0 analysis document task 8 recommendations for telework cost policy may 1, 2006
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Analysis Document
Task 8Recommendations for Telework Cost Policy
May 1, 2006
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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This report provides recommendations for technology investment strategy and value management policies for telework programs
This report on Recommendations for Telework Cost Policy is the eighth in a series of reports from the Telework Technology Cost Study
The overall study has three primary objectives
– Describe the current telework technology environment
– Estimate the costs of expanding telework supporting technologies so the infrastructure can support 25% to 50% of the federal workforce teleworking
– Provide recommendations on how best to expand the telework supporting infrastructure
This report provides a strategic framework and policy recommendations for maximizing the value of telework investments and thereby enhancing the cost justification and return on investment
The information in this report will help government executives fully consider the multiple benefits of telework when making investment decisions and developing cost-related telework policies
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Information for this study was collected from several sources within sixteen organizations that were chosen to be representative of the entire Federal Government
The Booz Allen team conducted interviews, focus groups, and surveys of Chief Information Officer staff, Telework Program Coordinators, Teleworkers, and Managers of Teleworkers, respectively
Ten Departments participated in the study:– Department of Agriculture Department of Interior
– Department of Commerce Department of Justice
– Department of Education Department of Transportation
– Department of Health and Human Services Department of the Treasury
– Department of Housing and Urban Development Department of Veterans Affairs
Five Independent Agencies and one Departmental Component also participated in the study:– Equal Employment Opportunity Commission National Science Foundation
– General Services Administration Securities And Exchange Commission
– National Aeronautics and Space Administration U. S. Coast Guard (Department of Homeland Security)
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This report gives government executives guidance for making wise investment decisions for enhancing and expanding telework
Several prior reports in this study have concluded that telework programs are in need of specific technologies, as well as new plans for organization, management, and enhancement, all of which require the agency to make a considerable financial commitment
History has shown that the strategic focus and investment capital for telework programs is often lacking, and this is one of the primary roadblocks holding back initiatives for large scale telework expansion
– One potential reason executives are reluctant to make large telework investments is that the direct financial return is often unclear
– However, the cost justification becomes much more compelling when value is considered from multiple points of view – including value that cannot be quantified in dollars and cents
This report illustrates the disadvantages of the current decentralized approach to telework program support and describes how a wide range of benefits can be appreciated through an enterprise-wide telework investment strategy
Furthermore, a number of government-wide and agency-level policies are recommended to help guide telework investment decisions, manage telework costs, increase telework program value, and ultimately help the government gain maximum return on telework investments
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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High-Level Data Synthesis Data Sources
• Administered surveys to teleworkers and managers of teleworkers to obtain information about telework technology availability, usage, and performance
• Conducted focus groups with Telework Program Coordinators to obtain information about telework program history and current state, technology issues, policy issues, and plans for expansion
• Conducted interviews with CIOs and other IT staff members to obtain information about the current status of the telework infrastructure and plans for enhancement
Data Collection From Three Sources in 16
Government Organizations
Development of a Series of Reports on Telework Technology
and Related Costs
• Distilled information about the need for policy improvements obtained throughout the data collection process
• Conducted discussion sessions with telework and technology experts to determine additional policy recommendations
• Used frameworks of the Capital Planning and Investment Control (CPIC) process and Value Measuring Methodology (VMM) value factors to organize and develop additional recommendations *
• Combined and elevated recommended policies to a strategic level appropriate for executives
• Further categorized recommended policies into those intended for agencies and those for government-wide oversight agencies
High-Level Synthesis of Findings to Determine Key Strategic Policy
Recommendations
Information from several detailed reports from this study was distilled into executive-level strategic guidance and policy recommendations
Detailed Reports
• Several reports in this study have established the technologies, costs, and enhancement plans required for telework expansion
• Reports from Task 2, Task 3, and Task 4 specify the technology components needed for scalability
• Reports from Task 2 and Task 5 detail the costs required for recommended technology enhancements
• Reports from Task 6 and Task 9 incorporate the technology and cost requirements from the other reports and provide recommendations for initiating and implementing telework program enhancement and expansion plans
De
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* See Appendix for more details about the CPIC process and the VMM value factors
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Study findings and industry expertise were used to develop a comprehensive list of recommended cost and telework value enhancement policies for use by agency decision-makers
