|Friday, July 18, 2003
Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for the Business of Government. We created The Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center and our work by visiting us at www.businessofgovernment.org.
The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with David Wennergren, Chief Information Officer of the U.S. Department of the Navy.
Good morning, Dave.
Mr. Wennergren: Good morning, Paul.
Mr. Lawrence: Joining us in our conversation is Tim Connolly.
Good morning, Tim.
Mr. Connolly: Good morning.
Mr. Lawrence: Dave, let's start by talking about the military. Could you tell us what's the role of the Navy?
Mr. Wennergren: The Department of the Navy is a large organization, and of course it includes both the United States Navy and the United States Marine Corps. Its mission is to project force and protect the sea lanes around the world, which makes it a very unique organization to work in: 800,000 people deployed in virtually every time zone, tens of thousands of them literally on mobile offices, ships, deployed Marines, and to be able to be connected around the world in real-time is one of the great challenges of that organization.
Mr. Lawrence: Tell us about the activities and the programs of your office.
Mr. Wennergren: As the chief information officer, I am responsible for information management and information policies across the Navy and the Marine Corps. It's a fascinating opportunity because it's a very big organization. We have an information technology budget of over $6 billion a year, and as I mentioned, hundreds of thousands of people, and to try to bring those people together to work your way through the entire range of information technology work, networks, knowledge management, e-business, security transformation, is a wonderful opportunity.
Mr. Lawrence: What types of skills would your team have? You just described a whole range of functions, and I would have thought they would have all been computer science folks doing that sort of stuff.
Mr. Wennergren: We certainly have some excellent computer scientists in the mix, but it is really a broad range of people, because a CIO's responsibility spans the gamut from making sure that you're giving the right oversight to your systems, all of your systems, weapons systems, information systems, because of course, they all have to work together. To the other end of the spectrum, caring about your work force, making sure your work force is changed and IT proficient. So we need people with lots of different skills in the IT business.
More and more, we see folks with a strong bent towards business, towards management, towards understanding the missions of the Department and how those missions could be improved. Business process reengineering is a very important element of the work that we do in the CIO organization. We have a small cadr� of folks that actually work in the headquarters organization. CIOs have to report to the Secretary of the agency, or in our case, the Secretary of the Navy. So we have a small team there, but then we draw upon the resources of technical experts from throughout the Navy and Marine Corps teams, so there are literally hundreds of thousands of folks who are really adept at being network engineers and being software developers, and then all the other skill sets that you need to actually run a business as big as this.
Mr. Lawrence: When people ask about the budget for technology in the Navy, is there a way to describe it to give people a sense of the size?
Mr. Wennergren: Yes, it's big, and the way that we track the budget the way that OMB and Congress asks us to is kind of interesting because it covers a very broad range. So the Department of the Navy's information technology budget is $6 billion, with a B, and that's a lot of money. The biggest single initiative that we have is our Navy-Marine Corps Intranet, which is over a billion dollars a year.
It also includes a lot of very significant national security systems, the E-2C Hawkeye and other programs that are heavily IT-oriented that make up that bill. So it is not just $6 billion spent on back office functions, it's $6 billion spent on command and control systems and command support systems and all the things that go into running the business of the Navy.
Mr. Connolly: Dave, can you tell us a little bit about your roles and responsibilities as chief information officer of the Navy?
Mr. Wennergren: I work directly for the Secretary of the Navy, and my job is to provide advice and counsel on the mission of the Department. I'm part of the leadership team for the Navy and the Marine Corps, where, of course, my responsibility would be making sure that we do our information systems and our information management correctly. So I have a responsibility for policy development, for oversight, for ensuring that we have a trained work force, ensuring that our systems are operable, that we have a robust enterprise architecture structure, that we're complying with the President's management agenda, and working your way through that whole portfolio of IT initiatives that happen in the world today. We are big proponents of electronic business and the web and wireless technologies.
Again, it's about having a small team of change leaders that can work with all of the commands across the Navy and the Marine Corps to help them as they do their jobs, because one of the things that we learned early on in this adventure as we were walking through the Y2K days is that IT is everywhere. It's embedded in every plant floor, every weapons system, and almost nothing works by itself anymore. So it really is all about the difference business lines of the Navy and the Marine Corps, and we view our job as intergrators.
What we want to do is to help you understand that you can use technologies in the work force, but in the end, it's your business process, your mission area, and so the E in e-business is just get people excited that there is a need to change away from paper processes to electronic processes, but the key part of that word is business. It's not about me doing your business for you; it's about me helping you to see a way to reinvent your business to take advantage of the digital age.
Mr. Connolly: So it sounds like you have pretty broad responsibilities on both the business side as well as on the technical side. Can you tell us a little bit about your previous career and how that prepared you for your roles and responsibilities today as the CIO?
Mr. Wennergren: I've had a varied career, I guess you'd say. I've spent my entire government career with the Department of the Navy, right out of college into the Navy as a young management analyst and kind of worked my way up through the organization.
