GAO official: Take the long view

GAO official: Take the long view

'Too many CIO shops are managing these processes, and there is not enough input from the program side.'
'DAVID MCCLURE

With the focus of President Bush's proposed 2003 budget on performance, agencies' IT capital planning and investment managers will play a much larger role in determining how money is allocated. And while tying the budget to performance is nothing new, expectations placed on agencies by the Office of Management and Budget are tougher than ever, said David McClure, director of IT management for the General Accounting Office.

McClure said agency officials must expand and improve their processes by looking at IT investments from a broader portfolio perspective rather than the narrower project-by-project view.

'The budget allocation for IT is basically broken up into two areas: operation and maintenance, and everything else,' McClure said. 'The operation and maintenance part is rarely scrutinized to see if there are projects or modifications that are absolutely necessary, or if there are projects that could be scaled back to free up money for new applications.'

By taking a look at an agency's entire IT portfolio, managers would have a better view of how IT applies to business processes, which is a major OMB thrust.

Most agencies, however, do not have a snapshot of their IT investments. Collecting that data is a good starting point for aligning IT investments with business processes, McClure said.

'By knowing where you are spending your money, it provides you the opportunity to drill down and find efficiencies,' he added.

Agencies that know where they spend IT money can use capital planning techniques to make better decisions on how to correlate IT to their missions.

The first step is to ask simple, pragmatic questions about IT investment, McClure said:

  • Are we selecting the right projects?

  • Are we getting value for our money?

  • Are we measuring how well we are achieving our goals?

    'These are the same basic questions Congress is interested in,' McClure said. 'Agencies tend to lose focus and get bogged down in details.'

    The last two questions are the hardest ones, he added. Too often agencies are concerned only with project costs instead of the overall benefits and risks to an organization.

    'Risk analysis has been in statute and OMB guidance for a very long time, but agencies don't apply it,' McClure said. 'Agencies also must quantify and identify benefits such as process improvements, customer satisfaction, cost avoidance, cost savings and capability enhancements.'

    At some agencies, certain offices perform cost, benefit and risk analysis very well, but those functions are not applied broadly across the entire agency, McClure said.

    'Too many CIO shops are managing these processes, and there is not enough input from the program side,' McClure said. Those on the program side need to be more involved because their business processes will be most affected by managers' decisions, he said.

    Agencies also find it difficult to measure the success of a project. Some agencies use balanced scorecards to evaluate projects and others rely on steering committees, McClure said.

    Measuring a project's performance reflects OMB's objective of tying IT to business processes.

    'The bottom line is for agencies to focus on benefit realization and whether the costs are commensurate with the benefits received,' McClure said. 'The e-gov criteria in the budget asks agencies to demonstrate return on investment and manage costs better. This push is much more results-oriented than we have seen in the past.'
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