Capital Planning and Earned Value Implementation for the Department of State’s

Global Network

PMI Knowledge Exchange Forum

October 26, 2004Presented by

Bob Horrigan, PMP

Session Talking Points

President’s Management AgendaGlobal Network Capital Asset Plan and

Business CaseThe RoadmapPerformance Goals and MeasuresAcquisition StrategyProject Investment and Funding PlanPerformance Based MeasurementArchitecture and Security

Brief History: Where We’ve Come From

1997 Clinger-Cohen Act: Added diligence in IT investment management

1998 OMB Directive 300: All agencies must implement IT investment planning for capital programs

2001 State Department: Implements Federal Information Technology Investment Portfolio System (I-TIPS)

2002 OMB Institutes Scoring for OMB 300 Requirements, DoS Receives Red Score, CIO Leads Charge to Improve

2003 All Projects Must Conform to OMB Requirements – Security, Management Controls (earned value), Risk Management, Alternatives Analysis, Conformance to Enterprise Architecture

Three “legs” of Clinger-Cohen

Select – Screen/Rank/Select Is this the best choice to achieve the desired

result?

Control – Monitor Progress/Take Corrective Action Is the project meeting schedule and milestone

targets? Should the project methodology be changed to

adjust for emerging factors?

Evaluate – Conduct Reviews/Make Adjustments/ Apply Lessons Learned Is the project meeting its intended goal? What was learned that could inform future

actions?

Agency Guidance

Define Technical Alternatives-- Status Quo-- Process/Organization projects-- Security projects-- Technical/System/IT-- Outsourcing

Benefit/Cost Assessment-- $ Benefits and Costs-- Business Benefits -- CFO/Budget Spreadsheet-- Risks

Business Line & IS Inputs

Modernization Blueprint (EA)Strategic Plan

Define Acquisition & Program Management Plans

Refine Selected

AlternativeCCA and FASA

OMB A-11 and A-130

IT Investment Guidance

Define Strategic Business Needs/Value Capture-- Derived from Strategic Plan Performance metrics and/or Cost Savings-- Enterprise ArchitectureDefine Customer NeedsDefine Critical Success FactorsGap analysis (process, organization, IT Capability)

Clinger-Cohen Act: IT investments are to be defined, selected, and managed on the basis of a well-founded Business Case

SEC. 5122. CAPITAL PLANNING AND INVESTMENT CONTROL. implement in the agency a process for maximizing the value and assessing and managing the risks of the information technology acquisitions

Risk ID, Assessment, & Define Management Plan

Business Case

(OMB A-11

300)

President’s Management Agenda (PMA)

The Problem (from PMA) — The federal government is the world ’s largest single consumer of information technology (IT). IT has contributed 40 percent of the increase in private-sector productivity growth, but the $45 billion the U.S. government spent on IT in 2002 has not produced measurable gains in public-sector worker productivity.

OMB’s Task — To improve use and management of IT resources in all agencies to achieve the greatest gain for U.S. taxpayer dollars through appropriate IT Capital Planning.

State’s Task — Move from “yellow” to “green” on the PMA scorecard with regard to IT Capital Planning. The Exhibit 300 is the tool that OMB uses to measure our progress.

Global Network Overview

Major, consolidated IT investment called Global Network ($1B over 10 years) includes 8 subprojects:

Bandwidth Management Enterprise Network Management Enterprise Software Licensing and Maintenance Alternate Communications Site InfoCenter Service Support Desk In-Line Network Encryption (Type 1) OpenNet Everywhere Exchange engineering

The Roadmap

Performance Goals and Measures Project Management Team and

Qualifications Alternatives Analysis Cost Benefit Analysis Risk Inventory and Assessment Acquisition Strategy

The OMB 300 lays out the plan for IT management. It includes:

The Roadmap (cont’d)

Funding Plan Earned Value Statistics and Variance Explanations Corrective Action Plans Agency Head Concurrence if variance is greater

than 10%

Enterprise Architecture Alignment Performance Reference Model Service Reference Model Technical Reference Model

Security and Privacy

Performance Goals and Measures

Four measures following the Performance Reference Model Bandwidth Cost Improvement Enterprise Standardization Improvement Security Improvement thru patch management and

monitoring tools Network Availability

These measures are also mapped to the support contractor’s performance-based contract ENM Project Performance Metrics

Acquisition Strategy

Performance Based Contracts Enterprise Network Management Support – Cost

Plus Award Fee Bandwidth – FFP Enterprise Licensing – FFP

Acquisition Plans developed for all three Formal MOU signed between DoS CIO and AID

CIO

Collaboration with US AID and GSA SmartBuy highlighted

Project Investment and Funding Plan

Performance-Based Management System in place following ANSI/EIA Standard 748-A.

Cost baseline identified from 10/1/05 – 9/30/14 Earned Value Measurement System in

place Reporting required monthly to eGov

Program Board

ENM’s Performance Based Measurement

Required by OMB and Contract Generates metrics for cost and schedule

performance Based on an internal, automated

timekeeping system, Microframe Project Manager (MPM), NGIT System Description, ANSI/EIA 748, Work Breakdown Structure, Billet Assignment System, Board Action Requests

Must have scope management discipline to succeed

Cost Control thru Earned Value - What is It?

Baseline Management A well defined plan before work begins A clearly identified performing manager for each project A clearly authorized scope, budget and scheduled time

frame to the performing manager

Early Visibility to Variance Quick decisive plan to correct and/or pose alternatives Management notification and concurrence

Possible Trade-Offs Schedule vs. Costs Greater customer involvement Cancel Project/Cut Losses

PDCA Cycle with EVA

Plan

Do

Check

Act

Reports

Change ControlProcess

General Ledger

$$

Time CardsTime Cards

Time Cards

ExpensesExpenses

Expenses

Hou

rs

TaskCompletion

Reports

Variance

Action

Plans

WBS

OBS

Resources

Schedule

Cost Accts

Time PhasedBudget

ProjectSOW

BOE

Summary

Project success dependent on adhering to stringent controls required by OMB Performance Goals Cost and schedule controls Performance based contracting requirements Adherence to security requirements and reporting

Long term planning and marketing required for future funding of new initiatives