Treasury
Inspector General for Tax Administration
Office of Audit
MAINFRAME COMPUTER PERFORMANCE IS
BEING ACTIVELY MONITORED, BUT DEFINED-SERVICE AGREEMENTS AND SOFTWARE LICENSING
CAN BE IMPROVED
Issued on September 23, 2011
Highlights
Highlights of Report Number: 2011-20-074 to the Internal Revenue Service Chief
Technology Officer.
IMPACT ON TAXPAYERS
The Internal Revenue Service (IRS)
mainframe computing environment provides the processing for mission-critical
tax processing systems. The IRS can improve management of
the capacity and performance of its mainframe computers by formalizing
performance measures in its defined-service agreements. There is also an opportunity for the IRS to
realize cost savings in mainframe software contracts that are dependent upon
the capacity of the International Business Machines Corporation
(IBM) mainframe computers. If actions
are not taken to renegotiate capacity‑dependent software contracts, the
IRS could incur unnecessary software costs.
WHY TIGTA DID THE AUDIT
This review is
included in our Fiscal Year 2011 Annual Audit Plan and addresses the major
management challenge of Modernization. The
overall objective of this review was to evaluate the efficiency and
effectiveness of the capacity and performance management of the IRS mainframe
environment.
WHAT TIGTA FOUND
The IRS has incorporated Information Technology
Infrastructure Library best practice principles into its mainframe capacity
management policies and procedures.
However, only four of 20 defined-service agreements included
measurable performance metrics. Without
a structure in place to measure and report actual performance relative to
performance metric requirements, the IRS will be unable to verify and ensure
that the quality of service provided by its mission-critical tax processing
systems will meet the expectations of its customers and stakeholders.
TIGTA also determined that the IRS has an opportunity
to realize cost savings in its software license costs that are dependent upon
the capacity of its mainframe computers.
If the IRS had changed its basis for measuring the capacity of its IBM
mainframes prior to a hardware upgrade in October 2010, it potentially could
have saved more than $580,000 in software license costs.
WHAT TIGTA RECOMMENDED
TIGTA recommended that
the Associate Chief Information Officer, Enterprise Operations, include
specific and measurable qualitative and quantitative metric measurements in the
defined-service agreements and establish a method of reporting actual
performance, relative to agreed-upon performance metric requirements, to
business unit application owners. TIGTA
also recommended that, to realize cost savings in mainframe software contracts,
the Chief Technology Officer should change the method by which mainframe
capacity is measured and attempt to renegotiate capacity-dependent contracts to
achieve more favorable terms for the IRS.
In its response to the report, the IRS agreed with
TIGTA’s recommendations. The IRS plans
to 1) develop and incorporate performance measures into defined services
design, 2) establish a method of reporting actual performance achievements
relative to agreed-upon performance metric requirements, 3) change the basis
for measuring capacity of its IBM mainframe computers in future software
upgrades, and 4) attempt to revise or restructure mainframe computer
capacity-dependent software agreements for maximum efficiency. The IRS disagreed with TIGTA’s $580,358
outcome measure. TIGTA maintains the appropriateness of this measure.
READ THE
FULL REPORT
To view the report,
including the scope, methodology, and full IRS response, go
to:
http://www.treas.gov/tigta/auditreports/2011reports/201120074fr.html.
Email Address: TIGTACommunications@tigta.treas.gov
Phone
Number: 202-622-6500
Web Site: http://www.tigta.gov