1

Capital Planning and Investment Control

Course 1.01

Presented to the DOI IRBFebruary 16th, 2005

Cyndy Anderson, PMPActing Chief Portfolio Management Division

IT Investment Management (ITIM)

2

What Is CPIC?

What it is notAn exercise in paperworkSomething we do to check off a box on a

scorecardA four letter word

What it isA systematic way of selecting the right mix of

investments to meet goals and then managing those investments to ensure success.

3

Change to a caterpillar is death…

But to its maker, is a new life.

4

Legislative Direction

Chief Financial Officer Act of 1990 Government Performance and

Results Act of 1993 Federal Acquisition Streamlining

Act of 1994 Paperwork Reduction Act of 1995 Clinger-Cohen Act of 1996 Government Paperwork

Elimination Act of 1998 Federal Information Security

Management Act E-Gov Act of 2002

“The Head of each executive agency shall design and implement in the executive agency a process for maximizing the value and assessing and managing the risk of the information technology acquisitions of the executive agency.”

Clinger-Cohen Act

5

Circulars, Manual Chapters, Maturity Models

OMB A-11 – Provide a full and accurate accounting of Major and Non-major IT investments

Section 53 Section 300

OMB A-130 – Use Capital Planning and Investment Control process

GAO IT Investment Management Framework Departmental Manuals

375 DM 6, Information Resources Life Cycle Management, 1989

375 DM 7, Benefit/Cost Analysis in Support of IRM Decision making, 1993

376 DM 4, Information Technology Investments, 1996

DOI Capital Planning and Investment Control Guide, February 2005

6

GAO IT Investment Management Stages

Stage 1Creating an Investment Awareness

Stage 4Improving the Investment Process

Stage 5Leveraging IT for Strategic Outcomes

Stage 3Developing a Complete Investment Portfolio

Stage 2Building the Investment Foundation

7

Key Decision Makers

DOI CIO Secretary’s delegated agent for IT investments

DOI Investment Review Board Manage DOI portfolio (select, control, evaluate) Define and refine Select decision criteria Make investment decisions such as: Approve,

disapprove, continue as is, modify, or terminate, for Departmental or bureau cross-cutting IT investment proposals or systems.

Define and implement the DOI IT investment governance process

Bureau Investment Review Boards Manage Bureau portfolio (select, control, evaluate) Manage project management deficiencies Approve, disapprove final investment decisions

8

IRB Roles and Purpose

Investment Review Board (IRB): The governing and approval body responsible for ensuring that proposed investments meet DOI strategic, business, and technical objectives, and manages the overall IT portfolio. The IRB reviews, recommends decisions, and issues guidance, on the implementation of recommendations contained in Modernization Blueprints for information technology (IT) lines of business.

From the IRB Charter Purpose: The purpose is to establish the Board as the forum for

collaborative governance of E-Government and IT within the Department, bringing together business and IT executives from Interior’s E-Government Team and Information Technology Management Council.

9

“ IT is not a separate function – its woven into everything we do.”

Mr. Paul Hoffman at the OCIO Retreat in Shepherdstown, WV, January 2005

10

IRB Responsibilities Reviews Bureau IRB decisions and considers

the impact those decisions have to the overall DOI IT portfolio.

To review and approve/disapprove all Departmental or bureau cross-cutting system IT investment proposals greater than $5 Million total life cycle; all sensitive systems, and all multi-bureau/agency systems.

To assure bureaus/offices have an IT investment review process for bureau/office specific IT investments.

To manage the IT portfolio for the Department.

11

Responsibilities (cont.) To adopt common approaches throughout the DOI

in responding to E-Government and IT-related issues or requirements.

To influence the development of Departmental budget requirements involving activities fulfilling the requirements of the Clinger-Cohen Act of 1996 (Public Law 104-106).

To assure “best practices” are identified and implemented within the Department.

To review and approve the Department and bureau or office requests for funding that involve data collection in accordance with the requirement to adhere to established standards.

To serve as an arbitrator among members regarding IT investments should the need arise.

12

Governance Meeting ScheduleOct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept

Identify Gaps and Redundancies

Determine and prioritize E-Gov opportunities

Prepare Pre-Select Business Cases

Prioritize Pre-Select Business Cases

Prepare and Refine Select Bus. Cases

Prioritize Select Business Cases andRecommend to MIT/ MEC

Conduct Quarterly Review of Ongoing Projects

Review Federal E-Gov Initiatives Updates andCoordinate other enterprise- wide efforts

Review IBAT Updates

Review Web Resources Council Updates

E-GovTeam

Project Mgrs

IRBIRB

Project Mgrs

IRBIRB

IRBIRB IRBIRB IRBIRB IRBIRB

E-GovTeamE-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeamE-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