I've had a lot of different kinds of jobs. I used to do outsourcing work, the A76 program, private-public sector competitions. I was involved in the base closure rounds of the 1990s. After the base closure rounds, I had the job of working in the installation management world and restructuring all of the shore establishment that didn't close.
Then I came to the CIO world, and my first adventure was Y2K there. So sometimes people say you must wander from one program of hate and discontent to another, but I'm a hopeless optimist. So I think that the thread there is complex organizational issues, so I think both me and my predecessor, Dan Porter, the last CIO of the Department of the Navy, shared this r�sum� of having worked complex issues and having to work issues that require integration and a good understanding of the mission of the organization.
So while I have had some technology-related responsibilities in my career, clearly my selection as CIO was driven by the idea that we need people that can lead change and integrate it across complex organizations.
Mr. Connolly: Based on that, how do you see that those experiences have really brought you to today to the visionary role of CIO of the Navy?
Mr. Wennergren: The common thread, again, I think is integration. The Navy and Marine Corps is very big and very decentralized. In fact, we have a culture of over 200 years of independent ships at sea and being the captain of the ship and the captain of your destiny. That presents tremendous opportunities for innovation. Having the wherewithal to manage your own resources and go make your own choices gives smart people great opportunities to think of new ideas, and our organization is just full of smart people.
The challenge that comes in this world of being so connected is that pieces have to work together. So the premise of sending a ship out and it will come back some day and you'll have entrusted the captain to have done the right mission is a little different in a world where you're constantly in contact from sensors to shooters to logistics support and those sorts of things. So now there's a great need to take this very decentralized organization and make sure that it's integrated. Integrated doesn�t always necessarily mean centrally controlled or centralized, but that the pieces work together.
One of my responsibilities is the critical infrastructure assurance officer, of the CIAO. I always get a kick out of that acronym. The critical infrastructure assurance officer is responsible for critical infrastructure protection, so physical security, security of our key infrastructures. It's not a job that you would necessarily have associated with being a CIO, the information officer, but we're finding more and more organizations starting to get their CIO that responsibility because protecting all of our physical infrastructures has a lot to do with integrating the efforts of numerous organizations, in our case organizations like our force protection people, our antiterrorism people, our investigative service people, our computer forensics types and those sorts of organizations. So bringing all these pieces together to actually work towards a common good is the resounding theme that we see in CIO work.
Mr. Connolly: Have you seen that the role of the CIO in the Navy has evolved then over the last 10 to 15 years from being much more technically focused to being much more organizationally focused and focused on taking the Navy to the 21st century?
Mr. Wennergren: Yes, I would have said it just slightly differently, because CIOs are kind of a new concept for us. With the Clinger-Cohen Act passing in the 1990s, the first Department of the Navy CIO only arrived on the scene in the late 1990s, the 1996-1997 time frame. If we look at the last 10 or 15 years, I think your point is right-on. While they weren't called CIOs, the CIO predecessor organizations were clearly focused on technical- and acquisition-related issues, and as we stood up a CIO organization through the Clinger-Cohen Act and a lot of the other pieces of legislation, the E-Gov Act, the Federal Information Security Management Act, the Paperwork Reduction Act, and the list goes on and on, there's a recurring theme in both the intent of Congress and the intent of the administrations that CIOs are there because information, knowledge, the intellectual capital of the organization, has to be managed effectively so that it's available.
As the most classic case, a statistic from Gartner, I believe, about how over 70 percent of an organization's information lives on a C drive, and in a world where you're imagining people thousands of miles away from each other trying to get work done together, that just doesn't cut it. The intellectual capital, the wonderful knowledge and learning that we each have and can bring to the table, has to be available for people to share.
Mr. Lawrence: That's a good point, especially about the C drive.
What's NMCI and what lessons have been learned? We'll ask David Wennergren of the Navy to tell us about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with David Mr. Wennergren, Chief Information Officer of the Department of the Navy.
Joining us in our conversation is Tim Connolly.
Mr. Connolly: David, the Department of the Navy has been pretty much a pioneer in outsourcing. With the Navy-Marine Corps Intranet, affectionately known as NMCI, can you tell us a little bit about the background of this effort, and what is NMCI?
Mr. Wennergren: NMCI is a fundamentally important part of our transformation. It is the foundation of much of the IT transformation that's going on in the Department of the Navy.
I sometimes tell folks a story about a place called the Winchester Home, which is out in San Jose, California. If you're familiar with it, you know the story about it, but you've probably near heard it as an IT analogy. The Winchester Home was built in the late 1800s by the heir to the Winchester Rifle fortune. There's a whole story about why she built this monstrous house, but she built it for 30 years. It has hundreds of rooms and tens and thousands of square feet. It's one of the biggest houses in the entire United States. There were hundreds of builders involved in building it and no architect, no orchestra conductor, if you will. Lots of builders with lots of money to spend built lots of really cool stuff. There are patents associated with this house, innovations in the 1800s that had never before been seen in homes in America. If you translate the $5-1/2 million price tag to today's dollars, it was a $160 million job building this house.
