INTERVIEW: Stephen Hawald, Education's dean of integration

Modernizing loan systems takes vision

As chief information officer of the Education Department's Office of Student Financial Assistance, Stephen Hawald is the systems watchdog over the $300 million modernization of the department's loan program.

This summer, Education released its modernization blueprint, which drew heavily from the Prime modernization project under way at the IRS.

After the release of the plan, the department in August chose Andersen Consulting of Chicago to oversee the modernization and migrate OSFA's 11 stovepipe systems into a single systems infrastructure.

Hawald joined OSFA in September. He had been vice president and CIO of United Healthcare Corp. of Minneapolis. Before that Hawald ran his own company, International LAN Technologies Inc. of Arlington, Va., which he founded in 1990.

He sits on the Government Information Technology Services Board and is a board member of the Society of Management's Capital Area Chapter.

Hawald has a bachelor's degree in accounting and electrical engineering from the University of Maryland-College Park and a pair of master's degrees, one in technology management from American University and a second in accounting from the University of Maryland-Baltimore County. He is pursuing a doctorate in IT at George Mason University.

GCN staff writer Frank Tiboni conducted this interview at Hawald's Washington office.

GCN:'How have you enjoyed your first months on the job?

HAWALD: I'm enjoying it a lot. This is the first performance-based organization (PBO) in government, and it really allows us to rethink how we do business-to-business processes within our organization. That is what caught my attention to even entertain coming to work for government.

The PBO legislation from Congress lets us be measured by the better servicing of our products and services from our organization. With that in mind, Congress can literally go through all the bureaucracy and see that we use business processes that make sense.

The people that I have in the chief information officer's shop are actually very good. What we're fixing is our processes. We're going to showcase the best practices from the commercial setting. We'll show the types of skills and tools with technology and apply those techniques with business processes so that we are streamlined and more oriented toward the customer.

That's the big emphasis at the Office of Student Financial Assistance. So with the good people here and the new processes and tools, we should be fine.

GCN:'How do you see your role as CIO of OSFA? What would you like to accomplish?

HAWALD: I see my role as the visionary of the organization, giving us the forward thinking in the way we use technology to deliver products and services to our customers.

I want to always be using the latest technology that can improve services and satisfaction and reduce costs. Then we'll be able to run a much better and more efficient organization for our customers.

What I hope to accomplish is to turn around the processes that we have in place to streamline them with new technology. I also want to consolidate the number of contractors and systems down to a point where it is very efficient using electronic commerce.

GCN:'What's up with the loan services' modernization, and what are some of the new and interesting information technology programs?

HAWALD: We have Andersen Consulting of Chicago as our modernization partner. We have been putting a lot of our attention into the infrastructure and framework of how we're going to go about the modernization.

The plan is no more than a framework, a guide to good business practices. It's a journey plan with specifics on how to do the best practices.

With that framework, kind of like a constitution, we'll have a living document that we can use to keep modifying our performance plan, as well as specific objectives and projects.

One of the programs we have right now in the IT shop focuses on how we can better serve our schools with the consolidation of the loan origination, loan disbursement and loan consolidation programs.

We are looking at commercial, off-the-shelf applications where we can use one system to get rid of five legacy systems. We're near to making a decision. We did a focus group to evaluate how we handle those services and products now and how we should handle them in the future.

GCN:'How is the partnership between Education and Andersen working?

HAWALD: I'm really pleased we have Andersen Consulting as our modernization partner.

One, they're a first-tier consulting firm. Two, they're very good at doing strategic and high-level thinking and working on design projects. Three, they don't offer products and other services to sell, so they'll be more independent and objective from the standpoint of the technology and the framework that we need.

They bring skills that we don't presently have, such as enterprise data warehousing, advance call center techniques and e-commerce strategies. I meet with Andersen twice a week, on Tuesday and Thursday afternoons, with a one-hour briefing of what's been accomplished and to address any issues.

GCN:'You're also working with Highway 1 as a nonprofit consortium in Washington. Can you describe the project?

HAWALD: We have a pilot now that will let us do an integration of all our systems so that we can turn around and extract data, then put it in on view for the student.

The program entails using Extensible Markup Language and partnering with Microsoft Corp. to build the front-end and e-commerce interfaces.

GCN:'How is the new management team working out at OSFA?

HAWALD: This is probably the second or No. 1 reason I'm here. I feel very strongly that the mission of putting students through school is a good one, along with the PBO concept.

The flip side for me entertaining the idea of moving from the commercial to the government sector was the management team. We call it the OSFA Management Council. It includes the general managers for students, schools and financial partners, a chief financial officer, me, and the council's chairman, chief operating officer Greg Woods.

I think we have the best people we could possibly find for every one of these positions.

We have J. Barry Morrow, a seasoned executive vice president of Sallie Mae who knows the channels and banks inside and out, as general manager of financial partners.

We have G. Kay Jacks as the general manager for schools. She has worked as a student financial aid officer for 25 years and knows exactly what the schools need and where they come from with their problems and issues.

We have Jeanne Van Vlandren as general manager for students. She has experience at the state and federal level in dealing with entitlement programs, specifically a lot of hands-on experience with Education in dealing with students.

We're in the process of filling the CFO position, but we have Linda Paulsen as acting CFO. She brings a lot of experience from financial systems, as well as the Inspector General's Office. Her background has been strategic in moving us to financial systems from Oracle Corp. so we can do our planning and budgeting.

GCN:'What are your initial goals for the job?

HAWALD: With Andersen and my new managers, I want to solidify our framework, technology, tools and architecture technologies. I want to outline a three- to four-year plan to finish the modernization.


' Age: '43 years young.'

' Pets: 'One 18-year-old cat I brought back from the Caribbean.'

' Last book read: Gardens Are for People by Thomas D. Church

' Favorite Web sites: and

' Leisure activities: Snowboarding, sailing and gardening

' Best job: Dive sports operator

The other big thing we'll be doing is completing a skills assessment to identify gaps so that we know where to apply training for our people in the CIO world. We'll determine the skills that they have and what we're looking for because we now have a framework of how we'll do business in the CIO's Office. Whatever deficiencies we have with our employees, we can build a training program for them with Web-based training software. That should bring us up to speed to what we're looking for.

We'll get all the tools and framework I would hope for from the good deliverables. We will have a new COTS application that can handle the loan origination, disbursement and consolidation. Then we can get into servicing.

Another big area is the creation of a virtual call center. We had 12 call centers across the country. Just as we did with our mainframes, we consolidated all those data centers into one contract, and we're saving in the neighborhood of 30 to 35 percent on each contractor on cost because we're doing it in scale.


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