E-GovTeam

Respond to OMB Passback IRBIRB

IRB

13

Major IT Investments: (meet at least one of the following criteria) Any investment previously reported to OMB $5M annual cost or > $35M lifecycle cost Importance to the mission or its significant role in administration of

programs, finances, property, or other resources Is an integral part of the Department’s modernization blueprint (EA) Mandated by legislation or executive order, or identified by the

Secretary as critical All financial systems with an annual cost greater than $500,000. High risk as determined by OMB, GAO, Congress and or the CIO. Directly Supports the President’s Management Agenda Items of

“high executive visibility” E-Government, Departmental, cross-cutting (across more than one

office or Bureau) Links to the first two layers of the FEA. (This is meant to imply the

first two layers of the BRM: Services to Citizens and Mode of Delivery

14

CPIC Process Entry/Exit Criteria

Entry Criteria:Concept Exit Criteria:Mission Needs Statement,Concept,Exhibit 300-1

Entry Criteria:Concept Exit Criteria:Mission Needs Statement,Concept,Exhibit 300-1

Entry Criteria: Exit Criteria:IRB Approved MNS Charter300-1 Full Exhibit 300

Project Plan

Entry Criteria: Exit Criteria:IRB Approved MNS Charter300-1 Full Exhibit 300

Project Plan Entry Criteria:IRB Approved 300 IRB Approved Project PlanSupporting Project Documents Exit Criteria:Updated 300Updated Project Plan Control DocumentsQuarterly Reports PIR Schedule

Entry Criteria:IRB Approved 300 IRB Approved Project PlanSupporting Project Documents Exit Criteria:Updated 300Updated Project Plan Control DocumentsQuarterly Reports PIR Schedule

Entry Criteria:Implementation completeDOI IRB approval Exit Criteria:Updated 300Completed PIRO&M Review Schedule

Entry Criteria:Implementation completeDOI IRB approval Exit Criteria:Updated 300Completed PIRO&M Review Schedule

Entry Criteria:DOI IRB approval to enter Steady State Exit Criteria:Updated 300Yearly Operational Analysis

Entry Criteria:DOI IRB approval to enter Steady State Exit Criteria:Updated 300Yearly Operational Analysis

15

DOI CPIC Guide – Pre SelectPre-Select Phase Process Steps

ProjectSponsor/

Functional Manager/Project

Manager

Depart-mental

IRB

BureauCIO

Office or BureauHead

Office or Bureau

Sponsor

Office or Bureau

IRB

Conduct Mission Analysis

Develop Concept

Prepare300-1 Business

Case

Review300-1 Business

Case

Approve300-1 Business

Case

Review Initiative and Recommend

Appropriate Action

Make Final InvestmentDecisions on the

300-1 Business Case

Mission Needs

Statement

300-1 Business

Case

Make Final InvestmentDecisions on the

300-1 Business Case for recommendation to

the secretary.

Identify a need

Check Modernization

Blueprints

16

Pre-Select Actions

CPIC Guide: Policy and procedures for submitting and

approving new investments GAO ITIM Stage 2, Critical Process 3:

Selecting an Investment CP3-C1: The organization has documented

policies and procedures for selecting new IT proposals.

CP3-C3: The organization has documented policies and procedures for integrating funding with the process of selecting an investment.

17

DOI CPIC Guide – SelectSelect Phase Process Steps

Depart-mental

IRB

Office or Bureau

IRB

BureauCIO

Office or BureauHead

Office or Bureau

Sponsor

ProjectSponsor/

Functional Manager/Project

Manager

Review Initiative and Recommend

Appropriate Action

Approve Integrated Project Team Membership

Make Final Investment Decisions

Approve Exhibit 300 Business Case and

Project Plan

Develop Exhibit 300 Business

Case Supporting Materials

Review the Mission Needs Statement and

Update, If Needed

Identify Funding Source and Obtain

DOI/Bureau Approvals

Prepare Project Plan

Review Exhibit 300 Business

Case and Project Plan

Make Final Investment

Decisions on the 300-1 Business Case for recommendation

to the secretary.

Create Project Charter

Approve or Reject Project Charter

Review and Recommend or Reject Project

Charter

Review and Recommend or Reject Project

Charter

Review and Recommend or Reject Project

Charter

Prepare Exhibit 300 Business

Case

18

Select Actions

CPIC Guide: Policy and procedures for selecting investments

using Rating and Ranking Criteria DOI: Value, IEA alignment, Risk, Quality of documents,

Project Health

Policy and procedures to review investment documents:

Charter, full 300, acquisition plan, risk management plan, performance measures, and project plan.

