Arlington, Virginia

Wednesday, August 30, 2000

Mr. Lawrence: Welcome to the Business of Government Hour, Conversation with Government Leaders. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of the PricewaterhouseCoopers Endowment for the Business of Government. The Endowment was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Visit us on the web at www.endowment.pcwglobal.com to find out more about our programs and research.

The Business of Government Hour focuses on outstanding government executives who are changing the way government does business.

Our special guest tonight is Patrick Schambach, Assistant Director, Office of Science and Technology and Chief Information Officer at the Bureau of Alcohol, Tobacco and Firearms, or ATF. A former guest on the Business of Government Hour was Bradley Buckles, Director of the ATF. He told us about the role of technology at the ATF, and this evening we want to find out more about that.

Welcome Mr. Schambach.

Mr. Schambach: Thank you, Paul. Great to be here.



Mr. Lawrence: Well, let's start out by finding out about ATF. Can you tell us about its mission?

Mr. Schambach: Sure. We're just over 4,000 employees in the Bureau, and we have both our regulatory and our criminal law enforcement mission, and it's really a three part mission.

In the first one, reducing violent crime is our goal and we do that by investigating the illegal use or trafficking in firearms or explosives, and we investigate certain commercial arson fires as well.

In our second mission, collecting the revenue, we collect federal excise tax on alcohol and tobacco products to the tune of $13 billion a year. And in the third mission area, protecting the public, we do that by regulating the manufacture and the contents of alcohol and tobacco products that are on the market or proposed to be on the market.

Mr. Lawrence: And how about your career? I see you began over 25 years ago working for the U.S. Secret Service. Can you tell us about the various positions you've held?

Mr. Schambach: Sure. In my years at the Secret Service, I have to say it was a wonderful organization to work for. Very committed people who have a very serious mission, and they're very committed to that and really a culture of excellence so for me it was a great environment to develop my technical and leadership abilities in that environment.

I went there right out of college, and I held various support positions. Ultimately, head of the IT Organization and supported their IT needs on a worldwide basis in computers and communications.

Mr. Lawrence: Did you begin in technology?

Mr. Schambach: Actually, I began in finance. I started my career as an accountant, which your folks in the organization would appreciate, and developed my career from there. I worked in management consulting for a while and ultimately got into IT work.

Mr. Lawrence: What lead you into IT?



Mr. Schambach: My first experience was automating our financial accounting system. I really enjoyed that role and thought rather than check the ledger month-by-month, that I'd really rather get into IT workers or career field.

Mr. Lawrence: I know our accountants will like that, they'll like to hear that story. In 1993 you lead a Treasury reinvention team which supported the re-invention efforts of the vice president. What were the findings and the results of this team?

Mr. Schambach: Well, actually, Paul, that was probably the best assignment in my entire career. I really enjoyed the idea of working at a policy level and looking into all aspects of Treasury operations. I was actually chairing the Treasury re- invention team looking at our department and its issues. And we took suggestions about operations and improvements we could make from employees, from public citizens, anyone who had a suggestion that we might work on.

And the findings really were that there were lots of room for improvement. There was streamlining of regulations and elimination of paper work, red tape issues, reorganizing issues, and reducing staffing needs in parts of the department as well. And we worked on all those issues.

Probably the most memorable one for me, one success story, I worked on consolidation of the Treasury Savings Bond Program. There was a Bureau of Treasury responsible for selling savings bonds and the operational part of Treasury, the Bureau Public Debt, did all the operational aspects of issuing and redeeming savings bonds and strategizing for funding the national debt. And our question was why were those operations in two different parts of the department?

Ultimately it led to a consolidation and the abolishment of the savings bonds part of the organization and the first time in history that Treasury abolished a bureau. But it has lead to a stronger program at the Bureau of Public Debt in the long run.

Mr. Lawrence: That's an interesting story about the consolidation and the abolishment. I mean, what were the lessons you took away from that, in terms of duplication and getting rid of it perhaps?

Mr. Schambach: I wouldn't say there was as much duplication as there was a disconnect between the selling arm of savings bonds and the operational arm of funding the public debt. And often their strategies were not closely tied together. So people were marketing an instrument for which the strategy for funding the debt was going in a possibly entirely different direction. And they were in some ways stuck in kind of a war time mentality of war bonds and, you know, raising money to defend the nation and really there were a lot of good reasons to have savings bonds as an investment.

