Information TechnologyServices Branch: Government On-Line Initiative

Benefits Realization: Government of Canada Benefits Realization: Government of Canada ExperienceExperienceA presentation to the Organization for Economic Co-operation and Development

E-Government Expert Meeting: Cost and Benefit Analysis

Paris, France

6 February, 2006

Christine Desloges, Director General, Government On-Line, Government of Canada

Bob Mornan, Executive Director, Chief Information Officer Branch, Government of Canada

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Purpose of presentationPurpose of presentation

To share current challenges faced by the Government of Canada (GC) in realizing benefits from IT/IM and e-government projects

To present an overview of the GC’s benefits realization methodology and experiences to date

To position the discussion for the afternoon session

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Overview of presentationOverview of presentation

The problem that the GC is trying to solve

Benefits realization principles

Benefits realization methodologies – Brief Definitions

1. Enhanced Management Framework

2. Outcome Management

Overview of Enhanced Management Framework

Overview of Outcome Management methodology

Project Management and Outcome Management: Key differences

Outcome Management: The Canadian experience

Outcome Management: The potential to address challenges for the GC

Conclusion

Next steps

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The problem that the GC is trying to solveThe problem that the GC is trying to solve

The GC requires a benefits realization methodology beyond just providing

deliverables to one that:

1. Ensures strategic alignment of outcomes with the business

2. Has broad applicability:

– Beyond IT/IM projects

– Horizontal initiatives

– Prioritizes projects and portfolios

3. Establishes clear accountability

4. Includes ongoing and ex post evaluations

– Soft, non-financial benefits

The GC has committed large sums of money to IT projects based on the promise of a return on that investment; the investment tends to be well managed, but managing the return needs improvement. “Business cases contain untested assumptions masquerading as facts”.

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Benefits realization principlesBenefits realization principles

Benefits realization is the pre-planning for, and ongoing management of benefits promised to be enabled by the successful implementation of an IT/IM or e-government project.

Sound project management can only enable a business owner (program) to realize intended benefits

Accountability for the realization of intended benefits must rest with the business function, not with the IT project

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Enhanced Management Framework and Enhanced Management Framework and Outcome Management: DefinitionsOutcome Management: Definitions

Enhanced Management Framework (EMF)

EMF is an integrated management model that includes processes and key practices designed to ensure that government information technology projects fully meet the needs of the business functions they are intended to support, deliver all expected benefits and are completed on time, on budget and on scope.

Outcome Management

Outcome Management is a set of methods, processes, tools and techniques for planning, selecting, managing and realizing results and benefits.

What are we building? What is the schedule? What does it cost?

What problem are we trying to solve?

“Start with the end in mind.”

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Enhanced Management Framework (EMF)Enhanced Management Framework (EMF)

In 1996 the Treasury Board Secretariat developed the EMF* which,

Is required as part of the submission process (solicitation of funds) for IT/IM projects

Focuses on Project Management concepts (IT/IM driven)

EMF includes:

Cost-benefit analyses (on budget, on time, and on scope)

“Gating” progress reporting

* For further information on EMF refer to Management of Large Public IT Projects (Treasury Board of Canada, Secretariat, 2000) presented to the OECD in October 26-27, 2000

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Outcome ManagementOutcome Management

What is an outcome?

An outcome (benefit) is the desired result of an initiative undertaken to meet a need or solve a problem (e.g. to reduce gun related crime by 25% within 5 years by implementing a national gun registry system)

Outcomes are final results supported by intermediate outcomes (benefits milestones)

Background

Outcome Management is focused on the outcomes or results side of an initiative or program

Outcome Management methodology is a Canadian approach based on internationally recognized project and risk management techniques that has been refined through public and private sector collaborations

Outcome Management is an evolving discipline

Details

Cost benefit analysis is a subset of Outcome Management

Outcome Management is the potential link to existing tools or other sources of performance indicators

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The Outcome Management processThe Outcome Management process

Outcome Management Process

Ensure Readiness

CreateLogic Model

CreateInitiative Register

CreateOutcome Register

CreateRisk Register

CreateValue Case

CreateOutcome Realization Plan

ImplementOutcome & Risk Monitoring

CreateOutcome Management Office

HarvestBenefits

Stage 0: Launch Outcome Management

Stage 1: Develop Outcome Realization Model

Stage 2: Develop Outcome Realization Plan

Stage 3: Monitor Deliveryof Outcomes

Stage 4: Realize and Optimize Outcomes

Assess Risk

Outcome Management versus Project Outcome Management versus Project Management - EMF: Key differencesManagement - EMF: Key differences

Project Management - EMF Outcome Management

Focus Manage costs, inputs, schedule, resources, deliverables

Manage outcomes, benefits, business results, portfolio

Deliverables Gantt Charts, schedules, work plan, costs, estimates, progress reports, milestones, issues, earned value, PERT charts, etc.

Outcomes maps, outcomes registers, value cases, value assessments, value graph, governance reports or structures

Measures of Success

On-time, on-budget, delivery of specified change enabler (e.g., system, process), risk management

Initiative delivers on promised results, maximized business value of portfolio

Processes Project initiation, project monitoring, project close out, etc.