A multi-step process was used to develop the information and comprehensive policy recommendations for this report
– Compiled the study data specifically addressing the need for policy improvements
– Facilitated discussions with telework and technology experts to determine additional policy recommendations
– Used CPIC and VMM frameworks to organize and develop additional recommendations
– Elevated recommended policies to a strategic level appropriate for executive consideration and categorized them as agency-specific and government-wide
This report presents a high-level discussion of value factors and policy considerations for enhancing and expanding agency telework programs, including:
– Incorporating telework into strategic enterprise planning
– Developing policies to enhance the strategic value of telework programs
– Specific policy recommendations for managing costs and maximizing success of telework improvement initiatives
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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Recognizing the multiple strategic benefits of telework programs can support a strong cost justification for telework investments
Telework programs have historically been considered a low-priority employee “perk” and therefore do not often receive dedicated funding or full consideration of their strategic value
However, telework programs have a high potential for strategic coordination with important enterprise-wide initiatives and can reap many different kinds of benefits for the organization
By taking these multiple benefits into account, organizations will likely find a compelling cost justification for enhancing their infrastructures and expanding telework programs
– Slight modifications to the traditional Capital Planning and Investment Control (CPIC) process can help broaden strategic thinking about telework investments and their value
– Similarly, the Value Measuring Methodology (VMM) is a robust, comprehensive approach to recognizing and analyzing investment benefits in several value factors
The CPIC and VMM frameworks are used to organize the discussion and recommendations
– In this section, CPIC modifications are proposed as a way to elevate telework planning to the enterprise level
– In the next section, telework value considerations and policy recommendations are aligned with the VMM value factors
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The current approach to telework technology procurement across government organizations is inefficient and lacks strategic focus
Current Approach to Telework Capital Investment Planning
B: Moderate telework investment – provides refreshed computer equipment and calling cards
A: Minimal telework investment – Allowed only for medical or disability situations
C: Considerable telework investment – provides home office equipment and services
Component AComponent B
Component C
Department / Agency
• Telework technology and procurement concerns not viewed as part of overall enterprise planning
• Components authorized to invest in telework as interest and budgets allow
• Telework investments not tracked
DECENTRALIZED PLANNING
TOP-LEVEL STRATEGIC PLANNING
Different Investment Strategies Across Different Organizational Components
Lack of Enterprise Capital Plan for Telework Results of Current
Process
•Administrative and procurement inefficiencies•Agency “mixed messages” about telework support•Lack of coordination between components•Low telework participation numbers•Diminished overall effectiveness of telework program
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An enterprise-level capital planning process will help enhance telework program efficiencies, benefits, and overall strategic value
Continuity of Operations (COOP) readiness for public health, weather, and other emergencies
Accessible, modernized applications that allow staff to perform their work regardless of location
Adaptable applications that support changing business needs of organizations
Legislative Compliance and alignment with ongoing Congressional interest
Opportunities for real estate savings
Coordinated standards for technology configuration
Enhanced organizational process efficiencies
Ability to appreciate economies of scale
Reduction of traffic congestion and pollution
Compliance with OPM and GSA guidance
Potential for increased employee productivity while teleworking and during office closures
Increased recruitment and retention potential
Potential for increased workforce diversity
Enhanced public image (“employer of choice”)
Increased work opportunities for people with disabilities
Improved support of mobile workers
Potential for tax incentives (in some states)
Continuity of Operations (COOP) readiness for public health, weather, and other emergencies
Accessible, modernized applications that allow staff to perform their work regardless of location
Adaptable applications that support changing business needs of organizations
Legislative Compliance and alignment with ongoing Congressional interest
Opportunities for real estate savings
Coordinated standards for technology configuration
Enhanced organizational process efficiencies
Ability to appreciate economies of scale
Reduction of traffic congestion and pollution
Compliance with OPM and GSA guidance
Potential for increased employee productivity while teleworking and during office closures
Increased recruitment and retention potential
Potential for increased workforce diversity
Enhanced public image (“employer of choice”)
Increased work opportunities for people with disabilities
Improved support of mobile workers
Potential for tax incentives (in some states)
Ad
dit
ion
al
Ben
efit
sTelework Program
Disaster Preparedness &
Continuity of Operations
Enterprise Modernization
Multi-use Tools and
Capabilities
Shared Costs, Risks, and Benefits with Other Enterprise Initiatives
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Four minor enhancements throughout the standard CPIC process help integrate telework into enterprise-level planning and maximize the value and flexibility of technology investments
*Appendix A provides more information and the Task 7 Report presents sample business cases developed using the CPIC process
Evaluate the quantitative and qualitative benefits of potential telework investments (e.g., using VMM)
Consider whether the potential investments will be multi-use (i.e., will they support telework as well as other business requirements?)
