Near Disaster: Budget OverloadBy Thomas Boyce | Posted 2008-02-21 Email Print
Re-Thinking HR: What Every CIO Needs to Know About Tomorrow's Workforce
When Thomas Boyce arrived at the National Institutes of Health in May 2005
as a senior fellow at the Council for Excellence in Government and program manager for the Electronic Research Administration, he faced the monumental task of transforming a paper-based organization that processed up to 3 billion forms a year into a humming digital machine. Achieving that goal required major cultural changes as much as it did adopting and developing new technologies. Boyce reflects upon his challenges and resolutions for taming the paper beast.
Near Disaster: Budget Overload
Though it was moving along well, the eSubmission project was consuming large chunks of staff time and quickly outpaced the budget. This prompted closer scrutiny of the entire budget and led to the discovery of a major problem.
Over the previous three years, the program budget had grown steadily and management, anticipating continuing increases, had added staff. Now, however, budget increases had ceased, and management was predicting flat budgets for the next several years. As a result, program expenditures were running thousands of dollars more per day than could be supported by the approved budget.
I had been meeting regularly with the program’s steering committee, providing updates on issues and problems. I discussed the budget problem with the committee and asked that the eRA program be allowed to focus exclusively on two projects in the coming fiscal year—instead of the six major initiatives being worked on—in addition to the eSubmission project. I also made it clear that, even if this proposal was accepted (and it was), I would still need to make substantial reductions in staff to work within the approved budget.
There were two paths to achieving the staff reductions. The first—which could be implemented fairly quickly and easily—was to eliminate some of our 20 existing contracts. The drawback was that we would lose valuable talent.
The second option was to surgically reduce staff across the program, ultimately cutting 20 percent of existing headcount. While this route would take longer, it would better enable us to retain our most prized contributors.
After obtaining approval for the surgical approach, I engaged eRA staff to determine how best to address this challenge. I sought input from at least three staff members of every contractor working for the program, asking for candid evaluations of contributors—who was a marginal performer and who was the one person they couldn’t afford to lose.
In addition, I met with each contractor, explained the budget crisis and asked them to restructure their costs. Most of the contractors complied, despite knowing we would still need to reduce overall contract staff by 20 percent. Ultimately, we were able to save nearly $2 million a year through cost restructuring alone.
One of the final challenges we faced was to revamp our entire approach to software development. We had seen benefits from taking a project-based approach with eSubmission, and the goal was to effect these changes across linked projects and the entire system.
The key to building processes the staff would endorse was to empower them to define what was important. The first procedure they drafted was how to raise an issue with any process and get it changed. The staff then followed a structured software lifecycle without over-engineering the process. The result was early acceptance and adoption of new development processes across the entire program.