IT Investment Management (ITIM) and the Integrated Financial Management System (IFM)

1. IT Investment Management (ITIM) and the Integrated Financial Management System (IFM) Ernest F. Steidle, Ph.D. Deputy Commissioner, Administration and Chief Operations Officer Commonwealth AITR Communications Exchange October 28, 2008 1

2. Project Scope • Integrates all fiscal processes, fiscal data management systems and data exchange processes for five DSA agencies and their subordinate units into a single system • Department of Rehabilitative Services (DRS) • Woodrow Wilson Rehabilitation Center (WWRC) • Department for the Blind and Vision Impaired (DBVI) • Virginia Rehabilitation Center for the Blind and Vision Impaired (VRCBVI) • Virginia Department for the Deaf and Hard of Hearing (DDHH) • Virginia Board for People with Disabilities (VBPD) • A data exchange engine that allows communication between CARS, CIPPS and eVa via 28 data exchange files with agency based systems. • Upon implementation, used by 25 COV agency codes.

3. Identification of Gaps • A high level of scrutiny by objective outsiders leads to questions that when answered, improves project performance, stakeholder expectations and reduces risk. • The project began using traditional life cycle processes, a detailed contract and unrealistic expectations. • DRS/DSA followed IT Investment Management (ITIM) Project Management (PM) processes required for Major Projects to uncover gaps and problem areas

4. Identification of Gaps • There was no vendor management plan • The contract requirements was the only documentation guiding deliverables. There was no mention of agency staff roles or expectations. Deliverables were not organized by project life cycle. • Commonwealth PMD identified that the Vendor’s management plan lacked key details for a Major IT Project • Project Team involvement was inadequate resulting in inconsistencies in understanding project requirements. • The project began several times • A re-charter of the Project Teams along with definitions of Team responsibilities and a high level of management support resolved this issue. • Because of the lack of a coherent Vendor Management Plan, the detailed project plan was flawed. • Commonwealth Project Management Division (PMD) identified the problem • Project status immediately went to “Yellow” alerting management • Conducting weekly status meetings revealed inconsistencies with the Project Schedule • Commonwealth PMD identified that the schedule showed 70% complete but supporting tasks showed 0% complete • All of the problems were related!

5. DRS/DSA Benefits • Project was headed toward failure. Early intervention allowed a realignment of milestones and more realistic deadlines • Project risks were significantly reduced by establishing consistency between a vendor management plan, project plan and project schedule • Stakeholder expectations were properly managed with clear expectations of project team participants and an accurate project schedule • Risk aversion thru transparency is the name of the game. ITIM PM provides the tool.

6. DRS/DSA Process Areas of Improvement • Just the right governance, just in time (under development by the ITIM Customer Council) • “Right size” governance requirements to project complexity • First priority is the project result • Establish viable project performance measures to insure project outcome exceeds user expectations • A “yellow” or “red” status report is not necessarily “bad” • It can elicit additional support from outside resources to get the project back on track • Clear communication with IV&V vendor is key for valid, relevant IV&V recommendations • COST • For IFM, 10% of Project cost is IV&V • For IFM, 10% of Project Cost is internal PM

7. Lessons Learned • ITIM has potential to reduce risk and save money, but it is still maturing • ITIM PM is not embraced by all agencies in the Commonwealth and not necessarily fully mature at this point, but the refinement work continues • While ProSight is one of the #1 leading tools for managing investments, some infrastructure issues remain and expect growing pains • Sometimes ITIM PM produces a false negative! Don’t be shy about pointing it out. • An ITIM Standard will help agency business and IT leaders understand the value of using investment management processes Communicate ITIM processes to your agency

8. Commonwealth IT Investment Management (ITIM) Standard Managing Technology Investments to Provide Value to Citizens in Virginia Presenter Presenter’s Title Group/Event Name Date 8

9. WHY IS ITIM IMPORTANT FOR THE COMMONWEALTH? Commonwealth goal of continuous improvement “Expand constituent impactthrough lower operation costs” “We must pursue more aggressive, transparent goals” Governor Tim Kaine • The Commonwealth must find ways to meet increasing demands through cost savingsand increased productivity. • Investment managementcan contribute to loweroperating costs and thegeneration of internal capital. • The Commonwealth must be innovative in the way in which it invests in IT.

