2006 PRICE INSight
IRS Business Systems Modernization On Track for True Program Success™ Using PRICE Program Affordability Management
In recent reports to House and Senate Appropriations Committees, the Government Accountability Office noted that the Internal Revenue Service (IRS) has made major progress in implementing recommendations to modernize its management controls and capabilities. However, certain controls and capabilities related to configuration management, human capital management, cost and schedule estimating, contract management, and post-implementation reviews have not yet been fully implemented or institutionalized. Weaknesses in these areas have contributed to Business Systems Modernization (BSM) project cost and schedule shortfalls.
The IRS subsequently contracted the services of PRICE Systems to implement improvements to the process used in the development of program cost, schedule estimates and related plans. PRICE Systems was awarded a contract by the IRS Business Systems Modernization Office to apply its specialized Program Affordability Management consulting services, methodologies, and supporting tools to the needs for improved credibility and reliability of program cost estimating and budgeting.
This effort was focused on the Modernized e-File Program in the form of an independent cost estimate and assessment for increment 3.2 of electronic Federal Income Tax Returns for Businesses and Non-Profit Organizations. The results of the analysis, in which MeF 3.2 software development costs were estimated very near actual costs, substantiated True S's functionality, and led to a substantial follow-on contract. Today, PRICE Systems' involvement has extended the Program Affordability Management process improvements for several related BSM efforts.
Independent Cost and Schedule Baseline Validation Tools and Methods
PRICE Systems' team employed analytical and business process improvement techniques to the IRS requirements using TruePlanning® software and the TrueMethods™ approach to cost estimating processes and Program Affordability Management. The business process improvements are needed to accurately estimate multi-faceted programs comprising hardware, software, systems integration, contractor and/or Government furnished elements, local versus overseas content, and many other essential planning factors.
PRICE's state-of-the-art tools and techniques are built on more than 30 years of working with more than 250 organizations in the Federal market. These processes support comprehensive program risk definition, assessment and analysis. They also support production of traceable basis-of-estimate documentation capable of supporting in-depth cost realism examination and scrutiny.
PRICE Systems' approach to applying the tools in a practical environment is through the structured and managed TrueMethods™ approach to Program Affordability Management. This PRICE Systems methodology emphasizes processes that integrate program performance and results to cost and budget planning. This is achieved through an object-oriented structure to cost analysis that allows each object to be classified and described in terms of functional, performance, or similar parametric measures. All aspects of the prospective program are tied to tangible and measurable cost and schedule estimates from the outset.
The process followed under TrueMethods™ for independent government cost baseline validation involves four major areas of activity.
- Develop a logical Work Breakdown Structure (WBS) for the various IRS BSM IT systems
- Develop a credible, reliable and independent resource, schedule and cost estimate for each program,
- Assess the uncertainty characteristics, perform an integrated risk analysis, and incorporate those effects into the core independent cost estimate
- Consolidate findings and business process improvements for deliverables.
This integrated performance and budget planning directly supports the President's Management Agenda. The results are expressed in time-phased resource and cost baseline forecasts that directly support Earned Value Management and project cost control. TrueMethods™ thus enable the IRS program offices to ensure credibility of initial and ongoing estimates.
