Wisdom in IT decision making is the acid testÂ for effective governance.
In most public sector organizations, InformationÂ Management/Information Technology (IM/IT) plays a vital role in the delivery ofÂ key programs and services. Many program branches spend millions of dollars onÂ IM/IT initiatives. Approximately half of all government capital expenses alongÂ with the associated FTEs (full-time equivalents) are allocated to IM/IT toÂ enable the business vision to be achieved. Yet many of the processes and bestÂ practices needed to ensure the most effective use of these resources are notÂ fully implemented. As a result, there is much duplication of effort; decisionsÂ regarding the allocation of IM/IT resources are not made from a branch- wideÂ perspective; and some of the applications under development are behind schedule,Â over budget and not to the satisfaction of clients. The return on investment forÂ the IM/IT funds spent leaves much to be desired.
To maximize the contribution of IM/IT in theÂ delivery of federal public sector programs and services, there is a need toÂ enhance the effectiveness and expediency of decision making through a moreÂ effective IM/IT governance framework. Effective IM/IT governance will ensure allÂ IM/IT initiatives are managed from an organization-wide perspective andÂ contribute to the business goals of the public sector organization.
Elements of an IM/IT governanceÂ framework
A governance framework includes three elements:Â principles by which to work, a structure through which to govern and a processÂ to make it work.
To be used effectively, the IM/IT governanceÂ framework must adopt the following principles of operation:
For IM/IT governance to be effective, there must be aÂ structure in place that allows maximum participation while ensuring soundÂ decision-making practices. The roles and responsibilities of the majorÂ stake holders in the IM/IT governance decision-making process are describedÂ below.
The Management Committee (MC) is the executiveÂ committee of the program branch. The MC is ultimately responsible for settingÂ the business directions for the branch. It is the ultimate decision-makingÂ authority on all IM/IT issues, approving the branches’ IM/IT strategic directionÂ and priorities, and approving the overall IM/IT budget and initiatives. Its keyÂ responsibility is to approve specific IM/IT projects, including funding andÂ human resourcing.
The Information Management Committee (IMC) includesÂ representatives from the informatics organization, the program branch and theÂ regions. This committee recommends most major decisions related to IM/ITÂ investments in the branch to the MC based on a thorough review of the businessÂ case.
In addition to these committees, the governanceÂ structure centers on several key organizations within the department. One ofÂ these, the Information Management Organization (IMO) is the user organizationÂ charged with assessing IM/IT needs, completing and updating an IM/IT operationalÂ plan, and assessing and addressing associated risks. It monitors projects thatÂ are underway and resolves problems related to individual projects orÂ multi-project priorities.
In addition, it coordinates all IM/ITÂ initiatives and provides quarterly status reports on all IM/IT initiatives toÂ MC. It also maintains, monitors and reports on the central IM/IT budget andÂ recommends allocation of funds to IMC. In addition to these, each IM/IT projectÂ has a steering committee. The steering committee’s role is to oversee the workÂ of the project team, ensure that the project remains on schedule and withinÂ budget, and keep the project in sync with the business requirements it is meantÂ to address.
This framework proposes a seven-step process forÂ launching new IM/IT initiatives within the branch or department. The best way toÂ illustrate this process is to present the steps in sequence, as they would applyÂ to a new candidate initiative. (See the Appendix, page 10, for a graphicÂ illustration of the governance process.)
Project proposal development
Anyone in a program branch may conceive of an ideaÂ for a new IM/IT project. The first step is to enlist a senior manager willing toÂ act as a project sponsor should the project be approved. The idea must beÂ documented in a standard project proposal format, a brief two-to-three pageÂ document outlining the opportunity/problem, the project’s objectives and scope,Â and the expected benefits. The project proposal format and content are furtherÂ described in the Governance tools section (see page 6). The proposal isÂ submitted to IMO which reviews it against a number of criteria, including itsÂ alignment with the business and IM/IT directions of the branch/department. IMOÂ forwards those ideas that are promising to IMC for further consideration.
Project proposal approval
IMC can either give the project proposal the go-aheadÂ to proceed to business case development or reject it with reasons. RejectedÂ proposals may be amended and resubmitted.
Business case development
The next major step in the approval process is theÂ development of a business case. The business case uses a standard format toÂ provide the information necessary from a business and technological point ofÂ view that will lead to IMC approval. The business case presents a detailedÂ examination of the opportunity or problem, the project’s objectives and scope,Â the estimated cost, benefits and risks. The format and content of the businessÂ case are further described under the Governance tools section (see page 6).