10. HOW DOES ITIM SUPPORT COMMONWEALTH BUSINESS? • Maximizes business value • Allows the Commonwealth to select IT investments that align with business goals and objectives Examples: Business Need IT Strategy Your business drives Commonwealth IT investments

11. WHAT CAN ITIM DO FOR MY AGENCY? ITIM is a proven business investment methodology that will help you: • Align investments to business goals and objectives • Identify and track spending on IT investments • Control and monitor IT investment projects • Confirm that IT investments are meeting business objectives • Leverage IT investment opportunities that may generate internal capital • Make informed decisions on an IT investment portfolio by assessing value and risk

12. WHAT IS THE ITIM STANDARD? • The ITIM Standard documents the current Commonwealth IT investment governance process, for better stakeholder understanding, that allows the ITIB and CIO to meet Code-directed responsibilities in collaboration with business leaders • The ITIM Standard utilizes best practices that are commonly used in both the public and private sector, around the world

13. ITIM ANSWERS KEY INVESTMENT QUESTIONS FOR BUSINESS LEADERS Commonwealth Strategic Planning Process Business Plans & Needs What proposed IT investments potentially solve business needs? Pre-Select Investment Results Which IT investments best meet the business needs? Commonwealth Technology Portfolio Evaluate Select Did the selected IT investments deliver the expected business value? Are the selected IT investments performing as planned? Control

14. WHAT BENEFITS HAVE WE ALREADY SEEN? • There have been no failed major projects in past 5 years • Projects are completing and meeting performance goals • The Commonwealth has significantly lowered project failure risks and improved decision-making capabilities • IT investments are aligned with business strategy • The Commonwealth has a systematic approach for managing portfolio risk and controlling investment activities • The Commonwealth has identified new opportunities such as shared services

15. AS AN AGENCY, WHAT DO I NEED TO DO? • Identify and document business needs derived from: • Citizen needs • Council on Virginia’s Future • Grant funding • Code of Virginia • Agency Strategic Plans • Consumer boards • Governor’s initiatives • Commonwealth Strategic Plan for IT • Federal and State mandates • Evaluate, score, and rank IT investments • Prioritize IT projects • Identify business needs and prioritize potential investments • Develop Investment Business Cases • Research possible enterprise/collaboration opportunities • Update the Agency Strategic Plan and Commonwealth Technology Portfolio

16. A COMMONWEALTH ITIM SUCCESS STORY - VDOT Fleet Equipment Management Information System (FEMIS) • VDOT had a business need to track and manage fleet equipment • Documented need for IT investment in the Agency Strategic Plan and Commonwealth Technology Portfolio • Business need aligned with the goals and objectives from the Council on Virginia’s Future

17. A COMMONWEALTH ITIM SUCCESS STORY – VDOT (continued) Fleet Equipment Management Information System (FEMIS) • Commonwealth CIO reviewed the Investment Business Case in theportfolio and saw a potential for multi-agency solution • VDOT worked with the CIO to establish a shared service that will benefit multiple agencies • Commonwealth contract is now in place for all agencies • Shared service will reduce Commonwealth costs to set up future independent contracts • Enterprise investment opportunity and resulting shared-service would not have been identified without following ITIM best practices

18. AS AN AGENCY, WHAT DO I NEED TO DO NEXT? • Translate business value into performance measures • Develop detailed project plans and execute projects as directed in the Commonwealth Project Management Standard • Develop applications in accordance with statewide technical and data standards for information technology • Submit monthly status reports, requests for baseline adjustments greater than 10%, and IV&V reports for each Major IT Project (as scheduled)

19. A COMMONWEALTH STORY WHERE ITIM GOVERNANCE AND OVERSIGHT PLAYED AN IMPORTANT ROLE - SBE VA Election & Registration Information System (VERIS) • SBE had a business need for a new statewide voter registration and election management system • Project started fine, but began to run into serious problems • Vendor missed deliverables and milestones • Assumptions and user requirements were not clearly understood by all the stakeholders • Vendor did not clearly understand the business problem

20. A COMMONWEALTH STORY WHERE ITIM GOVERNANCE AND OVERSIGHT PLAYED AN IMPORTANT ROLE (continued) VA Election & Registration Information System (VERIS) • ITIM governance and oversight helped recover a failing IT investment • Internal Agency Oversight Committee (IAOC) identified problem areas and escalated them to the Cabinet level • Secretary of Administration consulted with CIO on action plan • CIO recognized need for new Project Manager and weekly assistance to the Project Management team • A “Help America Vote Act (HAVA)” compliant system was finally delivered, but there were several key lessons learned along the way

21. A COMMONWEALTH STORY WHERE ITIM GOVERNANCE AND OVERSIGHT PLAYED AN IMPORTANT ROLE (continued) VA Election & Registration Information System (VERIS) • Lessons learned • VERIS Post Implementation Review Report dated September 19, 2008 stated, “Ensure that the state standards for project management and development are followed” • Stakeholder identification and commitment is vital to success • Assumptions and user requirements must be identified and validated early in the investment lifecycle • The statement of work with the vendor must be detailed and accurate • A realistic, achievable, and detailed project plan is critical to success

22. AS AN AGENCY, WHAT DO I NEED TO DO NEXT? • Conduct Post Implementation Reviews on Major IT Projects using the asset performance measures established in the Control Phase • Use asset performance measures to measure the business value • Document IT asset performance • Analyze gaps between current business needs and performance of IT assets • Make a determination to maintain, migrate, improve, or retire each IT asset in the agency technology portfolio

23. USING THE ITIM STANDARD • Each phase of the ITIM process is clearly explained • At the end of each phase, roles and responsibilities are clearly identified 4.3 Control Phase The purpose of the Control Phase is to ensure, through timely oversight, quality control, and executive review, that IT investments are developed and placed in operation using a disciplined, well-managed, and consistent process.

