Benefits Realization - Treasury Board of Canada Secretariat

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Information Technology
Services Branch: Government
On-Line Initiative
Benefits Realization: Government of Canada
Experience
A 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
Purpose 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
2
Overview 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
3
The problem that the GC is trying to solve
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”.
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
4
Benefits 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
5
Enhanced Management Framework and
Outcome 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.
What are we building? What is the schedule? What does it cost?
Outcome Management

Outcome Management is a set of methods, processes, tools and
techniques for planning, selecting, managing and realizing results and
benefits.
What problem are we trying to solve?
“Start with the end in mind.”
6
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
7
Outcome 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
8
The Outcome Management process
Outcome Management Process
Stage 0 : Launch
Outcome Management
Ensure Readiness
Stage 1 : Develop Outcome
Realization Model
Create
Initiative Register
Create
Logic Model
Assess Risk
Create
Outcome Register
Stage 2 : Develop Outcome
Realization Plan
Create
Risk Register
Create
Value Case
Create
Outcome Realization Plan
Stage 3 : Monitor Delivery
of Outcomes
Stage 4 : Realize and
Optimize Outcomes
Outcome
Implement
& Risk Monitoring
Create
Outcome Management Office
Harvest
Benefits
9
Outcome Management versus Project
Management - 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
Outcome Management: The Canadian
experience
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
11
Outcome Management provides clear definition of soft benefits
10.
Outcome Management: The potential to
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
Conclusion

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
13
Next 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
14
Christine Desloges
Bob Mornan
Director General, Government On-Line
Department of Public Works and Government Services
Government of Canada
5th Floor, 2745 Iris Street
Ottawa, Ontario
Canada K1A 0S5
Tel: (613) 941-4611
Fax: (613) 957-8700
Executive Director
Treasury Board Secretariat, Canada
Government of Canada
5th Floor, 2745 Iris Street
Ottawa, Ontario
Canada K1A 0S5
Tel: (613) 946-9887
Fax: (613) 952-7232
[email protected]
[email protected]
Examples of Outcomes
Financial:
• Decreased cost of operations
• Decreased energy consumption
(costs)
• Increased economic
development
• Maintained program
registrations
• Decreased bad debt
• Decreased loss risk
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
16
The 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 Maturity
High
10
Strategic
Alignment
Financial Worth /
Performance Measures
C
E
B
G
Hold
Low
Stop
0
A
J
Proceed
F
I
D
H
0
10
Low
Risk
High
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