Mr. Lawrence: And you've also served as the ATF's Year 2000 Senior Executive. What management lessons did you gleam from the Y2K effort?

Mr. Schambach: Probably the best one for me was just a lesson on how much can be accomplished through a spirit of cooperation. It was really an issue that a lot of people could embrace whether it was on the Hill or within the Administration or within the leadership of the government agencies. And both internally and externally that cooperation to show just how much could be accomplished. It was a large issue and a serious one that people took seriously and I believe it was a non-event essentially because so much effort was put into resolving the issue and a lot of spirit of cooperation.

I spent a fair amount of time out among our industry members making sure that our systems could continue to operate with theirs and particular the alcohol and tobacco industries. And I just met a lot of openness in dealing with those industry members that we don't see in maybe every issue we deal in, but they wanted it to work and we wanted it to work, and it was just refreshing to have that kind of partnership on an issue that large.

Mr. Lawrence: Many people sort of said, "well, you know, when you look back, the Y2K thing really wasn't a technology issue. It was sort of a management issue." I'm wondering about your observations.

Mr. Schambach: Yeah, I would agree. In our organization, I chaired the effort in both the IT and the non-IT area and I could see how it was mainly a management issue. Coordination, allocating resources, sticking to a time line and getting a job done.

Mr. Lawrence: Which positions in your career provided you the best opportunities to develop as a leader?

Mr. Schambach: Well, beginning I guess with my career in financial management, it gave me kind of an overview of the budget process and how it works in the government. And also an idea of fiscal accountability that I would say doesn't come naturally to every government executive, and so I'm thankful for that background. I spent some time in management consulting, internal management consulting at the Secret Service, and it taught me some analytical skills of how you look at an operation or an organization and look for opportunities to improve.

And then in the IT leadership positions I held, particularly in a law enforcement community, you have a very demanding customer, and it's important to them that things work and that they work right. Not a lot of patience for failure unfortunately. So that all, I think, helped me develop the skills that I have today.

Mr. Lawrence: When you look back at your experience of, I guess, almost 30 years in government service, what qualities have you observed as key characteristics of good leadership?

Mr. Schambach: Well, I would name three off the top of my head. First is to take care of your people; second to make sure that they can identify with the mission of your organization; and third, that you give them a future vision. And let me just expand a little bit.

First, in caring for our workers, I recognized early on that I worked hardest for bosses who appreciate us, seemed to care about me and wanted my opinion and left the impression on me that each individual counted to them. And, I thought to myself, if that makes me work harder, that probably is true for the average employee as well. They want to know people care about them.

The second is having a mission that you can believe in. Something you believe in, something you want to support. And I have to encourage people, particularly our technology folks sometimes to get out of their cubicles and to get out onto the front line and understand what the front line parts of our organization are faced with and to sort of embrace those challenges and see what role they play in helping to meet those challenges. And I think that connection sort of appeals to their level of commitment in the organization.

And then the last, I think particularly for leaders in the 21st century, is having a vision, to be able to articulate where you're trying to take the organization and have some idea how you want to get there that people can follow.

Mr. Lawrence: Do you think these have changed over time?

Mr. Schambach: I think they're probably core leadership qualities that have always existed.

Mr. Lawrence: And how about looking out into the future?

Mr. Schambach: I don't know. I think there are probably qualities that stood the test of time. I mean, getting people to follow a leader is always a challenge and having a mission they believe in and making them feel you care about them. I think they've stood the test of time.

Mr. Lawrence: Okay, great. Well, it's time for a break. We'll be right back with more of the Business of Government Hour. (Intermission)



Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and tonight's conversation is with Patrick Schambach, Assistant Director, Office of Science and Technology and Chief Information Officer at the Bureau of Alcohol and Tobacco and Firearms.

Well, let's start by talking about the role of the CIO. The position of the CIO is relatively new in the federal government, created in 1996, I believe. Can you describe what the role of the CIO is?

Mr. Schambach: Sure, Paul. The chief information officer, in some ways is a misnomer. It's not so much in my mind about information, knowing what information exists in an organization, as much as it is the information management function, the technology and the processes used to value information and to share information with an organization.

So in dealing with technology as I look at organizations, the technology is these days a cornerstone of every program's strategic direction. You look at any program at all, they always talk about the role of technology in accomplishing their program in the future.