Evaluate the quantitative and qualitative benefits of potential telework investments (e.g., using VMM)
Consider whether the potential investments will be multi-use (i.e., will they support telework as well as other business requirements?)
Include compliance with telework legislation as another screening criteria (along with the Federal Information Security Management Act [FISMA], Enterprise Architecture [EA] plan, etc.)
Include compliance with telework legislation as another screening criteria (along with the Federal Information Security Management Act [FISMA], Enterprise Architecture [EA] plan, etc.)
Determine whether telework investments are delivering multi-use benefits (i.e. are they supporting telework as well as other business requirements?)
Determine whether telework investments are delivering multi-use benefits (i.e. are they supporting telework as well as other business requirements?)
Capital Planning and Investment Control Process*
Potential Enhancements
Potential Enhancements
1 2
3
4
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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Government decision makers need information for comparing cost, benefit – both financial and non-financial, and risk that quantifies projected results in a meaningful and accurate manner
In July 2001, Social Security Administration (SSA) and General Services Administration (GSA) engaged Booz Allen Hamilton and Harvard University’s Kennedy School of Government to develop an effective methodology to assess the value of electronic services (e-Services)
The resulting Value Measuring Methodology (VMM)* was developed to be flexible, scaleable, and customizable
– Its guiding principles and consideration of risk, value and cost are universally applicable in the government environment
– This methodology enables important insight into the true business value of many types of investments
The groundbreaking VMM approach provides a means to quantify financial and non-financial value using five factors
– Direct User (Customer) Value– Social (Non-direct User/Public) Value– Government Operational/ Foundational Value– Government Financial Value– Strategic/Political Value
*Appendix B provides more information and the Task 7 Report presents sample business cases developed with the VMM framework in mind
What Could Make Costs Go Up or
Performance Slip From Projected Levels?
How muchwill it cost to buy?
How much will it cost to operate and
maintain?
What benefits will the investment provide to all interested parties?
What Could Make Costs Go Up or
Performance Slip From Projected Levels?
What Could Make Costs Go Up or
Performance Slip From Projected Levels?
How muchwill it cost to buy?
How much will it cost to operate and
maintain?
How muchwill it cost to buy?
How much will it cost to operate and
maintain?
What benefits will the investment provide to all interested parties?
What benefits will the investment provide to all interested parties?