The project sponsor assigns a project manager (PM) toÂ prepare the business case. A subject matter specialist (SMS) can also beÂ assigned to assist the PM in this. The departmental informatics organizationÂ also assists in preparing the business case by providing a preliminaryÂ determination of possible technical solutions.
Business case approval
Once the project sponsor has reviewed and approvedÂ the business case, it is submitted to IMC. Then IMC reviews it to ensure that itÂ aligns with the business vision and strategic IM/IT priorities of the branch andÂ department, and that its overall budget and timing are reasonable. BusinessÂ cases meeting these criteria are recommended for approval to MC. Such approvalÂ establishes the IM/IT initiative as an official project, with a budget only forÂ the next phase, that is, for user requirements/technical solution development.Â From this point on, budgets are approved only on a stage-by-stage basis. ThisÂ project management discipline is used as the primary engine in the governanceÂ process to ensure the relevance and success of the initiative.
User requirements/technical solutionÂ development
Approval of the business case is tacit approval toÂ proceed to the next stage – user requirements/technical solution development. AÂ project team composed of a technical and a user project manager is assembled.Â The user project manager documents all required business functionality in a UserÂ Requirements Report. The technical project manager, from the departmentalÂ informatics organization, focuses on defining the best technical solution forÂ the client, assessing the proposed solution against operational, support andÂ maintenance implications and against departmental standards and architectures.Â Where the appropriate technical solution has serious implications on theÂ departmental IM/IT infrastructure, it is the responsibility of the technicalÂ project manager to obtain the necessary approvals from the departmentalÂ informatics organization. This information is documented in the TechnicalÂ Solution Report. Together the user project manager and the technical projectÂ manager also produce the project plan and budgets (which include class BÂ estimates).
User requirements/technical solutionÂ approval
Approval of the user requirements must be obtainedÂ from the project sponsor, and approval of the technical solution must come fromÂ the departmental informatics organization. Once these approvals are obtained,Â the proposed solution and accompanying project plan/budget are submitted to IMCÂ for approval. IMC may accept, reject or insist on revisions to this plan andÂ budget. IMC approval means that the project plan and budget are forwarded to MC,Â which also has the right to reject, approve or revise it. If MC’s decision isÂ positive, the project then proceeds to its remaining stages.
The final stage in this governance process is theÂ implementation work that leads to completing the project and deploying theÂ resulting solutions. This may involve augmenting the project team as required.
Throughout the project, IMO and the project sponsorÂ review and assess functional and technical progress and adherence to budgetÂ monthly and at the completion of each remaining stage. Lack of progress orÂ significant deviations from the project plan will result in corrective actionÂ being recommended to IMC and/or MC.
Implementing this governance process on an ongoingÂ basis requires clear criteria to determine where and when it should be applied.Â It is suggested that it should apply to IM/IT initiatives that meet theÂ following criteria:
IM/IT initiatives, which are “stand-alone” inÂ nature, do not involve the sharing of data and are not subject to the governanceÂ process.
IM/IT governance development andÂ implementation process
To realize the full benefits of an IM/IT governanceÂ framework in program branches, a number of requirements must be met to provideÂ improved direction and more cohesion to the operation and use of the governanceÂ process.
There are a number of underlying policies required toÂ make this framework an effective tool:
In many programs there isÂ no central focus or control of IM/IT responsibility. As a result, there may beÂ no effective IM/IT planning at the strategic or operational level. This resultsÂ in projects not being delivered on time or within budget or to the satisfactionÂ of clients. Financial resources will have been spent on IM/IT initiativesÂ without an effective return on investment. Informed decisions about IM/ITÂ investments may have been lacking. Some program areas may be making investmentÂ decisions without a full appreciation of the business or technical consequences.
To rectify this situation and to professionally manage IM/IT resourcesÂ in the branch, responsibility for all IM/IT functions must be clearly definedÂ and consolidated in the new user informatics organization. IMO responsibilitiesÂ include operational planning, implementation and operation of the governanceÂ framework, budget monitoring/reporting, project oversight and change management.Â As well, the reporting relationship of the new organization must be finalized.Â Due to the importance of IM/IT as an enabler of programs and services, theÂ direct reporting relationship to the Assistant Deputy Minister (ADM) should beÂ established.
