone in the organization has to feel like they make a difference. That's was our first step. Next, we understand that information is timely. As a result, we explain it clearly and then share it quickly.

We have a variety of mechanisms for sharing information. Like many companies, we can send broadcast emails. Some of the leadership team might use entertaining voice mails to convey information about our business. We'll even put together videos and send them out as a way to broadcast how the company is doing or what changes have occurred in our business.

EL. If you look at your IT organization on an IT maturity model, where would you rank as an organization?

FL. Depending on how you'd look at things, we'd be all over the board on an IT maturity model. We recently went through an exercise with a partner where we compared ourselves with other companies on a maturity model. We also compared how we thought we were doing with what people in our industry thought of us. We don't take have much time to dig deep into IT industry standard ways of following a process, carrying it out, and then ensuring we can repeat it. Why? Quite frankly, our processes change very quickly, and we grow in new lines of business or new products very rapidly. The IT things we do today may not make sense tomorrow. We haven't spent much time studying and making sure that we let the industry-established IT governance standards dictate how we do business. On the other hand, we spend more time working with the business to understand how IT can better support the business.

If you look at the IT maturity models, you'll see that agility doesn't mean all that much in those models. You need to have processes that you can easily repeat and constantly maintained. These models assume that the overall business processes stay relatively the same and must be within certain tolerance levels at all times. The numerous disruptions in our business create the need for us to change rapidly and to be agile. I find it to hard to have those things operate in harmony.

EL. Because your business reacts to ups and downs in the economy, can you explain how you leveraged technology to stay competitive within your business model?

FL. We have the advantage of being able to leverage our technology platform here in one location and to do business in all 50 states. If we didn't have the technology platform to afford that, we wouldn't be in business right now. We've figured out a way to have the processes and the technology, and to maintain both of those things in such a way that we can adapt and can change it. Can you imagine having branch locations in all 50 states all trying to do the same thing! It would be nearly impossible to have a single platform that relates to our business, that operates smoothly, and that has visibility. We're fortunate to have very agile, knowledgeable IT professionals, business analysts, metrics people, and others. You need a powerful team like this if you want to build your business successfully on a single platform and to operate nationally.

We've been able to adapt our platform to work rapidly in our space. For example, we can get into a new line of business, like reverse mortgages, rather quickly. We can grow into the FHA loan business within a very short amount of time. If we had to do that with a branch model, we'd spend months and months and probably miss the opportunity. The technology in a single platform model has been a huge benefit to us.

EL. What's the process for setting strategy and how are you involved in it?


FL. We communicate in all directions throughout the organization.  The corporation has a formal process for how it meets certain guidelines. In addition, we have the informal process for how the team works together to get things done. It can include everything from streams of email and voice mails to a group of key people meeting throughout the week. The group might include the CEO, the process team, or the mortgage people. Our flat management structure enables people to figure out what is important, then to meet, and to decide what needs to get done. For example, the business development folks might say to the CEO, 'These are the top three things that we need to do.'

We don't have a quarterly board meeting. The CEO meets regularly with both decision makers and people in the trenches. The latter group has first-hand knowledge about what happens on the floor and recommends better ways to accomplish something. The information we gather from this diversity of opinions helps has to uncover business concerns that can help  dictate the strategy of where we need to go moving forward.

EL. Have you ever made a technology investment that turned out to be a mistake?


FL. Everyone has. We all learn from those lessons. I can't talk about specific ones for obvious reasons. Several led us down the path where we finally decided we needed to do this ourselves. While we try to focus on things that our core to our business, we need to look at things that support the core. For example, our off-the-shelf faxing system didn't work all that well with the industry standard solution, and we had many problems with it. The service level that the industry supports wasn't acceptable to our business. We wound up writing the fax system ourselves. That's one lesson we learned. To this end, we need to look at very closely, to evaluate, and then to decide whether or not an outside purchase provides better value than developing it ourselves.

El. Have you converged your IT strategy and your business strategy?

FL. We hope it is. IT needs to follow what the business needs to do. It can't be the other way around.  If you look at who we are, you'd see that we're a technology company that does mortgages.

EL. Do you give your IT professionals any special awards for outstanding performance?

FL. Within the IT team, we have a variety of different awards. We have something called the IT family gathering, which occurs quarterly. We try to make it special. During each gathering, we give out some type of recognition award. In many cases, team members will come to me and will nominate someone who has excelled in his or her job. We recognize people for the different areas they excel in.  We have innovation awards that are name changers. People must see their idea through execution and then to justify how it made a difference to our business. An award can range from recognition in front of a group, a call from our CEO, or the full star treatment at a Cleveland Cavaliers' game. Our chairman of the board owns this team.

EL. What development programs do you have available for IT professionals.


FL.
We have two programs in the company. One of them is our formal company-based leadership development program. As I became familiar with the people in IT, I decided to create an IT leadership development program. A group within IT, which we call the farm team, develops the leadership programs.


Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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