SERVICE DEFINITION FOR it-e-rate
Table of Contents
SERVICE DEFINITION FOR it-e-rate ..................................................................................................................................................1
Rationale ..........................................................................................................................................................................................1
Methodology .....................................................................................................................................................................................2
Service lifecycle ................................................................................................................................................................................3
it-e-rate pricing ..................................................................................................................................................................................6
Technical details ...............................................................................................................................................................................7
Example screen shots ....................................................................................................................................................................10
Project Business Value (BV) by perspective ...............................................................................................................................10
Project contributions to objectives ...............................................................................................................................................11
Objectives at risk .........................................................................................................................................................................12
Rationale
Successful enterprises invest in the present and the future. Whilst financial analysis and risk assessment help to identify the best
investments, factoring in the strategic value of investments has remained a challenge, particularly in relation to investments in IT
and infrastructure.
In general, an enterprise’s stated objectives reflect its vision, goals and strategies. To be fully effective, therefore, IT must support
the most important business objectives, both strategic and operational.
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it-e-rate is a strategic value management and modelling system that gives greater prominence to this critical factor. The system
highlights how well IT supports key business objectives, allowing enterprises to identify objectives at risk and improvement
opportunities, and to challenge priorities and spending allocations from a business as well as a technical perspective.
Assessment of business value – combined with quality, risk and financial analysis – will enable a broader, more strategic, view of
investments and projects. This will, in turn, increase the quality of initial evaluation and any on-going re-prioritisation, while
strengthening the focus on benefits monitoring and realisation.
Methodology
The first stage of an it-e-rate study involves creation of the client enterprise’s Value System Model; this forms the basis all
subsequent analysis. Much of the information needed to construct the model is generally available in the form of enterprise mission
statements, strategies and plans, departmental objectives and key performance indicators (KPIs) as well as general and specific
risk statements and any agreed change programmes.
Objectives are grouped into perspectives to represent different points of view or interests within an enterprise. Perspectives are
used to differentiate investments which may be closely matched on the first pass of an it-e-rate analysis. Examples of viewpoint
perspectives include: service; risk; and cost control; whereas interests might cover operating units, major functions or directorates.
Investment-related information requirements vary depending on the type(s) of value analyses needed. However, the modelling
system is designed to operate on relatively high-level information; producing highly insightful results, so does not require large
volumes of data to be captured and analysed. As an example, if management needs to prioritise a large portfolio of proposed (or,
indeed authorised) projects and wishes to focus on those with the highest business value, the information required would almost
certainly be set out in existing business case and project initiation documents. Information is entered via simple interactive screens
easily customised from the system’s standard screen formats.
In situations where management seeks to determine the extent to which on-going IT expenditure is aligned to the business and
thus contributing to business value the system will require information set out in existing enterprise and departmental budgets and
cost projections. In this way, the it-e-rate value modelling system identifies IT elements, business applications and projects where
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business value and cost look anomalous, and presents them in graphical reports for management consideration; some sample
it-e-rate reports are included later in this Service Definition.
Importantly, once the custom model is complete, the system allows easy, real-time adjustment of variables, so that revised (eg
what if?) analyses reflecting the adjustments can be readily produced. Such sensitivity analysis facilitates, amongst other things,
the rapid modelling of a project portfolio to support steering and governance meetings where planning decisions need to be made.
Service Lifecycle
The it-e-rate service provides facilities to:
1) Create a client-specific enterprise Value System Model to be used as the basis for determining and analysing value across
the enterprise. Where a model is to be used more than once, or over a period of time, it may be kept up to date to reflect
changing objectives and priorities;
2) Maintain information about proposed investments, as well as planned and in-flight projects;
3) Measure the value of proposed investments, and planned and in-flight projects;
4) Create charts and reports reflecting the results of the analyses to support stop/go decisions and prioritisation.
To ensure the integrity of clients’ Value System Models and protect the information held regarding clients’ portfolios of assets,
investments and projects, the service is delivered through a client-side application running on the client’s desk-top that
communicates with the it-e-rate application running on the it-e-rate server (the it-e-rate server-side application). The latter is
responsible for following rules, performing calculations and analyses, and returning the results to the client-side application. The
data sent between the client-side application and the server-side application is anonymous from the point of view of the assets,
investments and projects. This means that, in the unlikely event of data being compromised, there are no clear-text fields that
would allow anyone to interpret the data and relate it to a real world project or investment. As further protection, all client data is
encrypted.
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The main components of the service are described in the table below.
No Name
Frequency
1
Once
Initialisation
Activities
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2
Value System
Model changes
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Ad hoc
Assist client to determine how it-e-rate analyses are to be used alongside
existing evaluation and planning processes
Identify changes required to the it-e-rate system to meet specific client needs
(changes may incur additional costs depending on their nature)
Develop the Value System Model (with help from ITAC advisor)
Initial take on of investment and project information
Tune the Value System Model (with help from ITAC advisor)
Configure client-side application, as necessary, to maintain:
o Maintain Value System Model
o Maintain investment and project information
o Validate inputs and upload to it-e-rate server for calculation of results
o Perform analysis of results and generate reports
Install client-side application
Configure it-e-rate server-side application for any client specific needs
Provide information to client to enable development of working interface with
existing management processes; for example, to provide periodic updates to
on project progress
Develop custom and any additional reports required (at additional cost)
Assist with test of service end-to-end
Client tutorial (web-based)
Assist client to finalise support arrangements
Changes are captured through the client-side application and uploaded to the it-e-rate
server to re-produce results to reflect the changes. New results are returned to the
No Name
Frequency
Activities
client-side application for review, interpretation and further analysis.