VMM Key Considerations
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Using VMM to Guide Policy Development
•The VMM value factors can serve as a framework to develop investment and management policies for telework•The value factors overlap, so policies to increase the benefit in one factor can maximize overall telework value•Enhancing total benefit of telework helps support a positive return on investment
Quantifying value enables agencies to fully appreciate its interaction with cost when making decisions about telework investments
Things to Note About Using VMM• Different investment scenarios yield different potential values• VMM value factors help evaluate the full range of potential benefits associated with
different investment options • Similarly, these value factors can identify and structure policies to help maximize value• These policies focus efforts to fully realize the potential value of the investment and thus
support a stronger positive return on investment
Things to Note About Using VMM• Different investment scenarios yield different potential values• VMM value factors help evaluate the full range of potential benefits associated with
different investment options • Similarly, these value factors can identify and structure policies to help maximize value• These policies focus efforts to fully realize the potential value of the investment and thus
support a stronger positive return on investment
VMM Value Factors Used toEvaluate Individual Telework Investment Options
0
10
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$- $5 $10 $15 $20 $25 $30 $35 $40
C O S T ($M)
V A
L U
E
Direct User
Social
Gov’t Operational/ Foundational
Gov’t Financial
Strategic/Political
VMM Value Factors
BasicInfrastructureRamp-up
IdealInfrastructureRamp-up
0
10
20
30
40
50
60
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$- $5 $10 $15 $20 $25 $30 $35 $40
C O S T ($M)
V A
L U
E
Direct User
Social
Gov’t Operational/ Foundational
Gov’t Financial
Strategic/Political
VMM Value Factors
BasicInfrastructureRamp-up
IdealInfrastructureRamp-up
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The five VMM value factors help identify, define, and quantify the financial and non-financial benefits of telework investments
Value Factors Description Relevant Telework Benefits
Direct User (Customer) Value
Value associated with the delivery of high-quality, citizen-centered services
Realization of value in this factor typically drives the realization of value in all the other factors
Enhanced Quality of Work Life – Telework affords employees flexibility to better accomplish work and non-work responsibilities
Workforce Improvements – Telework has been found to increase employee productivity, morale, and retention
Social (Non-direct User/Public) Value
Secondary or indirect benefits directly attributable to the investment under consideration
Society benefits anytime the government is a good steward of public funds
Environmental/Civic Benefits – Widespread telework reduces traffic congestion and pollution due to fewer daily commuters
Continuity of Operations – Telework program can be used to help government work continue during emergencies
Potential Real Estate Savings – Telework enables reduced need for office space, resulting in taxpayer savings
Government Operational/ Foundational Value
Value associated with investments in building up the infrastructure - whether in staff skills or technology - required to accommodate a changing environment
Continuity of Operations – Telework program can be used to help government work continue during emergencies
Enhanced Recruiting – Telework is an attractive benefit that gives agencies a competitive advantage in recruiting high-quality candidates
Government Financial Value
Traditional direct cost information used in financial return-on-investment ratios
In the past, only this value was quantified and factored into decision metrics
Continuity of Operations – Telework program can be used to help government work continue during emergencies
Potential Real Estate Savings – Telework enables reduced need for office space, resulting in taxpayer savings
Strategic/Political Value
Captures and quantifies the value associated with advancing organizational and government-wide initiatives and mandates
Legislative Compliance – Agencies are required to provide telework opportunities to all eligible staff
Continuity of Operations – Telework program can be used to help government work continue during emergencies
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Agency-specific policy guidelines help organizations build mature telework programs, maximize their benefits, and become better stewards of the taxpayer dollars used to support them
Agency Policy Recommendation Description of Value
VMM Value Factors
Direct U
ser
Social
Gov’t O
perational
Gov’t F
inancial
Strategic/ P
olitical
Implement comprehensive planning and coordination efforts related to telework
For example:– Incorporate telework into
enterprise budgeting and planning– Incorporate telework into related
enterprise programs (e.g., modernization, COOP)
– Investigate potential avenues for cost savings when making telework investments (e.g., GSA schedules, negotiated rates, bulk discounts)
– Use the VMM framework to capture the tangible and intangible benefits of telework and incorporate telework into the CPIC process
Comprehensive planning and coordination efforts would institutionalize the telework program, providing an agency greater managerial and administrative control
