McShan leaves government after 30 years

When Clyde McShan II began government work in 1965 as an auditor in the Agriculture
Department, he had no idea his career would lead him down a path of systems integration
and cutting edge technology. But it did.

In his three decades of government
service, McShan rose to the rank of deputy chief financial officer at the Commerce
Department before retiring and taking a job in the private sector last month. He said that
his tenure gave him a lot of insight into how government can work more efficiently in
regard to systems use.

One of the biggest ways the government wastes money, McShan said, is by replicating
services in different agencies. As a result, he said, it became one of his obsessions.

To end the trend, McShan played a lead role in establishing the Agriculture
Department's National Finance Center (NFC) in 1972. When the project began, people were
skeptical that a single agency could handle payroll and accounting functions for multiple
government offices as NFC proposed.

"We really started with nothing," McShan said. "And we built one of the
best-managed administration process centers in the world."

Once the New Orleans center became operational, other government agencies began to come
on board and use its services. "After we proved ourselves, people began knocking on
the door," he said.

Today the center handles the payroll systems for the departments of Agriculture,
Commerce, Justice and Treasury as well as the Smithsonian Institution. A total of 43
government departments outsource administrative processing to the center. The center also
manages the $40 billion Federal Retirement Thrift Savings Plan, a 401k plan for government

McShan served as director of the center from 1981 to 1993. From that job, he moved to
Commerce, where he served as deputy CFO until last month.

He saw his role at Commerce similar to what he had done at Agriculture. So he set about
eliminating legacy systems and creating applications that could benefit Commerce as well
as other government agencies. As part of his job, he oversaw the department's Springfield,
Va., computer center.

"I was doing on a smaller scale what I had done before for Agriculture," he
said. "This is a hot topic right now. Government agencies are franchising their
services to other government offices. They are eliminating internal monopolies."

Under mandate from the Office of Management and Budget, all agencies are revamping
their data center operations. The administration's goal is to shutter half of the 200 data
centers civilian agencies now in operation (see story, Page 1).

McShan lauds this effort and said the government needs to run its operations more like

"The more government has to earn its way, the better off we are," he said.
"To do everything internally is not the way to go."

The Information Technology Management and Reform Act helped put some of these ideas in
the spotlight, McShan said, but there is still a long way to go. McShan said he would like
to see the government create three or four large data centers around the country that
would handle payroll and billing for all civilian agencies.

It is a suggestion, though not necessarily a popular one, that he has often made.
"Some people worry about losing control over their agency if they allow some
functions to be handled by others," he said.

McShan believes that one day his vision of a centrally run finance center for the
entire government will be realized. "It may happen long after I'm gone," he
said. "But it will happen, and the government will save millions of dollars."

McShan, a New Orleans native and a graduate of Southeastern Louisiana University with a
bachelor's degree in accounting, will return home for his next venture. Hired as a vice
president with Computer Data Systems Inc. of Rockville, Md., McShan will work on building
CDSI's market in New Orleans.

And the key to his success, so far? Simple, he says: "People are the most
important resource in any agency. You need programs to develop loyalty, and you end up
with people working harder than what is expected of them."

He related a story from his years at NFC. "When I worked with the National Finance
Center we took people at the clerical level, some of them without college degrees, and
trained them to be programmers," McShan recalled.

"People looked at the agency and said we were in over our head. But if you expect
excellence out of people and treat them with respect, that's what you get. People don't
forget that."

About the Author

John Breeden II is a freelance technology writer for GCN.

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