24. Control USING THE ITIM STANDARD (continued) Pre-Select At the end of the Standard, stakeholder responsibilities are listed in bullets and grouped together by phase for quick reference Select Evaluate

25. 2003 Council on Virginia’s Future Long Term Objectives Commonwealth Strategic Planning Process 2005 CommonwealthInformation Technology Investment Management (ITIM) Agency Strategic Plans I.T. Strategic Plans Service Area Plans Commonwealth Strategic Plan for Information Technology 2006 HOW DOES ITIM FIT WITHIN THE COMMONWEALTH’S EXISTING STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT MODEL? Commonwealth Strategic Planning Efficiency &Effectiveness ITIM insures that IT investments are aligned with the Council on Virginia's Future long term objectives and The Commonwealth Strategic Plan for Information Technology

26. NEXT STEPS ITIB approved September 30, 2008 Enhance investment portfolio management tool to better support ITIM Execute an education and awareness campaign; enhance stakeholder understanding

27. QUESTIONS? Contact Information AITR Name 804-phone number Email address Commonwealth ITIM Contact Constance Scott Manager, ITIM Office (804) 416-6179 constance.scott@vita.virginia.gov

28. Additional References

29. AS AN AGENCY, WHAT DO I NEED TO DO? • Identify and document business needs derived from: • Citizen needs • Council on Virginia’s Future • Grant funding • Code of Virginia • Agency Strategic Plans • Consumer boards • Governor’s initiatives • Commonwealth Strategic Plan for IT • Federal and State mandates

30. AS AN AGENCY, WHAT DO I NEED TO DO? • Identify business needs and prioritize potential investments • Develop Investment Business Cases • Research possible enterprise/collaboration opportunities • Update the Agency Strategic Plan and Commonwealth Technology Portfolio

31. AS AN AGENCY, WHAT DO I NEED TO DO? • Evaluate, score, and rank IT investments • Prioritize IT projects

32. AS AN AGENCY, WHAT DO I NEED TO DO NEXT? • Translate business value into performance measures • Develop detailed project plans and execute projects as directed in the Commonwealth Project Management Standard • Develop applications in accordance with statewide technical and data standards for information technology • Submit monthly status reports, requests for baseline adjustments greater than 10%, and IV&V reports for each Major IT Project (as scheduled)

33. AS AN AGENCY, WHAT DO I NEED TO DO NEXT? • Conduct Post Implementation Reviews on Major IT Projects using the asset performance measures established in the Control Phase • Use asset performance measures to measure the business value • Document IT asset performance • Analyze gaps between current business needs and performance of IT assets • Make a determination to maintain, migrate, improve, or retire each IT asset in the agency technology portfolio

34. GOVERNOR’S MESSAGE: CONTINUOUSLY IMPROVE MANAGEMENT OF IT INVESTMENTS • Optimize management, efficiency and productivity from our information technology investments • Align the Commonwealth’s business model and IT strategy • Improve maintenance and operations planning • Increase transparency in our return on investment • Provide a comprehensive IT governance model for managing all the IT resources of the Commonwealth

35. GENERAL ASSEMBLY’S MESSAGE: MANAGE IT INVESTMENTS MORE EFFECTIVELY • § 2.2-2457. Information Technology Investment Board. “The Board shall be responsible for the planning, budgeting, acquiring, using, disposing, managing, and administering of information technology in the Commonwealth.” • § 2.2-2007. CIO. “Direct the development of policies and procedures for the effective management of information technology investments throughout their entire life cycles, including, but not limited to, project definition, procurement, development, implementation, operation, performance evaluation, and enhancement or retirement.”

36. ITIM PORTFOLIO INFORMATION OVERVIEW (CURRENT AND FUTURE) Commonwealth Strategic Planning Process Assets - Includes Services (Future) ITIM Processes Projects (Current) Commonwealth Technology Portfolio (ProSight) Procurements (Current)

37. A COMMONWEALTH ITIM SUCCESS STORY - DEQ Document Management Implementation • DEQ had a business need for consistent records management processes that included quick, efficient, and reliable electronic access to documents • Documented need in the Agency Strategic Plan • Business need aligned with the goals and objectives from the Council on Virginia’s Future • Identified need for IT investment to CIO

38. A COMMONWEALTH ITIM SUCCESS STORY – DEQ (continued) Document Management Implementation • Commonwealth CIO reviewed the business case in the portfolio and saw a potential for an Enterprise effort • DEQ worked with the CIO to consolidate document management requirements across the Commonwealth • VEAP took lead on setting up Enterprise contracts • Enterprise investment opportunity and resulting contracts would not have been identified without following ITIM best practices