So with so much emphasis on technology and the fact that by nature it's a costly investment, organizations needed someone to manage that effort for them and to manage the big picture. I think that's why the role of the chief information officer evolved in many organizations -- to make it happen and to make solutions reliable and affordable to the organization.

Mr. Lawrence: And how about when you look at other CIOs? I guess you described three very interesting characteristics: knowledge of technology, ability to manage and also a business understanding. I'm wondering, is that what the CIO is accurately described as?

Mr. Schambach: Actually, I think that argument has evolved over time as the role of the CIO has evolved and from an argument of who knows, is it someone who knows the technology or is it someone who knows the business that we need as a CIO? And I don't think either is exactly right. I think what you need in a CIO is someone with an analytical mind, someone who gets excited about change and bringing change about in an organization and someone who's naturally optimistic. It can be a daunting effort to improve technology in an organization and you have to be optimistic about where you're going and your chances of getting there. And I think that optimism sort of catches on with everyone else.

Mr. Lawrence: What are some of the key challenges facing federal CIOs?

Mr. Schambach: I think probably foremost is the expense of technology in the face of a shrinking federal budget. As I said, by nature it's an expensive proposition to get into technology and figuring out where those dollars are going to come from and how you're going to continue to feed that investment in the future is a natural challenge that faces all of us.

Another is a need to focus on funding infrastructure. I think as I read the literature, the infrastructure is kind of emerging as probably a foremost issue in everyone's mind as you have to have the infrastructure there if you're going to support the technology. And the funds to keep that infrastructure in place is probably a key issue.

Another one is naturally the shortfall in the talent pool. We all read about the shortfall and IT professionals, particularly at the entry levels, and attracting them to come into government is a challenge that we all face as well. Information security is a challenge for all of us and in improving that posture in our organization.

And finally the all E-government movement, the challenges and opportunities that it represents is present for all of us as well.

Mr. Lawrence: Well, let me ask about one of those. You talked about getting technology dollars. I'm curious, what's the argument made to get technology dollars, the most common argument? It use to be, for example, that you got technology to generate some efficiencies, perhaps yield some savings, and yet that doesn't seem to be the one that's most common any more. Is that true?

Mr. Schambach: Yeah, I would say that is, and it's become more of an effectiveness issue than an efficiency one. The idea of trading salary costs or other expenses for technology dollars and realizing a saving, just hasn't proven to be the case in many instances. I think the more effective argument is arguing the issue of effectiveness -- make my organization more effective through the use of technology to improve how I deliver my program. Not necessarily do it cheaper but to do it better.

Mr. Lawrence: And how does one evaluate the achievement of that effectiveness? I think you indicate it's quite scary. The dollars are large, the promises are great, the time frames can be long, and yet there's not a lot of successes that people talk about.

Mr. Schambach: Yeah, that's a good point. A lot of times that gets into a discussion about performance plans or performance measures. And the issue I have with that is not to look at the IT organization and its performance measures, in my shortening in the mean time to repair of a particular device or a function, but in my delivering more effectiveness in the organization's primary mission. If our mission in ATF is to collect revenue or prevent crime, is our technology helping us be more effective in those measures -- not measuring IT for itself, but measuring the effectiveness of the entire organization.

Mr. Lawrence: Recently, there's been much discussion about the creation of a government-wide CIO position with cabinet rank, and legislation was introduced a while ago to create such a position. Do you think there should be a government wide CIO?

Mr. Schambach: Well, there's certainly been a lot of discussion about that issue. I frankly believe, yes, there should be.

On the one hand, success in IT happens at the operational level in an organization. You can see that even in a large department like Treasury. The successes in IT happen at the bureau operational levels.

Yet there are any number of larger issues that are difficult for a single bureau to deal with, leveraging technology at the macro level. And, again, the Y2K's are, I think, a good example of that. Becoming a classic example, putting a high level focus on a very significant issue that everyone needed to get engaged in in commanding some results. And I think the same applies of other large issues. The cybersecurity issue, the shift to E-government, government-wide software licensing; there are large macro level issues.

I'm not saying the government-wide CIO would control every dollar and every project and have the "yes" or "no" decision to make on those issues. But they certainly can provide focus and attention on the larger issues that are difficult for any one organization to resolve.

