May 18, 2008

Competitive Sourcing and Enterprise Architecture

Our economy is heavily based on ensuring a competitive environment to drive innovation, cost-competition, and consumer value.

One of the reasons why mergers and acquisitions are reviewed so carefully is to ensure that they are not anti-competitive, which would result in anti-trust action.

Competition law, known in the United States as "antitrust law," has three main elements:

  • Prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
  • Banning abusive behavior by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position.…
  • Supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licenses or access to facilities to enable other businesses to continue competing. (Wikipedia)

Competition law has been extended to the federal workforce as follows:

The Office of Management and Budget Circular A-76 mandates that “To ensure that the American people receive maximum value for their tax dollars, commercial activities should be subject to the forces of competition.” This includes the following activities:

“a. Identify all activities performed by government personnel as either commercial or inherently governmental.

b. Perform inherently governmental activities with government personnel.

c. Use a streamlined or standard competition to determine if government personnel should perform a commercial activity.”

The concept of A-76 is that without federal workers having to compete for their positions against for example, the private sector, then there is no way to ensure value for the American taxpayer. Where is the incentive for the federal workforce to perform if when they aren’t performing competitively, and they are not threatened with replacement by a better, more effective and efficient provider?

Federal Times, 12 May 2008 reports that “all indications are that as the Bush administration winds down, so too has its most controversial government reform: competitive sourcing.”

“Many in Congress have aggressively challenged the practice as being unfair and demoralizing to federal employees and last year they passed myriad reforms and restrictions that are already being felt.”

While I agree that competitions drive efficiency in the marketplace, I think A-76 has missed the mark in terms of reforming federal human capital.


Competing federal workforce against private sector contractors on a cost basis does not necessarily ensure best value. From an enterprise architecture perspective, we are missing something crucial in A-76 and that is the human capital perspective.

The human capital perspective on EA is one that was initially proposed by John Zachman, the founder of EA, and I am a strong proponent of it. Essentially, it says that just like the other business and technology perspectives of the EA, human capital is a filter through which you must make organizational decisions.

The human capital perspective of the architecture provides us an opportunity to optimize federal workforce performance in the first place, before getting to an outsourcing decision point. Additionally, if you can’t effectively manage your own workforce, what makes you think you can better manage a contracted-out function? (In the same issue of Federal Times, there was an article about how the federal procurement officials are resigning in droves!)

What can we do to first improve performance results from the federal workforce (and I’m not saying that there is any problem to begin with)? The same as with any organization—provide strong leadership to them. Provide them with a bold vision. Hire the best and the brightest. Accelerate the hiring and clearance processes. Make clear their roles. Inspire them as President Kennedy did when he stated “Ask not what your country can do for you, ask what you can do for your country.” Challenge the workforce and empower them. Provide training, career growth, and financial and other incentives. With these, the federal workforce can truly be competitive and best value—if not all the time, then certainly much of the time.

The enterprise architecture way to do this is to first, baseline your current workforce. Then, look at best practices, benchmark, and set the targets for your people. And finally, develop a transition plan to move your workforce from the baseline to the target.

There is much more work to be done in this area, and obviously this is just a cursory overview or sketch of what the human capital perspective of EA would do. On a personal note, this is an area of great interest to me and I look forward to exploring it further.


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