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An Enhanced Framework for the Management of Information Technology Projects

About EMF - Enhanced Management Framework

May, 1996
Chief Information Officer Branch
Treasury Board of Canada Secretariat

Background

The government is committed to deliver its programs and services more efficiently and effectively through the use of information technology. However, recent cancellations of major information technology projects together with indications that other projects may be experiencing difficulty have raised concerns for the achievement of this goal.

In recognition of these concerns and as part of its ongoing responsibility for advising Ministers on major projects, the Treasury Board Secretariat carried out a review (1995) of a sample of 25 of the government's information technology projects, with a total estimated cost of two billion dollars, to identify business, project management, risk management, and human resource issues influencing their outcome.

The Auditor General also reviewed four large government information technology systems under development as described in the Report of the Auditor General, Chapter 12 - Systems Under Development - Managing the Risks, released on October 5, 1995. The Auditor General's findings concurred with those of the Treasury Board Secretariat's review.

In addition, in 1992 Public Works and Government Services Canada initiated a series of Common Purpose Procurement pilot projects in an attempt to improve project success through procurement reform. In January 1995, the department published a summary of findings from audit reviews of this method of procurement and its relation to the success of information technology projects. In addition to procurement issues, these reviews also identified a number of deficiencies in departmental project planning, e.g., risk analysis and business-case.

While problems with information technology projects are not new, their impact seems more pronounced. Their underlying cause seems to be related to significant changes in the project environment that have occurred in the last few years. These changes include: the decentralization of the management of information technology; the transformation of the way the government does its business (business process re-engineering); and rapid technological evolution from mainframe-based systems to more complex distributed client-server systems.

The Canadian government is not alone in this regard. A study of 8,380 projects in government jurisdictions and the private sector in the United States indicated that a staggering 31% of all information technology projects are cancelled before they are completed; 53% of those that are completed cost an average of 189% of their original estimates and average only 42% of the originally-proposed features and functions. Only 9% of projects are completed on time and on budget. The lost opportunity costs from project delays and cancellations could not be measured but could easily be in the trillions of dollars, e.g., the delay of the baggage-handling software for the Denver airport cost the city $1.1 million per day.

The challenge for the government, therefore, is to enhance its framework for managing information technology projects to resolve this situation and ensure greater success. A Treasury Board Secretariat Project Management Office has conducted research in government and private sector organizations that are successfully implementing information technology projects and, with departments, has identified enhancements to the current framework based on the successful practices discovered.

Findings (1995)

Planning

• initial project definitions are inadequate;
• senior management's understanding, involvement and support are lacking;
• client focus and involvement are insufficient; and
• Treasury Board Secretariat's submission review process is incomplete.

Implementation

• project management discipline is inconsistent;
• the project manager's experience often does not reflect the project's size and risk; and
• changes are not rigorously managed.

Monitoring

• regular "sanity" checks are not performed; and
• project performance and progress is poorly measured and reported.

Procurement

• the current procurement approach is too inflexible and not conducive to co-operation; and
• private sector consultants lack knowledge of government organizations, responsibilities and policies.

Culture and Attitudes

• the present culture discourages open discussion of problems and their resolution; and
• while project failures are well advertised, successful projects are generally not.

Benefits

The benefits of implementing the practices described within the Enhanced Framework include:

• A more open and cooperative development environment between IT staff and client staff;
• A greater understanding and appreciation of the risks involved in software development projects and the necessity of managing these risks. Continuous risk management provides a disciplined environment for proactive decision making, to assess continually what could go wrong, to determine which risks are important to deal with and to implement strategies to deal with those risks.
• Increases in productivity, thus allowing more development with same staff complement;
• Decreases in the costs to deliver a project thus allowing development budgets to go further;
• Improved client satisfaction as a result of quality improvements and a reduction in calendar time to deliver projects;
• Reductions in defect and error rates;
• Schedule improvements, including a significant reduction in late projects; and
• Reductions in rework as a result of reduced root causes of errors.