Mr. Lawrence: One of the things that technologists like, well, all employees like, is training. I think it's particularly true for technologists, and I'm curious as ATF is embracing technology, how are you keeping pace in terms of providing training for the employees?

Mr. Schambach: Yeah, that's a challenge both for our working employees throughout the organization as well as for our IT employees. We are a part of the overall Treasury Work Force and Improvement Program and trying to find any way we can to leverage our training dollars for both working level and technology employees.

Mr. Lawrence: We'll take a break and be right back with the Business of Government Hour. (Intermission)



Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner in PricewaterhouseCoopers and tonight's conversation is with Patrick Schambach, Assistant Director, Office of Science and Technology, and Chief Information Officer of the Bureau of Alcohol, Tobacco and Firearms.

A while back when Bradley Buckles, the Director of ATF, appeared on the Business of Government Hour, he made the following remark and I'd like to quote him. "The employee of the future is going to be the employee that has a laptop computer and brings with him the entire experience of the bureau each time he shows up at a scene or to work. If ATF can put information and knowledge into the right hands through technology advancements, it's going to make a difference."

I'm wondering what your thoughts are on this remark?

Mr. Schambach: Yeah, Paul. Actually, that's typical I think of some of the informed leadership that we have in place in ATF today. When I moved from the Secret Service several years ago, I saw an executive staff at ATF that was really serious about putting a priority on information technology and really making IT a cornerstone of their strategic direction for the future and not just talking about it.

We have become the first agency to employ a seat management concept in outsourcing our desktop computing environment across the entire enterprise. And that really was, in most part, driven by a strong desire to move the organization from really an archeology in the past to an architecture of the future. And we've had some tremendous success with that program and frankly become the envy of a lot of agencies in town.

So I think Brad's remarks are typical of the view of our executives and what they, the view they have towards technology.

Mr. Lawrence: Well, what role does technology play in helping ATF fulfill its mission?

Mr. Schambach: Well, you know, today it affects literally every part of our organization as I look around. We have systems that help us trace crime guns and issue licenses to firearms manufacturers, distributors and dealers. We have systems that help us track the nearly $13 billion in revenue that I spoke about earlier in excise taxes from alcohol and tobacco products. We have systems that track the labels and formulas that we approve to put on those products. We have systems that analyze trends in explosive incidents, both domestically and internationally. We have systems that analyze our forensic science evidence and systems that help with criminal intelligence analysis as well. We have systems, everyday systems, that help our agents and inspectors manage their day- to-day case work load as well.

The Internet, another good example. If you look at, go to www.atf.treas.gov and look at today's web page for ATF, you'll find any number of ways that we're using to try to get information out to people on how to deal effectively with our organization, and where we're trying to take the organization, and what we're all about.

And all these processes that I've just talked about really have evolved from processes that were assisted by technology to processes that are being performed with technology today. And that's how it's evolved. And that reliance on technology in those operations will only continue to grow in the future in my opinion.

Mr. Lawrence: Technology is a rapidly changing field and you came to ATF as the Deputy CIO. How has technology changed your role?

Mr. Schambach: The role has evolved actually much the way I described earlier, that the CIO role in general has changed. The position was actually created in 1995 in ATF and, again, I think our leadership was a little bit ahead of the curve in recognizing the need for that strategic position and was created as a full member of the executive staff. It sits at the table where the real decisions are being made. And that was in recognition of the emerging importance of technology again on the organization.

And I have a continuing challenge of knowing not only how the technology works, but how it can be brought into the organization and moved, used most effectively in our main missions. And that's the role that I enjoy the most, working for an organization that has a serious mission and knows that it needs technology to assist them in getting there.

Mr. Lawrence: Treasury has 14 bureaus of which ATF is one. How do the CIOs of these 14 bureaus coordinate their initiatives and investments?

Mr. Schambach: Yeah, it's interesting that you would ask that question. We have an active CIO council at Treasury made up of all the CIOs from the bureaus and we meet faithfully once a month. Jim Flyzik, our departmental CIO, chairs it and I happen to co-chair the counsel. And the purpose is really to provide a forum for all of us to coordinate our activities and to find commonalities, where we can, between what we're trying to do in our organization.

But the issue of governance, which I think gets at your question, is one that we've recently been trying to grapple with. In the interest of trying to move us from a place where we share war stories and learn lessons from each other to a stronger place of trying to move the entire department in a singular direction, and without some kind of governance model, that's hard to do. And we're frankly struggling with that now.