But because they each worked independently, some odd things occurred. There are doorways that open into a wall; there are stairways that lead to nowhere; there are skylights embedded in the floor of the ceiling above; there's a chimney that starts in the basement and rises up four stories, only to stop three feet short of the roof. So without that common infrastructure, architecture, enterprise vision, big organizations tend to build lots of little things. Each little thing might be innovative on its own, but they don't work together so well, and that was the environment that we found ourselves in in the Navy and the Marine Corps team.
We found two apparent problems. We had organizations that were haves, and organizations that were have-nots. Some organizations, because of the way money flowed, had pretty robust networks, and some of our organizations had pretty pathetic networks. Unfortunately, a lot of the organizations that were not wired properly were our operational commands, which clearly needed to be.
We also found ourselves with a problem of not being able to refresh technology well enough. It takes government sometimes a long time to buy stuff, and of course you know the way technology is. I remember several years ago buying myself a 450 MHz computer and thinking that was a real hot machine there, and six months later it was who cared because technology changes so fast, and having refresh rates that take years and years and years will leave you always behind.
So we reached the point where we imagined in our minds that it was probably a couple billion dollar job to actually bring the Navy's infrastructure up to a level where you could be a really seamless enterprise network. So we have a hundred disparate networks, they didn't talk together very well, they had different security structures. We had a work force of network managers and network engineers that we were having trouble retaining. They come and they'd get trained by us, and they'd go for more lucrative salaries in the private sector. So we had to do something different.
So we landed upon the concept of the Navy-Marine Corps Intranet, which is a performance-based contract approach to buying IT as a service. This was basically a big seat management contract. There are lots of seat management contracts in industry, but this was a big deal for the government. It's the largest IT contract in federal government, it's the largest seat management effort in federal government history. So it really was a change of course as it was this basic premise that said electricity, the outlet here in this room, I plug my plug into it and if the light comes on, I get billed for the electricity of using that light. If the light doesn't come on, I don't pay a bill for it. I don't really care about what kind of transformer, what kind of stuff is on the other end of that power line out there, Virginia Power or something.
I care about service being delivered. I care about performance. So that was the path we embarked upon. It really was a novel path, because the beauty of the Navy-Marine Corps Intranet contract is that the services that it provides are the computer on your desk, the software that runs that computer, the help desk support, the long haul connectivity, to bring that enterprise network together for almost 400,000 people, 400,000 seats. It basically encompasses the entire United States and a couple of our overseas locations. Bringing that together into a performance-based contract has provided us with a world of wonderful change management experiences that we'll probably talk more about in a few minutes.
But getting that basic premise across that you could have somebody do this work for you and do it by providing a service, and the best way to take care of that would be to have a fixed price contract in terms of seat price. I'll have a menu, I'm a command and I'd like a laptop, I'd like a desktop, I'd like these kind of additional services and those sorts of things, and I understand the price and I'm willing to pay that. Then the contractor team is motivated for success by a lot of incentives. So the contract is really a wonderful novel contract vehicle because it's based on the premise of numerous service level agreements that are measured. So what I want is lots of access; I don't want latency. I want a good refresh rate, I want good security, and I'm going to measure you on that. If you exceed my expectations, then you get incentive payments.
Over half of the potential incentive payments that the contractor can get are based on customer satisfaction as measured by the individual users. What a novel concept for all of you that have relied on help desk support before, that you actually get to grade your help desk team, and that's part of how they get paid is that they've responded well to your needs.
It was an interesting adventure to go on. We're a couple of years into it now and we're making great progress now, but the early days were really a challenge because we had a fascinating dynamic. We were able to explain to people that this idea of seat management and this idea of performance-based contracting was really important and the right way to go. But you'd have this interesting dynamic when you would explain this to members of Congress, the Office of Management and Budget and the Office of the Secretary of Defense. We would almost consistently get back the answer that would say, yes, this sounds like a really great idea. You'll want to do this very quickly. You'll want to do this over a two-year period. Isn't that like awful fast for something this big and this different?
Then we would go to audiences like the Naval Postgraduate School, where we have young officers who are working on their master's degrees and are really savvy on technologies, and of course the postgraduate school is out in Monterey, not far from Silicon Valley, so they had a lot of exposure to the Internet age, if you will. So they would go, this really sounds like the right thing to do, but you're going to take two whole years to do this? Why can't you do it in months?
So it was an interesting set of dynamics, and it took us a long time to get the project actually started. We awarded the contract, and EDS is the prime contractor. Then there's a pretty august group of subcontractors: Microsoft, Dell, Raytheon, MCI. So it's a robust group of teams. But again, the important point was that we didn't say we wanted Dell computers, we didn't say we wanted Windows 2000 as the operating system. What we said to the bidders was we want good service, we want to be able to measure it, and we want service delivered well to all of these places with these service level agreements, and then you pick the teaming arrangements that you want to have to make that happen, so I don't have to be the one that goes out and buys all the servers and routers and worries about every computer and every help desk, every network operations center. I worry about getting service delivered well to me and being able to measure that service being delivered well to me.
