Treasury takes a step-by-step approach
- By Mary Mosquera
- Sep 16, 2003
'American taxpayer citizens should be outraged that federal IT decision-makers and project managers simply don't know what we're getting for their money,' Treasury CIO Drew Ladner says.
Henrik G. de Gyor
With billions of dollars pouring into IT annually, Drew Ladner figures it's just common sense to make sure the money is spent wisely. The best way to do that, the Treasury Department CIO says, is through portfolio management.
Treasury at the moment supports just a small pilot in the initial phase of leading its bureaus to portfolio management, but Ladner said he sees benefits to both individual bureaus and the department down the road. The bottom line: Portfolio management maximizes returns and minimizes risk on IT investments, he said.
Portfolio management includes systems that detail and help staff to understand IT investments and to track them. 'If we don't figure out what bang we're getting for the taxpayer's buck, we are simply not doing our jobs and being responsible,' Ladner said. 'American taxpayer citizens should be outraged that federal IT decision-makers and project managers simply don't know what we're getting for their money.'
Treasury is using portfolio management as a tool to align IT investments in programs and projects with the department's overall missions. The department also will try to coordinate IT investments so that decisions are made in an integrated fashion, which can reduce duplication.
Portfolio management milestones are still minimal at Treasury. The approach will roll out slowly, as bureau CIOs determine how it can best help them balance IT project demands with limited budgets, Ladner said.
The Mint, which has operated a portfolio management pilot for several months, has developed in-house software that tracks projects, costs and schedules, Ladner said. The Mint also is using its application to monitor security improvements.
Treasury created a technology investment review board to oversee its IT investments. The board began meeting monthly in July with Ladner as chairman. Its other members are subject experts from the CIO's office, the budget office and Treasury's bureaus.
Officials plan to develop a systems pilot by late fall to be deployed at the Mint and two other bureaus that will put portfolio management in motion. The Treasury bureau CIO council is still determining the precise timeline, Ladner said.
Portfolio management systems being developed will be required to help Treasury staff evaluate IT investments in terms of dollars, dates and performance, which will give decision-makers a good view of how programs or projects are progressing, Ladner said. For example:
- Is the department spending dollars faster or slower than what was promised?
- Is the department achieving milestones and completing programs and projects on time and on budget?
- Even if the IT investments achieved their business objectives, did they perform in a steady fashion or struggle through peaks and valleys?
Underlying the need for more accountability is the amount of money devoted to IT, which exceeds the annual budgets so often cited as benchmarks. In fiscal 2004, the government will spend about $60 billion on IT, but existing investments will continue to support federal government activities.
Taking into consideration depreciation and other discounting, the existing federal government IT asset base is about $160 billion, Ladner said.
Next year, Treasury will spend about $2.6 billion on IT, but preliminary estimates indicate the department has about $8 billion in its existing IT asset base, he said.Through a CFO's eyes
The demand for more financial and performance accountability, especially in leaner economic times, is encouraging more CIOs to look at their IT investments as chief financial officers do.
'If we don't identify goals of IT investments, align them with the business and then manage performance of those investments through an approach that maximizes return and minimizes risk in real time, we are not going to steward our resources wisely,' Ladner said.
If portfolio management can show that some programs and projects 'are knocking the cover off the ball, and showing a lot of leverage and benefiting business objectives, then we should direct more resources to those programs,' he said.
Similarly, programs that consistently fail to perform or underperform would require corrective action. 'Without systems to support a truer picture of what programs and projects are doing, it is very difficult for tough decisions to be made. Portfolio management shines the light on it,' he said.
Treasury also is using portfolio management to evaluate and improve the data for security reporting requirements under the Federal Information Security Management Act of 2002 (FISMA).
Treasury staff will be able to better identify erroneous or poor quality data and in the process make their systems more secure, Ladner said. Also, some aspects of system certification and accreditation can be monitored.
For example, if Treasury network scanning technology identifies that a configuration has been changed to a new one that is not compliant with FISMA security requirements, it will become apparent in the portfolio management system. CIO staff can then identify what corrective action needs to be taken and improve security.