And while it's true that we all have in a way unique missions among each of the bureaus, and if we didn't, we wouldn't exist, and that they sometimes present unique needs that sometimes demand unique solutions, I don't really buy the argument that we're so unique that we have to do our own thing within each of the bureaus. And that's what I'm trying to push for in the governance issue. That there's so many cases where that uniqueness is not present, where a general solution would fit everyone just fine and we could consolidate our buying power and encourage the market in a particular direction just by the sheer strength of our market power. That's something I don't think we're taking advantage of today and as one of the CIOs, I'm pushing us in that direction.

Mr. Lawrence: And the CIOs are by and large very smart group of people, and the argument seemed rather obvious. What prevents you from being successful?

Mr. Schambach: I think it's a need to protect the turf in their own bureau and their own decision-making process. They don't, they certainly don't want to give us major decisions that their bureau heads should be making, or that their own executive staff should be making.

But at the same time, I think if we formed directions that were consolidated and for a common good, that those were directions that they could then endorse and support in their own decision process within their bureau. It's not a mandate as much as an encouragement in a direction that makes sense.

Mr. Lawrence: Well, you did mention much about the unique needs. How are the technology needs at ATF unique, and how do they differ from the other bureaus?

Mr. Schambach: I think that's what my point is. You know, each of the bureaus is lead by a dedicated executive team. We're trying to do the right thing for the organization.

What is unique is the value that each of them puts in technology, and where technology fits in that organization. And that's really only a decision they can make. What is the priority of technology dollars versus manpower or other resources that they need to have?

But I believe if we put a bit more focus on the common use technologies and where they apply and consolidate that buying power again, they can have their decision making process and place the priority on the investment dollars that they have, and still have a common view that we can all move toward.

Mr. Lawrence: Well, let me ask you about something you mentioned earlier. You talked about "seat management." Could you tell us what that is?

Mr. Schambach: Yeah. Many people describe it as leasing a computer or desktop environment, and it's not really a leasing program as much as it is a concept of how you provide desktop computing resources to all the employees in the organization that need them.

In this day and age, the knowledge workers in government, we're beyond the argument, does every employee need a computer? If you're a knowledge worker, it's a given that you need a computer, and you need access to information. And seat management is a way to break away from the traditional approach of we have the whole organization to outfit so we'll buy 25 percent of our needs this year and 25 percent and by the end of year four we'll have everyone outfitted. And what happens is you never really get to an end point where everyone has the same capabilities, and you're constantly dealing with a flow down of moving technology from higher level workers to lower level workers on its way out the door.

And seat management for our organization was a chance to outfit virtually every employee in the bureau with a standard desktop environment and realize the advantages from Day One of having that environment in place where there's nothing unique about different parts of the organization. When we look at an IT solution that fits our environment, we know automatically it fits everywhere in our environment. We don't have to make distinctions between the haves and have nots in our organization.

Mr. Lawrence: ATF has been recognized for being one of the first, if not the first, to actually go and have a contractor provide seat management.

Could you tell us how that came about?

Mr. Schambach: Yeah. Well, to my knowledge we are the first to do this on an enterprise-wide bases, and we basically competed the GSA schedules in accomplishing that. We preexisted the GSA seat management contract that's since been awarded and is on the street now. Again, it was driven by a strong desire in our executives to renew our infrastructure, to put computers in the hands of our employees. And they didn't have an appetite for doing only part of it now and part of it later. And then the question of refreshing technology. You find the dollars today to do it only to turn around several years later and have to find the dollars all over again.

And rather than look at it as a capital intensive investment, we're trying to built it into our budget base as a month-by-month, year-by-year, relatively flat investment that we realize we're just going to continue to ride into the future.

Mr. Lawrence: One of the big concerns about giving a large contract to a private enterprise to provide these services is just how well they'll deliver the services.

How did you worry about that and ensure they would do a good job?

Mr. Schambach: Well, there's no doubt that that's a risk. And I think fortunately in our case, the whole concept of seat management was still early in its stages and our primary vendor, Unisys Corporation, realized that there were risks involved, but they entered into this with us really as a partnership realizing that we didn't have all the answers, and they didn't have all the answers.