3
Investment and
project changes
Ad hoc
Addition and deletion of investments and projects and changes to existing baselines
are captured through the client-side application and uploaded to the it-e-rate server to
re-produce results to reflect the changes. New results are returned to the client-side
application.
4
Progress of inflight projects
Periodic
(weekly or
monthly)
Actuals and revised estimates to completion are sent to the it-e-rate server from the
client-side application. it-e-rate re-analyses the portfolio to reflect the projected
impact on value and trends and returns the results to the client-side application. The
results take into account changes to organisational objectives and priorities.
5
Analysis and
reporting
Ad hoc
Analysis of results and generation of reports are done using the client-side
application. To enable the client to use results in other reporting and analytical
applications or to generate their own charts and reports, it-e-rate results are
additionally provided in MS Excel format. On-line consultations are available with
ITAC advisors to aid the client’s interpretation of results.
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it-e-rate Pricing
As set out in the Service Description a typical it-e-rate study is priced at £25,000.
This covers analysis and prioritisation of up to 100 projects or applications or services or investments, followed by production of a
standard set of reports. Unlimited use of the system is included during the study period to encompass all required data and
reporting changes.
This pricing is based on easy availability of the relevant data (e.g. via existing spread-sheets or other computer-based data sets),
so that it can be entered into the system electronically.
If after the study the User wishes to adopt the system on a more permanent basis then it is licenced at a fee of £10,000 per month
(minimum 6-month period) for unlimited use, and the £25,000 study fee is refunded to the User account.
Where system-tailoring is required or electronic data entry is not possible or complete then appropriate support is available at daily
rates if Users do not have the necessary resources in-house.
Support level
Systems
Architect /
Design
Authority
Technical
analyst
Clerical
support
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Work description
Significant system changes including data base
modification, and supervision of all other support.
Creation of any required data entry interfaces, reportpack modification, client data cleansing support etc.
Data entry from non-electronic sources etc.
Daily rate
£ 1,000
£ 500
£ 200
ITAC offers monthly-in-arrears invoicing for the duration of the purchased service. Clients are free to terminate with one month’s
notice (after the 6-month period if licencing).
ITAC undertakes not to terminate the service whilst the Client is an active user and is making payments in accordance with any
signed agreement
ITAC offers a trial service subject to agreement on payment for any Client-specific system changes required.
Technical Details
it-e-rate has been developed in MATLAB (MATrix LABoratory) from Mathworks (see www.mathworks.co.uk). MATLAB, the
language of technical computing, is a programming environment for algorithm development, data analysis, visualisation, and
numeric computation.
In simple terms, it-e-rate consists of two client components and a server component. The client components enable the user to:
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Maintain the Value System Model locally;
Maintain portfolio, ie assets and investments (eg projects) information locally;
Validate the Value System Model and portfolio information prior to analysis;
Invoke the server component to process the Value System Model and portfolio information and return results;
Analyse and visualise the results locally.
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The server component can be hosted by ITAC or the User and performs the calculations of business value. Transport of data
between client and external server components is via automatic emailing of encrypted files.
it-e-rate clients run in Windows 7 (32 bit) and require the MATLAB Compiler Runtime (MCR) environment to be available on the
client PC. MCR can be downloaded free from Mathworks – (http://www.mathworks.co.uk/products/compiler/mcr/). it-e-rate also
requires MS Outlook on the client PC.
The recommended minimum desktop system requirements are:
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Windows 7 Service Pack 1
Java 7 Update 11
Minimum 4 GB Disc space
Minimum 2 GB RAM
Because it-e-rate runs on high-spec desktops and laptops on Clients’ premises or is installed on their servers it has no nonstandard technical requirements.
Consequently Client users will rely on their in-house technical support provision for back-up, service management, resolution of
day-to-day service levels etc. This is considered to be a Client-side responsibility and ITAC will bear no financial responsibility for
non-performance in any of these areas.
ITAC will provide user and technical training to enable Clients to become self-supporting as part of any installation, and will
supplement that with normal-hours telephone support.
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Sample Screenshots
Below are three sample outputs that demonstrate the type of analyses available. The examples are based upon a given population
of eight projects (termed “business cases”) shown by description on each screenshot (eg “System X” “Upgrade Development” et
cetera).
Project Business Value (BV) by Perspective
This shows the business value of each project when viewed from the various perspectives in the Value System Model. The six
perspectives shown in the box include “Strategic Objectives”, “Cost” et cetera. It can be seen that the major contribution from
Project 1 is to strategic objectives, whereas the major contribution from Project 3 is to cost, and so on.
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Contributions to Objectives
This shows the relative contribution of six selected projects to an objective. The report covers six departmental objectives (termed
DSO 1-6) and a single change objective (CHG). The example shows the results for “DSO 4”. It can be seen that in this case the
“Single Customer Database” makes the greatest contribution to this objective.
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Objectives at Risk
This sensitivity analysis shows the impact of a potential decision to discontinue a particular project. In this case there are six
departmental strategic objectives, three change objectives, and three risk objectives. The project under scrutiny is “Upgrade Fraud
IMS”. It can be seen that the major negative impact of the project being discontinued is on objective 6 (a departmental strategic
objective) and objective 15 (one of the risk objectives).
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