19

Select Actions (continued)

GAO ITIM Stage 2, Critical Process 3: Selecting an Investment CP3-C2: Documented policies and procedures for re-

selecting new IT proposals. CP3-P2-3: Established criteria for analyzing/prioritizing/

selecting and re-selecting IT investments opportunities CP3-P4: A mechanism exists to ensure that the criteria

continue to reflect organizational objectives. CP3-A1-2: The organization uses its defined selection/re-

selection process, including predefined selection criteria. CP3-A3: Executives’ funding decisions are aligned with

selection decisions.

20

DOI CPIC Guide – ControlControl Phase Process Steps

Depart-mental

IRB

Office or Bureau

IRB

BureauCIO

Office or BureauHead

Office or Bureau

Sponsor

ProjectSponsor/

FunctionalManager/Project

Manager

Prepare Quarterly/Milestone

Control Review Documents

Evaluate Quarterly/Milestone

Control Review Documents

Maintain Current Project Costs,

Schedule, Technical, and General Status

Information Ensures all

budget documents

remain current and final

decisions are vetted through

PMD.

Establish and Maintain Project Costs, Schedule,

Benefits and Risks, and Technical

Baselines

Review Control Documents and

Recommend Appropriate Action

Make Control Review Decisions

Work with Project Manager to

Implement Decisions

Project Manager Project Sponsor

Quarterly Reports

Assess Project Progress

Against Performance Measures

Make Final control review

recommendations to the secretary.

21

Control Actions CPIC Guide:

Policy and procedures to review investment control documents and recommend appropriate action

Monthly monitoring of Project Costs, Schedule, Benefits, Risks and Technical Baselines

Quarterly reporting to IRB for Control Review decisions

GAO ITIM Stage 2, Critical Process 1: Instituting the Investment Board CP1-A3: Established management controls for ensuring

that the investment boards’ decisions are carried out. GAO ITIM Stage 2, Critical Process 2: Meeting

Business Needs CP2-A3: Users participate in project management

throughout an IT Investment’s life cycle.

22

Control Actions (continued)

GAO ITIM Stage 2, Critical Process 4: Investment Oversight CP4-C1: Documented policies and procedures for

management oversight. CP4-P2: Investments maintain approved project

management plans. CP4-A2: Verified data is used by the IRB to review

investment performance. CP4-A3: Actions are taken to correct underperforming IT

investments. CP4-A4: IRB tracks implementation of corrective actions

until completed.

23

Control Actions (continued)

GAO ITIM Stage 2, Critical Process 5: Capturing Investment Information CP5-C1: Documented policies and procedures for

identifying and collecting information about IT investments. CP5-C2: An official is assigned responsibility for ensuring

investment information collected is sufficient. CP5-P1: Adequate resources, including people, funding,

and tools are provided for identifying IT investments and collecting and analyzing investment information.

CP5-A1: IT investments are identified, and specific information is collected to support decisions about them.

CP5-A2: Collected IT investment information is easily accessible and understandable to decision makers.

CP5-A3: Collected IT information is used by investment decision makers to support investment management.

24

DOI CPIC Guide – EvaluateEvaluate Phase Process Steps

Depart-mental

IRB

Office or Bureau

IRB

BureauCIO

Office or BureauHead

Office or Bureau

Sponsor

ProjectSponsor/

Functional Manager/Project

Manager

Make Final Investment Decisions

Update Exhibit 300

Business case

Review Exhibit 300

Business case

Review Investment’s PIR Results and

Recommend Appropriate Action

Conduct PIR and Present Results

PrepareExhibit 300 or 300-1

Business Case

Evaluate IT Capital

Investment Management

Process

Make Final Investment

Decisions on the 300-1 Business Case for recommendation

to the secretary.

25

Evaluate Actions CPIC Guide:

Policy and procedures for Post Implementation Reviews (PIRs):

Impact to Stakeholders Ability to deliver quantitative and qualitative IT performance

measures Ability to meet baseline goals

Policy and procedures to evaluate the IT Capital Management Investment Management Process

Policy and procedures to move investments to Steady State

26

DOI CPIC Guide – Steady StateSteady-State Phase Process Steps

Depart-mental

IRB

Office or Bureau

IRB

BureauCIO

Office or BureauHead

Office or Bureau

Sponsor

ProjectSponsor/

Functional Manager/Project

Manager

AssessTechnology

AnalyzeMission

Assess User/Customer

Satisfaction

ReviewO&M

Update Exhibit 300 Business

Case

Review/Approve Exhibit 300

Business Case

Review Investment and Recommend

Appropriate Action

Make Final Investment Decisions

Make Final InvestmentDecisions on the

300-1 Business Case for recommendation to

the secretary.

27

Steady State Actions

CPIC Guide:Policy and procedures for conducting yearly

Operational Analysis of Steady State investments

Investment continues to effectively support mission requirements

Operation and Maintenance costs are within expected range

28

Questions?