Inclusion of telework into other initiatives, such as COOP, better positions the organization to be responsive and flexible in unexpected circumstances
Coordinated enterprise-wide planning that includes financial and non-financial benefits will result in balanced investments that serve as an advantage to the entire organization
Yes Yes Yes
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Agency-specific policy guidelines help organizations build mature telework programs, maximize their benefits, and become better stewards of the taxpayer dollars used to support them (continued)
Agency Policy Recommendation Description of Value
VMM Value Factors
Direct U
ser
Social
Gov’t O
perational
Gov’t F
inancial
Strategic/ P
olitical
Provide technical and managerial support for teleworking employees
For example:– Modernize the enterprise
architecture and infrastructure to improve the ability to support employees’ execution of the organization’s mission
– Make collaboration tools part of the enterprise architecture
– Develop/enhance telework training for teleworkers, technical support staff, managers, and/or others as appropriate
Providing better infrastructure, tools, training, and technical support would enhance employees’ ability to communicate and perform work functions regardless of location
Making administrative functions available electronically and giving applications standard web interfaces benefits the organization overall by allowing greater access to agency applications and information
Building a common understanding of telework tools and processes could enhance enterprise efforts to standardize IT procedures and protect agency information
Improving proficiency in the use of technologies could enable teleworkers to perform more of their job tasks remotely
Yes Yes Yes Yes
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Agency-specific policy guidelines help organizations build mature telework programs, maximize their benefits, and become better stewards of the taxpayer dollars used to support them (continued)
Agency Policy Recommendation Description of Value
VMM Value Factors
Direct U
ser
Social
Gov’t O
perational
Gov’t F
inancial
Strategic/ P
olitical
Provide a basic set of equipment and services for telework
For example:– Make laptops the standard issue
for all staff– Provide peripheral equipment to
teleworkers and others, as appropriate
– Provide broadband support to teleworkers and others, as appropriate
Providing up-to-date, basic equipment would enable employees to perform daily work functions while away from the office
A standardized, one-computer environment would ensure that employees have access to their current work on local disk drives regardless of location
The one-computer environment would also streamline costs, and enable better technical support
Providing basic equipment and services would position employees to share files, access agency systems, and collaborate with co-workers in a timely manner, regardless of location
Yes Yes Yes Yes Yes
21
Government-wide policy guidelines can help integrate telework considerations into enterprise-level decisions
Government-wide Policy Recommendation
Description of Value
VMM Value Factors
Direct U
ser
Social
Gov’t O
perational
Gov’t F
inancial
Strategic/ P
olitical
GSA Negotiate government rate for broadband
Working with major telecommunications carriers could establish government rates to avoid potential billing issues between consumer class and business class services, as well as save agencies money through economies of scale
Yes Yes Yes Yes Yes
OMB Include telework line item in Exhibit 300
Evaluating whether new technology requests support telework would highlight the need to integrate telework into enterprise-level planning
Yes Yes
OMB Include telework in agency scorecard
OMB measurement of telework progress would elevate its importance in contributing to Expanded Electronic Government and hold agencies accountable for compliance with multiple levels of Legislative and Executive initiatives
Yes Yes
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Government-wide policy guidelines can help integrate telework considerations into enterprise-level decisions (continued)
Government-wide Policy Recommendation
Description of Value
VMM Value Factors
Direct U
ser
Social
Gov’t O
perational
Gov’t F
inancial
Strategic/ P
olitical
Congress
Provide financial incentives for agencies promoting telework
Incentivizing agencies could encourage the implementation and enhancement of well-rounded telework programs
Yes Yes Yes Yes
CIO Council
Endorse requirement that any application development should be web-enabled
Moving to web services away from client-server and other legacy architectures provides an improved user interface and application flexibility
Yes Yes Yes
CIO Council
and
GSA
Endorse the use of VMM when evaluating potential telework investments
Implementing an established framework for evaluating telework investments could promote a more comprehensive view of the full benefits associated with such investments
Yes Yes Yes
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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Agencies should adjust their policies and strategic vision to incorporate telework into enterprise-wide planning, maximizing total agency benefits and return on investment
Agencies should follow an enterprise-wide approach to telework program investments in order to maximize strategic value, efficiencies and cost savings over time
Investments in telework support the entire organization and support several critical agency-wide objectives, including:
– Enhancement of Continuity of Operations Programs (COOP)