Mr. Connolly: Tell us about the timeline. The idea began in the mid 1990s. Walk us through the big things. We're two years into it. Then what's out there?
Mr. Wennergren: We did a lot of thought work about this in the late 1990s. The contract was awarded at the end of 2000. From there, it took time. Again, it got back to this idea about seems like a good idea, but we're very nervous, it's very different. I probably shouldn't say this, but we tested this thing like it was some nuclear submarine. We were talking PCs. They only cost hundreds of dollars each now. We're talking about Microsoft Office. We're not talking about nuclear power plants. So there was a lot of initial testing and a lot of initial turmoil to get the thing up and rolling.
This year has really been the year that made a difference. You go through a two-phase process, of course, as they come in. The first thing that happens is the team comes in and assumes responsibility for your existing network. Of course then, after they assume responsibility for the network, they cut over to the new equipment and the new processes. So you assume responsibilities and then you cut over.
We've cut over about 88,000 seats at this point. We have assumed responsibility for over 200,000 seats, we, the contractor team, and our hope is by the end of the year, we're up to about 300,000 seats, assume responsibility, and a couple hundred thousand seats cut over.
So this is the year now that we're actually seeing the power of it. So had we all been having this conversation a year or so ago, I would have told you about this vision about interoperability, access, greater security, but now I can actually talk to you about the results, and there are some wonderful examples of the results.
After September 11th, in addition to the tragic loss of life at the Pentagon, the Navy also lost 70 percent of its office space there. So we had literally hundreds of people that had no place to go to work. We were able to leverage this information strike force, this EDS team, to help us reconstitute that capability literally over a weekend. By Friday after the event on Tuesday, we had found an office building in Crystal City that had been vacant. It was pretty gutted, and the EDS team had tractor-trailers full of Dell computers and Sisco routers and everything on the road. They arrived in town, and virtually over the course of the weekend, put together the network and the infrastructure inside that office building for hundreds of people. If you think about it in the old view of the world what would have had to have happened, we would have had to have people buying computers, buying software, buying telecommunications services, buying servers, and installing all those things, and integrating all those things together would have taken days, weeks, months.
The other place where we've seen dramatic improvements is because you're moving away from this idea of a hundred disparate networks with different kinds of security strategies, seeing a significant improvement in our security posture, it really is beginning to pay dividends. But it also really is the foundation of transformation, and that's the thing that oftentimes confuses people, because they think NMCI is the whole IT game for the Department of the Navy, and it's really not. I often use the description of a highway system, local story right here, just interstate 95. I've got a great superhighway now, and NMCI is that superhighway. On the interstate heading down to Richmond, I don't have to get stuck in traffic. Maybe I picked a bad example. I don't have to stop at stoplights all along the way. But all the cars and all the drivers of those cars are still fundamentally important to the success of your organization. So imagine NMCI as the big superhighway we just built, so that where you are is connected to where you need to be, and wherever you are, you have the power of reaching back to the intellectual capital of the organizational team. But you also have to then focus on all the things that have to ride on that highway system if you're going to be successful.
Mr. Lawrence: The Department of the Navy includes both the Navy and the Marine Corps. How does the CIO make decisions for the entire department when it consists of these two unique groups? We'll ask David Wennergren of the Navy to tell us about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with David Wennergren, the chief information officer of the Department of the Navy.
Joining us in our conversation is Tim Connolly.
Mr. Connolly: David, we spent the last segment talking a lot about NMCI. Now as we look forward, if you had a choice of starting over again, what would you change about NMCI to make the process more effective and more efficient?
Mr. Wennergren: I wouldn't change a thing about the performance-based contracting concept, and I wouldn't change a thing about the team that we have. We have a great team working with us on the project.
How we began the implementation both from our side and from the contract's team, we learned a lot, because it really was something different for us. People really enjoy personal control, and federal agencies don't always do a good enough job of public relations work. So I think we probably could have done a better job of selling the value proposition to our individual organizations so that when they went through the pain of having to give up something that they used to control, to allow somebody else to do the work for them, although I don't know how much you could ever stop some of those cultural change issues from happening. So there was a lot we learned about how you could do the implementation smoothly. But I think that's really the only place that you probably could go back and have done it better.