It is reasonable to assume that similar gains can be achieved in the federal government. More importantly, full implementation of the Enhanced Framework will likely provide the required level of predictability in IT projects to avoid project cancellations and/or overruns within the federal government.

Ultimately, implementation of the Enhanced Framework should allow departments to leverage their IT investments to increase the efficiency of government programs and services.

Implementation

Since the publication of the Enhanced Framework in May of 1996, departments have not been idle. Pilots have been conducted, assessments have been made, lessons have been learned, and goals have been defined for the implementation of improvements within IM/IT organizations. What follows is a recommended strategy that will allow departments to integrate these plans with the requirements of the Enhanced Framework. This strategy contains:

• a step-wise approach and timeframes for implementation;
• an outline of the activities at each stage;
• a brief description of the roles and responsibilities of the players required for successful implementation;
• a description of solutions/approaches/methods available from Treasury Board Secretariat that will be of assistance to departments during implementation; and
• a broad outline of the initial tasks required to get started.

Departmental Improvement Plateaux

It is understood that departments are not beginning implementation of the Enhanced Framework from a standing start. Some departments have already launched IT process improvement initiatives. The chart below, however, provides the larger government-wide view of implementation and the steps that departments are expected to have either underway or completed.

Plateau 0: Baseline

This first plateau is designed to ensure that departments have in place the basic project solutions required to initiate and manage a project. These include defining: a clear and explicit business case, a procurement strategy, a project charter; a gating and review process; a project planning and control mechanism and a risk management approach.

The second objective of plateau 0 is to ensure that departments create a plan for advancing to the next plateau. Without a plan, it is unlikely that departments will make the improvement gains as identified in the Enhanced Framework. It is expected that departments will have implemented the project solutions and created the plans for achieving their next plateau by March of 1998.

Plateau 1: Project Focus

Project planning, tracking and oversight, and contract management (if applicable) begins once a project has been approved and initiated. While most departments already have processes in place that address these functions, the achievement of Plateau 1 will ensure that there are no gaps or weaknesses.

The objective of this plateau is to achieve proper planning for projects in government departments and to establish sufficient visibility into actual progress to allow senior management to take effective action when the project deviates from plan.

It is also in Plateau 1 that actions are taken to ensure project managers have the required knowledge and experience and the tools to support them and the project. Departments are to have implemented these improvements by March of 1999, and have a plan in place to move to their next plateau.

Plateau 2: Product Focus

Plateau 2 seeks to establish, at a project level, the controls and processes to be followed that will ensure:

• changes to requirements follow a clearly defined effective change management process;
• product integrity is maintained throughout the life of the project; and
• product quality is acceptable within defined parameters.

Again, most departments will have processes in place and achieving this plateau will ensure that elimination of any gaps or weaknesses. Actions continue to be taken to ensure plans are in place for addressing plateau 3 and that Project Managers continue to develop.

Plateau 3: Organizational Focus

The third Plateau deals with making the processes and practices established in Plateaus 0-2 the way that government departments do business for all their projects. The objective of this Plateau is to ensure that the best processes implemented in one project within a department are carried through to the other projects within the organization.

Organization-wide issues such as the training of personnel and the documentation of processes are also addressed at this level.

Plateau 4: Continuous Improvement

The final Plateau deals with continually improving the organizational effectiveness of departments when managing and delivering projects (e.g. deliver projects faster, better).

This Plateau includes quantitative techniques to measure and improve processes. This path for improvement will guide Enhanced Framework implementation by establishing clear priorities, objectives and time frames.

Practices

In the past, project success has relied primarily on the heroic efforts of the project team. Often the team has had to work in isolation, unsupported or misunderstood by the larger IT or Business organizations. Project success has been dependent upon the creativity, determination and relentless hard work of the project team, often in spite of these organizations.

The Business Directions (Principle 1) of a department provide the foundation for project success. It includes such practices as:

• projects being compatible with both business and information management plans of a department;
• full business-case analyses being performed; and
• clients being fully involved in all phases of the project.

