Monday, January 3, 2011

Using Enterprise Architecture to Reduce the Federal Debt

The Federal debt is caused, in part, by laws and regulations that are cumbersome, obsolete, and conflicting with other laws and regulations and with the charters of the enforcing departments and agencies.  These are the "Catch 22's" that infect all governments.  This problem makes the departments very cost inefficient.  In my experience as a process engineer and from observations of organizations in operation, an organization uses a minimum of 10 percent of its resources in causing and fighting this process friction (sometimes it can be much more). 

There have been many times when the US Federal government has "addressed" this cause with one time programs over the years, with varying degrees of success.  The unfortunately the operative phrase is "one time".  To be successful, all laws, regulations, policies, and standards have to be structured and there must be a process to revisit each to ensure that the are measurably performing as expected.

If properly used an Enterprise Architecture process and repository in the form of the Federal Enterprise Architecture Framework (FEAF) can reduce or minimize the conflicts among laws, regulations, policies, and standards over a 2 to 10 years period--depending on the size of the organization.  This does not mean that there will be no benefits for 2 to 10 years, in fact management may notice some within 3 to 6 months.  What it does means is that the complete transformation and acceptance of the the Enterprise Architecture process to help with investment and policy decision-making will take that long to be fully accepted by and inculcated into the organization.  Unfortunately, without a champion at the top of the leadership, working with a top-notch transformational enterprise architect, it will never happen...due to the many reasons, excuses, and loss of influence by various levels of management and their constituents.

A second cause is that the departments, bureaus, and agencies are running more on their management's agendas than on the organizations' charters.  This means that a single organization may have many duplicative processes procedures and tools, which greatly reduces the cost efficiency of the organization.  These are cause by private managerial agendas.  Private managerial agendas are caused by conflicts of policies/regulations, the NIH (that is, the Not Invented Here) syndrome, or the manager's personal empire building.

Sometimes the managers' private agendas are caused by conflicts in or obsolesence of regulations and rules preventing the managers from achieving their mission.  A good Governenace and Policy Management process coupled with a good Enterprise Architecture process will greatly reduce this cause for private agenda's.

Other times, the sub-organizations of an organization will decide that the organization does not understand their requirements for a particular function and therefore, they feel the need to create their own. Or, it may simply be that they do not trust the organization designated to perform the function to perform it in the manner they would prefer, and therefore, it needed its own.  A more malicious version of this, is managerial empire building, where the manager wants to enhance his or her own status by controlling all of the functions required to perform a given process, and additionally, takes a very wide interpretation the his or her mission or charter, and strategies, policies, procedures, and tooling.

In all of these instances the manager has a case of the NIH syndrome; which causes much waste of the organization's resources.  Enterprise Architecture can ameliorate the cause by mapping all strategies and processes to the organization's mission as recommended by the FEAF, providing measurable line-of-sight from the mission to the processes and tools.  For example, one in US Federal department, one organization had been charter to perform the reservation function for the entire department.  As of 2007, team of Enterprise Architects had found at least 50 sub-organizations with independent reservation functions.  Simply, by consolidating many of these functions into a single system, the department was able to save 10s of millions of dollars per year in development and operating costs.

A third cause is "Political Correctness" (PC).  This boils down to various political constituents getting a piece of the pie, irrespective of their knowledge, skills, and capabilities.  Part of this is due to organizational networking (which "PC" lobbists characterize as the "good ol'boy" network--which may have some validity).  DARPA, NSF and other Federal R&D organizations tend to award contracts to organizations that have performed well in the past--not a bad way to chose.  But, it leads to these agencies overlooking organizations with no track record; thus, they may miss good ideas.  Therefore, it stratifies organizations, giving organizations with a track record an advantage--their abilities are known--over other organizations--whose abilities are unknown.

Therefore, the US Congress, in its inimitable wisedom mandated that various "special constituents" get a piece of any large program irrespective of competence to ensure "fairness", and "equality."  However, requiring all large programs, especially those with high knowledge and R&D skills to include "PC" firms simply to win the contract, whether or not these firms have any skills at all, is very costly and frequently causes major cost overruns and program failure.

While Congress's objective was noble, the unintended consequences causing negative externalities have been very expensive to both the government and the long-term ability of the United States to compete in the global economy.

Layers of management, problems of coordination, and private agendas among the "teaming" partners--each vying for a larger piece of the project, even after it's been awarded.  When these "disadvantaged" firms fail to perform, there is a major risk of a cascade affect, that without quick transference or mitigation cause the program to fail.  But, process of transferring is tangled in contractual and inter-organizational political problems that slow the process to a creep or stall it altogether.