But we knew what our goal was, we knew what our requirements were, we had them nailed down very tightly, and as long as they worked with us to achieve those requirements, then the partnership was working. And I have to say, from the very get-go, it's proven to be a very positive experience. We're holding them to the requirements that we've specified right up front but giving a little bit of grace on how we got there and what methods that they chose to do it. Because after all, we want them to use their commercial practices to solve our problem and not try to duplicate what we were doing as a government agency.

Mr. Lawrence: Great. We got to go to a break. We'll be back in just a minute with more of the Business of Government Hour. (Intermission)



Mr. Lawrence: Welcome back to the Business of Government Hour. I'm Paul Lawrence, a partner in PricewaterhouseCoopers and tonight's conversation is with Patrick Schambach, Assistant Director, Office of Science and Technology, and Chief Information Officer, Bureau of Alcohol, Tobacco and Firearms.

What are some of the most pressing technology challenges facing ATF today?

Mr. Schambach: Well, there certainly are a number of them. First of all it is to continue to fund our infrastructure. I talked a little bit earlier about the importance of infrastructure and how our organization views it, and that's an expensive proposition. So one of the challenges is to find the funds to continue to support that and at the same time, have discretionary money for the new developments that need to occur in the organization.

Second challenge is recruiting and retention. I know, we'll talk a little bit more about that, but technical and scientific personnel are becoming harder and harder to come by and that's what my office is all about, and part of my responsibility is making sure we can continue to support those functions. Cyber security and infrastructure protection, an obvious one in the way things are under attack these days, and there are certainly elements out there who don't want our organization to be successful at what we do and so we're always on someone's target list for one reason or another.

And then we're coming up, as I mentioned, in our desktop outsourcing, and we're coming up on the three-year research of that technology and that presents another set of challenges and decisions to be made for us.

Mr. Lawrence: Well, you just mentioned the importance of attracting IT workers in a tight labor market. How do you go about doing that?

Mr. Schambach: Well, Paul, I frankly believe that money is not the only motivator of attracting and retaining employees. Nor is it primary motivator for a lot of people. I think a belief and an affiliation and the mission of the organization probably tops a lot of people's list.

So if there's things that I can do to make our employees have a stronger sense of belonging to our organization and where they fit in and the promise that they bring to the future and try to build that confidence in our employees, I think that strengthens their attachment and their commitment to the organization.

At the same time, we can't ignore the financial side, and I can't allow the gap between government and private industry to continue to widen. And we're taking steps there as well. We're early adopters within Treasury of authority that we got recently for the law enforcement bureaus to enter into a paid demonstration project. It's essentially an exemption from the Title V pay restrictions that exist for most federal organizations and the normal GS, General Schedule, pay plan that exists. And it includes in our case a pay banding scheme where employees are grouped in bands of pay rather than in fifteen discrete general schedule grades that existed in the old system. And it's also a pay-for-performance scheme in that they're pay is directly impacted by their performance evaluation at the end of each period.

It also gives us the ability to hire someone into the organization at a higher rate than the general plan use to and also to accelerate someone in pay faster than the old system use to as well. And then once they're on board we have various bonuses under the plan: recruitment bonuses, retention bonuses, relocation bonuses, education bonuses, a number of authorities that we've built into the pay demonstration project.

So generally it gives us more pay flexibility and the ability to act more like a business when it comes to salary and other financial remedies.

Mr. Lawrence: Does it help close the gap if the right bonuses were provided and the right choices are made as the bands, would the gap be closed?

Mr. Schambach: I certainly think it does, and I think our employees would agree of the 400 or so employees that were eligible for the pay plan in our bureau. We had over 97 percent voluntary participation rate. So, I certainly think that people recognize it as a start to closing that gap.

Mr. Lawrence: And is it too early to tell how quickly people can move through the pay bands? I think one of the issues that comes up around IT workers is they find themselves trained in the hot skill and are lured away by potentially large increases in salary, and I'm wondering if you'd be able to do that.

Mr. Schambach: That is still a little early for us. We're just our first year into the plan. We do have recent examples, however, of retention bonuses where employees have come in with offers in hand from other organizations that we've been able to match or at least come close enough to encourage them to continue staying with our organization.

Mr. Lawrence: And you indicate it's a demonstration project so it has not been rolled out widely?

Mr. Schambach: Well, that means it has a definite time frame to it. In our case it's a three-year project and we're in actually the second year of the authority but the first year of implementation. So, in another year we'll be seeking the approval to perhaps extend it and go on into the future with it. Or to possibly broaden it to a larger segment of the population.