What I really have seen happening out of this is that it was an amazing opportunity for us because it proved to be this wonderful forcing function. If you don't build yourself an enterprise network, you have no idea how many applications you own. I remember in the Y2K days, we were keeping track of our mission-critical and mission-essential applications and systems. We were looking out for a couple thousand of them. Then when we put into place the Navy-Marine Corps Intranet, we said to these hundreds of commands that had their own local area networks and had built the stuff to run on it, just give us your applications, identify them by name, we'll check them out to make sure they're complying with security rules and they work on Windows 2000 and we'll put them on the network, and those couple thousand mission-essential applications grew to almost 100,000. A hundred thousand applications, what could you possibly do with that many? Somebody told me they were at the Gartner conference last year in Orlando, I think it was somebody from Disney was there, and they were talking about their 4,000 legacy applications that they were trying to work their way through. Somebody from the audience stood up and said, how could you have allowed that to happen? I thought I'm glad I wasn't the one up on stage there. I would have had a hard time explaining tens of thousands of them. But because you didn't have that central visibility, that ability to do configuration management, you didn't know.
So NMCI has been a wonderful forcing function to get us to do things like designate functional area managers, functional leaders for business lines in the Department of the Navy that are now responsible for looking at all the logistics applications that these different commands have built and says this is the supply chain management program we're going to use, this is the online purchasing solution we're going to use, and we're going to get rid of these other ones. It's a phenomenally complex problem. We've done a great job of working our way down from that first initial list of 100,000 to several thousand now. But you wouldn't have been able to do that, nor would you have been able to achieve the significant cost reductions that you will get by not having to build each one of these solutions over and over and over again unless you have built this enterprise network.
We used the NMCI as the fulcrum point for bringing on board infrastructure and SMART card technology. Every computer is going to show up with a SMART card reader and Middleware. You'll be able to use your PKI digital certificates. Those kinds of changes wouldn't have happened if you didn't have this forcing function of building the enterprise network to get you going.
Mr. Connolly: You talk about NMCI as a transformation, and transformations are about change. What change would you say occurred in your own roles and responsibilities as CIO, and how do you see that continuing to change going forward with the implementation of NMCI?
Mr. Wennergren: I think we've greatly benefited from a really strategic leadership team in the late 1990s as this whole vision got created that recognized that there is a road map of transformation that you had to do, and you had to start with your infrastructure. If you couldn't get your infrastructure right, you had no hope of doing things like digital marketplaces and knowledge-sharing and those sorts of things. But having the NMCI network now being implemented is allowing the Navy and Marine Corps team to turn attention away from those network tasks, to focus on the rest of that transformation agenda.
The NMCI contract is a really big contract. Like I said, it's over a billion dollars a year, but it is just that superhighway system. There is a whole bunch of other really important work that is being focused on, and that needs industry participation and working together, creating knowledge management structures, business electronic government, web enablement of our legacy applications, building of an enterprise portal, greater security, all those pieces of work are the rest of that transformational agenda that actually gets you to be that interconnected organization that's secure and a learning, knowledge-sharing community.
Mr. Lawrence: The Navy includes both the Navy and the Marine Corps. How are decisions made for the entire Department?
Mr. Wennergren: We've gone through a significant restructuring over the last year, and I think that one of the great benefits of that restructuring was a tightening of those organizational relationships. So in our new vision of the world, as the CIO, again, I report directly to the Secretary of the Navy, I have a deputy CIO for the Navy. That's Rear Admiral Tom Zelebor, who is the command and control leader for the Navy chain of command. I have a deputy CIO for the Marine Corps, who is General John Thomas, who is the director of C4 for the Marine Corps. So there's this wonderful match-up now of the person who is responsible for the command and control and computer systems for the operational chains of command now has a working relationship with me and a very close relationship in terms of dialogue and problem-solving together to make sure that the information management agenda is working in synch with those chains of command. I then have a third deputy, Rob Kiery, who works in my office, who is the deputy CIO for policy integration, who works with me to help shape and integrate those transformation efforts along those two chains of command.
We then said that each of our major commands, or what we call echelon 2 commands in the Navy and major subordinate commands in the Marine Corps, imagine business units under the Chief of Naval Operations and the Commandant of the Marine Corps, each must have a command information officer, and that command information officer must have a working relationship with Admiral Zelebor and General Thomas. We sort of leveraged some of the things that we learned from visits to GE about the way that they managed IT, this idea that if you're a business unit or a command information officer, you really need to make two people happy if you're going to be successful. You need to make that business unit leader happy, and clearly our command information officers in the past did that. They worked for the commander of the Naval Air Systems Command, and if you didn't make the Naval Air Systems Command's mission work, then you weren't getting a good CIO for that command.
The second piece of that puzzle that the folks at GE realized a while back was you also have a reporting relationship with the agency CIO, because otherwise, you'll suboptimize because you'll build great systems for -- I need an online small purchase system at NAVAIR and so I go out and build one. But I'm over here at the Naval Supply Systems Command and I say I need an online small purchase system so I go build one, and I'm out at the Pacific Fleet and you see how it goes, and each one of those cost me millions of dollars. So if you only focus on that command, you miss the important point, that we are an enterprise. Up until a couple of years ago, enterprises for us were organizations like the Atlantic Fleet, the Pacific Fleet, because that's the way the money flowed and that's where your responsibility flowed. So this new set of organizational relationships really kind of helps everybody think a step up, to say that the enterprise is the Navy and Marine Corps team, because if you don't think that way, you can't build a Navy-Marine Corps Intranet, you can't build a Navy-Marine Corps enterprise portal, you can't align yourself about interoperable single authoritative data sources, et cetera.