– Information technology modernization efforts
– Legislative compliance
Agencies need to measure the total value of telework – both financial and non-financial – when evaluating potential telework investments; the multiple telework benefits will lead to more compelling cost justifications
Focusing policy improvements in three areas will help agencies realize the potential benefits of telework
– Comprehensive and coordinated telework program planning
– Technical and managerial telework program support
– Provision of basic equipment and services for teleworkers
Furthermore, government-wide oversight organizations should provide guidance and structure to encourage agencies to elevate telework program planning to a more strategic, enterprise-wide level
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
26
The Value Measuring Methodology is a structured approach for investment analysis that can be used to evaluate potential telework infrastructure enhancements
VMM PROCESS
Step 1. Develop a Decision FrameworkIdentify and Define the Value Structure – including the five Value Factors (Direct User, Social, Government Operational/Foundational, Government Financial, and Strategic/Political)
Prioritize the Value Factors Identify and define the value measures Prioritize the value measures
Identify and Define the Risk Structure – including risk inventory and risk probability and impact scale
Identify and Define the Cost Element Structure
Begin Documentation
Step 2. Alternatives AnalysisIdentify and Define Alternatives – should be based on the information in the Value and Risk Structures
Estimate Value and Cost
Conduct a Risk Analysis
Step 3. Integrate InformationAggregate the Cost Estimate
Calculate the Return-on-Investment – ROI metric often used by the Federal Government is the Savings to Investment Ratio
Calculate the Value Score – aggregate the estimated performance against the value measures according to the assignment Value Factor and value measure weights
Calculate the Cost and Value Risk Scores
Compare Value, Risk, and Cost
Step 4. Communicate and DocumentCommunicate the overall value of an initiative to a variety of stakeholders
OUTCOMES
Step 1 Decision Framework Global assumptions Project-specific drivers and
assumptions Documentation of research and
prioritization sessions
OUTCOMES
Step 1 Decision Framework Global assumptions Project-specific drivers and
assumptions Documentation of research and
prioritization sessions
Step 4
Support / justification for budget requests
Step 4
Support / justification for budget requests
Step 2 Expanded descriptions of the
alternatives Complete, comprehensive list of
both cost and value assumptions Assumptions regarding the risks
associated with a specific alternative
Step 2 Expanded descriptions of the
alternatives Complete, comprehensive list of
both cost and value assumptions Assumptions regarding the risks
associated with a specific alternative
Step 3
Insight into cost, values, and risks of all alternatives
Step 3
Insight into cost, values, and risks of all alternatives
Source: Booz Allen Hamilton’s “Value Measuring Methodology White Paper”
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Table Of Contents
Introduction
Methodology
Telework Program Investment Considerations
Policy Guidelines to Enhance Telework Value
Findings and Conclusions
Appendix A – Value Measuring Methodology (VMM)
Appendix B – Capital Planning and Investment Control (CPIC) Process
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Appendix B – Capital Planning and Investment (CPIC) process
Utility of the CPIC Process
Guides development of sound business cases, including Exhibit 300s & Exhibit 53s
Ensures compliance and alignment with multiple government regulations and strategies
– President’s Management Agenda
– Government Performance and Results Act of 1993 (GPRA)
– Full implementation of IT security, privacy and electronic transactions policies
– Alignment with organization strategies and performance measures
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Appendix B – Capital Planning and Investment (CPIC) process (continued)
CPIC Phase 1 – Pre-Select
The Pre-Select phase provides a process to assess a current investment’s support of agency strategic and mission needs and to provide initial information to further support investments
There are significant information requirements and a potential expenditure of funds in the preliminary planning phase to prepare for review and selection of IT investments
– Identify the business/mission need
– Establish relationships to the Department and/or agency strategic planning efforts
- For example, it assesses compliance of proposed business solution with Department’s Target Enterprise Architecture (EA), as well as with key security requirements such as FISMA
– Provide opportunity to focus efforts and further the development of the initiative’s concept
– Allows project teams to begin the process of defining key components of the business case:
- business requirements and associated system performance metrics
- performance measures, benefits, and costs
- subsequent completion of a business case and project planning efforts in preparation for inclusion in the Department’s investment portfolio
30
Appendix B – Capital Planning and Investment (CPIC) process (continued)
CPIC Phase 2 – Select
In the Select phase, the agency ensures the IT investments that best support the mission and the Department’s approach to enterprise architecture, are chosen and prepared for success (i.e., have a qualified project manager analyze risks, etc.)