Mr. Lawrence: Is it just at ATF?

Mr. Schambach: Right now, the authority exists in three bureaus, Customs, Secret Service and ATF, but we're the only ones who have implemented it so far. And it's limited to scientific and technical positions within those bureaus.

Mr. Lawrence: How are technologists at ATF able to get training in new technologies to stay abreast of what's going on?

Mr. Schambach: Actually, that's one example with the Treasury CIO Counsel I spoke about earlier where we are trying to consolidate our efforts and team together with what our training needs are in driving some of the prices down. It's an expensive proposition to put IT workers through the training.

And while we rely on contractors for a lot of our very specialized expertise, there's a limit on how far you really can stretch that risk. Now, we have to have at least a certain percentage of people within the government ranks that are trained in these technologies as well. So we're trying to consolidate basically with the other bureaus, within the Treasury and force some of the prices down.

And we also committed this year, across the entire Department, to try to spend three percent of our IT dollars in training, allocated directly for that purpose. That's a higher percentage then we've ever been able to achieve, but something that all the bureau CIOs are committed to trying to achieve this year.

Mr. Lawrence: When you think about the future of ATF, what do you think will be the major challenges that the bureau will face?

Mr. Schambach: Well, I think first of all we're facing more sophisticated criminals with more sophisticated schemes in the future. We're already seeing ways that technology is being used by the bad guys against us as an organization. So we're having to develop a whole pool of talent and computer-based crime solvers, people with the skills to deal with not only the traditional crime, but once you insert the technology into how that crime is committed, are we able to unravel that and to prove a case.

On a broader scale, when you think about alcohol, tobacco and firearms, it's hard to think of any other three products with which Americans have more of a love-hate relationship. So everything we do as an organization is scrutinized and, in many cases, criticized by one side of that issue or another. So, I think the broader issue and challenge that faces the bureau is to uphold our responsibilities under the law and not to be swayed by opinion of whether laws should be supported or not supported. Our job isn't to pass the laws. Our job is to enforce the laws that are part of our jurisdiction.

Mr. Lawrence: And what advice would you give future CIOs or the next group of CIOs coming up through the ranks in terms of what they should be doing now, thinking about and learning to be more effective?

Mr. Schambach: There's no doubt they need to know about technology and keep ways in mind of how they're going to stay abreast of technology. They also need to have a sense of what the organization is trying to accomplish and hopefully be a major player in trying to mold that direction of where the organization is heading in the future.

And I think back to my issue of being optimistic that I mentioned earlier. I think a lot of the challenge of looking at the future and taking an organization in the direction, is having the optimism that our best efforts are going to achieve something. They're going to get us in some ways toward the goal that we've set for ourselves.

And optimism is contagious with people. You know, employees begin to believe that we really can do this, and if the employees believe in it, then you can do it because that's the only way an organization makes progress is through its people.

Mr. Lawrence: And what advice would you offer to somebody perhaps entering the job market now and given a choice between say perhaps going to work for government and maybe even ATF or some other place? How would you counsel them to think about perhaps a choice between a public sector career and a private sector career?

Mr. Schambach: Well, actually I get that question quite a bit from young people who are looking at possible federal careers, and I have to counsel them that there is certainly a lot of satisfaction in public service and there are few organizations where you get the level of responsibility that you do, at as young an age as you do, often in the federal sector. Where financial gains might be higher in the private sector, the level of responsibility and the ability to really impact an organization, I think, comes a lot sooner in the career for a public servant than someone in the private sector. You may wait an entire career for the opportunity to really be a decision-maker in the private sector, where it can happen much more quickly in the public sector.

Mr. Lawrence: Well, I'm afraid we're out of time Patrick. I want to thank you for spending so much time with us this evening. I've enjoyed our conversation very much.

Mr. Schambach: Thank you, Paul. So have I.

Mr. Lawrence: This has been the Business of Government Hour, Conversation with Government Leaders. I'm Paul Lawrence, a partner of PricewaterhouseCoopers, and the co-chair to PricewaterhouseCoopers Endowment for the Business of Government. To learn more about the Endowment's programs and research into new approaches to improving government effectiveness, visit us on the web at www.endowment.pwcglobal.com. See you next week.