Did you catch the big IRS announcement? On 2 February and less than 12 weeks before the US tax filing deadline, a temporary but comprehensive computer systems outage took out many of its tax processing platforms. No 2015 tax returns could be filed electronically, a problem potentially impacting 27 million taxpayers. Additionally, refunds from 2015 returns would be delayed.
IRS tax payment processing systems are now back online and the agency has promised that the US taxpayer will feel minimal impact when they e-file their 2015 tax returns. While the delays amounted to no more than 24 hours, everyone is keen to find out what happened – and why?
Who’s to blame?
The agency blamed an underlying hardware failure preventing the processing of electronically submitted, e-file returns. IRS commissioner John Koskinen indicated that all ‘other IRS services’ were available and most taxpayers would receive their refunds within the usual 21 day period after electronic submission. Helpful comments for sure – less useful was the Where’s My Refund’ web inquiry feature that went offline when most needed.
But the outage still leaves many questions unanswered. Was this event preventable? Are older IT systems truly to blame? How does the IRS avoid a similar event in the future?
Fact and Fiction
Fact: Hardware failures occur in every sector. In many cases, mitigation rather than prevention is the watchword. So, did the IRS have no disaster recovery or failover systems? Not according to IRS officials; these systems continue run on isolated, older computing platforms running application programming languages such as COBOL. Funding cuts have delayed most application modernization projects and some media outlets and a few IRS officials have blamed the agency’s continued use of ‘older’ and ‘outdated’ technologies such as COBOL.
Unfortunately, their fact is mostly fiction. Take online or mobile banking. Most of us want to interact with our bank when we want on our preferred device. But have normal banking practibces significantly changed your banking providers’ processes just because you’re interacting with them digitally? Not really. Core banking processes are regulated and rarely change. While your bank has provided a new way for you to interact with their services, the backend processes are generally the same.
The same is true of booking an airline ticket. Behind the mobile interfaces of Expedia, Travelocity, and Kayak is a core airline booking system that manages ticketing across the various airline carriers. We experience the colourful overlay of a core system which has been in place for decades.
And what do banking apps and airline booking systems have in common? They both leverage core business applications written in that multi-decades old programming language, COBOL.
Yes, COBOL – the original programming language remains one of the most portable, flexible and scalable languages in the industry, particularly where high volume transaction and data processing is required at rapid speed. There are few viable alternatives. Perhaps this why the IRS continues to rely on its COBOL applications – they work, and work very well.
The Move to Modernize
So, could COBOL, really be a contributing factor to the IRS’ system availability issues? No. Blaming the programming language is as convenient as it is unhelpful What’s needed is a comprehensive modernization strategy that blends core strength, namely the current business rules and application logic, with next gen technology and platforms. This enables faster innovation with less risk. The IRS has a successful application portfolio – a suite of feature-rich, high performant transaction processing applications built for scale, speed and precision – to move into the future.
They could easily be ported to new platforms including distributed environments, .NET, the Java Virtual Machine or even the Cloud. This would provide new channels and enable a greater elasticity to meet increased future demand or negate unexpected IT failures. The IRS’ application investment could be extended for decades to come.
It’s been done before
Check out the COBOL modernization initiative at the US Small Business Administration, an agency now well positioned for future growth and leverage next gen technology. Or how about the City of Miami or Marin County, CA who have also undertaken similar COBOL application modernization projects? Modernizing core business systems is can be straightforward and almost risk-free and it all begins with a strategy geared towards leveraging past success and unique attributes.
So, what’s next for the IRS? With all systems now back online, its busy processing returns and issuing tax refund payments. But is the agency prepared for its next outage? Will they have the modernization plan needed to mitigate foreseen and unexpected challenges? There are many paths to modernization, but only one approach will truly enable the IRS and others to modernize core business systems while preparing for the future.
It’s time to turn yesterday’s investment into tomorrow’s new innovation.