Once a project has been defined that meets the Business Directions of a department, then the Accountabilities (Principle 2) for the project need to be established. This ensures that the following practices are defined and communicated:

• the accountability of departments for projects;
• the role of TBS for the project framework;
• the contracting role of PWGSC;
• the specific and explicit accountabilities of the multiple stakeholders;
• the degree of organization readiness;
• the explicit roles of the project sponsor, project leader and project manager;
• the required competencies of the project team; and
• core responsibilities and functions are not outsourced.

Corporate Discipline refers to the development of project managers (PM) across government to ensure they have the requisite knowledge, skills and experience to manage the project's scope, complexity and risk profile. This development consists of such practices as:

• a consistent project manager discipline;
• government-wide PM development;
• a continuous learning culture; and
• a PM support network.

With all of the above in place and supporting the project, Project Management Decisions have the following practices associated with it:

• decisions are based on risk and projects are structured for minimum risk;
• project off-ramps are linked to a gating process;
• methodologies and tools are defined and used that allow for risk assessment, determination of project complexity, early product delivery, change management, measurement and metrics; and
• a complement of staff exist who are trained in the use of common methodologies and tools.

Principles

The Enhanced Framework provides guidance for future improvements to the IT project management regimes currently found within departments.

The Enhanced Framework defines four overall principles that set the broad parameters within which information technology projects are to be managed.

• Projects are aligned with and support the business directions

• Information technology projects are undertaken to achieve successful and economical support of a business function. The project sponsor, leader, and manager, together with the management and major users of the business function, must ensure that the system achieves these goals and delivers the expected benefits.

• Clear accountabilities are established

• Information technology projects can be complex undertakings. The responsibilities of all parties must be clearly defined and their delegated authority specified. Problems must be resolved in a timely manner to prevent them from threatening the success of the project and the achievement of the benefits expected from it.

• Project managers are developed in, and work within, a corporate discipline

• The project manager is the key for the successful completion of the project and the achievement of the expected benefits. The project manager, therefore, should have the appropriate training, skills and experience to manage the scope and risks of the stated project. There is a need for a corporate approach to the development or acquisition of project managers based on government-wide practices, common tools and methodologies.

• Project management decisions are based on risk management

• Typically the government has emphasized meeting the target date of projects, with the result departments have pressed ahead to meet commitments, even where there are indications the project is in difficulty. Risk management, the determination and resolution of all threats to the successful achievement of project objectives, including the benefits identified in the business case, is a primary concern. Projects must be planned, organized and structured to ensure success from their initial organization and planning through design, development and implementation.

Too often attention has been focused on the visible project with its attendant issues, while root causes of the problem has remained hidden within the organization surrounding the project environment. Thus the order and wording of the Principles was chosen with great care. Each forms a part of the foundation for project success upon which the next is built. All are crucial in creating the environment within which a project can be expected to succeed.

Brochure

More effective, efficient and successful management of IM/IT

Maximizing your department's information management and information technology (IM/IT) investments and minimizing risks.

• Optimal selection of high-return IM/IT investments
• Balanced decision-making
• Comprehensive risk management
• Enhanced control of timeframes and budgets
• Successful delivery of projects

IM/IT investments need special attention

Government is committed to maximizing the return on IM/IT investments

Rapid developments in IM/IT is transforming the way in which the Government of Canada provides its services and programs. Increasingly, IM/IT investments are central to the government's commitment to helping Canadians realize the benefits of an information society where knowledge is the prime resource.

The size of the government's investments in IM/IT — nearly four billion dollars annually — reflects its ambitious goal of becoming the most connected nation in the world by year 2000. Recognizing that Canadians expect careful stewardship of their resources, the government is also committed to maximizing the return on its IM/IT investments and ensuring that its IM/IT projects are completed on time, on budget, and deliver expected benefits.

Enhanced Management Framework for IM/IT (EMF)

To help departments better manage their IM/IT projects and improve the success rate of IM/IT investments, the government developed, in 1996, the Enhanced Framework for the management of IT projects, which has since evolved to become the Enhanced Management Framework for IM/IT (EMF). The EMF has expanded from focussing solely on project management disciplines to include portfolio management, which entails the overall management and governance of IM/IT investments. This helps improve the strategic use of IM/IT investments through a stronger alignment with business directions and priorities.