The completion and approval of the strategicÂ information management plan is needed to provide the vision and direction forÂ IM/IT initiatives required to achieve the business vision for the programÂ branch. The completion of this plan provides the priority and sequence of IM/ITÂ initiatives needed to support the business vision. It also provides the means ofÂ assessing the relative importance of the many IM/IT proposals that are beingÂ evaluated through the governance process.
Proactive identification of IM/IT needs will help toÂ ensure the availability of informatics resources, improved service and theÂ likelihood that projects will be delivered on time, within budget and to theÂ satisfaction of clients. The use of ad hoc methods to assess, plan and carry outÂ major IM/IT projects greatly increases the likelihood that serious problems willÂ be encountered.
One of the key requirements for the improvement ofÂ the governance process is controlling the annual IM/IT budget to ensure thatÂ informed investment decisions which support the business vision of the programÂ branch are made. This will ensure that investment decisions are made from aÂ long-term perspective, with knowledge of the consequences from a business orÂ technological perspective.
Monitoring and reporting on an IM/IT budget,Â along with the power to recommend adjustments, will provide the controlÂ necessary to ensure that all IM/IT investment decisions benefit the branch as aÂ whole. It will also help to provide an effective return on the investment ofÂ IM/IT funds. Once an IM/IT initiative has been approved through the governanceÂ process and becomes an official project, the funding is allocated and becomesÂ the responsibility of the project sponsor and the project manager.
Business process requirements
A number of best practices need to be implementedÂ across the program branch to ensure the effective operation of the governanceÂ framework. These best practices include:
Project managementÂ requirements
Sound project management is an obvious requirementÂ for successful governance. The following identifies some of the key requirementsÂ often not considered:
The project roles/responsibilities must be clarified,Â understood and carried out effectively so that each project operates under theÂ same parameters. These should become the standard set of roles andÂ responsibilities for all IM/IT projects. The major project players include theÂ project steering committee, the user project manager and the IT project manager.Â Where IM/IT projects are applications, these roles and responsibilities shouldÂ also be aligned with the methodology being used for either custom applicationsÂ or commercial off-the-shelf software.
The most qualified and effective project managersÂ available must lead projects, from either the program area or from Informatics.Â The project must be staffed with dedicated subject matter specialists from bothÂ the user environment and from Informatics, especially on projects related toÂ application development. Without knowledgeable project managers and subjectÂ matter specialists effectively representing the interests of the program branch,Â there is a much stronger likelihood that projects will not be delivered on time,Â within budget or to the satisfaction of clients.
Project management practices must employ sufficientÂ assessment points or “gates.” After a business case has been approved, manyÂ projects are allocated a budget to complete the remainder of the project. AtÂ this point, there is not a complete understanding of user requirements orÂ technical solutions. The budget estimate is inaccurate, and a full understandingÂ of the complexities of the project is not possible.
A number of assessment points are required to ensureÂ that the project’s progress reflects user needs, that the most appropriateÂ technical solutions are used, that an effective return on the investment isÂ provided and that the business of the branch is supported. The proposedÂ governance framework fulfills this requirement by providing assessment points atÂ the completion of project proposal, business case and userÂ requirements/technical solution. Assessment points also take place during and atÂ the completion of each remaining phase.
A standard reporting format/guideline must beÂ established for all project status reports, along with a standard set of successÂ criteria to assess project progress.
Governance frameworkÂ approval
Confirmation of startÂ date
Once all the elements of the framework have beenÂ approved, a start date for their use should be confirmed.
There are a number of timing guidelines for theÂ completion of the various stages of the IM/IT governance process. The keyÂ guideline is that the process must be simple and flexible enough not to undulyÂ delay the assessment and consequent development/implementation of importantÂ IM/IT initiatives . At the same time, there must be a rigorous process in placeÂ to ensure that approved IM/IT initiatives do indeed support and enhance theÂ IM/IT and business vision. This governance process is an end-to -endÂ decision-making process to ensure that from project conception through toÂ delivery, there is an effective return on investment for IM IM/IT fundsÂ expended.
The exact timing to complete the assessmentÂ stage from project proposal and business case will vary with each organization.Â The completion of the development and implementation stages will depend upon theÂ type and complexity of the IT project.
