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Business operations collaboration with IT is critical to modernization success

Focus On: Verlinda Paul

A retired member of the U.S. Federal Senior Executive Service, Verlinda Paul is a change leader with expertise in strategic planning, analysis, and measurement, with 37 years of experience serving the Internal Revenue Service (IRS). During her tenure at the Agency, she served as Director, Office of Program Integration & Coordination leading a small team and large cross-functional matrix coalition to successfully implement individual tax provisions of the Affordable Care Act (ACA) legislation & the Foreign Accounts Tax Compliance Act legislation for the agency’s Wage & Investment (WI) Operating Division. She utilized enterprise risk management, project management, and enterprise life cycle tools to govern for successful results and worked closely with Information Technology and her counterparts in the other operating divisions. She also served as Director, Earned Income Tax Credit (EITC), and was responsible for the agency’s over $90M annual budget for EITC. She serves on the Board of the Association of Former Internal Revenue Executives, a Certified Public Accountant and a Chartered Global Management Accountant, and an active member of the Professional Services Council Vision Analysis team. 

We spoke with Verlinda about the integration of business operations and IT within IRS, her perspectives on pragmatic modernization, and the role of the Taxpayer First Act (TFA) in driving continuous improvement in agency processes. 

Q: When you think about the relationship between BPO and IT operations within IRS, what are the main points of intersection? What does a successful collaboration look like?

You can’t really separate them at all. IT and the Business Operations Divisions (BODs) must be completely intertwined in order to work effectively, and there needs to be collaboration at and across every level – from technicians to management to senior-level executives. Everyone must be in lockstep to deliver what is considered one of the most critical operational components: filing season. Working together is paramount to ensuring that taxpayers can file their taxes in a timely way. 

At times, a successful collaboration could look like structured communication mechanisms – executive steering committees and technical project teams, where the technical folks get together and work out the requirements needed for a successful program. This involves ensuring that downstream impacts are considered, and for some projects, these sessions should be held as frequently as daily. 

Q: How do the BODs help drive IT modernization? 

Modernization within IRS presents ongoing challenges primarily because the agency is the steward of some of the most sensitive citizen information there is. This drives a real conservatism on the responsibility to protect that data. It’s a tremendous responsibility, and it leads to an organization that is very inwardly focused on processes, procedures, and technology to protect taxpayer information. 

One of the challenges is taking an inwardly focused organization with a strong sense of stewardship and turning it into an organization that focuses on making it easier for the taxpayer to file.  This is where the BODs come in – in helping to show that all internal processes will become easier and more streamlined if the agency overall makes it easier for the taxpayer. 

The BODs have to recognize where opportunities for modernization lie, while at the same time understanding and anticipating where operational challenges will surface that need to be addressed – not by leaning on more staff, but in terms of what can be done to automate the process. Then the next step is to collaborate with IT to discover and implement best practices around those new processes. 

How does the IRS view modernization and how do decisionmakers set priorities to establish the modernization roadmap? 

Initially, the BODs would organize modernization councils of the top operational leaders, led by a business system process executive who would walk through the business challenges. Then the various councils would come up with ideas about how to solve those challenges – which could be modernizing a previously automated system or creating something completely new. 

Next, those projects would be given what’s called a rough order of magnitude (ROM) costing, and from that, a project would go into a queue for prioritization to be considered by an enterprise-wide council. A number of factors influence that prioritization – upcoming legislation, economic challenges, and of course the funding challenge. 

A good example of a current modernization effort underway at IRS is Enterprise Case Management (ECM). Harrison Smith, Director of Enterprise Digitalization Management, broke down the three components of ECM required to handle the massive amount of data and information the IRS has: 

  • Digitization, or getting rid of paper;
  • Digitalization: making the now-digitized paper readable and accessible to the downstream organization; 
  • and Digital Transformation: utilizing machine-readable data in the form or self-service account or virtual call agents.

How is the passage of the Taxpayer First Act (TFA) serving as a forcing function for modernization within the agency? 

The modernization plan that came out a few years ago from the IRS IT organization was really a precursor to the TFA because it laid out a framework illustrating ways for taxpayers to self-service, helping to eliminate paper, which is a tremendous burden on the agency and makes filing so much easier for the taxpayer.

The TFA mandates an improvement of the citizen experience by implementing the type of automation and self-service technologies that people are used to interacting with in private sector financial institutions.  

Digitization and web enablement are two of the core elements of improving that experience. The other thing that the TFA does with regards to the citizen experience is that it considers the entire tax ecosystem, including taxpayers, entities, and preparers – all are considered “customers” of the IRS. 

In my mind there are two other key components: a reorganization of the agency that will streamline and consolidate key programs to better serve the citizen experience, and a greater emphasis on training that will encourage an organizational mindset shift toward a stronger focus on the enhanced citizen experience. 

We talk a lot about pragmatic modernization as the key to success within IRS. What does pragmatic modernization mean? In your experience, what does that look like within IRS? 

It boils down to each step toward modernization being iterative and building in checkpoints on the journey. This is to ensure that the modernization roadmap laid out in the beginning still makes sense. Why? Because the investment is massive. 

From a practical standpoint, it’s also critical to anticipate required justifications from governing organizations within and outside of IRS. Convincing congressional overseers that the budget is being used effectively to move the taxpayer experience forward is going to be key. 

What processes, like the assignment of personal tax ID numbers, could benefit most from the implementation of emerging technologies like automation? What role must BPO and IT play in ensuring that processes are designed to drive outcomes/get results? 

The biggest one is the ability of the taxpayer to see into their account in a way that they can easily understand what is going on. This is where the ECM initiative is going to make great strides.

The BODs don’t know what they don’t know from a technology standpoint. BOD collaboration with IT is critical to modernization success. The BODs working together with IT to understand where challenges lie for the internal end-user and the taxpayer, and looking to industry to determine the best potential solutions to address those challenges, is key. But business operations can’t do that without understanding the requirements, which involves deep collaboration with IT. 

Learn more about our work with IRS and our team of IRS experts here