Mr. Lawrence: One of the things driving management is the President's management agenda, and it calls out specific items. One of them is e-government. What are you doing in the area of e-government?
Mr. Wennergren: Absolutely. E-government is so crucially important to us. There were some terminology things we had to work our way through first. I have a PowerPoint slide whose title is �a constantly changing world� that goes e-commerce, e-business, e-government, e-war fighting, because you go out and talk to an audience in the Navy and they go we're not business. What do you mean e-business? We don't do that kind of stuff. We're not selling products. And you're like absolutely, you're a business. Your business is national defense and you still have labor-intensive, cumbersome paper processes that you do and that's eating our lunch, and you need to find ways to leverage technology and get with it, and get with the web, and get with wireless technologies and develop E kinds of solutions. So we have done a lot of work to really take the President's management agenda, and even before the President's management agenda, to build ourselves organizations that will help us achieve that goal.
We established a Department of the Navy E-Business Operations Office that is a single innovation center for the Navy and Marine Corps team. There's a small cadr� of government folks with a number of private sector partners that basically helps you. If you're a command and you say I need some help trying to figure out how to do this e-business stuff, they'll bring out consultants, they'll come work with you and help you develop solutions.
They actually operate a pilot fund. We put aside $20 million and say let's go find great ideas and pilot new ideas. What classically happens in large organizations in I think government or the private sector is that you have this great idea, it's going to save us a million bucks a year, I need $100,000 to make it go. The controller says feel free to use your savings. I don't have those yet. Well, I don't know, I guess you're going to have trouble getting started. So we have found there is tremendous power in planting these small seeds of change.
I can tell you one quick story. A hospital, the Naval Medical Center in San Diego, California, a neonatologist and a CIO for that hospital came up with an idea regarding a very cumbersome process about how a patient goes from visiting a general practitioner to getting a specialist's appointment. It was bad. It was just really cumbersome. You didn't know whether the person actually made the appointment or whether they kept it, your general doctor didn't know if the person was getting treatment, whether he was well until he saw the person again in six months. They said what a great way to leverage web technologies and wireless devices to change this experience. So they developed this wonderful solution where the doctor sits in the room with the patient, he's got a little wireless device in his hand and he's saying you have a problem but Mary is really good at this and she has an opening next Wednesday at 9:00, can we lock you in for that, and he just pushes a button on his wireless device and locks the patient in for the appointment right there. Here come your lab results, and all the while maintaining that face-to-face contact as they work through this issue; $100,000 they needed to do this.
I have to tell you, $100,000 is not a lot of money for the Department of the Navy, but it's an incredibly large amount of money for a hospital. So the e-business operations officer comes and brings the $100,000, brings the private sector partner in for the solution. The neonatologist and the CIO, which I get a kick out of because when they both talk, you really can't tell who the IT person is because the neonatologist can talk babies, he can walk web. They build the solution; they love it so much. They, not us, they the hospital folks, take it to the Department of Defense Health Affairs Board, the surgeon generals for the Army, the Navy, and the Air Force, and say you can implement this solution DoDwide for $2 million. The surgeon generals say we were about to do something like this that had less functionality and was going to cost $20 million. We can take this idea and put it across DoD and avoid spending $18 million. That's a powerful example about how planting that $100,000 seed will help the Department of Defense avoid spending $18 million.
I have the benefit of being the best practices co-chair now for Federal CIO Council, so I'm able to start to take these ideas and the ideas that are going on in lots of other federal agencies and build this portfolio of best practices that are going on that tie directly to all parts of the President's management agenda.
Mr. Lawrence: That was an interesting point about the collaboration between the doctor and the CIO.
What role does IT play during a military conflict? We'll ask David Wennergren of the Department of the Navy when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with David Wennergren, the Chief Information Officer of the U.S. Department of the Navy.
Joining us in our conversation is Tim Connolly.
Mr. Connolly: David, we spent a lot of time this morning talking about change. The real question I have is, what do you see as the CIO's role in not only delivering change in programs like NMCI, but really in creating and leading change as the Navy progresses toward the future?
Mr. Wennergren: I think the measure of an effective CIO is the ability to lead change. You have to understand technology, but I believe firmly that technology is only a percentage of the answer. I may spend 20 percent of a day worrying about some technology issue and 80 percent of the day worrying about the cultural change issues that go along with actually making an organization transform. There is so much that you can learn from that. I could have spent the whole hour talking about that, but there are some important nuggets that you pick up.
Change takes on two forms. There are evolutionary types of change. When we go and do knowledge management, it's a real grassroots kind of thing. You go to a command and you say you could do this kind of stuff, you'd be a learning organization, that's great. They all get excited about it and they go off and do it. The beauty of evolutionary change is that it has great consensus and support. You can build a great little solution there. The problem is that evolutionary change on its own doesn't do sweeping enough change. So while we've embraced this theory of teaching people to fish, we've developed tools. We have tools about how you do knowledge management, how you develop a work force, how you do critical infrastructure protection/vulnerability assessments, CDs or web-based tools, and we give these tools to commands.