The "PC" regulations together with their affects creates dysfunctional Virtual Extended Enterprises (VEE).  Note that VEE's are business versions of SOA's Composite Applications, in that they are composed of many small, but highly skilled and knowledgeable organizations.  Through the life cycle of a product these component organizations can be introduced into and let go from the VEE in a manner similar to that of Service Component replacement for purposes of technology insertion.  The "PC" regulations militate against these changes, creating a high risk of failure for programs trying to produce unprecedented complex systems.  This adds greatly to waste of Federal resources.

Enterprise Architecture can provide a method for sorting out the best and brightest organizations from both "advantaged" and "disadvantaged" but incompetent organizations, if the enterprise architecture processes and repository are properly organized and the processes are correctly executed.

Longer term, this waste of resources from all of these causes will cause the US to both lose its competitive edge militarily and economically.  Again, over time, the proper use of the enterprise architecture processes and repository will enable a competitive advantage.

Also see the post entitled "Thoughts on Solving the Federal Debt Issue", and "Rebuilding Jobs in the United States".


  1. Happy New Year! There's a lot going on in here, and I don't pretend to understand all of it. How would Enterprise Architecture address the "fox guarding the hen-house" syndrome? In many cases (finance, energy, food safety, defense, etc) the federal employees who are supposed to be looking out for the public good are in fact former and future industry lobbyists, and they owe their true loyalty to a private employer and not to the public? This leads to a related "revolving door" conflict-of-interest syndrome, when these people leave government positions and have incredibly lucrative jobs waiting for them in the very industry they were supposed to be regulating.
    In the short run, these sorts of conflicts-of-interest lead to a lot of wasteful spending that does not benefit the public. In the long run, the divided loyalties of "private barbarian contractors" brought down the Roman Empire. What would be the Enterprise Architecture approach to these problems?

  2. Good comment and good question.

    Actually, as I envision it, enterprise architecture is accountable for ensuring that conflicts-of-interest are minimized, and the primary role of the enterprise architect is to create the decision-support system, rather than action, as one of the Subject Matter Experts (SMEs)--these are the people that can easily jump between the public and private roles, as as you indicate.

    In my notional design, the tools are measurably linked to the processes, which are, in turn, linked to the organization's strategies, and (vision/charter and mission). Additionally, all rules, regulations, and laws, are also linked to the strategies, mission, and vision. The links are measureable in terms of process effectiveness and cost efficiency.

    Once the enterprise architecture processes and repository are operational, the enterprise archiect can model any changes in tooling, processes, rules, regulations, laws, and so on, to determine their affects before they are put in place.

    Obviously, since when first instantiated, the process has a learning curve, and the metric will be poor, and the data in the repository will be in complete, many decisions will be less than optimal, and the models will make poor predictions. However, based on my experience, I suspect that by the second or third iteration, the models will begin to prove their value.

    The problem is that the people that you indicate may not allow for the second or third iteration using the predictions from the first as their justification. There is every reason to believe that they will do this, since they gain "Political Value" under the current set of political processes, and this change directly affects their influence (their gatekeeping ability).

    There is one problem in your comment, above, since there is no clear and measurable definition of the "Public Good." That is, what one person feels is in the "public good" another might feel is a "private interest." For example, is leaving a stand of 150 year old oaks more important than using the land for low income or elderly housing? That depends on the governmental mission and vision. Is it better to build a new non-poluting dam and power plant in a canyon or leave it for recreation? This is where Arrow's paradox enters. The enterprise architecture process can help to reduce some of these conflicts of "goods", but cannot eliminate them, since Arrow's impossibility Theorm seems to be rooted in the structure of the Universe, like the speed of light.

  3. Agreed about the inherent "squishiness" of the public good. I do believe in the existence and the importance of the public good and/or the public interest, even as such things are admittedly messy, contradictory, and difficult to measure. Maybe it should be more of a "statement of intent" rather than a defined goal. Life, and perhaps also Enterprise Architecture, is a journey and not a destination, right?

  4. The purpose of Organizational Economics is to measure the value (see the posts on value) of decisions made by the leadership of an organization. In general, value means how well the investments made by and policies of organization help it achieve its vision and mission. It cannot define what the vision and mission are; that is the responsibility of the organization's leadership. For countries, that is "the government". Organizational Economics with an associate Enterprise Architecture can perform the measurement of value, but only if the vision and mission are clearly stated and understood. A good example of a clear mission statement was JFK's mission to the moon.

    However, I get really concerned when someone wants to identify "the public good". Many Utopians have tried. There are two foundational flaws to all religious, scientific, and political/economic Utopias--they are steady state (once reached, they are not suppose to change, i.e., no growth of knowledge), and that the authority of the Utopian design knows what is best for everyone.

    This one key reason that I think the United States works. As you will see in future posts, the vision statement for the US found in the Preamble to its Constitution has the phrase "more perfect" and not "perfect."

    Organizational Economics is attempting to put these squishy concepts on a more firm foundation where they can be measured; reducing the political noise to some degree, while moving toward agreed on goals (vision and mission) for the entire US population