EMF is an integrated management model

EMF enhances the government's capability to manage its IM/IT investments, successfully deliver IM/IT projects, and minimize risks. EMF is an integrated management model that includes processes and key practices for executives, as well as for business and project managers. The framework is supported by a set of principles, best practices, methodologies, tools, templates, handbooks, guides, and standards.

EMF's focus is on Portfolio and Project Management

EMF focuses on two broad areas: portfolio management and project management. It stresses the importance of aligning business planning with an integrated IM/IT strategy. This strategy should set priorities and budgets for the organization's IM/IT investments as a whole, allowing it to assess and successfully manage projects, existing operations, enhancements and innovative pathfinders. Within this context, organizations should review and prioritize their IM/IT investments and — based on this review and available funds — select those investments that will deliver optimal value. EMF also promotes the application of project management disciplines to all approved initiatives, as well as the implementation of risk and performance management throughout the entire process.

EMF is based upon Four Guiding Principles: 1. Alignment of IM/IT investments with business strategies. 2. Establishment of clear accountabilities for managing IM/IT investments. 3. Development of corporate project management disciplines. 4. Identification and management of risks on a continuous basis.

Implementing the EMF

BASELINE In order to better direct and guide improvement initiatives, Treasury Board Secretariat (TBS) conducted a baseline assessment for 21 major departments in June 1998. The assessment helped identify strengths, areas for improvement and risk exposures. This baseline established the EMF implementation plans for TBS and other departments. It also provided a benchmark against which to measure progress.

PARTNERS The EMF Implementation Council is a government-wide partnership that includes representatives from 21 major departments and key supporting participants from the Office of the Auditor General, The Institute for Government Information Professionals, and central agency representatives from functional areas like policy, risk, audit and procurement. The Council provides advice and support to the deployment of the EMF across government. Within their respective departments, Council members work and partner with colleagues from business lines, as well as corporate planning, internal audit, finance, and IM/IT planning groups.

Special Interest Groups (SIGs) meet to share experiences, best practices, and lessons learned on specific subjects and issues such as risk and process improvement.

Ad-hoc Working Groups help develop specific solutions, including templates, tools, guidelines and methodologies.

Partnering to make it happen

The EMF Division within the CIO Branch of TBS, is a centre of excellence assisting departments in their EMF implementation efforts. In partnership with the Implementation Council, it evolves the framework, rolls out well-researched solutions and toolkits, promotes and shares best practices, conducts symposia and workshops, addresses policy issues, and provides leadership, advice and support.

EMF delivers unparalleled benefits

EMF can provide you, as a senior manager, with a more balanced decision-making framework to help you reflect business priorities in your selection of IM/IT investments. By implementing underlying EMF concepts, such as enhanced accountability, risk and performance management, you'll increase the likelihood of successful IM/IT project delivery across your organization, and achieve a greater return on investment.

As an IT practitioner, you'll be able to gain greater control over project timeframes and budgets, manage change cycles, and deliver more successful projects.

You could benefit too!

Research studies on a number of leading organizations in the industry have found that implementing best practices reaps a number of tangible benefits such as the following:

• Savings between $4-$6 for every $1 invested
• Increased productivity by 10-100%
• Reduced schedule delays by 50-70%
• Reduced rework by 25-40%
• Improved quality by 45-70%

EMF's comprehensive approach goes well beyond the implementation of best practices to deliver even greater results to the organization.

Find out more: Your EMF Implementation Council member is your access point for information and guidance. Workshops and symposia are conducted on a regular basis - check with your Council member for upcoming dates and locations. Contact EMF, CIO Branch, TBS for more information, including how to participate in the Implementation Council. Tel: (613) 957-9689  Fax: (613) 946-5040 E-mail: cio-dpi@tbs-sct.gc.ca