If you think about it, if each command takes that tool and uses it to do knowledge management, they all end up doing knowledge management in a consistent way, and I get the same kind of answer that I would have gotten if I had just mandated that they all do knowledge management, but of course, they all did it willingly.
The problem is they may not all do it, and so sometimes in order to get broad, sweeping change, you have to embark on a revolutionary change. We would not have a Navy-Marine Corps Intranet if we had not just said you will do it. We would not have 2-1/2 million access cards, SMART cards, in the hands of DoD people if we had not just said we're going to go to a single SMART card. So you have to couple these evolutionary change approaches with revolutionary change approaches.
Of course, the challenge with revolutionary change approaches is I didn't get each of your buy-in. So I have to then deal with the personal/cultural issues of change is coming to you, and there's a book about managing transitions that's out now. Or the guy makes an interesting point about we don't like change, we don't like transitions because in order to have a new beginning, you must have an end, and people tend to not like endings. So every time I do something that's sort of forceful, you have to worry about how you're going to deal with those cultural change issues. But you have to embrace them, because the world is changing at such a fast pace, if you don't think about change which means accepting some risks, you really do risk irrelevancy. So we've learned a lot.
We've learned about moving with speed. The solutions that are working best for us right now are those that we do in months. Take an e-business pilot like the one we talked about, put it in a place in three months, leverage industry best practices and go. The things that are not working well for us are the things where we try to build this perfect solution, build it to death, and two or three years later try to deliver it. Because in our world, over two or three years, technology changes, military people rotate in and out, political leadership comes and goes, and you never quite close the deal. You have to move with speed. You have to look for forcing functions. You have to say if you're going to change a little, you might as well change a lot. There is no point in just getting a few computers. At the moment that you're going through that stress of a change in a computer, I'm also delivering you new processes and those sorts of things.
You need to think about how you change the status quo. We had a culture where once you're in the budget, I'm a legacy application, I got approved, and now I get $5 million a year, and next year I want $6 million. So people go why do you need an extra million, but you're basically in the game. Of course, with those legacy applications that are the old mainframe client-server kind of solutions, they're not my web services view of the future of the world, so it's the new stuff that is going to be wireless and web-based that really is where we need to focus, but of course they're new and so they get tortured to death. Where is your testing plan? Where is your business case? Where is your this, where is your that, before you ever get to the place where you say let them go or let them try because that's where I want to spend my money.
That's why our legacy application process is so important, because that's where we're going into each of those people with the baby and saying that's not a web-based thing, that's not PKI-enabled, that's not available on the enterprise portal, you are not part of the future vision. The status quo stuff needs to go in favor of the new path.
I think finally and most importantly, it's this idea about the Indiana Jones movie, "Indiana Jones and the Last Crusade," and he's on the search for the Holy Grail. This is another IT analogy, because he's got the little book and he knows what his vision is. His dad has been shot and he has to find the Holy Grail to save his dad. He gets to that chasm and he has to get across and the book says it's a leap of faith. His reaction is don't you hate that? But of course, he eventually takes the step and there's a pathway and he gets across. That's what this is about for all of our commands. There is that moment when you do have to take that leap of faith. So you need to give people as much confidence that they should be trusting to take that leap of faith, but in the end, you have to find some way to encourage them to take it or you'll never get this change in.
Mr. Connolly: Can you tell us a little bit about web enablement means to the Department of the Navy? And can you expand on the role of the Department's new portal policy in achieving this objective?
Mr. Wennergren: We've been getting it for a while. We have a senior leadership course that we teach at our Naval Postgraduate School where we send our senior flag officers and general officers, and they go spend a couple of weeks talking to folks in the Silicon Valley and elsewhere about what's going on in the world, and they come back very energized. They get it. They understand the power of the web, the power of the web in terms of access, the flow of information, better security structures, all the things that go into being web-enabled. But then you turn around and look at your organization and you still have a lot of old legacy systems that aren't that kind. So we've embarked upon a lot of work to try to change that.
We created a task force web team whose job was to go encourage and push for web enabled solutions, and Monica Sheperd and her team of folks that have been doing that for the Department of the Navy have been doing an outstanding job.
In order to have a web strategy work though, you have to have a place for that stuff to hang. So we've just released our policy for the Navy-Marine Corps portal, our enterprise strategy that says we're going to have a constituent portal structure where you really will have a single front portal that you get to do work whether you're aboard ship, you're ashore, you're in a hotel, you're at your wireless device waiting for the bus, whatever kind of channel delivery you need, you have a common access to the intellectual capital of the Department. That will again be like the legacy application process where we have hundreds of portals. Portals became cool, so everybody wanted to build one. I don't really need the Surface Warfare Officer's School in New England to be the 505th place to build another portal. What I need them to do is to focus on content. They may have content they want to deliver to students. You find that content, we'll give you the portal to hang it on as a database, as a transaction. I don't need you to be the next person to worry about a customized look and feel.