– Individual investments are evaluated in terms of technical alignment with other IT systems and projected performance as measured by cost, schedule, benefit, and risk (CSBR)
– Milestones and review schedules are also established for each investment during the Select phase
In this phase, the agency prioritizes each investment and decides which investments will be included in the portfolio
– Investment submissions are assessed against a uniform set of evaluation criteria and thresholds
– The investment’s CSBR are then systematically scored using objective criteria and the investment is ranked and compared to other investments
– Finally, the organization selects which investments will be included in the Department’s portfolio
31
Appendix B – Capital Planning and Investment (CPIC) process (continued)
CPIC Phase 3 – Control
The objective of the Control phase is to ensure, through timely oversight, quality control, and executive review, that IT initiatives are conducted in a disciplined, well-managed, and consistent manner
– Investments should be closely tracked against the various components identified in the risk assessment and mitigation plan developed in the Select phase
– This phase also promotes the delivery of quality products and results in initiatives that are completed within scope, on time, and within budget
– During this process, senior managers regularly monitor the progress/performance of ongoing IT investments against projected cost, schedule, performance, and delivered benefits
Although the organization usually selects new investments annually, the Control phase is an ongoing activity
– It requires the continuous monitoring of ongoing IT initiatives through the development or acquisition lifecycle
– Agency reviews occur before the annual budget preparation process
– Additionally, periodic summary reviews are completed based on the review schedule completed during the Select phase
The Control phase is characterized by decisions to continue, modify, or terminate a program
– Decisions are based on reviews at key milestones during the program’s development lifecycle
– The focus of these reviews changes and expands as the investments move from initial concept or design and pilot through full implementation and as projected investment costs and benefits change
– The reviews focus on ensuring that projected benefits are being realized; cost, schedule and performance goals are being met; risks are minimized and managed; and the investment continues to meet strategic needs
– Depending on the review’s outcome, decisions may be made to suspend funding or make future funding releases conditional on corrective actions
32
Appendix B – Capital Planning and Investment (CPIC) process (continued)
CPIC Phase 4 – Evaluate
The purpose of the Evaluate phase is to compare actual to expected results after an investment is fully implemented
– This is done to assess the investment’s impact on mission performance, identify any investment changes or modifications that may be needed, and revise the investment management process based on lessons learned
– As noted in GAO’s Assessing Risks and Returns: A Guide for Evaluating Federal Agencies’ IT Investment Decision-Making, “the evaluation phase ‘closes the loop’ of the IT investment management process by comparing actuals against estimates in order to assess the performance and identify areas where decision-making can be improved”
The Evaluate phase focuses on outcomes:
– Determining whether the IT investment met its performance, cost, and schedule objectives
– Determining the extent to which the IT capital investment management process improved the outcome of the IT investment
The outcomes are measured by collecting performance data, comparing actual to projected performance and conducting a post implementation review (PIR) to determine the system’s efficiency and effectiveness in meeting performance and financial objectives
– The PIR includes a methodical assessment of the investment’s costs, performance, benefits, documentation, mission, and level of stakeholder and customer satisfaction
– The PIR is conducted by the agency, and results are reported to the OCIO and E-Board to provide a better understanding of initiative performance and assist the project sponsor in directing any necessary initiative adjustments
– Additionally, results from the Evaluate phase are fed back to the Pre-Select, Select, and Control phases as lessons learned
33
Appendix B – Capital Planning and Investment (CPIC) process (continued)
CPIC Phase 5 – Steady-State
The Steady-State phase provides the means to:
– Assess mature investments
– Ascertain their continued effectiveness in supporting mission requirements
– Evaluate the cost of continued maintenance support, assess technology opportunities
– Consider potential retirement or replacement of the investment
The primary review focus during this phase is on the mission support, cost, and technological assessment
Process activities during the Steady-State phase provide the foundation to ensure mission alignment and support for system and technology succession management