Two of the essential tools needed to provideÂ effective IM/IT decisions are project proposals and business cases for allÂ proposed initiatives. The project proposal is a high-level investment toolÂ providing a description of the problem to be addressed, the objectives, scopeÂ and assumptions of the initiative, its high-level benefits and risks. InÂ conjunction with the detailed information on costs, benefits and risks providedÂ by the business case, it provides the information necessary to ensure that allÂ IM/IT investment decisions support the business vision of the user branch.
The benefits inherent in the use of projectÂ proposal and business cases include:
The IM/IT project proposal is an investment tool usedÂ to provide an initial understanding of the problem/opportunity and a high-levelÂ solution. It includes a high-level description of the problem, projectÂ objectives/scope/assumptions, benefits/risks for a proposed IM/IT investment. ItÂ is the initial mechanism used in the IM/IT governance process to screenÂ potential investments to determine whether the information is sufficientlyÂ complete to judge its merit. Where the information is incomplete, the projectÂ proposal is returned to the author for revisions. Where it is complete, theÂ project proposal is then assessed to determine whether it has sufficient meritÂ to warrant refinement into a business case.
All project proposals should adhere to a commonÂ format and be developed using a common process. This project proposalÂ development process includes:
An IM/IT business case is a detailed investmentÂ submission providing an understanding of all costs, benefits, risks andÂ alternatives associated with a proposed investment. It provides a context toÂ understand how the investment supports and/or promotes the IT strategy and theÂ business vision of the branch and department. It provides the information toÂ ensure decision-makers have a level of confidence that the investment willÂ support program delivery, reduce costs, enhance client services, or supportÂ business priorities to implement a required new program.
While business cases can vary in their level ofÂ detail, they all should adhere to a common format and be developed using aÂ common process. This business case development process essentially refines theÂ information provided in the project proposal to a point, which allows anÂ informed decision to proceed to be made. It:
The business case is created using a common.Â format and submitted to IMC for consideration.
Evaluation of the proposedÂ initiative
Once the costs, benefits and risks associated with aÂ proposed IM/IT investment have been determined, the next step in the businessÂ case development process is evaluation. The evaluation of a proposed IM/ITÂ investment must be based upon a set of criteria. These criteria allow aÂ determination of how well the proposed IM/IT investment supports theÂ organization’s goals and its business processes, and demonstrates its benefitsÂ to the branch, department or government as a whole. The evaluation of theÂ proposed IM/IT investment must be based upon a multi-criteria approach. TheÂ evaluation criteria to use in assessing business cases may be grouped under theÂ following headings:
The specific evaluation criteria under each of theseÂ headings must be tailored for each organization.
Based on an analysis of the findings, theÂ proposed IM/IT investment is either recommended for approval or rejected withÂ reasons by IMC. Based on the recommendation from IMC, MC rejects or approves theÂ business case and its budget for the user requirements development and technicalÂ solution development.
There are three levels of alignment in terms ofÂ the IM/IT governance of the program branch and that of the informatics;Â organization including: the policy level, the planning level and the projectÂ level.
Critical successÂ factors
There are several factors crucial for the governanceÂ framework to prove effective for any federal public sector department:
It must be effective in eliminatingÂ duplication of effort/overlaps in IM/IT initiatives across the program branchÂ and department and in realizing subsequent cost savings.
This approach to informatics decision makingÂ provides the ability to organize disparate pieces of data into the coherent bodyÂ of information that is needed to make rational decisions about allocating scarceÂ organizational funds and to ensure an effective return on IT investments. InÂ short, the use of this governance regime will ensure that data will be convertedÂ to information, the information refined into knowledge, and knowledgeÂ transformed into wisdom. Wisdom in IT decision making is the acid test forÂ effective governance.
Bryan Shane is a senior partner with BPCÂ Management Consultants, For more than 20 years, be has provided consultingÂ services in strategic management, information technology and performanceÂ measurement to a wide variety of public and private sector organizations. He hasÂ published a series of three articles on performance measurement in the publicÂ sector in Optimum . Mr. Shane holds an MEd from the University of Ottawa. He hasÂ also completed extensive graduate studies in statistics and evaluation.
Patricia Lafferty is a partner with BPCÂ Management Consultants and has extensive experience as a senior professionalÂ manager She has served as a senior consultant to both private industry and theÂ federal government for more than 20 years. Her areas of specific expertise areÂ strategic change management, facilitation, implementation planning andÂ performance consulting. She holds an MEd (Administration) from the University ofÂ Ottawa.
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