So with this portal strategy linked with the Navy-Marine Corps Intranet, linked with this web-enabling path, what you see is this change now. In the past, you were the aircraft maintenance technician out on an aircraft carrier thousands of miles from home in the Pacific Ocean and all you had to go by was your knowledge, your tech manuals, your engineering drawings, the knowledge of your supervisor, and you had to fix the plane. Now through a distance support portal, you can reach back to the engineer in Crane, Indiana who actually designed that part that you're trying to work on and have like a voice/video/data whiteboard exchange with him. So now these young men and women that you would be so proud of deployed far from home in harm's way have the power to reach back to the literally hundreds of thousands of people that are back here in the United States. And all that expertise, all that knowledge, all that intellectual power is now available to them, and that's compelling.
Mr. Lawrence: Could you tell us about your role as the chair of the Defense SMART Card Senior Coordinating Group?
Mr. Wennergren: I have a lot of great jobs, and that's another wonderful one, being the chair of the SMART card effort across the Department of the Navy. We talked about NMCI being a big change management issue because it's going to touch 400,000 people's lives. The SMART card program is touching 4 million people's lives across all of DoD. So everybody has an opinion about that.
We're really thrilled. I think there are great kudos that go out to Mary Dixon, who runs the access card office for the Department of Defense and is my partner in crime in this adventure, and the folks at the Defense Manpower Data Center who actually do the programming and such that makes this program happen, because this is truly a testimony to the power of industry/government partnerships. We knew we needed a SMART card. We knew we needed them for millions of people. We couldn't afford to build some government-only solution, and we really did get it. We worked with industry and we came up with standards where there weren't any and we leveraged standards where they were, and we did the right things. PKI digital certificates were going to live on this card, x509 version 3, standard base certificates, Global Platform, the security structure that Visa and others use, JavaCard, using all the common approaches that would make this thing be affordable and that we wouldn't have to build all the things that make it work. The x509 version 3 certificate is recognized by Microsoft Outlook. I don't have to build special stuff into every commercial product that I want to have touch this SMART card. So I think we really got it right, and we got it right because of the work of people like Mary, Ken Shefflin, Robbie Brandaway and all the other folks who do this kind of work.
We have 2-1/2 million SMART cards out there now. It is one of the largest SMART card deployments in the world, and it really is changing the way we work and live. So if you followed me around today when I go back to the office, I'll use this SMART card to get into my office as my physical access badge. When I get up to my computer, I'll use the PKI digital certificates on the computer chip on the card to get on my computer and do a cryptographic logon, much more secure than user IDs and passwords. I'll use the digital certificates to launch myself to secure websites, again getting past the idea of about 50 websites I need to go to, so I have 50 passwords I'll keep on a yellow sticky. I use the digital certificates to do digital signatures, which of course are the key to electronic business. So I'll file a travel claim this afternoon and digitally sign it. Then when I leave to go to lunch, I'll pull the card out of the computer, the screen will lock up and nobody else can be me, and off I go. So this power of having a digital key in the hands of every sailor, every Marine, every airman, every soldier, every civilian, every contractor that works on our facilities is really a key part of this vision. It's the way that we'll get PKI in the hands of everybody, and it's the way that we really get this idea about e-business and digital signatures in place.
Mr. Lawrence: What advice would you give to someone considering a career in public service?
Mr. Wennergren: I think it's a wonderful calling, and you have to want that. As I said before, I look around the nation and I see young men and women doing phenomenal things on behalf of all of us in defending this nation, and it just makes your heart glad and you feel really proud.
There's a wonderful team spirit. I think it's particularly true of the military departments. There's a wonderful team camaraderie about being part of this together. So there are some great opportunities, great opportunities for public service, and it is that idea about service to the nation that is so important. So if that's the kind of stuff that turns you on, there's are such opportunities now. The work force is aging. People are retiring. The skill sets that are needed are different. We need people who are web-savvy. We need people who are Internetmeisters. So the skill sets that we need are the skill sets that the people coming out of high school and college have and live this kind of multitasking kind of work. So there are phenomenal opportunities for those that feel that calling to help serve the nation.
Mr. Lawrence: Dave, thank you very much for joining us today. That has to be our last question, but Tim and I want to thank you for squeezing us into your busy schedule.
Mr. Wennergren: Thank you, Tim. Thank you, Paul. It's been great being here with you. I guess I could point out that if you liked anything you heard today, www.doncio.navy.mil is our CIO website and has more information about everything we talked about today. So thank you again.
Mr. Lawrence: Thank you.
This has been The Business of Government Hour featuring a conversation with David Wennergren, chief information officer of the Department of the Navy. Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and research and get a transcript of today's fascinating conversation. Again, that's businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.