Agencies Target Human Resource Outsourcing

Agencies Target Human Resource Outsourcing

By David T. Hughes
Contributing Writer

Federal agencies are increasingly turning to outsourcing and the use of commercial, off-the-shelf solutions to meet their information technology needs, according to several agency chief information officers.

Outsourcing of human resource operations is gaining greater government attention, with the departments of Defense, Energy and Treasury setting the trend, said CIOs at the Feb. 10-12 Virtual Government '98 conference sponsored by the Armed Forces Communications and Electronics Asso- ciation. It was held at the University of Maryland in College Park.


Tom Horan photo

Anthony Valletta, assistant secretary of defense for command, control, communications and intelligence

Woody Hall, the Department of Energy's chief information officer, said his agency already has begun to outsource its human resource activities. The Energy Department recently hired PeopleSoft Inc. of Pleasanton, Calif., to conduct a pilot program to handle human resource functions. The leading provider of enterprise application software announced Jan. 12 that it intends to enter the market for outsourced enterprise solutions. The company plans to officially launch its outsourcing business unit by the middle of 1998.

The shift in the government's handling of personnel matters also is evident at the Treasury Department. James Flyzik, chief information officer for the Department of the Treasury, said his agency is evaluating a one-stop type of human resource management paradigm.

Instead of each unit in the Treasury Department doing its own human resource management, Flyzik said one office would handle all agency personnel needs. Although there is some cultural resistance to this from Treasury divisions such as the Bureau of Alcohol, Tobacco and Firearms, that is being overcome.

Flyzik said he sees many human resource functions, not only of his department, but a good portion of the federal government being outsourced to the private sector.

Human resource outsourcing "is going to be a major opportunity" for information technology firms, Hall said. Federal hiring, employee administration of benefits and other duties are becoming less insular, government officials said.

Anthony Valletta, assistant secretary of defense for command, control, communications and intelligence, said the military branches will be outsourcing many tasks to the private sector. The Air Force and Navy are already in the process of outsourcing a number of technical and maintenance tasks now performed by military personnel or civilians on bases, said Valletta, who is retiring from his post later this month.

Not to be outdone, Lee Holcomb, NASA's chief information officer, pledged that NASA is "going to be the leader in outsourcing." He said the space agency will be using private companies to do such things as tracking and ground support for satellites and launches. If early privatization efforts are successful, he predicted that NASA would completely privatize the space shuttle program.

Every member of a panel that included Valletta, Flyzik, Hall and Holcomb, as well as Eugene Taylor, chief information officer of the Department of Transportation, promised bigger civilian sector slices of the government information technology spending pie.

Panel members invited contractors to make suggestions for how private concerns could help agencies be more efficient and productive.

Agency CIOs speaking at the conference also discussed the need to modernize their existing information technology infrastructures. The info- tech chiefs said they are looking to use primarily commercial, off-the-shelf solutions. The days of expensive, agency-specific computer and software systems are over, the officials said.

The Treasury Department's Flyzik promised a cornucopia of private-sector projects for fiscal 1999, which begins Oct. 1. These projects include a modernization of the U.S. Customs Service communications system, data center consolidation for the Internal Revenue Service and other Treasury offices, and expansion of the asynchronous transfer mode communications backbone connecting the department's offices and those of other federal agencies.

The Department of Transportation also will be looking to information technology professionals for many upcoming projects, which will total billions of dollars, Taylor said.

Those projects include a much-needed overhaul of the Federal Aviation Administration's air traffic communications and computer system. This endeavor will save airlines time and money by allowing point-to-point navigation plans.

In addition, the FAA will be spending several billion dollars to upgrade radar systems to newer Doppler-type systems for better weather forecasting. Other projects include research to develop so-called "smart highways" and spending of about $15 million to create and administer World Wide Web pages for use internally and by the public.


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