Reinvention Critic Says Efforts Fall Short
One overseer fires a warning shot to agencies and their reinvention consultants, but analysts predict massive dollars will continue to flow into re-engineering programs
P> Companies riding the lucrative wave of business process re-engineering in the federal government could soon find the well running dry unless they start performing, said Judith Douglas, a senior official at the General Services Administration.
Douglas, who spent seven years at the Internal Revenue Service working on the Tax System Modernization program, said the results on federal BPR efforts are coming in -- and they aren't good.
"A lot of federal and state governments have been spending big bucks on BPR, and after a specific period of time, in many cases there has been nothing to show from it but spent money and lost time," said Douglas, director of GSA's newly created center for governmentwide information technology management. Her duties include measuring the effectiveness of BPR efforts. "This industry that has grown so rapidly could take a big fall."
Consulting firms have come into federal agencies with elaborate BPR plans that the agencies couldn't implement, she said.
Bob Gilbert, a spokesman for giant systems integrator Computer Sciences Corp., El Segundo, Calif., said a March 1995 survey of information systems executives showed that re-engineering dropped to second place behind "linking technology to corporate goals" as a top concern. It was the first time since 1990 that re-engineering did not top the survey of critical issues, he said.
"We don't think the market for government re-engineering will shrink," said Gilbert. "But the government will shrink the list of re-engineering consulting companies it will employ, based on a history of delivering results."
But Christine Ferrusi Ross, an analyst for Dataquest Inc. of Framingham, Mass., said the government and private sector BPR markets will continue to grow.
Dataquest shows the worldwide market for BPR growing from $2.2 billion in 1994 to $7.4 billion in 1999. Meanwhile, BPR work for the government is growing at a slower rate -- 11.2 percent annually -- with $132 million in contracts in 1994 and a projected $225 million in 1999.
"It's a phenomenal marketplace, and it's not going to stop," said Bonnie Digrius, with the Gartner Group of Stamford, Conn.
Bob Dornan, senior vice president at Federal Sources Inc., a consulting and market research firm in McLean, Va., said it's hard to put a figure on federal BPR business because it's often tied into other programs. But he follows 16 major contracts, valued at $6.5 billion, that all include significant BPR tasks.
Gary R. Nelson, executive vice president of Arlington, Va.-based SRA International Inc., said his company is still committed to the growing government BPR market.
"I don't agree with Ms. Douglas, but I think it's a useful warning," said Nelson.
BPR business represented 25 percent of the company's 1995 revenues of $134 million. And with federal agencies required to do BPR studies before starting major systems development, he expects federal BPR business to grow before it takes a downturn.
Nelson said the Department of Defense will save an estimated $13.2 billion in five years because of better performance created from BPR programs.
Terry Miller, owner of Government Sales Consultants Inc. of Great Falls, Va., which helps companies with government contracts, doubts whether GSA will have the power to pressure BPR providers to show results.
For one, he said, GSA doesn't have the authority for systems design: It can't tell another agency how to use its machines, he explained.
"This is a job that GSA has assumed for itself," said Miller. "GSA does not have the authority ...to be the government's internal management consultant."
That means an agency can throw out GSA's recommendations, Miller said.
"That's true," Douglas agreed.
To prevent future BPR failures though, Douglas and the GSA have developed a "readiness assessment" program, which measures an agency's potential for BPR success.