Initiative definition, value definition, portfolio selection, results attainment

Project / Initiative

Is accountable to the business sponsor for project deliverables

Is accountable to the Program Manager for project execution

Facilitates the value case, ensures that the initiatives benefits are achieved

Timeline From project planning to implementation

From program planning through implementation to results attainment

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Outcome Management: The Canadian Outcome Management: The Canadian experienceexperience

In 2005-06, an examination of 12 GC projects using Outcome

Management approach and traditional cost-benefit analysis practices:

8 projects used Outcome Management methodology

4 projects used cost-benefit analysis practices

10 Lessons Learned:

1. Align outcomes with departmental and government priorities

2. Outcome Management can articulate both the business and IT outcomes

3. Engage all stakeholders in the process

4. Outcome management provides flexibility in defining intangible or “soft” benefits

5. Conduct Outcome Management early in the lifecycle

6. Integrate Outcome Management with existing methods, frameworks and tools

7. Successful Outcome Management requires champions, education and communication

8. Outcome Management needs to overcome systemic challenges in government context

9. Cost-benefit analysis useful to document cost and areas for cost avoidances and conducting options analysis

10. Outcome Management provides clear definition of soft benefits

Outcome Management: The potential to Outcome Management: The potential to address challenges for the GC address challenges for the GC

Challenge Outcome Management

1. Strategic alignment with outcomes (business driven)

• Focuses on realizing benefits• Identifies activities that contribute to the desired outcomes• Complements and extends the cost-benefit analysis and results in a more robust and comprehensive understanding of the outcomes expected by the initiative

2. Flexibility:- Beyond IT/IM projects- Horizontal initiatives- Prioritizes projects and portfolios

• Can be used at the project, portfolio, program and initiative levels• Supports complex horizontal activities that require multiple stakeholders across jurisdictions• Provides information to make adjustments and/or prioritizations at both the portfolio and initiative levels along the way

3. Clear accountability • Supports a clear understanding of how outcomes will be realized and recognized, quantification of outcomes, and the assignment of accountability

4. Ongoing and ex post evaluations:

- soft, non financial benefits

• Monitors outcomes and their indicators throughout all stages of the Outcome Management process • Provides a process for strong identification and qualification of both hard and soft benefits, presenting a broader view of expected value

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ConclusionConclusion

The Government of Canada has faced challenges achieving the benefits of IT/IM and e-government projects through the traditional project management and cost-benefit approaches

Outcome Management has the potential to overcome many of the current challenges

Outcome Management

Focuses on realizing benefits not just providing the deliverables

Supports project, portfolio, program and initiative levels

Supports an enterprise approach

Adjusts and/or prioritizes along the way

Details and assigns accountabilities

Facilitates on-going and ex post evaluation of “hard” and “soft” benefits

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Next stepsNext steps

Outcome Management

The Government of Canada will:

Continue to research and pilot the Outcome Management methodology

Explore how Outcome Management can be integrated into existing tools

Research how to better cultivate a public sector culture that supports and practices benefits realization evaluations

Christine Desloges Bob MornanDirector General, Government On-Line Executive Director

Department of Public Works and Government Services Treasury Board Secretariat, Canada

Government of Canada Government of Canada

5th Floor, 2745 Iris Street 5th Floor, 2745 Iris Street

Ottawa, Ontario Ottawa, Ontario Canada K1A 0S5 Canada K1A 0S5

Tel: (613) 941-4611 Tel: (613) 946-9887

Fax: (613) 957-8700 Fax: (613) 952-7232

Christine.Desloges@pwgsc.gc.ca Mornan.Bob@tbs-sct.gc.ca

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Examples of OutcomesExamples of Outcomes

Non-Financial:

• Increased service levels

• Decreased time to complete process / transaction

• Increased compliance with regulations

• Increased privacy protection

• Increased customer satisfaction

• Reduced client wait time

• Created environmental benefits

• Increased quality of life / social benefits

Financial:

• Decreased cost of operations

• Decreased energy consumption (costs)

• Increased economic development

• Maintained program registrations

• Decreased bad debt

• Decreased loss risk

The Outcome Management process in detailThe Outcome Management process in detail

Stage Key Activities

0. Launch Outcome Management • Ensure readiness

1. Develop Outcome Management Realization Model

• Define final outcomes • Build Results Chain (Logic Model/Outcomes Map) • Assess strategic alignment & corporate worth• Define risks

2. Develop Outcome Management Realization Plan

• Detail outcomes and risks to be tracked (Registers)• Identify outcome owners (Accountabilities)• Establish outcome target metrics and timeframes• Define reporting process

3. Monitor delivery of outcomes • Enact outcome monitoring and reporting process• Implement outcomes and risks tools and methods• Prepare outcome realization progress reports• Communicate progress regularly

4. Realize and optimize outcomes • Reinvest as defined in outcomes realization plan• Identify opportunities to increase outcome performance levels• Declare and communicate success

Value Management MaturityValue Management Maturity

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RiskLow High

Lo

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Proceed

Hold

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StrategicAlignment

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