Monday, April 5, 2010

IT Investments

For all the flak, the Government usually takes for being bureaucratic and slow and inefficient, in the world of IT, the Governments of the western worlds in particular are doing well to adopt a lot of sensible policies and procedures to help increase efficiency. In fact, the US Dept of the Interior’s Information Technology Capital Planning and Investment Control Guide (CPIC) is one of the best investment frameworks out there for IT investments.

It actually all started with the GPRA (Government Performance and Results Act) which mandated that all federal agencies had to be results–oriented. This included defining general goals and objectives for their programs, to develop Annual Performance Plans specifying measurable performance goals for all their programs and to publish an Annual Performance Report showing actual results compared to the projected goals for each program. As a result of this, the Government’s Office of the Chief Information Officer came up with the CPIC guide to govern and manage the IT investments for the Government and to align all IT investments to the to the strategic goals of the Department.

The CPIC process consists of circular flow of 6 phases:

  • Pre-Select Phase: In this phase, the business recommends IT services based on their requirements. A concept is created and a Business Case for the new IT service is developed, evaluated and approved. Based on these actions a final approval to move forward will then be obtained from the relevant stakeholder.

  • Select Phase: In this phase, a project plan is created with established performance goals and quantifiable performance measures. Costs, schedules, benefits and risks are identified and evaluated. With the completion of all steps in this phase, approval is obtained to proceed to the next phase.

  • Control Phase: The goal of the Control phase is to ensure that through timely oversight, quality control, and executive review, the IT initiatives are conducted in a disciplined, well-managed, and consistent manner. It is in this phase that the project is moved from the requirements definition to implementation. The project management occurs here with the project progress being monitored, reported and evaluated with course correction taken as needed. This phase is considered complete when the production deployment or implementation is completed.

  • Evaluate Phase: In this phase, the actual results after implementation are compared to the projected results and any changes or modifications needed are implemented. A Post Implementation Review (PIR) is conducted in this phase and based on the results corrective action is taken. Once this is completed, the next phase is entered.

  • Steady-State Phase: During this phase, analysis is used to determine whether mature systems are continuing to support mission and business requirements. Customer satisfaction is evaluated and opportunities to improve performance and reduce costs are considered. The investment stays in this phase until a determination is made by the appropriate stakeholders to modify, replace, or retire the system. A major enhancement can be defined as, new architecture, or new functionality. The cycle then begins again at the Pre-Select Phase.

The CPIC fits in nicely with ITIL and its Service Strategy Phase. It also fits in well with ITIL’s consideration of IT Services as a portfolio of services which CPIC does as well. The interested reader can easily obtain more information on this and other Investment management frameworks. The question isn’t which one to choose but how well are we implementing and evaluating the one we have chosen. If IT investments are not being performed under a proper investment management process but rather by some sort of emotional, ad-hoc fashion by top executives, then return on investments is going to be low – guaranteed.

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