July 9, 2007 By Chandler Harris
Any organization can implement Val IT practices, Harrison said, because Val IT processes can be tailored to the culture and size of the organization. Although the Val IT framework has been available for less than a year, its practices have been used by many organizations for more than a decade. Val IT principles are an integral part of the federal government's spending on IT. The federal Office of Management and Budget (OMB), which oversees the estimated $64 billion annual federal IT budget, has used Val IT principles. And the Federal CIO Council consulted Thorp's The Information Paradox as a reference.
"The Capital Planning Investment and Control [CPIC] process has all the principles of Val IT -- to be able to rank and stack those assets in an objective way, the accountability for results, the process to determine where you are getting results, the rigor to cancel and modify investments," said Russ Caple, a vice president for Fujitsu Consulting and co-author of The Information Paradox. In 1997, federal agencies were mandated by the Clinger-Cohen Act to use the CPIC process to evaluate all IT investments.
Feds Warm Up to Val IT
A key to successful IT management -- as outlined by Val IT -- is accountability. To secure federal funds, federal agencies must first submit an "Exhibit 300" to the OMB, which is a "summary of the investment's current justification and management plans including a project plan, benefit-cost analysis, alternative analysis, acquisition plan, risk management plan, human resources management plan, enterprise architecture and IT security plan," according to the OMB.
Using predetermined scoring criteria to assess these submissions, the OMB can objectively rank and prioritize the federal portfolio for IT investments. For IT investments that are proposed or are under way, the OMB and the Capital Investment Review Board determine if investment funding should be continued.
Every year, each agency reports to the OMB, which then reviews the agency's investments and their current status, assessing whether the agency has accomplished its goals. If the investment doesn't perform as outlined, Caple said, funding may be reduced or discontinued.
Fujitsu Consulting acts as an internal OMB for the U.S. Department of Homeland Security (DHS), and Caple said his firm has already helped improve the DHS's investment quality by filtering out unnecessary projects.
"Every year literally hundreds of millions of dollars in investments get deferred or canceled," Caple said. "We wear the OMB hat for the DHS and prevent a great number of investments from even reaching the OMB because of the Val IT principles."
Organizations both public and private worldwide have adopted the Val IT principles, including in Queensland, Australia and Mendoza, Argentina. Private-sector examples include Unisys, Sun, Prudential Asia, Allstate and Harley-Davidson. Still, officials familiar with Val IT principles wonder why more organizations aren't adopting them.
"It is a remarkable accomplishment for the federal government to successfully adapt portfolio management principles such that they become business as usual," Caple said. "At the same time, it's an unusual way of business because very few public and private organizations have institutionalized the principles such as those defined in Val IT."
Chandler Harris is a regular contributor to Emergency Management and Government Technology magazines. He also writes for Digital Communities magazine and is the former editor of Shout Out newspaper.
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