Baremos

management plans that include expected cost and schedule milestones and measurable benefit and risk expectations.

23

“Steady state” means maintenance and operation costs at current capability and performance level, including costs for personnel, maintenance of existing information systems, corrective software maintenance, voice and data communications maintenance, and replacement of broken IT equipment.

Section 5: Critical Processes for the ITIM Stages •Stage 2: Building the Investment Foundation ••Providing Investment Oversight

Each IT project management team creates and maintains a project management plan24 _{for the project or system for which it is responsible.}

This plan documents a variety of project decisions, assumptions, and expectations, including project performance.25 _{These expectations could}

include a cost and schedule baseline control system, such as the earned value management system, milestone-based accomplishment expectations, or other such control systems as are commensurate with the project’s size, importance, cost, and risk.26

Each project that is in its operations and maintenance (O&M) phase should have its own distinct project management plan, one that is different from plans for new investments. This requirement is due in large part to the differences in how each investment is managed. O&M projects typically do not have milestones, and their cost structure is more predictable.

Activities Activity 1: Data on actual performance (including cost, schedule,

benefit, and risk performance) are provided to the appropriate IT investment board.

For an organization to establish control of projects in Stage 2, it is essential that all performance data including cost, schedule, benefits, risks, and system functionality (both expected and actual) for each IT project are collected and distributed to the appropriate IT investment boards. In addition, to monitor the long-term value of a project or system, the organization needs to collect and distribute this information to the

appropriate IT investment board during agreed-upon stages of the project’s life cycle.

These performance data may be collected by the board itself or collected and distributed in some other manner (e.g., through a centralized third

24

See IEEE 1058 Standard for Software Project Management Plans for an example of additional guidance on creating a project management plan.

25

See U.S. General Accounting Office, Executive Guide: Measuring Performance and Demonstrating Results of Information Technology Investments, GAO/AIMD-98-89

(Washington D.C.: March 1998) for additional guidance on performance measurement.

26

For additional guidance on earned value management, see the Defense Department’s Earned Value Management Web site at http://www.acq.osd.mil/pmand Capital

Programming Guide Supplement to Part 7 of Circular No. A-11 (Office of Management and Budget Circular No. A-11, July 2003).

Section 5: Critical Processes for the ITIM Stages •Stage 2: Building the Investment Foundation ••Providing Investment Oversight

party). These data will be key to assisting each IT board in its decision making.

IT projects in development, by definition, provide little current benefit, but they may provide benefits to the organization upon completion. The potential benefits of an IT project are enumerated in the project’s business case; they are used to conduct an [expected] benefit/cost analysis and to persuade executives to select the project as a good investment. These potential benefits will be realized after implementation is complete. Measuring the actual benefit of a project while it is in development is a challenge. One way to measure the benefit of development work is to approximate it. Measuring a project’s actual cost and schedule progression (i.e., evaluating earned value, which is a measure of the amount of

preplanned work that is actually performed in relation to the funds

expended) renders an approximate value of the project to the organization. Activity 2: Using verified data, each investment board regularly reviews the performance of IT projects and systems against stated expectations.

The board typically oversees the project’s performance by conducting reviews at predetermined checkpoints and/or major milestones, in order to interpret the data on project cost and schedule with respect to historic project data and expectations.

Project oversight

• is conducted at least at the major life cycle milestones for each project; • is managed to limit changes in scope, such as increasing functionality

requirements (scope creep);

• differs in its degree of depth depending on the size, cost, and importance of the project;

• must compare estimated schedule time frames to actual schedules, including schedule slippages and/or compressions;

• must compare estimated costs with funds spent or obligated to date, any changes in funding, and the impact of these changes; and

Section 5: Critical Processes for the ITIM Stages •Stage 2: Building the Investment Foundation ••Providing Investment Oversight

• ensures that project information and data are valid and that corrective actions are verified by qualified and independent audit teams, quality assurance groups, or internal verification and validation (IV&V) contractors.

Project oversight should also address each of the following project management issues:

• Development/Acquisition. Problems (e.g. contractor management)

stemming from the selection of a specific project development and implementation approach.

• Technical. Technical issues or problems concerning such components

as hardware, software, or telecommunications.

• Benefits. Evaluation of benefits delivered to date and the relationship of

the project to specific business objectives.

• Risks. Assessment of the risks encountered to date and how expected

risks are to be managed.

Activity 3: For each underperforming IT project or system,

appropriate actions are taken to correct or terminate the project or system in accordance with defined criteria and the documented policies and procedures for management oversight.

Using estimated and actual cost and schedule data, the organization should identify projects that are not meeting their cost and/or schedule

performance expectations. The following are examples of data that could be compared:

• actual cost data to planned cost data;

• the current number and scope of requirements to the original requirements established for the project;

• the current conditions and assumptions to the projects’ initial assumptions and context; and

• the actual performance of the software development organization to its specified deliverables (e.g., schedule, costs, functionality, technical solutions).

Section 5: Critical Processes for the ITIM Stages •Stage 2: Building the Investment Foundation ••Capturing Investment Information

Senior executives should ensure that there is a support and reward

structure in place for identifying issues and raising them to the appropriate decision-making level and that there are no incentives for covering up significant problems. Go/no-go criteria can be a helpful tool in supporting management oversight.

Activity 4: The investment board regularly tracks the

implementation of corrective actions for each underperforming project until the actions are completed.

The investment board ensures that

• corrective actions and related efforts are executed by the project management team and tracked by the investment board until the desired outcomes occur, and

• if the corrective actions are significant enough, an independent review is conducted before returning to the original project plan (i.e.,

reinstatement of funding) to ensure that all corrective actions have achieved their intended results and to determine whether additional changes or modifications are still needed.

Capturing Investment